Andrew Mullis

Summary

Procter and Gamble is a Cincinnati-based company with sales of about $83 billion

annually. William Procter and James Gamble founded the firm Procter and Gamble

in 1837. The P&G Company is well known for household products such as Tide,

Gain, Head & Shoulders, and Gillette (just to name a few). P&G is trying to

determine which brands are worth keeping and which brands should be

discontinued in order to increase the firm. The company began mass marketing its

first product over 135 years ago and it was a bar of soap called Ivory. Of the $83

billion overall revenue, the Ivory brand contributes with sales of around $112

million annually. The brand Ivory is a bar soap that has been around since the 1870s

and this was the first product P&G decided to market across the country.

Ivory body wash has higher repeat purchase rates than other rival brands such as

Dove and Dial. This indicates that there must be sufficient brand loyalty among

Ivory users. Even though the market share of Ivory has gone down, the brand loyalty

is still there and consumers of competitor’s product are not as loyal.

Unfortunately, P&G is deciding on whether they should remove the Ivory brand.

Ivory is the product that started branding for P&G and look how successful they are

now.

This move could be detrimental to the P&G brand given its deep roots in the

company’s history. The Ivory brand has been around for such a long time and this

could upset loyal customers. Consumers could start to question the firm’s values

based on the removal of the Ivory brand. P&G has been trying to figure out which of

the 100 brands they wish to keep and focus on. P&G is going to focus on promoting

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70 to 80 brands that account for majority of its revenue and profit. The other 20 to

30 brands will be removed from the product line in order to increase the success of

the other brands. There are various options that Procter and Gamble should

consider before making a final decision.

Key Issues/Problems

There are a various issues associated with the decision to remove the Ivory brand or

keep it around. Although P&G is a hugely successful company, Ivory’s sales

performance has continued to decline over the years. At one point the Ivory brand

had about 20% share of the bar soap market share. This was all the way back in the

1970s when bar soap was the popular soap and Ivory was also being used as dish

soap. Also, there were not as many alternative products available like there are

today. Sales have started to fall due to the fact that Americans have adopted the use

of body wash and liquid soap instead of the traditional bar soap.

Causes

Even though American consumers were starting to adopt the liquid soaps, Ivory’s

market share within bar soap continued to fall. Ivory’s market share of bar soap has

fallen from 4.7%, about 10 years ago, to 3.4% today making it less profitable.

Furthermore, sales of Ivory products have been declining progressively on an

average of 4% every year. These percentages justify American consumers choosing

other bar soap brands over Ivory. P&G has a few options they should consider

before making a decision that could hugely impact their firm in the long run.

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Solution1

If P&G decides to continue the Ivory brand, then they should revamp the entire

product. Ivory has kept the exact same image for over a millennium and the brand

needs to keep up with competition. Around 3 years ago, a P&G team came up with a

plan to rejuvenate the Ivory brand but never actually occurred. There was a plan to

include products like a two-in-one hair and body wash and redesigning the brand’s

logo and packaging. The logo is still the original one created over a millennium ago

so change is long overdue. P&G has never changed the look of the Ivory brand in

order to see if it will change the perception and increase sales. In this market, there

is an ambiguous amount of competition and so products must strive to stay on top.

The product should be reintroduced with a newer, sleeker look so that it can appeal

to the newer generations. The campaign can focus on history of the Ivory brand and

introduce where it will be going in the future. Although the trend is that consumers

are not using bar soap as often, there are still some consumers who prefer the bar

soap. Every consumer is different and this is something many companies fail to

realize. I would suggest reinventing the Ivory brand and see if it improves the sales

of the brand before deciding on discontinuing the product for good. Removing the

product could damage P&G’s reputation and turn consumers away from the other

products. Reintroducing the Ivory brand could be beneficial for P&G and retain

customer brand loyalty.

Solution 2

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Organic products have always been around without consumers recognizing how

they affect the entire world. In recent years, organic products have become more

popular and more American consumers are starting to adopt them. This comes

along with consumers wanting to live a sustainable lifestyle to enhance the world.

Products such as Toms have increased the awareness about the organic lifestyle.

Mothers are prone to organic products because they want to keep their children as

free from harm as possible. P&G could create a campaign discussing the organic

lifestyle and how it affects families around the United States. This campaign could

focus on a mother/child relationship and how using Ivory affects their lifestyles.

Ivory bar soap is made from pure vegetable oils and is whipped with air during

production enabling it to float in water. P&G should focus on promoting the Ivory

brand as an organic product and how it helps the environment. There are no

chemicals used in the soap that are harmful to the environment. This could be a

campaign for a more “green” lifestyle.

Solution 3

Even though the Ivory brand has been around for more than 130 years, P&G could

decide on the brand being removed altogether. Ivory bar soap’s sales have been

declining repeatedly over the past decade. P&G could decide to focus on other

products that are actually showing growth and dominating their markets. The

market share has fallen from 4.4% ten years ago to 3.4% last year. This indicates

that even though consumers are switching to liquid soap, the Ivory brand is still

losing to other bar soaps. The Ivory brand does not seem to be contributing to the

success of P&G like the other products are. The Ivory brand was once a powerful

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force in the bar soap market, but it has struggled to keep up over the years. The firm

could decide to move forward without the Ivory brand and focus their time and

money on growing products.

Best Solution

Deciding to remove the Ivory brand before trying something new would not be the

best move. This product has been around for many years and removing it could

reduce brand loyalty. My first solution is probably the best idea for P&G to consider

which is reintroducing the Ivory brand to consumers through a campaign. The

campaign could still discuss the brand’s history but, most importantly, show where

Ivory is today. Updating the Ivory logo could enhance the perception of the brand

and be beneficial to consumers who may feel negatively about it. Revamping a

product that has been around for so long would be like introducing an entirely new

product. The Ivory brand has been around for such a long time and still has not been

altered in the least bit. P&G should try to save the Ivory brand before considering its

removal altogether. If this idea does not work, then P&G should consider other

options.

Conclusion

It is no secret that the Ivory brand is suffering and not performing the way it once

did, like a few other products on the chopping block. Considering all options would

be beneficial for Procter and Gamble before deciding on something that could hurt

the brand. The history of the Ivory brand goes back many years and removing the

product from the product line could change consumer’s perspective on P&G and

what they stand for. Removing Ivory would alter P&G’s credibility because this

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product was developed not long after the company was established. Exploring

various options before making a final decision would be in P&G’s best interest in

order to retain current customers.