P&G-Marketing capabilities

HBS case study

Overview

History

Brands

Situation analysis

Objectives

Disclaimer

Some points where P&G should focus

●Founded in 1837 by candlemaker William Procter and soapmaker James Gamble.

●It is a company that makes mostly daily use products.

History of P&G

●It was the first company to advertise directly to the consumers ,in the 1880’s.

●The company started it’s international expansion in the 1930’s and in 1945-1980,it began to enter market in Latin America,Western Europe and Japan.

●It is considered to be a global leader in branded consumer goods and known for category defining products.

History of P&G

●The company is known for it’s impressive brand portfolio.

●The company also produces brands in several sizes and forms and use their parent brands to launch new products.

●Some of the well known brands of P&G are Tide,Gillette,Vicks etc.

Brands

• Has two dozen 1 billion dollar brands known worldwide.

Brands

Brands

• P&G is a company with good company background and is also the market leader in the Fast-Moving Consumer Goods(FMCG) sector.

• The company has a firm belief in innovating and constantly improving their products & brands.

• The company aims to serve 5 Billion consumers worldwide.

• The company has very great brand portfolio and also,great application of brand extension and multi branding strategy.

Situation Analysis

• Given below are the net sales and organisation structure.

• Net sales in developing countries has increased marginally from 2008 to 2010.

Situation Analysis

• North America represented 42% of net sales , Western Europe represented 21% of net sales,Asia 15%,Central and Eastern Europe and Middle East and Africa 13% and Latin America 9%.

• Developed countries represent 66% of total sales in 2010.

Situation Analysis

Situation Analysis

• To know about the different marketing channels used by P&G.

• To know marketing strategies used by P & G .

• To know about the significance of innovation and R&D in success of P&G.

Objectives of case study

• P&G reorganised itself to boost growth after the net sales slowed down to 2.6% .

• P&G felt the GBUs would help with global product development and quick-to-market strategies.

• Seven global business units (GBUs) based on product categories replaced the company’s four geographic business units.

Innovation & R&D - The Secret Sauce

• Three new teams supported the GBU’s :• Business development team focussed on innovating in existing categories.

• A venture team tasked with acquiring brands in new areas.

• Market development organisations to perform the intensive research to ensure global products’ success in local markets.

• 50% of the innovation came from P&G’s labs and 50 % of innovation came through the labs -partnership and connections with non P&G scientists.

Innovation & R&D - The Secret Sauce

• This strategy was called the “Connect & Develop “ strategy.

• However , firm struggled to control costs and it’s stock slid from $118 to $52 in 18 months.

• But, CEO Lafley remained committed to reorganisation and believed that it would deliver the innovations promised.

Innovation & R&D - The Secret Sauce

Innovation & R&D - The Secret Sauce

• Lafley created a new design unit different from other business units for design innovation and strategy .

• Lafley made Claudia Kotchka as the Vice president for the design innovation unit.

• Lafley also appointed Jim stangel as the new CMO.

The focus on design

• Claudia Kotchka tried to introduce a culture of design through a

number of steps such as-• “Design tasting” featuring design case study for P&G’s top 200 marketing

executives.

• Creation of “clay street “project bringing cross functional teams to create new brands based on design.

• P&G used design as a complement helping consumers recognize,understand and in some cases ,even imagine the functions of a given product.

• The influx of design had a strong impact on product development of P&G.

The focus on design

Claudia Kotchka tried to introduce a culture of design through a number of steps such as-

“Design tasting” featuring design case study for P&G’s top 200 marketing executives.

Creation of “clay street “project bringing cross functional teams to create new brands based on design.

P&G used design as a complement helping consumers recognize,understand and in some cases ,even imagine the functions of a given product.

The focus on design

• This kind of emphasis on design moved the P&G towards a more consumer centric approach .

• Now , the focus of company shifted from product development to the design innovation and consumer centric approach.

• Also brought their focus on Return on Marketing Investment(ROMI).

• Also associated themselves with “Project Apollo” which helped themselves understand consumers better.

Consumer centric approach

• Qualitatively,it ran focus group discussions,interviews of customers at home and in-store interviews.

• Quantitatively, they gathered data on consumers,did large scale study of habits and practices of the consumers who purchased P&G products.

• Used the emotional branding .

Consumer centric approach

• The firm is well known for marketing several brands in the same

product category.

• Some examples are Head & shoulders and pantene, OralB and crest , Tide & Ariel etc.

• They are also known for producing brands in several sizes and forms and launching of new brands under the name of parent brand.

• They also used emotional branding which is evident from “Thank You Mom” campaign.

Multi brand Strategy & Brand Extension

• P&G mostly relied on television commercials,dramas and operas to sell their products .

• The ads were based on their product superiority and clear functional benefits of the product.

• P&G ,with the help of other agencies tried to develop the media neutral idea that could be translated across a range of media

• They created a brand character named “commander safeguard “ in Pakistan “ for safeguard soap.

Advertising

• The firm aimed to shift their advertisement towards more design and emotion driven advertising.

Advertising

Advertising

• P&G has been involved in many sponsorship activities.

• The firm was the US team sponsor in the 2010 games , also sponsored in 2012 winter games in Russia , and 2016 summer games in Brazil.

• This helped the firm to increase its visibility .

• They also tied in with NFL’s play 60 initiative.

Sponsorships

P&G has been involved in many sponsorship activities.

The firm was the US team sponsor in the 2010 games , also sponsored in 2012 winter games in Russia , and 2016 summer games in Brazil.

This helped the firm to increase its visibility .

They also tied in with NFL’s play 60 initiative.

Sponsorships

• The firm used the celebrity endorsements to promote their

brands.

• This help them affect the opinion leaders which helps in the growth of brands .

• Roger Federer featured in gillette fusion product ads .

• NHL player named Alex Ovechkin was named the brand ambassador of Gillette and starred in TV commercials promoting gillette fusion razors and other new products.

• Many similar kind of endorsements was done by P&G for different brands.

Celebrity endorsements

The firm used the celebrity endorsements to promote their brands.

This help them affect the opinion leaders which helps in the growth of brands .

Roger Federer featured in gillette fusion product ads .

NHL player named Alex Ovechkin was named the brand ambassador of Gillette and starred in TV commercials promoting gillette fusion razors and other new products.

Many similar kind of endorsements was done by P&G for different brands.

Celebrity endorsements

• The firm launched websites such as pampers.com which provided product information and also served as interacting forum.

• P&G also used mobile marketing campaigns to publicize crest whitening plus toothpaste in 2006.

• Digital marketing enabled a raft of niche segmentation targeted to specific consumers including online serials , video games and youtube channels for specific products.

Digital Marketing

• Old spice television commercial “the man your man could smell like “ gave the greatest exposure to the company.

• It was a successful campaign and also the video was one of the most viewed videos of youtube.

• This campaign was seen as a milestone in P&G’s transition from mass marketer to one to one digitized marketer.

Digital Marketing

• P&G maintained it’s marketing budget despite the recession in

2009 .After that , it also started advertising on the social media.

• P&G launched two campaigns, capessa for women on yahoo! Health and People’s choice community associated with people’s choice awards.

• Facebook was used as marketing supplement .

• P&G is known for identifying the needs of their consumers and providing an alternative for it.

• An example of this is “manofthehouse.com”.

Social Media

• P&G needs to get more active on social media and work out on more effective ways to reach people through social media.

• They should also develop their website.

• They should monitor their consumers time to time and understand their needs .They should also try to reduce their cost of products.

• They should also keep a close eye on their competitors and just be ready to answer their any move.

Some points where P&G should focus

P&G maintained it’s marketing budget despite the recession in 2009 .After that , it also started advertising on the social media.

P&G launched two campaigns, capessa for women on yahoo! Health and People’s choice community associated with people’s choice awards.

Facebook was used as marketing supplement .

Social Media

Disclaimer

This presentation is made by Shivam,IIT Kanpur under the guidance of Professor Sameer Mathur,IIM Lucknow during an internship of marketing management.