Arctic Power Essay Research Paper The Canadian — страница 2

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as a superior laundry detergent, especially formulated for cold water washing. In the western market, Arctic Power has attempted to develop the cold water market. In either case, Arctic Power’s position is connected to cold water. The good news is that regular cold water washing has increased nationally from 20% in 1981 to 29% in 1986. Another 25% of consumers could be described as occasional users of cold water for washing. Hence, 54% of Canadians wash in cold water. When people were asked about the benefits of washing in cold water, the results were astounding. The eight most common answers could be easily divided into two categories – those that were money saving in nature (saves energy, cheaper, saves hot water, saves electricity) and those that related to the quality of

the job performed (stops shrinkage, prevents color running, colors stay brighter, easier on clothes). Appendix E analyzes the responses given by region. The results clearly indicate that Quebec, the Maritimes, and British Columbia are more interested in the cost saving aspects of cold water washing. Conversely, Ontario, Alberta and the Manitoba/Saskatchewan believe that cold water washing’s positive treatment of clothes is its greatest benefit. The nation is actually divided on its perception of the benefits of cold water washing. Consequently, giving the customer what he/she wants may necessitate two different marketing positions. One position should highlight the cost saving benefits of cold water washing, while clearly stating that Arctic Power is formulated to be the best

detergent for the job. The other position should focus on the positive features of washing in cold water (less shrinkage, easier on clothes, colors stay brighter) while stating once again that Arctic Power is specially formulated to be the best detergent for cold water washing. On average, Canadians kept 1.3 laundry detergents in their homes. This means that more than two-thirds of buyers purchase only one detergent. A detergent that is positioned as effective in all temperatures would most likely be purchased. Tide holds a great marketing position as a superior-cleaning detergent that works in all temperatures. Arctic Power’s advertising states that detergents that work in hot water will not be as effective in cold water. Their message would lead the consumer to believe that

their detergent will not work well in hot water. Hence, removing themselves as an option for the buyer who washes in all temperatures and wants to purchase only one detergent. Arctic Power is in a good position to be purchased as a second (complementary) detergent in markets such as Ontario - for those who use more than one detergent. When a consumer buys Tide for quality cleaning in hot and warm loads, she will also buy Arctic Power for high quality cleaning in cold water. Tide aired copy in Quebec that stated its efficacy in cold water. These efforts made little difference in Tide or Arctic Power sales. Arctic Power has great room to grow and almost nothing to lose in Ontario, since its market share there is already less than one percent. Although it is equal to Tide in

cleaning ability, it is not perceived that way. The western campaign was generally unsuccessful in Alberta, however CPC learned that sales of Arctic Power more than doubled almost instantly (from 1.1 to 2.8 market share) with the implementation of the trial size box with coupon followed by the $.40 Free Standing Insert coupon. Recommendation Based on the analysis, Arctic Power must go beyond the three strong regions and market nationally if it is to eventually obtain the desired 12% of the market share. Particularly, the large market of Ontario must be penetrated, where brand and advertising awareness are at 0.0% and 0.7% respectively. Furthermore, having two positioning strategies will benefit Arctic Power. A positioning strategy of a money-saving cold water detergent should be

further developed for Quebec, Maritimes and British Columbia. A positioning strategy of a superior-cleaning cold water detergent that is gentle on clothes can be expressed to Ontario, Alberta and Manitoba/Saskatchewan. Appendix A National Break-Even Analysis Fixed Costs = .23 Sales Volume in $ = $19,805,500 Contribution Margin = .18 Break-Even = [(.23) x (19,805,500)] / (.18) = 4,555,265 / .18 = $25,309,027 Assuming each percent of market share = $3 million in sales: A detergent would need 8.4% market share to break even. Arctic Power is presently at 6.5% market share. Appendix B Detergent Offerings with 10% or Less of Market Share (1986) % of Nat’l Share Percent Media Expend. Company Offering 1983 1986 Change Change in 1986 CPC Arctic Power 4.7 6.5 +1.8 +38 9.3 Fab 2.1 1.4 –