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Scope Case Analysis

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Autor:   •  February 11, 2018  •  Case Study  •  1,654 Words (7 Pages)  •  13 Views

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Tobias DeGoede

Scope Case Study

01/28/2018

Scope

In the case study for Scope Mouthwash, brand manager, Gwen Heirst has some key benchmarks to meet in order to keep Scope as the top brand in the market segment that fights bad breath in the mouthwash industry. These benchmarks are, the profitability of the brand, the volume of sales, and maximizing Scope’s market share. Gwen has three options that make sense to help her achieve these goals. The first is status quo, basically to leave the Scope brand alone and focus on capturing the market share of the mouthwash industry. The second option that Gwen has is to add a line extension to the Scope brand that focuses on competing with Plax to win over the market segment that focuses on dental health in addition to freshening breath. Lastly Gwen has the option of launching a whole new product line in the drug category instead of the present cosmetic category in which Scope is currently selling. This is an alternative route for Scope to be able to attract that same health conscious customer.  All these options come with risks that could greatly affect Scope’s success in the mouthwash market segments. In this report I will be looking at the pros and the cons of each one of these options and the data to back it up, to properly assess what the best option is for Gwen to achieve her benchmarks for Scope.

Scope was initially the first brand that offered not only protection against bad breath but also offered a better taste than other mouthwashes. Not much risk was presented to the Scope brand as the leader in breath freshening mouthwash until 1988 when Plax was launched. Plax was launched on a whole new platform and claimed to not only freshen breath, but fight plaque. To prove this, Plax products have been put through testing and attained seals from the Health Protection Branch (HPB) and the Canadian Dental Association as being a product that fights plaque. With these seals Plax has the ability to reach a different market share that is focused on health not just fresh breath. Plax has posed a great threat to the future of Scope’s success due to it’s unique market positioning. Since its introduction in 1988, Plax had gained a 10% share in the category and was a cause of concern to the management. As a result of this new threat posed to the Scope brand, Gwen was given the task to develop a strategy to ensure it  continued profitability

Wholesale Units Sold

Year

1988

1989

1990

Total Market Units:

1,197,000 units

1,294,000 units

1,358,000 units

Scope

395,000

427,000

440,000

Listerine

182,000

208,000

225,000

Listermint

182,000

127,000

144,000

Cepacol

163,000

137,000

140,000

Plax

12,000

129,000

136,000

Percent Change

Year

88-89

89-90

Scope

8.1%

3.04%

Listerine

14.3%

8.17%

Listermint

-30.2%

13.4%

Cepacol

-16%

2.2%

Plax

975%

5.43%

The graphs above indicate the changes in the units sold for the mouthwash market between 1988, 1989, and 1990 and the percentage increase within those years. It is clearly shown that Plax has had the biggest impact on the market. This increase of Plax sales has dramatically effected the sales of other brands, specifically Listermint and Cepacol.  Although Scope is still doing well in the industry Gwen’s greatest fear is that without any development or changes made to the brand its sales will drop as the mouthwash industry gets more

        The first option, remaining status quo; would basically require Scope to do nothing in comparison to the other two alternative courses of action. Even though no new product or product line would be created, the company would as a result need to increase promotion and advertising of their current product. A huge setback that could occur with this option is the possibility of the company experiencing a shelving fee given to retailers. If retailers don’t see a distinct difference between Scope and the new formula Scope, they could cut shelf space or charge $50,000 per stock-keepin unit. Some of the benefits if Scope does nothing and leaves its product alone are that a new scope product may be confusing to already brand loyal customers and there are no garrenties that a new brand of scope will be successful. Scope has to do something, all the other companies in the mouthwash industry are changing there business strategies or adding new products, so change is unavoidable. After looking at the numbers and reviewing the facts I believe that if Gwen decides to do nothing, Scope will be put in a tough position and more than likely have a significant decrease in their sales and profitability. Although the status que option has much less risk because you already have a successful product, I believe Gwen Hearst would be making a huge mistake by not trying to get Scope approved as a plaque fighting product.  

The second option that I believe Gwen needs to explore is creating a line extention. I believe that keeping the Scope brand is a great idea, especially because it already has a ton of brand loyal customers. (40% of the total consumer) Yes there is a slim chance in my opioion that some of the current customers that are loyal to the Scope brand maybe thrown off by a new product in the line, but the chances are that brand loyal customers will stay with the brand especially if it adds something to its great taste and ablity to fight bad breath. Especially when that thing is something that is healthier for there dental care, like being a product that has the ablity to fight plaque and gum disease. To achieve this there could be an ad campaign done that explained the new product as serving both purposes helping to explain the diffents in cost for the new product as well. The new product will change catagories from Cosmetics to Drug which will lead to an increase of advertisement expenses that may have strickter guildlines. As long as you can explain an increase in cost it will prevent the current consumers from switching to other brands, but this unfortuniately will not help the product increase any new sales as a result of you changing the formula. There will be significant cost involved in promoting a revised product along as well as an increase in its ingredients costs and re-packaging costs.

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