Introduction
Charmin Ultra Soft is branded as America's softest toilet paper. The toilet paper is a favorite product among American consumers because it is ranked as among the best in many surveys including good housekeeping (GH, 2011). The toilet paper is a 2ply luxurious product that comes in various sizes. The toilet paper is affordable and of high quality.
Situation Analysis
Company Analysis
i. Company Background
Charmin was first created in 1928 in Green Bay, Wisconsin. The company was founded as a subsidiary of Hoberg Paper Company. The company eventually changed its name to Charmin Paper Company and focused operations on making napkins, paper towels, tissues, and other paper products. P&G bought the rights of the company in 1957 but eventually sold its rights in Europe to SCA. The company remained in the US operation. Since then the company has grown to become one of the global leaders in paper productions (Natsu, 2009).
ii. Chart of Sales of Ultra Soft from 2010- 2016
iii. Product Category Analysis
Charmin Ultra Soft is placed under the Paper category. This category includes products such as paper towels, tissues and wet wipes. The product is broadly categorized under cosmetic products and household items, but these terms are too general and cannot be used to reference toilet rolls as accurately.
iv. Paper Sales Chart
(Statista, 2016)
v. Analysis
There has been a steady rise in the sales of paper products over the years with a corresponding increase in production as well. The public outcry over the need for the environmentally friendly industry has seen the percentage of paper products made through recycling increase by 15 percent in the last five years. The export data for paper products such as tissues and pulp products has also seen a steady growth in numbers. Although the sales are on the rise, they are yet to hit the peaks of the mid-nineties. The fall in sales over the turn of the century can be attributed mainly to an environmental conscious society. There has been increased pressure to use recycled materials to form paper products to decrease the number of trees being cut for paper.
SWOT Analysis
External Factors
Opportunities
There is a great growth opportunity for the product to grow in developing markets. The growth in sales and popularity of the brand gives Charmin Ultra Soft and related products a good foothold to gain market share in developing markets. The developing countries are showing exponential growth in three areas: population growth, household numbers and household income.
New product outline presents a great opportunity for growth of the brand. There is a potential to gain a larger market share by investing in other products. These products include paper towels and wipes. Charmin already has several products on the market. These products include Charmin Mega Roll and Charmin Ultra Strong. These products are already doing good numbers regarding sales (Statista, 2016).
Threats
Intense competition in the industry is a major factor affecting the operations of the company. Some of the competitors include Unilever, Johnson & Johnson and Private labels. All these companies have huge assets and revenues more than $10 Billion
Increase in the price of raw materials. The increase can be attributed to a larger public outcry against cutting down trees. Oil prices are also a factor in the price of raw materials. Before 2016, the price of oil had been going up by almost 40% annually.
Internal Factors
Strengths
The company has a large scale of operation. The parent company, P&G, is a global leader in fabric, homecare, and beauty, baby and family care products. The company operates in 42 countries worldwide with its products sold in more than 160 countries. The manufacturing capability of the company is one of the best in the world.
Strong branding power of the company is a major advantage of the group. The company participates in the production of more than 40 product categories under 300 products. These brands have a great consumer base worldwide in the 160 markets that the company sells.
Analysis
The large scale of operations could be used to increase the penetration of the company's products in developing countries. The strength of the company is the massive scale of operations that it enjoys globally. The company is a world leader with strong consumer appeal. This factor will enable the smooth entry of the company's products in developing markets.
Competitor Analysis
i) Top Competitors
The top competitors of Charmin Ultra Soft include Private Label and Angel Soft. These two are the strongest competitors to the brand regarding sales and market share in the US. These competitors have strong sales in the 2ply and 3ply toilet consumer goods market.
Ii) Market Share and Sales History of Competitors
Private label is the biggest threat to the brand of Charmin Ultra Soft; Private label boasts a market share of 19.1% . This figure represents a majority market share compared to Charmin’s 12.7% market share. Angel Soft has a market share slightly larger than Ultra Charmin by 1%.
Sales History: Private label
Sales History: Soft Angel
iii) Competitors Products
Private label is certified soft and strong toilet rolls that come in both 2ply and 3ply packs. The product has been able to gain a large market share because of the good quality products made. Angel Soft rivals that of the Ultra Soft regarding how soft the products are. Angel Soft is a popular product for mothers because of the quality and strength.
iv) Perceptual maps
v) Competitive Position Analysis
The company has a great competitive positioning in the paper market. The company has a large combined market share for all its products which include the Ultra Soft and the Ultra Strong brands. The parent company, P&G, has a vast array of resources at its disposal. With sales of over $15 billion annually, there is a great room for growth. The company has a trusted brand name and quality products.
vi) Competitive Target Audience Analysis
The target audience for the product includes the people in many developing countries. The target population is found in growing economies with large populations such as India, China, and Brazil. The large populations in these countries are experiencing increased household incomes and provide the perfect market for the product.
Customer Analysis
Charmin Ultra Soft satisfies various needs of its customer. The product has functional uses in being used in bathrooms, to clean up spills and can be used during colds as well. Psychological needs include the assurance of a cleaning tool whenever you walk. Many consumers require a good, soft paper product on their person to clean up at any moment. Emotional needs include a tissue to wipe away the clients’ tears in hard times. The product can be marketed as an emotional partner.
Demographics
India is ranked as one of the fastest growing markets in the world. The population of the country is well above the 1 billion mark as of the year 2016. China, the second-largest economy, has a population of over 3 billion. Brazil has a population of more than 100 million individuals, the majority of whom are middle class. The strong economic growth and large population in these target markets increase the potential for great returns (Cai & Wang, 2012).
References
Cai, F., & Wang, M. (2012). The China population and labor yearbook: Volume 3. Leiden: BRILL.
GH. (2011, April). Charmin Ultra Soft Toilet Paper Review. Retrieved from http://www.goodhousekeeping.com/health-products/toilet-paper-reviews/a27570/charmin-ultra-soft-toilet-paper-13/
Natsu, P. (2009, February 25). Greenpeace Releases Latest Recycled Tissue and Toilet Paper Guide · Environmental Leader · Environmental Management News. Retrieved from http://www.environmentalleader.com/2009/02/25/greenpeace-releases-latest-recycled-tissue-and-toilet-paper-guide/
Statista. (2016). • Sales share of the leading toilet tissue brands of the U.S. 2015 | Statistic. Retrieved from http://www.statista.com/statistics/262106/sales-share-of-the-leading-10-toilet-tissue-brands-of-the-us/
