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1, Analyze the toilet paper category from the end consumer’s viewpoint. How do people choose

what toilet paper to buy? What is the role of brands and why are private labels so successful?

From the article, toilet paper is regarded as a cheap product; however, people have to use it

everyday. So, when they are debating which one should they buy, they always take more

consideration on the piece and quality, and take less concerns about brand and format. It is easy

to understand that toilet paper is an ordinary and cheap product, and also it is understandable that

people tend to choose the cheapest ones since the toilet paper is listed as a product that people

have no need to spend too much to buy and with the regardless of which brand they buy. As

mentioned above, it can explain the question that why private labels are so successful, because

customers do not pay more attention on choosing brand, the most important things they

considered when they are buying toilet paper is price.

2, Analyze the structure of the toilet paper market. Who are the biggest competitors? What is

the role of retailers? What are the trends in this category that will effect structure 5 years from

the time of the case?

In Western Europe, the toilet paper market is growing slowly between 2002 and 2005 because

of the stagnant consumer population and market saturation. In addition, the market is shared by 4

categories, which are comprehensive daily necessities producers, such as P&G; giant paper
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companies, such as SCA; retailers, such as Carrefour, Lidl, and Tesco; and medium-size paper

companies, such as Tronchetti.

From the Exhibit 1, it shows some differences in market structure among Worldwide,

Western Europe and Portugal. In the world, the medium-size paper companies occupy the largest

share of the market, and following by P&G, Kimberly-Clark and private labels. However, in

Western Europe, private labels hold the most significant share of toilet paper market, and

following by P&G. In Portugal, its native brands, such as Renova has more impacts on toilet

paper market, which contains 17% share of it; but it is interesting that P&G has the most

significant share of toilet paper in Portugal.

The retailers are the biggest competitors in this market. They use their specific advantages,

such as stable customer base, placement, and lower price, to produce private label toilet paper.

Because of toilet is not a product which needs to be paid more attention to buy, and the

placement of toilet paper are always leads people to consider the price, the brand awareness of

every toilet paper producers was weakened. Consequently, the retailers can take the advantages

from this market.

The role of retailers is originally to place and distribute the products made by toilet paper

companies.

Form this case, the toilet paper companies tend to make some innovation on their products in

order to differentiate their products with others’. These premium products are produced by

advanced technology or have some unique features. For instance, Georgia Pacific launched its

new product with higher quality-“thick, strong and soft” and received success in sale; Regina

Rotoloni focused on improving shopping and usage convenience and lunched “big rolls”, also

succeed in sale. In consequence, it is believable that in 5 years form the time of case, in order to
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counter the challenge from private labels, toilet paper companies would take more efforts in

innovating new products with some unique features.

3. Analyze the Renova company. Does it have any unique capabilities? How strong is the

Renova brand?

The Renova company has a long history in producing toilet paper(from 1961). Based on the

exhibit 9, which shows that toilet paper occupy half of Renova’s sales. Moreover, the production

capacity of Revona is 100,000 tons of paper per year, and there are 600 employees working in its

factories in Portugal, France, Spain, Belgium and Luxembourg. In addition, in 1986, when

Portugal joined the EU, Renova started to expanding internationally and it didn't claimed that it

is a Portugal based company. Most importantly, it shares 17% of toilet paper market in Portugal,

which means it has a strong brand awareness and people have the willing to use its products.

After Paulo Pereira da Silva becoming the CEO of Revona, he wanted to build brand

awareness by using advertising. Revona partnered with some famous photographers to release

some unique ads, which attracted lots of attention from public, even though some ads are

sensitive in some countries, especially in France, these ads were banned form outdoor displays.

Due to the long history and the advertising campaigns, Revona has a strong brand awareness

in Portugal. This strong brand awareness spread from younger customers to higher social classes.

Studies also shows that the brand prestige of Revona is higher than L’Oreal and not very far

from Danone. There is no denying that Revona has a strong brand awareness.
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4, Develop a chart comparing each of the five strategic directions mentioned in the case: 1)

increased price competition; 2) private label manufacturing; 3) continued technological

innovations; 4) launching a black toilet paper as a limited PR coup; 5 ) launching black toilet

paper as a fully-fledged line extension. In the chart, answer the following questions: a) What

are the pros and cons of each option; b) Which option would you recommend be chosen by

Renova? What are the implications of your recommended option on Renova’s existing

portfolio?

strategic directions pro con recommend level

Not good, since lower I will not recommend

price will increase the this direction, Revona
cost, and giants have has relatively low
Increased price more capacity to lower capacity to lower the
competition price, and this will not let price.
its products
distinguishing with
others.

The technology of
making toilet paper is
not advanced, and the
cost of producing is
low,so the retailers can
It might be useful, since built their own factories
private label
retailers can easier to to produce paper. Also, Not very recommend.
manufacturing produce products. if partnering with
retailers, the revenue
will reduce, since
Reveno needs to share
the profit with retailers.

It should be useful, But innovation needs

continued
since the examples of lots of budget, and also,
technological other companies were there are some Kind of Recommend.
innovations succeeded. limitation in innovation.
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It will be useful. This

unique product can
attract customers
attention. This product
can be defined as a People will consider
launching a black luxury one which meets whether this product is
the brand goal of environmental friendly
toilet paper as a and health friendly or
Highly recommend
Revona(from disposable
limited PR coup paper brand to not, which will lower
wellbeing brand). In their desire to buy.
addition, the black ones
can be seen directly
from shelves in shops.

It might be useful, but Change the production

launching black the toilet paper is not a line is costly, and not
toilet paper as a products that everyone everyone likes the black
Medium recommend.
fully-fledged line wants to spend more ones.
extension. money to buy.

5, From what you know about the Renova company and using Claritas Prizm Segment Explorer,

in which USA segments do you believe they could have the most success? Pick 2 segments and

explain why.

Segment1: Young Digerati

People in this segment are tech-savvy and live in fashionable neighborhoods on the urban

fringe. Affluent, highly educated, and ethnically mixed, Young Digerati communities are

typically filled with trendy apartments and condos, fitness clubs and clothing boutiques, casual

restaurants and all types of bars--from juice to coffee to microbrew.(Young Digerati, from

https://www.claritas.com/MyBestSegments/Default.jsp?ID=30&menuOption=segmentexplorer&

pageName=Segment%2BExplorer.)

The black toilet paper can attract them because if Rvona defined the black toilet paper as a

luxury product, these people have the ability to use it. In addition, their age are between 25-44, it
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is a range of age that have the desire to try new things and they want to be different from others.

Black toilet paper can be priced higher and placed in luxury stores, such as Bloomingdale’s that

they always go. Furthermore, they also have the desires to change from their ordinary, routine

purchase of toilet paper to a more fashionable bathroom.

Segment2: Sunset City Blues

Scattered throughout the older neighborhoods of small cities, Sunset City Blues is a segment

of lower-middle-class singles and couples who have retired or are getting close to it. These

empty-nesters tend to own their homes but have modest educations and incomes. They maintain

a low-key lifestyle filled with newspapers and television by day, and family-style restaurants at

night.(Sunset City Blues, from

https://www.claritas.com/MyBestSegments/Default.jsp?ID=30&menuOption=segmentexplorer&

pageName=Segment%2BExplorer.)

This segment has low income, or they retried, so the higher price black toilet paper is not suitable

for them. They will not buy this product in reasons: 1, their income cannot afford the routine

purchase of this product; 2, they tend to be careful on their expenditures; 3, they are too old to

accept new things, especially changing from the white toilet paper to black ones.