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Global leader in branded consumer good. Procter & Gamble:Marketing Capabilities

Procter & gample

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Global leader in branded consumer good.

Procter & Gamble:Marketing Capabilities

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How many number of brands company managed?

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What were the net sales of P & G in 2008, 2009 and 2010?

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What is the organizational structure of P&G products?

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What is the percentage sales division of P&G products in different continents?

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North America – 48%Western Europe – 21%Asia – 15%Central and Eastern Europe and the Middle East

and Africa – 13%Latin America – 9%

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What percentage of sales existed in developing markets in 2010?

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How many Global Business Units are there?

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Seven global business units are there based on product categories.

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How did the company expanded globally?

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By acquisitions and joint ventures

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Who are the Players?

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CEO (1999) – Durk JagerCEO (2000) – LafleyCMO (2000) – Jim StengelVice president for Design innovation and

Strategy – Claudia Kotchka

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Problems faced

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Competition with the rival companies as they followed the same technology.

Problem 1

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Risk of cannibalizing P&G’s other laundry soap products as Tide came into the market.

Problem 2

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Decrease in net sales in 1999 by 2.6% from the previous year.

Problem 3

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The firm struggled to control costs and its stock slid from $118 to $52 over 18 months.

Problem 4

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In 2002, it faced challenge in winning new customers in less familiar markets outside the Americas and Western Europe

Problem 5

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Maintaining the marketing budget during recession in 2009.

Problem 6

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Major Marketing Strategies

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Innovation and R & D

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• P&G connected R&D with company’s sales and marketing• Formation of seven global business units (GBUs) based on

product categories that would help with global product development and quick-to-market strategies.

• Three new teams supported GBUs: a business development team focused on innovating in existing categories; a venture team tasked with acquiring brands in new areas and nurturing ideas created by the business development team that did not relate to an existing brand; and market development organizations that would perform intensive market research to ensure global products’ success in local markets.

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Connect and Develop

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• Selected potential partnership products• Located in six connect-and-develop hubs (in China,

India, Japan, Western Europe, Latin America, and the U.S.), the technology entrepreneurs focused on products and technologies specific to the specialties of the hub’s region.

• Rather than eliminate R&D jobs internally, connect-and-develop forced P&G to adapt and develop new skills.

• By 2006, more than 35% of P&G’s new products had elements that originated from outside the firm, and 45% of P&G’s initiatives had key elements discovered externally.

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Design based marketing

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• Kotchka sought to bring design to every step of product development.

• She hosted a “design tasting,” featuring design case studies for P&G’s top 200 executives , created a P&G design board and created the Clay Street Project, bringing cross-functional teams from their jobs elsewhere across the firm’s global footprint to Cincinnati for 10 weeks to create new brands based on design.

• P&G did not use design as an antidote to its function-driven process but rather as a complement, helping consumers recognize, understand, and in some cases even imagine the functions of a given product.

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Customer centric marketing

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• P&G’s brands faced two moments of truth: first, on the store shelf; and second, when the consumer used the product and decided whether it delivered on its promise.

• CMO Stengel moved P&G’s marketing approach away from its traditionally process-oriented and template-driven culture toward a deeper understanding of who the product was for, what was different about that consumer, and how that consumer expected to use the product.

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Marketing through advertising

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• Used sponsorship opportunities to connect with more people.

• P&G brought a number of celebrity endorsers for the endorsements.

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Marketing through Media

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• At the time of recession, though the firm’s marketing budget was not directly cut, P&G shifted to coupons and in-store promotional activities to maintain the same media presence, while shifting ad costs.

• In 2010, P&G increased ad spending by $1 billion, with a 20% increase in media impressions; higher revenues led to an increase in dollars spent.

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Digital marketing

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• Launch of different websites like pampers.com and BeingGirl.com to provide information to mothers and girls respectively and served as an interactive forum.

• Launched its first mobile marketing ad campaign in 2006.

• In 2010, P&G started using facebook as a marketing tool.