procter & gample

Global leader in branded consumer good.

Procter & Gamble:Marketing Capabilities

How many number of brands company managed?

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

What is the organizational structure of P&G products?

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

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

and Africa – 13%Latin America – 9%

What percentage of sales existed in developing markets in 2010?

How many Global Business Units are there?

Seven global business units are there based on product categories.

How did the company expanded globally?

By acquisitions and joint ventures

Who are the Players?

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

Strategy – Claudia Kotchka

Problems faced

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

Problem 1

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

Problem 2

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

Problem 3

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

Problem 4

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

Problem 5

Maintaining the marketing budget during recession in 2009.

Problem 6

Major Marketing Strategies

Innovation and R & D

• 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.

Connect and Develop

• 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.

Design based marketing

• 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.

Customer centric marketing

• 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.

Marketing through advertising

• Used sponsorship opportunities to connect with more people.

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

Marketing through Media

• 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.

Digital marketing

• 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.