Project Strategy ­ SWOT Analysis

Kolodzik Business Scholars

Team Procter & Gamble ­ Crest Max Agranoff, Ashley Boggs, Austin Bolger, Kendall Cappel, Brad Chamblin, Hayley Coldiron, Clement Coleman, Shannon Dowling, Katie Gepford, Nick Heiny, Stacey Helcher, Julia Heyl, Parker James, Noah Kelley, Lauren Meyer, Zac Moore, Joe Ratterman, Edward Rivin, Erica

Switzer, and Chris Tankersley

Essentials of Business: MGMT 1051

Professor Ric Sweeney

November 5, 2014

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Table of Contents

Overview: Procter & Gamble…………………………………………………………………...3 Strengths………………………………………………………………………………………….4 I. Introduction II. Superior Products, Innovation, and Company Standing III. Diverse Product Line IV. Advertising V. Conclusion

Weaknesses……………………………………………………………………………………….8 I. Introduction II. Lack of Recognizable Endorsements III. Product Competition IV. Conclusion Opportunities………………………………………………………………………………...…11 I. Introduction II. Social Media III. Growing Elderly Population IV. Crest Be V. Conclusion Threats…………………………………………………………………………………………..14 I. Introduction II. Limited Children’s Line III. Brand Recognition IV. Crest in the Global Market V. Conclusion Strategic Recommendations……………………………………………………………………18 I. Introduction II. Expanding the Demographic III. Merge Crest and Scope IV. Crest Chewing Gum V. Conclusion References……………………………………………………………………………………….22 Appendix………………………………………………………………………………………...26

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Overview: Procter & Gamble

Procter & Gamble (P&G) is a well­established company that has been present since 1837 when it was known as a soap and candle company. It was started by two brother­in­laws, William Procter and James Gamble. Over 175 years of company there have been multiple successes including the creation of iconic brands, such as Bounty, Charmin, Dawn, Pampers, Tide, and Crest. Through innovation, determination, and listening to customers, P&G has become a world­renowned presence in more than 180 countries. It serves nearly “5 billion of the more than 7 billion” people on the planet (“Procter & Gamble”). There are over 8,000 employees who are driving this effort, including more than 1,000 with PhDs. With a large amount of employees comes opportunity for specialization, which P&G has accomplished. They hold presence in beauty/hair/personal care products, baby/feminine/family care products, fabric and home care products, and health and grooming products. This totals to 37 brands that bring in anywhere from $500 million to $10 billion in annual sales (“Procter & Gamble”).

All of this great success could not have been possible without the establishment of their mission and values. Procter & Gamble’s mission statement declares:

We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come. As a result, consumers will reward us with leadership sales, profit and value creation, allowing our people, our shareholders and communities in which we live and work to prosper (“Procter & Gamble”).

Due to the percentage of the world P&G serves, they are always looking to improve “lives in ways that enable them to thrive.” They are reaching for the remaining consumers of the world; P&G is trying to increase quality of living through social responsibility programs. P&G feels that their purpose “unites an extraordinary group of people” who are of over 140 nationalities (“Procter & Gamble”). This diverse group comes together to “touch lives and improve life every day” (“Procter & Gamble”).

In researching Procter & Gamble, specifically Crest, credible Internet sources were

pertinent. With access to a plethora of websites, articles, and news all pertaining to Crest, researching was straightforward. Also, international websites allowed for global research of Crest. In addition to Internet sources, employees of Procter & Gamble served as useful sources. A tour of P&G’s Heritage and Archives Center was given to the research team, which provided numerous insights into product advertisement and development that proved to be advantageous in the project. Several employees were contacted via telephone or email, such as Zorya Kluska and Donna Chamblin, who provided feedback on ideas, suggestions, and answers to questions.

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Strengths

I. Introduction

Since the production of the first fluoride toothpaste in 1955, Crest has remained one of the strongest dental hygiene lines. International expansion has enabled Crest to grow and develop into one of the top fifty brands globally. The development of different products within the Crest brand has allowed it to appeal to consumers of most ages. Procter and Gamble has spent millions of dollars on advertising this brand over the last few decades, building a reputation and customer base that has been loyal over the years. Ultimately, Crest’s superior products and operations, diversity in markets, and advertising have helped to keep Crest a top competitor in its field.

II. Superior Products, Innovation, and Company Standing

Since the Crest brand was developed with the help of Indiana University researchers, it

has consistently led the market in research and development. Coming into the market as the company with the first toothpaste holding an American Dental Association Acceptance, Crest has a strong brand loyalty all across United States of America. While being the first in a market category provides Crest with an advantageous position, continuable innovation is the most significant sign of a company’s sustained growth. According to Assistant Brand Manager of P&G Oral Care George Parker, not only does Crest innovate with considerable funding into research and development conducted by PhDs and experienced researchers, the company has set a precedent in past years to extend its product lines nearly once every six to twelve months. Whether this is done through developing product lines such as “Crest Be” or “Crest 3D White,” or even continuing social science research into the beliefs average Americans have about their oral care, Crest has a robust history of sustained progress.

An example of Crest’s unique successes is the brand’s release of Crest Pro­Health in 2006. This was the first and the only toothpaste on the market that has an ADA Seal of Acceptance for fighting bad breath, containing fluoride, having teeth­whitening ability, and controlling plaque, gingivitis, sensitivity, and tartar (“ADA­Accepted Toothpaste”). Not only did this product transcend the qualities of Colgate Total, it also lacked the negative facets of the Colgate competing line. Colgate struggled significantly with the chemical triclosan on account of finding that the chemical was harmful to humans. While Colgate fought the legal battle of keeping the ingredient in their products, Crest progressed seemingly with the promise that “P&G doesn’t produce or market triclosan­containing oral care products anywhere” (Kary). According to Robert Gerlach of the Crest Product Development Advisory Board, the key to Crest’s achievement in producing world­class products comes from the fact that the company takes decade­long ventures in researching. This approach undoubtedly allows for the great leaps Crest takes in each new major product line release, including the release of Crest Pro­Health. Dr. Robert Fazio, Assistant Clinical Professor of Surgery at the Yale School of Medicine, stated that Crest’s innovative usage of the ingredients stannous fluoride, an active ingredient fighting cavities and gingivitis, and sodium hexametaphosphate, a cosmetic cleaner, demonstrates the integrity of the stellar research conducted within Crest. Dr. Fazio is also a member of the Crest Pro­Health Advisory Board, a board comprising of two men and three women with professional background experience ranging from college professors to personal dental care operations. By

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having this diverse leadership, the brand promotes diversity in moving forward with innovations in the Crest Pro­Health product line.

Outside of basic product development, Crest is extraordinary at protecting its internal patents. Through its intensive legal protection of product patents covering lines like the 3D White Strips, Crest has been able to disqualify the major competitors in its market of whitening strips, which has a “total market size of close to three billion dollars” (Vasel). Recently, an oral care company named Clio produced a product largely resembling the Crest 3D White Strips. This provoked Deborah P. Majoras, P&G's chief legal officer, to “exert [P&G’s] rights as the law allows" (Dulaney). Easily winning the federal court case, Crest solidified its 67% market share, over $250 million in annual sales, and its dominance in North America (Chapin). Demonstrating this pride in itself and its award­winning research illustrates Crest’s willingness to prosper in the face of adversity.

III. Diverse Product Line

A broad range of markets have allowed Crest to remain a major dental line. Since the

introduction of the first fluoride toothpaste, the company has established continuity with innovative products, releasing lines ranging from whitening strips to mouthwashes. The diversity of markets Crest caters to keeps the brand ahead of its competition on the innovation frontier and provides customers with an abundance of oral hygiene products, enabling and encouraging brand loyalty.

Toothpaste has been the staple point in the Crest line since being founded. The toothpaste market has extended from one type to separate toothpastes for adults and children, as well as toothpastes for consumers’ unique needs. Different types of adult toothpastes include gum protection, glamorous white, and cavity protection. Gum protection toothpaste serves the purpose of reversing gingivitis, an inflammation of the gums. Gingivitis is a problem facing nearly fifty percent of adults. While this approaches the borders of a nationwide epidemic, the Crest website states that the gingivitis cycle can be reversed in just four weeks. Another corrective product, stain protection toothpaste, removes up to ninety percent of surface stains in just two weeks. Cavity protection toothpaste has the ability to fight cavities by strengthening tooth enamel. Kids toothpaste uses a cartoon character campaign to encourage children to start taking care of their teeth. This proactive approach will help to improve oral hygiene over time (“Crest Dental Hygiene Products”).

Since the release of whitening strips fifteen years ago, they have grown in popularity and dominated the respective market. They have been revolutionary, as consumers wishing to whiten their teeth no longer have the expenses of professional whitening services. Similar to the toothpastes, whitening strips come in multiple forms based on consumers’ specific needs. The product promises to whiten teeth in twenty days; however, visible results can be seen in as few as three days. 3D Luxe Whitestrips Glamorous White are considered to be twenty­five times stronger than the leading brand of whitening toothpaste. Gentle Routine whitening strips are produced for customers who experience soreness after using traditional whitening strips. This helps open the market even further to consumers, providing Crest with a strong advantage. Crest 1 Hour Express Whitening Strips offer a quick alternative for consumers who are constantly on­the­go. The strips are worn for an hour and are highly effective, showing visible results after just one use. Supreme Flexfit Whitening Strips are the top of the line brand of whitening strips.

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They are moldable to teeth, providing the ability to whiten each tooth evenly. Whitening strip innovation has allowed Crest to satisfy a broad range of consumers through a diverse product line (“Crest Dental Hygiene Products”).

Similar to other products made by Crest, multiple types of mouthwash are produced. 3D White Glamorous White Rinse Mouthwash is part of the 3D line, which promises a whiter smile in as little as seven days. Also, future dental stains are prevented while using this brand of mouthwash. A recent innovation in the mouthwash front was the Crest Pro­Health Rinse, which limits the burning sensation of alcohol. This has made the innovative rinse popular and the flavor more enjoyable. Through its production of such a diverse range of products, Crest has the ability to meet all the needs of its consumers, becoming an all­encompassing oral care brand (“Crest Dental Hygiene Products”).

IV. Advertising

Through Crest’s strength in advertising, it has succeeded in becoming a billion dollar

brand within P&G and a household name. Over the years, Crest has reached many memorable milestones. Crest found that recognizing and publicizing these noteworthy accomplishments could become effective advertising for the brand. One of their most popular advertisements, the “Look, Mom ­ No Cavities!” campaign, was launched in the late 1950s. This advertisement was created to endorse Crest’s new fluoride toothpaste, the first of its kind in the oral care market. It involved a commercial and poster which depicted smiling kids holding notices from their dentist with the advertising slogan (See Appendix A). P&G spent over 1.6 million dollars on advertising the year this campaign was released. The result of this attention­grabbing message was a raise in the Crest stock to $18 in 1960 (Crest ­ America’s Greatest Brand).

Crest’s next major advertising campaign began when the American Dental Association reported that Crest created “an effective decay­preventative agent”with its Pro­Health Toothpaste and gave the product its official approval . When Crest began to advertise this statement on their toothpastes, it increased customer interest and sales. This development enabled Crest to become the leader of the sector. A few years later, the American Chemical Society listed Crest’s fluoride toothpaste as one of the great discoveries of the past 100 years. In the 1980s, the Crest brand was further consolidated with the introduction of new toothpastes, including cavity protection and tartar control. These discoveries greatly helped Crest rise to become one of the top oral care brands (America’s Greatest Brands).

A breakthrough for Crest occurred in 2006 when it launched a toothpaste that protected against each of the seven areas that dentists check ­ plaque, tartar, sensitivity, stains, gingivitis, cavities, and fresh breath. A year later, Crest transcended another milestone by launching Crest Whitestrips Daily Multicare, the first five­minute­a­day­strip. Crest’s product development became the main advertising campaign year after year (America’s Greatest Brands). The effective advertising has enabled Crest to become a billion dollar brand within P&G, helping their health care department grow to become 9% of P&G’s net sales and earnings (P&G 2014 Annual Report).

P&G has successfully turned Crest into one of the top 5 Oral Care Brands, one of the Top 50 Brands Globally, and One of the Top 100 Brands in the US (Brand Ranking). These titles prove that Crest has successfully built its brand reputation, particularly through advertising to the public. Crest is one of the biggest spending brands in the advertisement and awareness

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department. P&G spent roughly 9.3 billion dollars on advertising for Crest in the last few years. This is nearly seven times the amount P&G was spending on advertisements in 1987 (See Appendix B). Its increase in advertising has helped them increase their sales by approximately 20 percent over the last 25 years, showing that there was a profitable return on this investment (Johnson, See Appendix C).

Apart from ads, one other aspect of advertising that Crest has mastered is the packaging and appearance of its products. Compared to other oral health care products, Crest has a much more appealing and relatively simplistic presentation of its merchandise. The variety of colors portrayed – reds, blues and greens – are more engaging to the customers, along with the placement on shelves in stores. With every product line extension, Crest maintains the consistent blue background of its products. Whether it is the bright flashy blue of the Crest 3D White boxes or the blue Crest Scope line that is complemented with a mint green side, Crest’s consistency supports brand recognition. Selecting the color blue is also advantageous for Crest in that it portrays strength and dependability, supporting the notion of brand loyalty. In addition to colors, Crest effectively utilizes shelf space by consolidating different product lines and categories. This tactic is especially useful in reaching differentiated target markets. In doing so, the brand ,in conjunction with Oral B, has attained “five years of sustained growth and value­creation” according to P&G’s CEO A.G. Lafley.

Crest’s success as a brand can largely be attributed to its ability to capitalize on the many opportunities in the world of marketing. By turning major milestones into marketable advertisements, Crest built a brand reputation that impressed consumers and earned their trust.

V. Conclusion

As one of P&G’s billion dollar brands, it is clear that Crest possesses expertise regarding the

oral care market. Crest’s dedication to innovation and developing products with the specific wants and needs of its customers in mind has led it to offer distinct product lines that satisfy its diverse consumer base. Expanding into the whitening strip and mouthwash markets further diversified the products of Crest and allowed it to become a household name. Customer loyalty increased with the innovation of products and publicity of major milestones, such as achieving the title of one of the Top 50 Brands Globally. Due to these skills and strategies, Crest has excelled at its craft over the years and proved its caliber as an oral care brand.

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Weaknesses

I. Introduction

A weakness is defined as a characteristic that places the company or project at a disadvantage relative to other companies. While statistics show that Crest continues to be a largely profitable company, there are areas in Crest that, if slightly modified, could push sales further than they already are. Areas that should be improved inside the Crest company include its lack of recognizable endorsements and product cannibalism with Scope and Oral B. II. Lack of Recognizable Endorsements

A point that is pushing sales away from Crest is its lack of recognizable endorsements in

the domestic market. Currently, the prominent endorsement that Crest holds is Shakira as a global ambassador, with other spokespeople such as Todd Lowe, Jimmy Deshler, Brandon Tyler Russell, and Eliza Roberts. These names have no pull on the domestic population because they are unrecognizable and thus have no positive effect on the brand. While Shakira is a recognizable name worldwide, she has not won any major awards for her music since the mid­2000s. It is difficult to say that Shakira is still a prominent figure to younger generations. It is crucial that a company that has settled in continues to innovate with endorsements. With a fading star, Crest lacks in this crucial area and is hurting its brand reputation.

In general, Crest consumers are struggling to align with the values of the current celebrity endorsers. With financially stable adults making the purchasing decisions, celebrities representing Crest must be recognizable and memorable. Without widely spread celebrity name recognition, the endorsement is not likely to make an impact.

Another disadvantage that stems from targeting specifically a younger generation of buyers is the promotion of the family unit within ads. With advertisements that include attractive families with crisp white smiles, Crest attracts consumers who are looking for a brand that is family oriented. However, this conversely affects the college­aged population and single adults because they are searching for a product that has visible results for a good value. To attract these kinds of consumers, the brand must step away from the family aspect and focus on well­known celebrities who are relevant to the modern American.

A large percentage of Americans may not admire Shakira or align with her goals and values. She is a relevant spokesperson for the Hispanic community, but not the for the domestic consumer base. To fully capitalize on endorsement opportunities, Crest needs to seek other celebrity endorsers who will help reach the younger American generation and provide an incentive to buy its products. III. Product Competition

One of the biggest limitations placed on the brand was a second Procter and Gamble

product, Scope. When first introduced, the brand Crest stood only for quality in toothpaste and toothbrushes. When Crest was introduced, the common belief among P&G executives was that each brand could only stand for one category (“Crest Heritage”). This means that the company would have one brand that would be in the manual toothbrush and toothpaste category, and a

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separate brand for other categories, such as mouthwash or electric toothbrushes. For a period of time that logic was very successful for Procter and Gamble. Recently however, that line of thinking has been challenged. In 2005, during its fiftieth anniversary, P&G tested the idea of having a brand stand for high quality oral care in multiple categories. The launch of Crest Pro­Health Rinse moved the brand away from a toothbrush and toothpaste manufacturer and toward a full line oral care brand (“Timeline”). At the time Crest only offered one product in the mouthrinse category, Crest Pro­Health Rinse. The logic behind this particular mouthwash was to complement the health benefits of its toothpastes, fighting against plaque, gingivitis, and bad breath germs. Crest also sought to create a mouthwash without the “burn of alcohol,” something many customers disliked about traditional mouth rinses. This health minded and less intensive flavor focus differentiated Crest Pro­Health from P&G’s existing mouth rinse brand Scope, a P&G brand since 1966 (Scope History). Scope focused on two important factors: creating a clean mouth feeling and killing 99% of bad breath germs. Since the launch of Crest Pro­Health, the brand has expanded its line of products in the category. Today, Crest offers eight different mouth rinses, three more than its internal rival Scope. Crest has not only expanded past Scope in the number of products offered, it has moved into both Scope’s stronger flavored mouth rinse and killing 99% bad breath germs niches. Only two of the mouth rinses listed on the Crest Mouth Rinse website now list “avoiding the burn of alcohol” as a key benefit of the product. Instead, six of Crest’s mouth rinses use alcohol and five of them list killing bad breath germs as an important product benefit, the same number of products Scope has accomplishing that goal. Crest and Scope mouthwashes began as different products for different customers, but in the nine years since the two have become competitors, a situation many refer to as market cannibalization, has materialized.

Crest and Scope are not just competitors in their product descriptions; recent sales numbers support the idea. From 2012 to 2013 the percentage change in sales of Procter and Gamble mouth rinse products has decreased by 3.8% (Grocery Headquarters…Vendors). Compared to the other top nine brands in the industry, this is the largest decrease in sales over the time period. When the sales trends are broken down into the various products, we see the change in sales is coming from different trends. For Crest’s mouth rinse sales, there has been mixed results. Crest 3­D White had an increase of 27.1% and Crest Pro­Health rinse had a decrease of 9.9% from 2012 to 2013. Scope on the other hand has had both their two largest product categories, Scope Outlast and Scope Classic, see significant decreases in sales. Scope Outlast had a decrease of 6.1%, and Scope Classic had a decrease of 19.9% of their sales from 2012­2013 (Grocery Headquarters…brands). While the Crest products produced mixed results, all Scope products had a substantial decrease in sales. Initially, Procter & Gamble believed that a brand, specifically Crest, could not extend itself outside a category. Because of this, they created a different brand for their toothpaste and mouthwashes. After experimenting with products under the same brand branching out into different categories, they found a brand can stand for more than just toothpaste, but also for excellence in oral care. This led P&G to create different brands of mouth rinse that served two different purposes. The success of Crest mouthrinses caused them to expand their line of products and somewhere along the line ended up in competition with their preexisting brand, Scope. When they served different purposes, the existence of both brands made sense. However,

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this is no longer the case and sales are beginning to prove this fact. Without differentiation, both brands will continue wasting marketing budgets on pulling customers away from each other. IV. Conclusion

Procter & Gamble does not have over glaring weaknesses that contribute to the loss of

revenue on a large scale. However, there are significant areas in which the company could improve their internal workings in order to increase their revenues. By cutting sectors of their company that are not performing or taking away from the potential growth of another sector and using more modern endorsers, Crest can grow to be even larger in size into a company that has the potential to have products in every American household.

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Opportunities I. Introduction

Although Crest is a very strong brand and is extremely profitable, there is always room

for improvement. Innovation is constant and it is important to continually improve, no matter how successful a company or brand is currently. Crest clearly understands this, evidenced by multiple new brands and product line extensions, but Crest still could improve in a few different areas. Crest could potentially benefit from improvements in social media, products available to the elderly market, and Crest Be.

II. Social Media

An area of opportunity for Crest would be to expand the brand’s social media presence.

Crest’s top competitor, Colgate, has a much stronger social media existence. For example, on Facebook, Colgate has over three million people who like the page, allowing them to interact with and keep up with changes in the Colgate line of dental care. The Crest Facebook page has less than seven hundred thousand likes (“Crest Facebook Page”). A major opportunity for Crest could be to invest money and expand this marketing tactic. If Crest can increase its Facebook page likes to match Colgate, the brand could potentially gain market share. The people who like Colgate on Facebook are most likely brand users. When a person is scrolling through their Facebook news feed and sees a brand repeatedly, the specified brand will be more on top of mind when they get to the store shelf, leading to a purchase. Colgate has the ability to place their advertisements on the Facebook pages of over three million consumers, while Crest’s advertisements are being seen by less than one million people. Increasing likes would drive higher brand recognition for Crest and would, in turn, increase the market share. Social media is an area that has a large room for improvement, as Facebook is commonplace across multiple generations. This gives the brand the potential to advertise to people of various demographics. Colgate has verified status on Facebook, signified by a blue check mark, while Crest is not. Being verified on social media makes the company appear more professional, credible, and trustworthy. Individuals on Facebook can see that Colgate is verified, and can see that the brand has many followers. Since Crest is not verified, some consumers may not be as trusting of the brand’s claims. If Crest becomes verified, they could earn the trust of consumers who use social media to research products. In the long run, a stronger social media presence will benefit Crest. With more supporters on Facebook, Twitter, and other social media sites, Crest will have the ability to advertise to a larger audience, which will increase market share and profits. There is an uncharted amount of opportunity in the world of social media due to its exponential growth. With each generation, technology and social media is becoming more prevalent and important. In order to keep up with the amount of advertising that Colgate is doing on Facebook and the number of consumers that their advertisements are reaching each day, Crest needs to improve their social media plan. If Crest increases their number of likes and becomes verified, they would have the ability to increase the number of individuals seeing what is posted about Crest and would appear to be a trustworthy brand.

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III. Growing Elderly Population

The era of 1946­1964 in the United States of America brought about the Baby Boomer generation. In 2012, the Baby Boomers accounted for over twenty percent of the population in the United States and is made up of Americans mostly above the age of fifty. It is known that the health of a human being degenerates as the body grows in age, including dental health.

As the dental health of a person decreases, they should use more specific and preventative dental care products. As people age, teeth become more sensitive and have a higher chance of decaying or getting cavities. Procter and Gamble has an opportunity to develop a dental line for seniors through a Crest line extension fighting tooth sensitivity. The brand has continually innovated to create relevant products for its consumers and now it must cater to the aging population. This would create an opportunity for Procter and Gamble to gain more of the market, leading to additional revenue. After obtaining FDA approval and using Procter and Gamble’s successful marketing tactics, Crest would be successful in the sensitive tooth space. This opportunity falls in line with the mission of P&G in order to cater to the needs of the company and make life easier and healthier for the individual. IV. Crest Be

Procter & Gamble’s target market consists of catering to the customer with disposable

income. For this reason they have not focused as many resources into marketing towards younger generations. P&G has started to market towards this next generation however, through introducing Be toothpaste. Be toothpaste incorporates the hygienic properties that customers have come to expect from Crest with bold new flavors that are different from the pro­health line. According to Euromonitor, “Consumers can influence others’ purchasing habits thanks to social networks, so brands need to work harder than ever to earn consumer loyalty.” Because of this, it is important that P&G has a large social media presence with the introduction of Be. The current tag line for Be toothpaste is “Be Adventurous/Dynamic/Inspired,” which draws feelings of adventure and fun for the young consumer. Be has the opportunity to draw in new customers to the Crest brand. Competitors, such as Sensodine and Pronamel, have released nothing for younger generations, as their products are associated with older consumers.

When comparing prices of toothpastes, Be is the most expensive product Crest offers, even more so than Crest’s premier toothpaste, 3D White Luxe Glamorous White. As it is, there are no visible added health benefits to using Be; it just simply says on the package fluoride toothpaste. At this price point, the product is less affordable for their target market. There is no incentive to buy Be, as consumers can buy a top of the line toothpaste for the same price. Be has a large opportunity to capture its target market with its wild and bold new flavors, but it needs an increased presence on social media and a change in price if it plans to reach its full potential.

V. Conclusion

For a large company like P&G, constant innovation is vital. With continuous innovation, Crest could increase sales and revenue in multiple ways. Crest could potentially increase its market share by having a stronger presence on social media through more advertisements. It also could expand into products specialized for the elderly, as the aging baby boomers make up a

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large portion of the market. Crest could also cater more to the needs of the adventurous consumer by growing it’s Crest Be brand.

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Threats

I. Introduction As a business in the oral care industry, Crest has an established global market. Global

competition and a need to be strong in all product categories are also present with a global market. With these global competitors, Crest’s brand recognition, credibility, and the fulfillment of diverse needs is essential to differentiate their products. Currently, Crest is lacking not only in its children’s line, but also in its brand recognition and global marketing compared to its main competitors, including Colgate­Palmolive, GlaxoKlineSmith, and Johnson & Johnson, who are all outshining Crest in these ways. This poses a major threat to Crest’s overall sales, brand loyalty, and marketing strength. II. Limited Children’s Line

A business in the oral care industry creates products designed to aid in “the practice of

keeping the mouth clean and healthy by brushing and flossing to prevent tooth decay and gum disease” (“Oral Hygiene”). Such oral care products can include different types of toothbrushes, toothpaste, dental floss and mouthwashes. The most successful companies offer diversity in their product portfolio, allowing them to appeal to a diverse group of customers. Therefore, to be successful in oral care business, companies must provide more than just the essentials needed for oral hygiene. Most oral care brands branch out to meet the needs of various age groups, levels of sensitivity, and whitening while providing different designs and features. Crest, overall, is a very competitive brand in the oral care market, offering extensive adult products with whitening, sensitivity, and flavor options (“Crest Dental Hygiene Products”). However, the children’s line of products is falling behind Procter & Gamble’s competitors, Colgate­Palmolive, and GlaxoKlineSmith (Firestein).

Crest’s current children’s line consists of eleven different toothpastes and three different toothbrushes. Within the toothpaste line, both regular and two liquid gel toothpaste products are offered in different flavors and in convenient packaging. Overall, ten Disney characters ranging from Winnie the Pooh to the Avengers are featured on packaging. Three toothbrushes and toothpastes are marketed as matching character sets featuring Disney Fairies, Hello Kitty and Sesame Street. In addition to these three sets, there are eight other unique character toothpastes. Crest’s matching sets, consisting of a toothbrush and toothpaste, offer options for girls, featuring characters they are more likely to enjoy, while offering no matching sets with characters for boys. Rather than segmenting products by age group, an encompassing line focusing on children two and older is provided. No products are offered to younger children with the ideology that fluoride is harmful to small children, as toothpaste is often swallowed (“Crest Kids Dental Hygiene Products”). The limited selection of these sets for children are hindering the strides Procter & Gamble’s Crest could be taking.

Crest’s top competitor, Colgate­Palmolive, takes a different approach with its child oral care line. Rather than an encompassing line, oral care products are divided into segments based on age, including ages two and under, two to five, five to eight, and eight to twelve. Children grow up using Colgate­Palmolive products with each age group they fit into, with the products tailored to meet each segment’s particular need. For children under the age of two, three toothbrushes and fluoride­free toothpaste are offered. For the other age groups, various

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toothpastes, regular toothbrushes, and battery­powered toothbrushes are offered. These products are sold in matching character sets consisting of a toothbrush and toothpaste ­ a key packaging setup. Concerning these matching sets, children have toothpaste, and then the option to choose between three different manual toothbrushes or three different battery­powered ones. Unlike Crest, Colgate offers matching oral care sets featuring characters for boys and girls. Colgate holds the advantage not necessarily by featuring more children’s characters on their products, but by offering more set options within the characters presented (“Welcome to Colgate Kids”).

Another top competitor, GlaxoKlineSmith, the manufacturer of Aquafresh, takes a similar strategy to Colgate­Palmolive concerning the segment organization. However, GlaxoKlineSmith’s oral care products are divided into fewer segments including ages two and under, two to six, and older than six. Overall, the children’s line is smaller and the company focuses more on adult products. In total, the children’s line consists of six different toothpastes in various flavors and two toothbrushes. However, unlike both Crest and Colgate­Palmolive, famous children’s characters are not featured on packaging. Instead, smiling teeth and toothpaste squiggles dominate the containers (“A Great Start to a Lifetime of Happy Teeth”).

Overall, Crest’s children’s line is falling behind in several regards. Rather than offering an age­segmented brand, an encompassing brand loses many of the younger customers. Parents who buy a specific oral care brand for their children are more likely to stay loyal to that company if they offer products that correspond to the growing child. Crest does not offer as many matching character sets, especially when focusing on products for boys. Children tend to focus not on the health benefits a particular toothpaste offers, but on their favorite TV show characters on the packaging. In respects to matching character sets, Crest does not offer a battery­powered toothbrush option for children who have trouble with using a manual toothbrush, which poses a problem for younger children. Colgate­Palmolive and GlaxoKlineSmith are dominating the market in the child oral care line, posing a serious threat to Crest. III. Brand Recognition

Brand recognition is the extent to which the general public or an organization's target

market is able to identify a brand by its attributes and subsequently exhibit brand loyalty. Brand recognition is when consumers can recall a specific brand without being explicitly exposed to the company's name, but through visual signifiers like logos and slogans (“Brand Recognition”). Brand recognition is vitally important in order for a product to be successful in today’s competitive global marketplace. Domestically and internationally, Procter & Gamble’s main competitor, Colgate, is beating out Crest in brand recognition and loyalty.

The American Dental Association, commonly abbreviated ADA, is the premier organization for dentists nationally. The American Dental Association gives certain toothpastes a Seal of Acceptance. According to the American Dental Association website, “the ADA Seal of Acceptance program began in 1931 and to this day, dentists and consumers recognize the ADA Seal of Acceptance as the gold standard when it comes to evaluating the safety and efficacy of dental products (“ADA Seal of Acceptance”).” A big threat to Crest is that Colgate has twelve different toothpastes that have Seals of Acceptance from the American Dental Association, while Crest only has nine (“ADA Seal Product Category”). During a student­led survey of local toothpaste shoppers at a Cincinnati Kroger store, when asked why consumers bought Colgate or Crest, most people responded that they always had bought that brand or used it as a child.

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Statistics show that 43% of consumers remain loyal to a particular toothpaste brand (Agredano). With more dentist recommended toothpaste offered, consumers are more likely to purchase Colgate toothpaste and will continue to make repeated purchases of Colgate products, further increasing their brand recognition and loyalty. Colgate Total is the "only toothpaste approved by the Food and Drug Administration to prevent gingivitis, as well as by the American Dental Association to fight plaque and gingivitis (Williams).” This threat demonstrates Colgate brand recognition that is unmatched in the marketplace. In 2010, Colgate­Palmolive had 33% of market share in the toothpaste industry while Crest’s market share was listed at 20% (“Why Colgate Beats P&G in Oral Care”). Because Colgate has a larger market share than Crest, more customers are likely to recognize the Colgate brand and exhibit loyalty to the brand, both now and in the future. IV. Crest in the Global Market

While researching dental associations across the globe, it becomes clear that the Colgate

brand has more of a presence. Both through sponsorships and approved products by these organizations, Colgate holds the upper­hand. Two associations, the British Dental Association and the Hispanic Dental Association, are partially sponsored by Colgate, as clearly shown on their websites (“Colgate”; “Sponsors”). Two other organizations, the Australian Dental Association and the New Zealand Dental Association, do not have sponsors but have a list of oral care products that earn their seal of approval, helping the public decide which brands to purchase. The Australian Dental Association has approved 19 Colgate toothpastes, 22 products total, and zero Crest products (“Toothbrush.”). The New Zealand Dental Association has approved 10 Colgate toothpastes, 13 products total, and zero Crest products (“Approved Products”). In addition, Colgate’s products are shown on their website printed in multiple languages, which promotes inclusivity and familiarity. Consumers in foreign countries will feel much more familiar with Colgate because the websites not only cater to their language, but show the product names and benefits on the package itself in the respective language.

Out of all the dental associations researched, only one has an official connection to Crest. The brand sponsors the Hispanic Dental Association, which is based out of the United States. No other foreign associations have any products approved. Crest has some products printed in different languages, but far less than the amount found on Colgate’s website (“Oral Hygiene Products Crest.”).

Even Johnson & Johnson has more global awareness than Crest. Johnson & Johnson, the producer of the Listerine mouthwash, sponsors the British Dental Association and is partnered with the European Federation of Periodontology, one of the largest dental organizations in Europe (“Johnson and Johnson”). The EFP includes 29 National Periodontal member societies across the continent (“Welcome to the EFP Website”). The New Zealand Dental Association has also officially approved five Listerine mouthwashes. In the global oral care market, Crest is lagging in approvals, threatening the brand presence.

V. Conclusion

Consumers typically make their purchasing decisions based on availability in stores, wide product selection and awareness of products. Availability and awareness of products has a direct

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link to a brand recognition, which provides for a larger market share and more in­store shelf space. Furthermore when dental associations are sponsored by or approve of certain brands, it becomes a huge marketing advantage as it furthers brand credibility. Consumers are more likely to purchase a brand they are familiar with in a positive way. Showcasing a well­known dental association’s Seal of Acceptance on the packaging is powerful, especially considering most consumers in the oral care market are sensitive to health benefits. In combination with health benefits, many customers want to fulfill the needs of various age groups, levels of sensitivity, and whitening. Crest is falling behind the competition and needs to create new, diverse products and partnerships to stay relevant in the marketplace.

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Strategic Recommendations I. Introduction

After conducting research, data has been analyzed and conclusions have been drawn. The

result is a set of three recommendations for the Crest brand based on its current strengths, weaknesses, threats and opportunities. The first recommendation is to increase Crest’s clientele by expanding current product lines and targeting certain demographics. Next, Crest should avoid confusion and product cannibalism by Scope mouthwash with the current Crest mouthwashes. Lastly, Crest should enter into an entirely new market by introducing a Crest Chewing Gum. All of these recommendations will expand Crest’s current profits and market share. II. Expanding the Demographic by Reaching All Markets

With an increasing emphasis on oral hygiene in the growing population, an opportunity

for Crest is arising. Untapped markets for potential clientele and reworked marketing strategies can provide Crest with an expansion in sales, clients, and research and development. Crest should be marketed to all age groups. This can be done by dividing its market into three segments: children, middle aged, and elderly, and then creating a different approach for each age group. By using a multi­segment approach, Crest will be able to advertise to and satisfy the needs of the entire market.

The first target market that Crest can reach is children. An external threat is that Crest’s competitors all have a wide range of products for different age groups of children, while Crest only offers toothpaste for those above the age of two. Because of this, customers with children under the age of two are currently going to competitors for those children's toothpastes. With proven brand loyalty, Crest should implement a toothpaste for children under two. By doing so, Crest will increase not only its current consumer base but also its brand loyalty for existing consumers. By attracting parents with children of this age, it will be likely to attract these customers for life and in turn increase the percentage of consumers that remain loyal to its toothpaste brand.

Another way to better reach the demographic of children is to expand its current children’s line of products. Crest’s kids’ line lacks the organizational structure founded by its competitors. Colgate found success through a structured, aged based kids’ line with matching character products. By expanding and organizing Crest’s kids’ line in a similar way to their competitors, Crest will effectively expand their target market to include children of all ages. Crest also has the opportunity to create a multitude of different characters to choose from. Children are more likely to be happy with their choices and look forward to brushing their teeth. An excited and motivated child brushing teeth can lead to satisfied parents, increasing Crest’s brand loyalty.

The second market segment encompasses middle­aged adults. Crest does not have to modify any products or add new ones because the existing products already cater to this segment. However, Crest should make the move to reach out to this age group through the use of social media advertising. People of all ages are on social media websites including Facebook, Twitter, and Instagram. In fact, 74% of adults use social networking sites (Facts) . Simply becoming

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verified on these sites and actively posting updates will reach a large market of the middle­aged demographic who are on social media and have the potential to be loyal Crest consumers.

The third target market that we believe Crest can reach is the baby boomer demographic. As customers age, they have a larger chance of developing oral diseases. In response to this, Crest could make a toothpaste and mouthwash line, similar to its Crest 3D White and Pro­Health lines, targeted specifically towards those who are aging and concerned about the health of their teeth. Therefore, this line of products, possibly called Crest Silver, will act as preventive and protective agents for their teeth that have had decades of wear and tear done to them. The toothpaste will help prevent darkening teeth, root decay, bad breath, and gum disease, which all are more susceptible in elderly mouths (Prince). The mouthwash will also help fight bad breath, keep their teeth clean, and help customers who have dry mouths (Dental). Producing Crest Silver will both benefit Procter & Gamble and the largest and most influential demographic in the United States.

Since toothpaste is a very elastic product and most customers purchase whichever is cheapest, it is imperative that Crest strives to satisfy its entire market’s needs. By increasing brand loyalty, Crest can make their toothpaste more desired. When someone thinks of toothpaste and dental care, they should think of Crest, and in turn, grab Crest off of the shelves rather than its competitors. III. Merge Crest and Scope

Since the launch of Scope in 1966, Procter & Gamble has had an influence in both the

toothpaste and mouthwash markets. Scope dominates the mouthwash market, but Crest has products in this sector as well. Scope’s past revenue sales have been increasingly lower than Crest’s. This can be seen with one specific example regarding lines of Crest toothpastes. “Plus Scope,” a toothpaste line, was released indicating that Scope had been added to various tiers of Crest toothpastes. However, there are no Scope products infused with Crest. This in itself shows how Scope, as a brand, is inferior to Crest.

Data shows that Crest mouthwash has outperformed Scope mouthwash in recent years, even though the entire Scope brand’s focus is in this respective category. In 2013, Crest 3D White accounted for 4.2% of total mouthwash and dental sales in the United States, Crest Pro­Health Multi Protection accounted for 4.1%, and Crest Pro­Health Complete accounted for 3.4%. Scope Original accounted for 3.2%, and Scope Outlast accounted for 2.3% (Percentage). All three of Crest’s mouthwashes outperformed the Scope mouthwashes in terms of percentages of total mouthwashes sold in the United States. Moreover, the data from total sales of leading mouthwash brands in 2013 provides further evidence to support this claim. In 2013, Crest brought in $56.4 million from sales of Crest 3D White mouthwash, $54.9 million from sales of Crest Pro­Health Multi Protection, and $45.5 million from sales Crest Pro Health Complete. Scope only brought in $43.2 million from sales of Scope Original and $30.8 million from sales of Scope Outlast (Sales Growth). In total, Crest made $156.8 million from mouthwash sales while Scope only made $74 million. It is imperative in looking at these statistics to note that Crest’s mouthwash is not the product of the brand with the highest priority, but rather its second leading product is put out on shelves, yet Crest still more than doubled Scope’s sales of mouthwashes in 2013.

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Through the merging of Crest and Scope, new product innovation would result, and the same recognizable brands would still exist. This is a more productive way of getting rid of Scope than just selling it off which many speculate will happen after A.G. Lafley’s announcement about cutting up to 100 weak P&G brands from their portfolio. By combining Crest and Scope mouthwashes, all the Crest mouthwashes would still be in existence, but new Crest mouthwash infused with Scope technology would be introduced. This idea of infusing Scope into Crest products would be a widespread effort applying to all Crest products, including each tier of Crest toothpaste and each tier of Crest mouthwashes. Most of Scope’s loyal customers will make the transition over to these new Crest with Scope mouthwashes. Overall, the merging of Crest and Scope would be beneficial to both brands.

IV. Crest Chewing Gum

The average Crest user has two interactions with its product per day. Both of these occur

when the user is brushing their teeth: once in the morning and once at night. However, with the exception of those few who brush their teeth after lunch, the average user does not have any interaction with the product between uses. During this time, the customer is eating meals and drinking sugary sodas, along with enjoying the occasional snack. The majority of customers do very little when it comes to oral care in the middle of the day. While Crest should not take on a new strategy that would change the user’s habits and get them to brush their teeth in the middle of the day, one could be tailored to a habit that they already possess: chewing gum.

The chewing gum industry is valued around $19 billion, with annual sales approaching $2 billion every year (Topic). On average, an American chews approximately 280 pieces of gum every year (Chewing). Users of chewing gum cite several reasons for the usage and habits. While some chew gum simply for the favor, a majority use gum to remove any particles stuck in their teeth and to freshen their breath. Crest customers use chewing gum in the middle of the day as a substitute for brushing their teeth, so an innovative move would be to provide them with a product that does just that.

Crest Chewing Gum will provide Crest users with a quick and easy way to tend to their teeth in the middle of the day. This gum would not only provide the functions of normal chewing gum such as freshening breath and clearing the teeth of particles, but would also contribute to the health of the customer’s teeth. According to the American Dental Association, “clinical studies have shown that chewing sugarless gum for 20 minutes following meals can help prevent tooth decay” (Learn). The ADA does not endorse replacing the average sugarless gum with brushing teeth, but instead using the two together for cleaner teeth. While this is an innovative idea, there is proof that it is possible. Research for gum that can clean teeth has already been completed by the United States Military. Soldiers can use its “Combat Gum” when they do not possess clean water to use to brush their teeth (Tan). Procter & Gamble can use its research and development department to make the product more affordable for consumers. The Combat Gum’s main cleaning ingredient is anti­microbial peptide and can destroy the average oral bacteria in around five minutes (Morais). Crest Gum would combine the benefits of sugarless gum with the extremely effective peptide of Combat Gum to make a great product that could improve the lives of Crest’s current and future consumers.

Crest Gum will have a stronger cleaning power than regular gum while freshening breath and customers will purchase it due to its quick and easy way to do something healthy for their

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teeth. When entering the chewing gum market, Crest will have a competitive advantage given their great reputation and recognition in the oral health market. Crest can even expand their line of Crest Gum to one modeling Crest Pro Health and another focusing on Crest 3D White. There can also be a Kids Crest Gum for parents who are worried about the effectiveness of their child’s brushing. Crest Gum is an innovative product that has potential in the existing oral hygiene market, but also has potential to make a difference in underdeveloped countries. Procter & Gamble has been dedicated to helping the 783 million people in the world who do not have safe drinking water with its Children’s Safe Drinking Water Program and its Procter & Gamble Water Purification Packets (P&G Children’s). Formulating a type of Crest Gum that could be focused on the needs of people who do not have great dental services and clean water could change lives around the world because this is a product that cleans teeth without using water. There are a variety of opportunities with Crest Gum, and Crest has the resources to be a pioneer in this developing field.

Crest can enter a whole new market by creating Crest chewing gum, providing our customers with an alternative to brushing their teeth in the middle of the day. This product will not only freshen the user’s breath and remove particles from their teeth, but will also be infused with fluoride to promote the health of our user’s teeth. Crest’s reputation in oral care will greatly contribute to the success of Crest Chewing Gum, and has the potential to be a market leader in this category.

V. Conclusion

There are many opportunities seen here for Crest to grow. The first suggestion is that Crest can monetize on its untapped demographics by standardizing and increasing their kids lines, increasing their presence on social media to become more connected with the adult demographic, and creating a Crest Silver line for the expanding Baby Boomer population. Another recommendation is to combine Crest and Scope mouthwashes. This is an effective way of moving the loyal Scope users to Crest Mouthwash, and it goes along with Procter & Gamble’s plan of slimming down their portfolio of brands by getting rid of the weaker brands. Finally, Crest Chewing Gum can provide customers with a new option for oral care and provide Crest with a new product category that aligns with their existing lineup. By implementing these strategic recommendations, Crest will further expand its share in the oral health industry.

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Appendix

A. “Look Mom ­ No Cavities” Advertisement (“Look Mom­No Cavities!”)

B. P&G Statistics 2012 vs. 1987 (Johnson)

2012 1987

Worldwide sales ($B) $83.680 $17.000

U.S. sales ($B) $29.500 $11.805

U.S. as % of worldwide sales 35.3% 69.4%

Worldwide ad spending ($B) $9.345 $1.386

Ad spending as % of sales 11.2% 8.2%

Research and development expenses ($B) $2.029 $0.576

R&D as % of sales 2.4% 3.4%

Worldwide employees 126,000 73,000

Fiscal years ended June 30. Source: Ad Age DataCenter analysis of Procter & Gamble Co.'s 10­K and annual report disclosures.

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C. P&G Worldwide Ad Spending as Percent of Sales (Johnson)

Year Sales ($B) Ad expenses ($B) Ad spending as % of sales

1987 17.000 1.386 8.2%

1988 19.336 1.594 8.2%

1989 21.398 1.660 7.8%

1990 24.081 2.059 8.6%

1991 27.026 2.511 9.3%

1992 29.390 2.693 9.2%

1993 30.498 2.973 9.7%

1994 30.385 2.996 9.9%

1995 33.482 3.284 9.8%

1996 35.284 3.374 9.6%

1997 35.764 3.414 9.5%

1998 37.154 3.638 9.8%

1999 36 .710 3.471 9.5%

2000 38.545 3.828 9.9%

2001 37.855 3.654 9.7%

2002 38.965 3.696 9.5%

2003 42.133 4.406 10.5%

2004 50.128 5.401 10.8%

2005 53.210 5.804 10.9%

2006 64.416 7.010 10.9%

2007 71.095 7.714 10.9%

2008 77.714 8.426 10.8%

2009 75.295 7.453 9.9%

2010 77.567 8.475 10.9%

2011 81.104 9.210 11.4%

2012 83.680 9.345 11.2%

Fiscal years ended June 30. Source: Ad Age DataCenter analysis of Procter & Gamble Co.'s 10­K and annual report

disclosures. Some data reflect restated P&G figures.

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