This 6-page paper answers several questions offered by a Harvard Case study about P&G and introduction of feminine protection products into Russia and Eastern Europe. Issues discussed include pricing strategies, advertising and potential product line expansion.
the flagship brand Always had grown since its launch in Russia in October 1995, there were questions about price levels of the Always brand, as well as potential strategies to
expand from beyond Russia specifically. 1. Should the price premium of Always be maintained, or should there be an attempt to develop the mid-market through lower priced brands?
There are two issues to this question. The first is that P&G entered the Russian market as the leader -- mainly because
there wasnt any other product like Always at the time. While in other emerging markets, P&G competed on price, the management, at the outset, decided that the "best technology at
premium prices" should be introduced -- and as a result, the premium business had been built. The standard pricing philosophy of marketing is that if you price a product too
low, consumers will be suspicious of quality. P&G already knew that Russians are prepared to spend "a higher than usual proportion
of their low disposable income on consumer packaged goods." By the same token, Russians dont just spend willy-nilly, rather, they want proof that a product will work before they spend
too much money on it. We just spent a paragraph discussing that pricing a product too low would likely drive away
a consumer -- especially Russian consumers. On the other hand, if you price it too high, you could price yourself out of the market.
This is especially true when it comes to Russians -- they arent paid on a regular basis, nor are they paid all that well. Theyre willing to