Mr. Clean Car Wash: Procter & Gamble's Foray into Services

Case Code: BSTR375 Case Length: 21 Pages Period: 2007-2010 Pub Date: 2010 Teaching Note: Not Available

Price: Rs.500 Organization: Procter & Gamble Company Industry: Consumer Packaged Goods Countries: US Themes: Entry Strategy, Franchising

Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

The case is about US-based consumer packaged goods giant Procter & Gamble Company's (P&G) foray into the service industry. P&G entered the service arena by setting up the Mr Clean Car Performance Car Wash in Cincinnati in 2007. Leveraging on the value of 51-year-old Mr Clean brand, P&G hoped to lure potential customers and make a mark in the car wash industry in the US. In February 2009, to further develop its car washing business, P&G expanded into franchises through the acquisition of Atlanta-based car wash chain Carnett's Car Washes. The case discusses the franchising model of Mr Clean Car Wash and the services offered by the outlets. The Mr. Clean Car Wash model offered state-of-the-art car wash services with facilities such as comfortable lounges, a premium coffee bar, a free Internet service, and gift shops.

The case then talks about P&G's plans to expand Mr Clean Car wash facilities to other potential markets in the US which provide a good opportunity for car washing business.

The case also discusses the challenges faced by P&G in the service sector such as high customer expectations, competition, and a new business model. Some experts labeled the move as risky and pointed out that the company had entered the service sector at a time when the market was in the grip of recession and households were cutting down on discretionary spending. While some analysts were confident that the brand awareness and loyalty for many of P &G's products would create an initial interest in the Mr Clean Car Wash service and attract customers, others were not so certain that P&G would be able to lead the franchisees and succeed in the service business.

Issues

The case is structured to achieve the following teaching objectives

• Study how a consumer goods company forayed into services
• Study the franchising model adopted by P&G for Mr Clean War Wash
• Analyze the challenges faced by P&G with respect to its foray into services
• Discuss and debate certain aspects of P&G's strategy
• Explore strategies that P&G could adopt to succeed in the service sector

Contents

Moving From Goods to Services
P&G - A Leading Consumer Packaged Goods Company
About Mr. Clean
The Beginning
Franchising Model
Car Wash Facilities
Expansion
Challenges
Outlook
Exhibits

Keywords

Consumer goods company moving into services, Franchising model, Franchise development program, Business format franchising, Diversified business portfolio, Brand extension, Brand awareness, Brand equity, Customer service, Operations, Competition, Recession, Consumer packaged goods, Car wash industry, Procter & Gamble, P&G, Mr. Clean

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