3. Add another claim that Scope reduces plaque and/or fights germs to compete with the new competition, and add ADA and CDA approval seals.
Market Research showed that this may not help users switch from the competition, although, this may retain current users of Scope. Adding the Canadian Dental Association seal also requires products to demonstrate effectiveness against cavities or plaque/gingivitis. This means there are submission requirements of the packaging and advertising for approval and close examination. Specifically, the CDA would need clinical studies demonstrating health improvements were done before granting the seal for plaque reduction and gum reduction. Plaque reduction is already proved to the HPB from Scope, but not for gum inflammation reduction like Listerine. They can work to formulate that in the long run, but can add the claim for plaque reduction now.
This can be costly and time-consuming for Scope to attain the seals, and will have to adjust their advertising to reflect the new claim even if it went through. This can also cause confusion to current customers that may think the product has changed. This shifting of perception will need more and/or different advertising for it to be effective.
Research says 30% of users use mouthwash for killing germs so the benefits may help acquire many new and existing customers. Listerine is the market share leader in the US and adding the ADA seal may help, as well.
4. Focus more on distribution, advertising and promotional tactics for increasing sales in drug stores.
42% of mouthwash sales in food stores are from Scope, and only 27% from drugstores. Furthermore, 65% of all mouthwash is sold in drugstores and 35% in food stores.
Promotions, coupons, incentives, and shelf placement, slotting allowances, and other methods can be used to increase sales activities in drugstores. If Scope works with the retailers of drug stores, then they can focus on premium shelf space by paying slotting allowances to place their product on end caps and high traffic areas.
5. Focus on increasing current consumers’ usage of Scope through advertising.
The usage of the Canadian mouthwash market has increased from 2 times per week in 1986 to 3 times a week just four years later (Kerin 209). 40% of users are “heavy” users, using once or more per day. 45% of users are “medium” users who use 2 to 6 times a week, and 15% of users “light” who use less than once a week.
An uncertainty is that advertising may be ineffective and costly to implement, especially if it’s hard to shift the usage of mouthwash.
On the other hand, efforts can be made to target the light and medium users comprising 60% of the total mouthwash market to potentially increase usage through advertising. Market research may help target consumers more efficiently through their advertising based on their GRP rating, which show that Scope’s exposure is not as effective. (Appendix B)
Appendix B. GRP Rating
Relevant Information
SWOT Workup
Strengths:
- Industry leader in Canada
- Tastes great
- Bad breath reduction
- Ability to retain customers
- Advertising Expenditures and Weeks
Scope’s competitive advantage in this industry is its great tasting and bad breath reducing qualities. Brand users perceive Scope as above average in reducing bad breath, and Scope users are still loyal to the brand, even though they only recognize the bad breath reduction as above average in the scoring (Kerin 211). With the market maturing off, customer loyalty has allowed Scope to have a competitive share at around 33% of the market (Appendix C). An advantage that we currently contain is the Number of weeks our advertisements run throughout the year as well as the expenditures we have allocated for our advertisements. (Appendix D)
Appendix C. Units Sold
Appendix D. Advertising Expenditures and # of weeks on air.
Weaknesses:
- Inferior brand perception from users and nonusers
- No seals of approval from ADA and CDA
- Not positioned as germ-fighting/plaque reducing
Brand users of Scope perceive many attributes below average, such as removing plaque, healthier teeth and gums, preventing colds, cleaning your mouth well, and being recommended by doctors/dentist. There’s also no seals of approval by ADA or CDA, and therefore difficult for them to be seen as germ-fighting/plaque reducing. This may also be a reason why the scoring is low in the health benefit attributes of the brand.
Opportunities:
- Increase Scope sales in drugstores
- Line extension
- Seals of approval
- Position differently
- Increase usage of Scope
- Increase ad exposure
42% of mouthwash sales in food stores are from Scope, and only 27% from drugstores, Furthermore, 65% of all mouthwash is sold in drugstores and 35% in food stores. This shows an opportunity where Scope can try to increase sales in drugstores. They can also extend their line or try to introduce new products, and position them against competition. They can also help increase sales by getting seals of approval from the ADA and CDA, to increase their credibility. The GRP ratings to weeks on air show that our advertisements are not as effective as Listerine however our weeks on air is more substantial than our competitions.(Kerin 212).
Threats
- Competition (especially Plax and Listerine)
- Maturing mouthwash market
- Easy to duplicate (cosmetic status (no seals))
The biggest threat to Scope is the increasing competition from Plax and Listerine, who are growing faster than Scope in the industry. The market is also maturing, so the competition threatens to take customers away. Also, Scope has a cosmetic status with no seals, and is easy to replicate, since there aren’t rigorous standards to adhere to like in drug status.
Scope’s entire market share from ’88 – ’90 has stayed almost the same from 33% - 32.3%. But overall, in relation to the unit sales, Scope went from an 8.1% increase from 88-89 and a 2.7% increase from ’89-‘90.
Plax, on the other hand, introduced their line in late ’88, which is the reason for their enormous increase in market share from 1% to 10% in ’90. Plax growth rate in total unit sales was from 981% from ’88-89, and 4.9% from ’89-90. The initial big jump
Listerine’s market share went from 15.2% to 16.1% to 16.6% from ’88-90. In total unit sales, this increase was 12.7% to 8.2% from ’89 – ’90. (Appendix A)
This data shows that the entire market is maturing, but also that Scope is losing the most out of the emerging competition.
Identify best alternative
The best alternative would be a combination of 2 of the alternatives. One being to add another claim that Scope reduces plaque and/or fights germs to compete with the new competition. This would include trying to attain ADA and CDA approval seals and add new claims of plaque reduction at the least. This may not be so easy, since the Health Protection Branch’s guidelines are very strict, and a shift from cosmetic status to drug status has to be done in order to validate these new claims. Also, to get the approval for reducing gum inflammation and fighting gingivitis, especially for the CDA, Scope has to submit their packaging and advertising for approval to the HPB. They also require products to demonstrate effectiveness against cavities or plaque/gingivitis .
This can be costly and time-consuming for Scope to attain the seals, and will have to adjust their advertising to reflect the new claim even if it went through. Another uncertainty is that this can cause confusion to current customers that the product has changed. This is why only adding another claim of plaque reducing and germ fighting should be added, as well as keeping the traits and advantages of the original brand image.
So despite these uncertainties, for long-run stability and sustainability, Scope should make the shift into drug status and compete with these new trends with new claims. Even though market research showed that this may not help users switch from the competition, they may still retain current users of Scope. This is why the old claims of “great tasting” and “bad-breath reducing” should also be kept, which is what made them market leaders in the first place.
Along with new claims and approvals from the ADA and CDA, Scope should seize the opportunity of new sales by focusing on increasing current consumers’ usage of Scope through advertising. Combining this with the previous alternative will allow Scope to meets its objectives of increasing sales volume, as well as retaining its brand image and current customers, gaining old and new/potential customers by educating them about the new claims, and also hopefully taking away the competition’s customers by the current competitive advantage of having the best tasting, bad-breath reducing mouthwash.
Implementing Decision
Our plan will be initiated by adding the plaque reducing seals from the CDA, which has already been proved. This new claim will allow our current consumer base to stay consistent and gain consumers from the competition or from non-users. This will be a plus in growth but we can also submit our product to get its seal of approval from the ADA as well as the CDA health benefit, which will add to the credibility success in the future for Canada and the US, and will hopefully stabilize the business in the long- run.
Our decision will be implemented through heavy advertisements, as well to educate consumers about the health benefits. We are currently lacking Gross Rating Points (GRPs) to Listerine (Appendix B). If Scope’s GRPs were to increase to Listerine’s GRPs our exposure will increase by 40%. This can be done through effective target market research.
Our advertisements will focus on the effectiveness of using Scope on a daily basis. If we get the 45% of users that use around 4/week to use 5/week we can increase our units sold by 49,500 units. If we can get the 15% of users that use the product about 1/week to use it about 3/week we can see an increase in 132,000 units. With a total of 181,500 more units our growth can eventually be 41.25%.
A goal is to increase advertising usage from 1 to 3 times per week (light users) and 4 to 5 times a week (medium users). The assumption is that advertising costs increase only 10% from the previous year through proper target assessment to increase GRPs. Assuming advertising is a per unit cost, adding 181,500 units will increase our advertising costs by $771,375 for the year.
(($1.87M current year advertising (10% more than previous year)) X 181,500 total units)/440,000 current units).
Contingencies
If implementing the chosen alternatives doesn’t work in meeting its objectives within a few years, Scope can focus more on distribution, advertising and promotional tactics for increasing sales in drug stores. 42% of mouthwash sales in food stores are from Scope, and only 27% from drugstores. Furthermore, 65% of all mouthwash is sold in drugstores and 35% in food stores. Promotions, coupons, incentives, and shelf placement, and other distribution methods can be used to increase sales activities in drugstores.
If contingency plan doesn’t work, then Scope may have to reinvent themselves in the market by either branding new products with or without the Scope name to compete with the current market. This may or may not include keeping their current image and position of a great tasting, bad-breath fighting. Scope may have a name that is so associated with their original product that perceptions from old and new customers won’t shift. In this case, they may have to brand a new name and position to keep up in the industry in the long-run. The reason why this is a last resort is that the risk is way too high, with heavy advertising costs, in which Scope is already spending $1.7 million in 1990. Also, even with a great strategy, implementing new and/or innovative product(s) would increase costs for advertising, packaging, research and development, and all other associated costs, but would still not guarantee that the product will be successful. Scope may also try to use some of these strategies to increase market share in the US more than just adding the ADA seal, as well.
Works Cited
Kerin, Roger A., and Robert A. Petersen. Strategic Marketing Problems : Cases and
Comments. Upper Saddle River: Prentice Hall, 2006.