Mr. Clean Car Wash: Procter & Gamble's Foray into Services
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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
Excerpts
About Mr. Clean
In 1958, P&G launched Mr. Clean, an all-purpose liquid used to clean hard surfaces, laundry, jewelry, etc. It was launched at a time when most women stayed at home, cleaning the house and keeping it tidy. Its advertising icon, also called 'Mr. Clean' , was arguably one of the most recognized and popular advertising icons in the US...
The Beginning
Over the years, P&G designed a global, diversified business portfolio which enabled it to grow consistently. Its core strengths were consumer understanding, brand-building, innovation, go-to-market capability, and scale which helped it in achieving financial stability and generating revenues...
Franchising Model
After testing its two car washes in the Cincinnati area, P&G initiated a franchise development program. According to analysts, the company opted for a franchise system instead of building its own outlets as large capital investments would be required to set up company-owned car washes...
Car Wash Facilities
P&G preferred to build new facilities rather than convert existing operations. Every Mr. Clean Car Wash center was optimized by its location and site design. Talking about the need to set up new facilities, Arnett Jr. said, "There are probably opportunities out there for conversions, but what we're trying to drive is that experience...
Expansion
In February 2009, Mr. Clean Car Wash announced its national franchise expansion and started to accept franchise applications. P&G planned to initially focus on six markets - Georgia, Ohio, Illinois, Kentucky, North Carolina, and Texas. "We want to be a national brand across every state. We want to have a presence in every major metropolitan area," Foster said...
Challenges
Some analysts were apprehensive about P&G's entry into full-service car washing and criticized the move as risky. They pointed out that the venture had been launched at a time when the market was in the grip of an economic crisis...
Outlook
P&G planned to expand its car wash business nationwide. The goal of the company was to become one of the top car wash franchisors in the US by the end of 2010...
Exhibits
Exhibit I: P&G: A Timeline
Exhibit II: P&G Business Segments
Exhibit III: Procter & Gamble - Consolidated Statements of Earnings
Exhibit IV: Mr Clean Products
Exhibit V: Car Wash Market in the US
Exhibit VI: Mr Clean Car Wash - Services
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