Reports

Scotch Brite [3M] Pakistan – A Marketing Report

by Ravi Magazine · 5th September 2015

Scotch Brite [3M] Pakistan – A Marketing Report

INTRODUCTION

Based in St. Paul, 3M is one of the leading manufacturing conglomerates in the world. As in 2003, this $14 billion company employees more than 70,000 people in 63 countries who create, manufacture and sell more than 60,000 products in 200 countries.

3M has established a strong presence in offices, manufacturing plants, construction sites, hospitals, supercomputers centers, automotive body shops and households all over the world. Their innovative spirit and problem solving culture have spawned one of the most extensive and diversified product portfolios – based on 100 technologies of any major corporation.

They are multicultural organization with offices world wide staffed by locals who are familiar with the culture, business environment and needs of customers in their region. And they capitalize on our diversity. Each 3M office is a member of the 3M family with full family support and privileges. This means that every customer they do business with is afforded access to the vast resources, innovative spirit, and problem solving culture of 3M. The products of 3M serve the following markets in particular:

Electro and Communications Markets.
Automotive and Chemical Markets.
Industrial Markets.
Consumer Market.
Office Market.
Traffic, Graphic and Safety Markets.
Medical Markets.
Dental, Personal care and Pharmaceuticals Markets.

[Source 3M websites and Internet]

3M PAKISTAN

During the past 30 years, 3M with the assistance of several Pakistani distributors Organizations serve the country in the variety of market areas, including electrical and telecommunication, health care, office and protective chemical products.

Early in 1994, 3M Pakistan (PVT) Ltd. opened its offices in Karachi and expanded the coverage of market segments.

The goal of local subsidiary is to bring 3M expertise close to the end user of the products. The meeting customer needs, the local organization is dedicated to meeting exceeding consumer expectations.

3M’s corporate values focus on ‘innovative’ as the key to growth. As the business climate changes in Pakistan customers will be looking for solutions to the challenges of the future.

As it is mentioned above that currently 3M is selling more than 60,000 products all over the world. We have chosen one of the products from the diversified product line and this product is Scotch Brite.

MACRO ENVIRONMENT

3M keeps the following macro environment forces into consideration while designing their policies and strategies:

Social & Cultural Forces.
Economic Conditions.

Social & Cultural Forces

Their greatest strengths are their drive to innovate and their reliance on people both employees and customers. Key to 3M’s success is their customer-focused marketing approach. They do more than just sell products. 3M listens closely to customers to determine as well as to anticipate their needs and problems. Only then do they offer, adapt, or create products to meet those needs. 3M staffers the world over, whatever their areas of expertise are charges with the mandate to develop solutions to customer’s problems, whether technological, product of service based.

They are proud of themselves on forming collaborative and innovative relationship within their organization, as well as with suppliers and customers and between domestic and international business units. These partnerships ultimately inspire new products that make life easier and better for all 3M customers. Their relentless pursuit of innovation and most significantly, their ability to combine 3M core technologies in ways that solve customers, is their driving force. They have pledged to achieve 30% of each year’s sales from products introduced within the previous four years and 10% of sales from products that have been on the market for just on year.

In their quest to become the preferred supplier in every market they serve, they continue to build on their traditional strengths as a company driven by technology, innovation and new product development.

Demographics

In Pakistan 3M markets its products to the target group of women from age group of 18 years and onwards. They are up-to-date on the demographic conditions in the country and specially Karachi, Lahore, Islamabad where 80% of the sales are generated. Scotch Brite was initially for only the upper class of house wives so concentrated marketing was done and more emphasize was on them but the people behind Scotch Brite soon realized that this will not help them in achieving their goals so keeping in mind that more than 70% of population of Pakistan comprises of lower middle class so they also introduced other sized for cheaper rates and then they started shifting towards mass/undifferentiated marketing which was for upper as well as for the lower middle class.

Competition

3M’s Scotch Brite enjoys a monopoly in the local market. As far as quality and standards are concerned they don’t have any competitors in the market. 3M being one of the largest home care products manufacturing companies of the wold offers Scotch Brite as a unique applicator used for dishwashing and other related purposes. The product is a real blend of extravagant features, which makes it genuine consumer product, which has been carefully manufactured by 3M to cater the consumers’ needs.

Scotch Brite’s monopolistic competition in the local market went unstable when a few local manufacturers introduced similar applicators which were similar in color (green, as that of Scotch Brite), similar in packaging but in price they were quite cheaper as compared to Scotch Brite.

The Company did notice such moves by the local companies but they were confident about their product’s results, performance, quality, assurance and other such reliable factors. They however concentrated mainly on the commitment of producing quality stuff. They worked hard on their goals and whatever they produced was of highest quality.

Economic Conditions

3M does look into prevailing economic conditions and mould their strategies according to that. The most important government policies for them are the import policies and the media policy because that is a big part of their sustenance. 3M believes in the motto that ‘every crisis is an opportunity for those who wants to avail it.’ Therefore they deal with all the prevailing conditions in the market and the government policies. They also look the sensitive indicators such as the Sensitive Price Index (SPI), Consumer Price Index (CPI) and the stock market indices.

Technology

3M believe in using the latest technologies for their products manufacturing and also marketing. They are currently utilizing all type of mediums and technologies ranging from television to radio to newspapers. Also they are always looking to invest in new machines which increase the productivity and reduce the costs. In last five years they have upgraded their plant three times bringing in new improvements.

MICRO ENVIRONMENT
3M’s microenvironment includes the following forces:

The organization itself.
The Market.

The Organization

Organization chart of 3M is attached with this report. All the departments work together and in collaboration with the head office to achieve the targets and to set new goals. The Finance department holds the greatest importance as it allocates the budgets to all other departments. The marketing department has the role of utilizing all sources of media and sales to achieve its targets. All these aspects will be given in full detail in the actual report.

Distribution

The company ‘3M’ has given exclusive rights of distribution to only one distributor namely Muller & Phipps in Pakistan. As every company wishes to increase its sale same is the case with 3M. For this reason they are planning to have intensive distribution for their products. 3M uses indirect channel of distribution which means that the product is first provided to the distributor who makes the sales then.

The Market

There is a huge market to explore. 3M started Scotch Brite initially only in Karachi but not the target market has expanded to other provinces also. They major regions include Lahore, Islamabad, Faisalabad, Multan and Gujranwala. Still a lot of market is unexplored where lower quality products are sold. A lot of research and huge budget is being spend to come up with low priced high quality product for the huge undiscovered market.

ScotchBrite

Scotch Brite is basically an applicator of dish washing, which can be used either with water or with any dish washing bar, soap or powder.

It is a new thing and brand introduced in Pakistan by 3M because it’s a new segment and there was no one offering this type of applicator before. There was a metal cluster like thing available in the market before Scotch Brite and still it is available at some places which has no brand and it is very harmful for the hands and it is unhygienic as well; whereas Scotch Brite is very much friendly to its users as it is harmless, hygienic, long lasting, and higher degree of utility as well.

Scotch Brite Concept

Market Structure – segmented on sensitivity to and expectations

from cleanliness.

Product Category – mechanical surface cleaning tool.
Target group – 25-40 years, middle to high-income group,

conscious for cleanliness.

Case Proposition – superior cleaning which is hygienic.
Position – best cleaning tool for concerned homes.
Core Benefit
- Functional – better cleaning, better hygiene (no residue/stain).
- Psychological – family care and well being.
Product attributes – strong and firm form, sensitive and flexible,

strong cleaning ability.

Extended Benefits
- Functional – convenience (saves effort and time).
- Psychological – happy family.

Scotch Brite Culture

Physique – firm, agile, soft surface – strong structure.
Personality – lady, 30 years, young, discerning, innovative (modern outlook with traditional values, conscious of self and surrounding, pragmatic, in control, open-minded, sociable).
Values – strong family orientation, clean surrounding, aspiring, ethical.
Identities – brand name with dolly, brand tagline, brand

Jingle.

Associations – home cleaning practices, home hygiene issues, clean natural environment (waterfall, green foliage, dew drops, raindrops).
Consumer relation – dependable partner.
Tone / mood – confident, serious intent, self-content, happy.
Colors – bright, not shining, not crowded.

Scotch Brite Business Strategies

Continue to develop and build on distribution and organization (1999-2009).
Develop brand, product range and competitive strategy and align variables for development (1999).
Invest in brand building and product penetration (1999-2002).
Extend Product range with semi mass products (2000-2).
Invest in Penetration of new potential products (2003-5).
Consumer promotions to enhance usage (2003-5).
Enlarge Product range (2004-8).
Maintain profitable local business.
Retain profitable and potential products.
Supply Chain excellence.

Scotch Brite Marketing Objectives 1999-2002

Product Penetration

To be available in 20% household in top 125 towns by 2001.
To be available with atleast 2 products in 50% of the penetration household.

Sales

Increase Sales Value to 340% (Rs. 280 million) by 2001.

Market Share

Achieve and maintain a 85 % market share (value) in organized cleaning product categories.
Maintain 70% market share in Scrub Pad category.

Marketing Strategies

Brand Strategy Development and Realignment

Research on brand benefit, image and product position.
Packaging strategy, redesign and research.
Media and POS communication on product and brand.
Invest in brand building and loyalty generation.

New Consumer generation for current products

Reposition and media communication.
Sampling and education.
Improve product performance.

Non-performing product relaunch

Improve product performance and research demand of current non-performing products.
Research position.
Packaging and launch.
Media communication and POS visibility.

New Product Launch and Penetration

Evaluate commercial viability.
Research product performance, demand, position and benefit.
Packaging and launch.
Media communication at launch and later depending on business status and potential.

Basis of segmentation

Segmentation is done on the basis of Lifestyles because first of all their target market was the upper class people for which they were following the idea of push and pull strategies for e.g., initially they had offered a scheme for shopkeepers that if they buy 12 cartons of Scotch Brite they will get the 13 carton free. So they got 13 at the price of 12. Scotch Brite is the applicator that is currently becoming a necessity of each and every household. It has been marketed in such a manner that everyone has at least used it once foe the testing purpose.

Market Segments

Market segments which Scotch Brite captures is basically of people who like quality and hygiene in dish washing and firstly when Scotch Brite was introduced back in 1994, it was for upper middle class as the introductory price was Rs. 12, which wasn’t affordable for the lower and middle class people as alternatives, which were and are not so good, available in the market for less than half the price of Scotch Brite. But since then they have introduces various sizes for cheaper rates. In the beginning it was over used by foreigners but now everyone is using it. The Psycographic dimensions of segments are:

The Ritualists – who are driven by daily ritual, looking for basic cleaning.

The Calvinist – effort and economy driver, cleanliness as symbol of her effort.

The Pragmatic – discerning, conscious, looking for superior cleanliness, opens to new products, which gives high performance and save efforts.

The Perfectionist – desires perfect clean, highly involved with tasks, looking for high performance products.

Target Market

Market Position

The Scotch brand has been positioned in the minds of consumers as follows

“Scotch Brite is the name for a range of superior home cleaning tools that I use. Scotch Brite products provide me hygienic (best) cleaning for my home. My home remains hygienic and my family well and happy.”

Differential Advantage

Other such products in the market differentiate Scotch Brite by price, durability, reliability, hygiene and quality. The product’s differential advantage is its long lasting feature, quality, higher degree of utility and hygiene. The consumers of Scotch Brite are satisfied with the product. The company gives a quality product at a much cheaper price that makes it more unique. It’s probably the best product giving value for money.

Differentiation for Consumers

Scotch Brite offers a range of home care products ranging from gloves and laminates to metallic spiral and scotch guard. The different product having different prices and uses are for consumers belonging to different strata, who could buy a world-class product according to their available resource. The variation in prices creates differentiation for the product.

Initially Scotch Brite’s target market was the upper and upper-middle class, which could easily afford to consume the product on a regular basis and also to satisfy these consumers’ requirements of cleanliness, hygiene and quality. But then the company altered its strategy and came up with different sized and forms, thereby differentiating it further.

Brand Name: Scotch Brite

Scotch Brite is an applicator used to clean crockery. It can be used for soap, washing liquid and even with water. It has distinctive characteristics, such as:

High Quality
Innovation
Gentle on hands
Comparatively long lasting

Scotch Brite: Brand Promise.

“For the conscious and discerning ‘lady of the house’, Scotch Brite represents a range of superior household cleaning tools that provides the best cleaning performance (with convenience), thus assuring better household hygiene and the well being of the family.”

Brand Identity

Product thrust – home cleaning.

Expression – concern for family well being and effective self-performance.
Performance – superior cleaning which is hygienic (and also saves effort)
Basis of Performance – technological superiority and innovation based on the understanding of home cleaning needs.
Functional benefit – superior features that ensure hygienic cleaning and are also convenient for use.
Emotional benefit – family well being and happiness with self- effectiveness.
Self-Expressive – expresses concern for family well being and fulfils an aspiration to contribute towards a happy home alongwith self-efficiency.

USP of the brand in the long term

Superior home hygiene and well being (happiness of the family).

Brand Mark: Scotch Brite is a product of Minnesota Mining Manufacturer and the company uses 3M as a brand mark for all its products.

Trade Character: Dolly is the symbol used with Scotch Brite

Scotch Brite is a tangible product though the company is putting great efforts to make it a generic product. However time and appropriate policies are required in this regard. As earlier mentioned, it’s a product for the final/ultimate consumer.

Brand Equity

Minnesota Mining Manufacturers – 3M has a good reputation in the market and all their products enjoy goodwill and thus add to the brand equity.

Marketing Mix

Price

The price of Scotch Brite scrub pad is 3 to 4 times of local cheap unorganized traditional products.

Small Pack Rs.6/-

Medium Pack Rs 9/-

Large Pack Rs.12/-

The cost of the product is purely margin based and the company works with a fixed margin of profit. The cost of the product is not influenced by the competitor price or by demand. The introductory price of medium size pack was Rs. 7 which is now Rs. 9 which is due to fluctuation of dollar and government policy, but the demand for the product has not decrease which show that the demand is not elastic.

Marketing Mix

Distribution

The company has given exclusive rights of distribution to only one distributor namely Muller & Phipps (M&P) in Pakistan. Like every other company wishes to increase sales, so does 3M. For that they are thinking of further intensifying the distribution.

Channel of Distribution

3M uses indirect channel of distribution, which means that the product is first provided to the distributor who later supplies it to wholesalers and retailers. The company has a Contractual VMS with M&P, which supplies the product throughout Pakistan.

Some of their Distribution strategies are:

Focus on top 125 towns(45% urban population) with presence in another 100 towns (based on demand).
Focus on all general, grocery, food, departmental, utensil, crockery retail store.
Focus on POS availability and visibility.
Focus on trade relation.
High reputation for service and reliability.
Efficient (cost effective and swift) service.
Strong planning and operating systems.
High ethical standards.

Marketing Mix

Promotion

Promotion is an important factor in the marketing mix of Scotch Brite. The whole activity is done with a purpose that the encoding of the message is made very clear in the minds of the consumers. The message that is given in promoting Scotch Brite is informational as it emphasizes on the benefits of the goods. The firm allocates its Budget according to its goals, objectives and feedback, and after a careful analysis it allocates an appropriate budget.

The communication media used are:

Mass: TV (regional channels), Print.
POS: poster, sticker, dangler, and dispenser.
Unit (primary) packaging.
Product leaflets/inserts.
Product detailers/ sales brochures.
Outdoor hoarding / billboards.
Shop name boards.
Shop / Wall paintings.
Awnings / Sun shades.

Advertising Agency

The advertising agents of 3M in Pakistan are THE CIRCUIT.

The Types of Promotion

3M Pakistan is using all types of promotion techniques, to boost up the sales of its brand Scotch Brite. The promotion is done in the following ways:

Advertising

Their main concentration is electronic media, i.e. Television and radio. On Television they are advertising mainly on PTV1 and PTV World while FM 100 Channel is used in radio. Most of their ads are on air between the Prime Time shows of the respected channels, so that they could get maximum coverage to most of its customers. TV media is used to communicate a core message, which needs demonstrations and imagery. They are designed to include only one key message at a time on the product. The capsule time depends on the storyline and creativity. As far as print media is concerned, it is not used to the same extent as the electronic media. Their adds have been printed on Daily Dawn and Jung always in color and include product picture, product name, product offering, product related message, brand name logo, brand tag line and brand identities with colors relevant to the product being promoted.

Demand Oriented Advertising.

The adds of 3M are basically demand oriented adds as they are aimed to increase the demand of the particular products.

Vertical Cooperative Advertising.

3M share the cost of advertising with its distributors as they have their share of profits as the sales are increased.

Publicity

3M also use the publicity technique by sponsoring different shows and seminars.

Personal Selling

In this area special representatives are hired for the purpose of making sale. These representatives go door to door and distribute flyers of Scotch Brite. Mostly female sales persons are used to sell Scotch Brite in small areas and towns.

Sales Promotion

Sales promotion strategies are directed towards both dealers and consumers. For consumers they have been offering Free packets of Scotch Brite in collaboration with Caltex in the past. For dealers they on and off give the scheme of BUY 12 AND GET ONE CARTON FREE. Apart from this a shares of sales incentive is also given to dealers and distributors.

Packaging

Scotch Brite is packed in BOPP Polythene packing with colorful representation of the company logo on the top, which looks attractive. The packing ensures the safety of the product and that of the consumer as well. The message communicated through packaging says:

Cleans Faster – Lasts Longer

Initially the product was positioned for the higher income group. But gradually it was made available for the middle-income group as well. The company assumes that nowadays, they even attract the upper lower class.

Conclusion

The future of applicators market in Pakistan is quite bright. 3M feels that this monopolistic business would not last longer and very soon they might be facing a competition from others. But such an atmosphere wouldn’t treat to Scotch Brite, because world leader in consumer backs world’s renowned product care products, whose strengths are quality, reliability and customer satisfaction.