Reference no: EM131670333
Question: SOAP COMPANIES DO BATTLE
Procter & Gamble has been the leading soap manufacturer in the United States since 1879, when it introduced Ivory soap. However, late in 1991, its major rival, Lever Bros. (Unilever), overtook it by grabbing 31.5% of the $1.6 billion personal soap market, of which Procter & Gamble had a 30.5% share. Lever Bros. had trailed Procter & Gamble since it entered the soap market with Lifebuoy in 1895. In 1990, Lever Bros. introduced a new soap, Lever 2000, into its product mix as a soap for the entire family. A niche for such a soap had been created because of the segmentation of the soap market into specialty soaps for children, women, and men. Lever Bros. felt that it could sell a soap for everyone in the family. Consumer response was strong; Lever 2000 rolled up $113 million in sales in 1991, putting Lever Bros. ahead of Procter & Gamble for the first time in the personal-soap revenue contest.
Procter & Gamble still sells more soap, but Lever's brands cost more, thereby resulting in greater overall sales. Needless to say, Procter & Gamble was quick to search for a response to the success of Lever 2000. Procter & Gamble looked at several possible strategies, including repositioning Safeguard, which has been seen as a male soap. Ultimately, Procter & Gamble responded to the challenge by introducing its Oil of Olay Moisturizing Bath Bar. In its first year of national distribution, this product was backed by a $24 million media effort. The new bath bar was quite successful and helped Procter & Gamble regain market share. These two major companies continue to battle it out for domination in the personal soap market, along with the Dial Corporation and Colgate-Palmolive. Shown below are sales figures in a recent year for personal soaps in the United States. Each of these soaps is produced by one of four soap manufacturers: Unilever, Procter & Gamble, Dial, and Colgate-Palmolive.
In 1983, the market shares for soap were Procter & Gamble with 37.1%, Lever Bros. (Unilever) with 24%, Dial with 15%, Colgate-Palmolive with 6.5%, and all others with 17.4%. By 1991, the market shares for soap were Lever Bros. (Unilever) with 31.5%, Procter & Gamble with 30.5%, Dial with 19%, Colgate-Palmolive with 8%, and all others with 11%.
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