Renova Toilet Paper Harvard Case Solution & Analysis

Renova Toilet Paper Case Solution

Introduction:

The first sheet of paper as a Renova reference made by David Ardisson in 1818 in central Portugal, and first Renova toilet paper product emerged in 1958. It shows the first unique design marketing and management innovation, which shows the emerging culture of company in 80’s. Renova started to sell tissue products in 1979 and decided to expand the business by making new infrastructure.

The case is motivating the value of good market strategy, that not only focusing its own company but instead it provides skin care products with the range of products such as colored, black, and home decoration products. It is observed that with no initial investment, Renova has turned a very boring product (that is never discussed in public) into an interesting one (through their artwork). Renova has expanded its infrastructure from four countries to fifty seven countries.

Hence, Paula Pereira da Silva, CEO and physicist of company, focused on good marketing design, was enthusiastic about understanding consumers and followed the market in order to increase awareness and brand image in the eyes of customers.

The case discusses price strategy, cost strategy, and technological impact on market. Along with this, the company is facing strategic challenges in launching a black toilet paper as limited or fully-fledged to all consumers. The next focus of company should be a value chain strategy that requires leadership, new organization culture, and structure performance based on new infrastructure of company.

1.      Do you think it is an interesting strategy to compete on price in this segment reducing the prices of the product? Explain in Detail and Provide Examples.

The CEO is facing a challenge in terms of pricing strategy to attract customers. The customers are very sensitive to quality and price of the tissue products; therefore, it is good a marketing strategy to compete through adjusting price based on the market share, brand image and setting a competitive price. In Portugal, tissue price ranges from 0.10 euro to 0.70 euro, depending on the package sizes and rolls. The variation in sizes changes due to difference in unit prices. Companies price their products based on customer’s value sensitivity and quality.

According to research, young customers attract the market share of company from high society class, as Renovo's market share is rated at 7.5 out of 10 rating scale. On the other side, buyers spend more time in choosing the toilet paper based on quality and less on price. Therefore, reduction in price of tissue papers would attract more customers by considering following examples:

  1. Based on the case, the price of toilet paper is relatively high in Portugal as compared to other European countries because of low market share and hence, they have low competition and fewer discounts and due to strong demand for domestic brands, international products do not attract customers. Therefore, as a domestic brand in Portugal, Renova should reduce the price to attract this segment.
  2. Another Example is of a private label that is increasing its market share by introducing various discounts and offering best quality to price ratio. Therefore, Renova should make efforts to increase quality of products and offer them at a low price and offer numerous discounts (such as: buy one and get one free offer) because most of the customers are price sensitive and willing to purchase only at lower prices with higher quality.

Therefore, the reduction in price is an interesting strategy to compete with prices that would result in attracting large range of customers..................

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