Opportunities:
a) the fast growth specific to the Russian market - if only 53% of women reported using regular pads in 1996, a year later, the percentage of women stating the same thing increased to 78% (i.e. A 47% increase) b) the negative perception of tampons allowing a generous market share for pads - if in 1996, 37% of women reported using tampons on a regular basis, in 1997, only 20% of them continued to use such products c) the Russian women's tendency to move from traditional pads to the more sophisticated ones using Ultra technology and having wings (Plus) - in 1997, Always Plus registered a 5.2% unit share compared with Always Classic which reported a 2.9% unit share for the same year while Always Ultra reported a unit share five times higher that the one in the previous year.
Threats:
a) the high uncertainty of the Russian market due to unpredictable political, economic or social maneuvers b) the low level of income reaching a monthly average of $220 per household c) the unfair distribution of income between Moscow and the regions, negatively impacting on P&G sales as the adherence on the Russian capital's market is more fragile because of not reaching the pharmaceutical channel d) the irregular payment that Russian employees receive makes them give up brand preferences and choose cheaper products fitting their income level e) the considerable growth (88%) that the Polish brand, Bella, achieved in 1997 f) parallel imports which consist of fuelling the Russian market with products bought at lower prices in neighbor countries.
Identifying, evaluating, and choosing alternatives
In order to ban parallel imports, P&G Russia may consider the following alternatives:
1) reducing prices for the Always pads offered on the Russian market in order to line up this outlet to the neighboring ones
2) offering major discounts to wholesalers who buy large quantities of merchandise
3) compelling the P&G warehouses from the neighbor countries to sell products only to wholesalers from the respective countries.
The first alternative will contradict the general policy that has been applied to the Russian market so far. Thus, the corporate image might receive a major...
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