Lenor Product Design and Packaging

Options under considering

Relaunch Concentrate

Launch Refill

favored by Leonard Phillipe

-Brand manager

favored by Kathy Stadler

-Asst.Brand manager
Carton

2.Refill
Carton;Sept

3.Eco-Pak
4.Eco-Pak
Carton;Dec Doypack;Sept

4.Eco-Pak
Doypack;Dec

Forecast for Lenor refill package

Forecast for Lenor refill package

Forecast for Lenor refill package

Forecasts for Lenor Refill Package

Customer Trends and Marketing Strategy

RIDE THE WAVE:

Change marketing strategies to follow current customers and target new

segments.
WEATHER THE STORM:
Maintain core marketing competencies in the segments that value them,
abandon customers that leave your niche and acquire customers that
enter it.
FAN THE FLAMES:

Change marketing strategies to accelerate the behaviors that accompany

demographic trends, abandon current customers, if necessary, in order
"create" new ones.

P & G: Lenor Refill Packages: Why it

happened? Using 20/20 HINDSIGHT

COMPETITIVE FACTORS:
Share & category volume decline means something (anything) new is needed.
Low differentiation means high (short-run) returns for uniqueness.
Henkel was positioning for eco-friendliness (R&D; acquisition of Lesieur-Cotelle).

Refill launch demonstrates category leadership if competitors follow.

SOCIAL TRENDS:
Consumer attitudes and government regulation indicated a long-term global trend of increasing
environmental concern.
Major non-social drivers reduce the risk of being a fad cycle.

What Happened??

Doypack refill launched in September.

Splish-Splash commercial was used in ALL Lenor advertising (at 150%
normal media weight) focused on educating consumers.
It exceeded even the most optimistic forecasts; overall the Lenor brand
gained 3 share points in the first six months.

Germany's retail grocers name Lenor's refill pouch the inventionof the year.

Waste reduction continued to grow as a social issue.

Two years later the doypack was 60% of Lenor volume (25% concentrate,
15% dilute).
The refill package spread to other European countries, other P&G
products, and competitors copied it. Eventually, Canada launched EnviroPak and US launched cartons.

What else happened?

Environmentally proactive packaging

became a major focus of PR

emphasis.

Even corporate structure changed.

RELAUNCH CONCENTRATE
Brand Mgt.
Finance Dept.

Do Nothing
Volume Predictions
Concentrate
Dilute
Refill
Total
Change from base

Adjustments

1,721
4,015

780
400

5,736
-

Adjustments

2,501
3,615

780
480

REFILL CARTON
Brand Mgt.
Adjustments

2,501
3,535

6,116
380

6,036
300

60%

Finance Dept.

Adjustments

1,721
3,115
1,500
6,336
600

80%

REFILL DOYPAK
Brand Mgt.
Adjustments

1,721
3,415
750
5,886
150

Adjustments

1,721
3,115
1,500
6,336
600

60%

Finance Dept.

80%

1,721
3,415
750
5,886
150

Revenues
Concentrate
Dilute
Refill

35.64
34.06

35.64
34.06

35.64
34.06

35.64
34.06
29.65

35.64
34.06
29.65

35.64
34.06
29.65

35.64
34.06
29.65

Costs
Concentrate
Dilute
Refill

11.10
12.81

11.10
12.81

11.10
12.81

11.10
12.81
12.15

11.10
12.81
12.15

11.10
12.81
11.02

11.10
12.81
11.02

24.54
21.25
0.00

24.54
21.25
0.00

24.54
21.25
0.00

24.54
21.25
17.50

24.54
21.25
17.50

24.54
21.25
18.63

24.54
21.25
18.63

Contribution
Concentrate
Dilute
Refill
Total (before fixed costs)
Change from base

127,552
-

138,193
10,641

136,493
8,941

Additional Costs
Startup for 400 MSUs
Promotion Budget
Allocated Fixed Costs
Total

45,182
68,000
113,182

48,082
68,000
116,082

48,082
68,000
116,082

Profit
Net Profit
Net Profit per MSU
Change from base
%change from base
Adjustments:

14,370
2.51
0%

2,900

22,111
3.62
7,741
54%

2,900

20,411
3.38
6,041
42%

134,677
7,125

33%
6.5%

1,604
48,119
68,000
117,723

16,954
2.68
2,584
18%

127,927
375

33%
6.5%

1,604
48,119
68,000
117,723

136,372
8,820

41%
6.5%

1,807
48,119
68,000
117,926

10,204
1.73
(4,166)
-29%

Volume predictions adjust the "Do Nothing" (based on a 7.5% decline from 1987) according to data and predcitions given in the case. Similarly,
startup and promotional costs are adjustments of the "Do Nothing" costs.

18,446
2.91
4,076
28%

128,775
1,223

41%
6.5%

1,807
48,119
68,000
117,926

10,848
1.84
(3,522)
-25%

127,552
127,552
Volume
- - Predictions
Concentrate
Dilute
Refill
Total
Change from base

138,193
138,193
Do Nothing
10,641
10,641

Adjustments

1,721
4,015

780
400

5,736
-

- - Revenues
Concentrate
35.64
45,182 2,900
2,900 48,082
48,082
45,182
Dilute
34.06
Refill
68,000Net Profit 68,000
68,000
68,000
Costs
113,182
116,082
113,182
116,082
Concentrate
11.10

2,900
2,900

Change from base

Dilute
Refill

12.81

Contribution
Concentrate
Dilute
Refill

14,370
14,370
2.512.51
Total (before
fixed costs)
Change from base
0%0%
Additional Costs
Startup for 400 MSUs
Promotion Budget
Allocated Fixed Costs
Total

136,493
136,493
8,941
Adjustments
8,941

134,677 REFILL CARTON

127,927
136,372
128,775
REFILL DOYPAK 128,775
134,677
127,927
136,372
Brand Mgt.
Finance Dept.
Brand Mgt.
Finance Dept.
Adjustments
Adjustments
Adjustments
Adjustments
7,1257,125
375375
8,8208,820
1,2231,223

RELAUNCH CONCENTRATE
Brand Mgt.
Finance Dept.
2,501
3,615

780
480

2,501
3,535

6,116
380

6,036
300

12.81

12.81

60%

80%

1,721
3,415
750
5,886
150

60%

20,411
20,411
3.383.38
138,193
6,041
6,041
10,641
42%42%

16,954
16,954
2.682.68
136,493
2,5842,584
8,941
18%18%

45,182
68,000
113,182

48,082
68,000
116,082

48,082
68,000
116,082

24.54
21.25
0.00

2,900

24.54
21.25
0.00

33%
6.5%

12.81
12.15

12.81
12.15

12.81
11.02

24.54
21.25
17.50

10,204 24.54
10,204
21.25
1.731.73 17.50
(4,166) 127,927375
(4,166)
-29%-29%

18,446 24.54
18,446
21.25
2.912.9118.63
136,372
4,0764,076
8,820
28%28%

134,677
7,125

1,604
48,119
68,000
117,723

33%
6.5%

1,604
48,119
68,000
117,723

41%
6.5%

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Profit
Net Profit
Net Profit per MSU
Change from base
%change from base
Adjustments:

14,370
2.51
0%

1,721
3,115
1,500
6,336
600

80%

1,721
3,415
750
5,886
150

- - 33%33% 1,6041,604 33%33% 1,6041,604 41%41% 1,8071,807 41%41% 1,8071,807

35.64
35.64
48,082 6.5%6.5% 35.64
48,119 6.5%6.5%35.64 48,119
48,119 6.5%35.64
6.5% 48,119
48,119 35.64
48,119
48,082
48,119
6.5%6.5% 48,119
34.06
34.06
34.06
34.06
34.06
34.06
29.65 68,000
29.65
68,000
68,000
68,000 29.65 68,000
68,000 29.65
68,000
68,000
68,000
68,000
116,082
117,723
117,723
117,926
117,926
116,082
117,723
117,723
117,926
117,926
11.10
11.10
11.10
11.10
11.10
11.10

24.54
22,111
22,111
21.25
0.003.62
3.62
127,552
7,741
7,741
54%54%
2,900

1,721
3,115
1,500
6,336
600

22,111
3.62
7,741
54%

20,411
3.38
6,041
42%

16,954
2.68
2,584
18%

1,807
48,119
68,000
117,926

10,204
1.73
(4,166)
-29%

Volume predictions adjust the "Do Nothing" (based on a 7.5% decline from 1987) according to data and predcitions given in the case. Similarly,
startup and promotional costs are adjustments of the "Do Nothing" costs.

18,446
2.91
4,076
28%

12.81
11.02

24.54
10,848
10,848
21.25
1.84
1.8418.63
128,775
(3,522)
(3,522)
1,223
-25%-25%
41%
6.5%

1,807
48,119
68,000
117,926

10,848
1.84
(3,522)
-25%