Background and Problem
After peaking in 1995, Scope’s volume share had been on a continuous decline. Finally, it lost its leadership position to Listerine in 1997. To recover this lost position, Scope was considering a new, direction in its advertising campaign. Assistant Brand Management, Rob Assimakopoulos, and Brand Manager, Krista Boone, were choosing between focusing on the “refreshment benefit” or on the “hybrid benefit” segment.
Among the major brands, Scopes seems to be the only one focused mainly on “refreshment benefit”. It actually succeeded in the market because of that positioning. Listerine, its most important competitor originally positioned under the “therapeutic benefit” segment, was found to be tasting not so good at all. However, a growing segment of the market seems to be the “hybrid benefit”. Colgate Total, Plax and many private labels are positioned in this market and eating much of the share of the total market.
While Listerine is enjoying a higher total volume share of 30%, Scope with only a total volume share of 26% was doing better by variant. Scope’s Green Original enjoyed a volume share of 17% compared to Listerine Original’s 11%. However, except for Listermint (3%) which the company did not really promote or market well, all other Listerine variants (Freshburst, 7%, and Coolmint, 9%) performed better than Scope’s variants (Peppermint, 5%, and Hint O’ Mint, 4%). Scope’s volume share had actually declined over previous year’s levels; meanwhile, shares of Listerine, Colgate Total and private labels increased.
Scope overtook Listerine and took leadership position in 1974. After peaking in 1985, its share went on a continuous decline. Private labels had been growing during that period. After a period of decline as Scope ate up its share, Listerine has been on the rebound and became the leader in 1997.
Being a premium product, mouthwash seems to be price inelastic. Low-priced private label brands do not make much impact on the premium priced brands’ share. In fact, the highest-priced brand, Listerine, remains the market leader. The more expensive Colgate Total still managed to get 6% volume share, a growth of 5.6% from the previous year.
Analysis
The hybrid market seems to be the growing segment of the market and this where P&G should position its Scope brand. While the market in Canada is not yet fully developed, it is considered saturated. This indicates that market players are targeting the same users and has not expanded much into converting non-users.
Being exposed to all the brands available, the market may be evolving. From two distinct segments of “refreshment benefit” and “therapeutic benefit”, the “hybrid” segment is growing and may become the norm. Mouthwash are luxury products and at the same time impulse items. While consumers may buy these products on impulse, they may take many considerations other than price and single benefit. Price per se may not be important to most users. Given the high price of the products, value for money may be the more important consideration. Obviously, the more benefits that a product has, the greater value for money it offers. Hybrid brands have thus made a dent in the market. Private labels that positioned itself in this segment, even if they are actually of lower quality, seem to have grown and got for themselves a significant share of the market.
Listerine was essentially a therapeutic brand. However, it re-positioned itself through improved product taste and, more importantly, through communication. Its “Rooster” and Grandfather” ads educated the market on the importance of its therapeutic claims. In addition to preventing oral diseases, its therapeutic benefit included having fresh breath. For the refreshment benefit, it used the new variants and targeted the youth market with its “Speak Out”. The “Speak Out” ad was not product focused but rather more on the consumer and lifestyle. The brand reverted to its more product focused approach with its “Toothbrush” and “Taste” ads. Apparently, the product-focused ads explaining the twin benefits of “refreshment” and “therapeutic” worked better than lifestyle type ads. It is also important for Listerine to come out with explanatory ads given its high price. It has to convey having better quality than Scope or the private labels.
Curiously, Scope is focusing on lifestyle ads. The storyboard of its new ads appeals mainly to emotion and people’s insecurity. Its chief benefits focus on how people would feel and how they would be accepted. The ads clearly are focused on the “refreshment benefit” segment.
Conclusion
It would be wise for Scope to reconsider its advertising campaign and think about the hybrid segment. For one thing, refreshment is already the area that Scope had been since it was introduced in Canada. This segment of the market could already be saturated as the entire mouthwash market. Growth for Listerine seems to be coming from outside the existing market. Given people’s familiarity with the product, consumers may want more benefits other than just refreshment. Listerine may be offering a better argument why it is a better product, with more benefits and thus its high price. This segment of the market is also where Colgate Total and Plax might be making in-roads. Scope should guard against any possible adverse development in the market.
While it may be more expensive, Scope could also develop more than one advertising campaign as Listerine had. It could focus one campaign on refreshment as already done, and the other on more therapeutic benefits. It will have to take care though that the campaigns do not look like ads for completely different products. It should also be careful about making claims. If it cannot make claims to match those of Listerine—or perhaps even those of Colgate Total or Plax—it may need to go into some serious product development or improvement.
While Scope would be able to maintain its existing market, it could miss out on the growing “hybrid” and new market. As mentioned, the Canadian mouthwash market is not fully developed as the US market. Growth for Listerine and private labels seem to be coming from untapped markets that may be looking for multiple benefits or higher value for money. In the long term, Scope would be able to maintain volume sales and present profitability but could lose market share.
Reference
Fullerton, Gordon and Heidi Weigand. Introductory Marketing. Halifax: St. Mary's University, 2015. PDF.
