The Procter & Gamble Company: Investment in Crest Whitestrips Advanced Seal

Abstract

A financial analyst for Procter & Gamble must report on the prospects and implications of a new teeth-whitening product. Beyond a realistic profit-and-loss forecast and baseline net present value, he must determine which pricing and marketing strategy is most likely to maximize value for shareholders.

Excerpt

UVA-F-1670

Rev. Dec. 7, 2016

The Procter & Gamble Company:

Investment in Crest Whitestrips Advanced Seal

It was May 2008, and Jackson Christopher, a financial analyst for the Procter & Gamble Company's (P&G) North America Oral Care (NAOC) group, hustled along a sunny downtown Cincinnati street on his way to work. NAOC's Crest teeth whitening group was considering the launch of an extension to its Whitestrips product, and the project had dominated most of his working hours. At least he avoided a long commute by living downtown.

The week before, the group had met to consider the merits of the proposed product, known as Crest Advanced Seal. Although openly intrigued by the concept, Angela Roman, the group's general manager (GM), was reserving judgment until she had a clearer picture of the idea and risks. She had tasked Christopher with putting together the economic perspective on Advanced Seal, an effort that had required a lot of work amalgamating all the different considerations and thinking through the financial implications. In the process, he had had to manage a lot of different constituencies. In short, it had been an interesting week, and with the follow-up meeting the next day, Christopher knew he needed to present some conclusions.

. . .

Keywords: brand extension, trade margins, forecasting