Proctor & Gamble originated in 1837, when William Proctor and James Gamble formed a partnership in Cincinnati, Ohio.The partnership flourished making the company a gaining name as principled manufacturer of high quality consumer goods sold at competitive prices. By 1992 Proctor & Gamble was a multinational company with annual sales of almost $30 billion profits exceeding $1.8 billion, and a reputation for quality products, high integrity, strong marketing, and conservative management. When P&G grew they became more and more interested in foreign markets. In 1992 they had sold their products in more than 140 countries around the world.
In 1991 P&G after being satisfied with their success with Charmin Bounty and Puffs they decided they wanted to expand their business to foreign lands. They decided that Canada was the best and most logical choice to make that first step because of its location and free trade between Canada and the U.S. In 1991 P&G found that Canadian Pacific Product Company, a large paper company was prepared to see Facelle Paper Products, it’s tissue division. Facelle was a medium sized manufacturer and marketer of tissue, towel and sanitary products. So for 185 million P&G bought the Facelle Co.
Proctor & Gamble had to consider many things when entering the market in Canada. Tissue products were inexpensive, widely used and were frequently purchased (on average once every two weeks.) Brand switching was high and the risks with product failure were low. The only thing that manufacturers had to worry about was to differentiate their products on performance to build loyalty. Retailers felt that the paper was a low profit, low loyalty category. They used it primarily to draw consumers into their stores.
Royale had been the only 3ply tissue on the market, and was viewed as the traditional strong, premium quality facial tissue. Florelle was a 2ply tissue that had received little promotional attention. It lost most of its market share in 1991 and was down 5.8% at the beginning of 92. Other competing brands of tissue were Kimberly Clark with their Kleenex brand, which had a very good year in 1991. Scott tissue who at first fell a few shares due to loss of trade support, but relaunched their brand in September 1991, positioning it as a product with high content of recycle material, and supporting it with heavy advertising. Irving and all others had average an average year.
Brand Image for Royale based upon it’s premium positioning, historically unique 3ply product design and its softness claim, and had built the leading brand image in the product category. Brand users gave Royale an overall score of 85 on a scale of 100, marginally superior to Kleenex. Even though Royal enjoyed a very favorable overall brand image, they were lacking on thing that would make their product do even better. Knowledge about the brand was not as high as they would have liked. Many people who used it didn’t even know that it was a 3ply tissue rather than a 2ply. This brand image did not translate to market share. Royale was used as a part-time brand that was bought on feature or specifically for cold care, but seldom for regular usage around the household. Also Royale’s price exceeded Kleenex’s by more than $.20 when Kleenex dropped to $0.79 after the introduction of Kleenex’s 150’s.
Florelle a standard 2ply tissue brand offered specialty sizes (pocket packs, man-size, and cube format). P&G felt the need to upgrade the softness of Facelle tissue by adding eucalyptus fibre and sacrificing some tissue strength since Facelle was one of the strongest tissues on the market. The one problem with the upgrade was deciding whether to keep the product name of Facelle and just say it is better, or change it to Royal some how distinguishing the 3ply from the 2ply. They decided to introduce the product under the name Puffs. Puffs, which had been successfully launched in the U.S twenty years ago, not yet introduced in Canada, would still do well due to
Proctor and Gambles results to the research regarding consumer perception of Royale and Facelle were not good. Even though Royale was one of the leading brands in quality it was not the preferred tissue. It was only bought when people were sick or if the product was on sale. The brand had few loyal customers who would by the product to be used around the house. Facelle was one of the strongest tissues for just being a 2ply. The only problem P&G found was that it was not as soft as they would like. They decided to change some ingredients and take away some of the strength to make the tissue softer. They felt the need to rename it after a product that had been in the United States for many years, Puffs.
The Royale tissue is a good quality tissue. The only problem is getting people to buy it on a regular basis. P&G may need to rename the product into the Puffs family or find a better way of getting people to purchase the product more often. Facelle was almost a no-name brand before they named it into the Puffs family. It was a high quality tissue but just didn’t have the exposure. I think it was as smart move on P&G’s part to rename Facelle Puffs. I think that is what they may need to do for the Royale product if they can’t get more consumers to buy the product on a regular basis.