Scope Case Study

STRATEGIC MARKETING Mid-Semester Exam Spring, 2009 Name Erika Woodhouse 1. Evaluate the changes that have occurred in the Canadian mouthwash market in the past three years and their impact of desktop. Be specific. (20) In 1987 the growth rove for the mouthwash market experienced a 26 pct amplify due to the introduction of new flavors. Brands were adding unique customization to attract consumers to their brand, and as a result the market as a whole grew. Since then the growth rate has declined to a level of 5 percent. 2. Management believes that the status quo is the best strategy.The team has been asked to make the case for and against this position, including in their discussion an evaluation of the positions of all or or so all members of the team. (20) a. _ Status quo_ b. _ Against status quo_ Scope should take action anddo something to compete with Plax and Listerines new claims. Proctor & Gamble states in their statement of purpose and strategy, We ordain continuously stay ahead of competition while aggressively defending our established profitable business against major competitive challenges despite short bound profit consequences. Therefore doing nothing is simple not an option. The market had an increase of 5 percent last year, while Scope suffered from a . 7 percent loss. Plax as a new competitor to the marked was able to achieve a 10 percent market trade in over simply three years, and will continue to grow and could take from our share if nothing is done. If we created a better tasking pre-brush rinse we can also compare this to Scope when entered the market.Scope had all the same attributes of Listerine but offered a better taste, and was able to penetrate the market and be successful with a 12 percent market share in one year. 3. Management has wondered what impact the line extension strategy (using the Scope name) would have on overall profits of the Division if the price were held eternal and if the price were increased 10 percent, assu ming underway volume. Accounting has provided the following information to assist in your analysis Current variable cost 20. 2/unit Variable cost likely increase with the line extension 13% Total fixed cost $2. 5 million + advertising, promotion, and general spot costs. Scope should not introduce a line extension to compete. A line extension with the scope name would be likely to confuse its current customers. Also if the product fails it could reflect poorly on Scope. They also dont have the ability to make a superior product because they could hurt the brand image of providing quality and value.