By the way, What is P&G?

Procter & Gamble Co. , also known as P&G, is an American multinational consumer goods company headquartered in downtown Cincinnati,Ohio, United States , founded by William Procter and James Gamble ,both from United Kingdom.

It holds one of the most powerful portfolios of trusted brands. More than 100 !

➢ Today P&G products are sold in more more than 180 countries.

➢ On the ground operations in 80 countries.➢ Manage two dozen $1 billion brands known worldwide,

including Bounty, Crest, Downy/Lenor, Febreze, Gillette, Iams,and Pampers.

➢ First company to advertise directly to consumers, in the 1880s, and invented “soap operas”.

➢ The company has a firm belief in innovating and constantly improving their products and brands. William

ProcterJames Gamble

of case study

➢ To evaluate the marketing strategy taken by P&G during its early expansion in 1980s

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

➢ To evaluate primary and unique communication strategies and money spending

➢ To know about the design, implementation and interpretation of product development

Lets dig some more about P&G

A.G. Lafley

Bob McDonald

Durk Jager

Claudia Kotchka

Marc Pitchard

Jim Stengel

N O PT E PA O &B P GL LE E

“We focused on three specific choices: to grow P&G’s core brands and categories with an unrelenting focus on innovation; to build our business with unserved and underserved consumers; and to continue to grow and develop faster-growing, higher margin business with global leadership potential.”

- Bob McDonald (CEO of P&G ,2010-2013)

➢ Vision To be recognized as the best consumer products and service provider in the world.

➢ Mission To provide branded consumer goods and services to people all around the world.

How do they become market leader in more than 100 brands?

They have a secret!

Innovation and R&DP&G Marketing’s Secret sauce● R&D -: Replacing the trial-and-error

methods commonly pursued, P&G took a scientific approach and connected R&D with the company’s sales and marketing.

● Innovation -: P&G always tries to bring better innovation to its products and services for better experience for its customers along with faster speed to market and greater growth. The two most innovative ideas were Global Business Units (GBUs) and connect-and-develop.

Global Business Units (GBUs)● Seven GBUs based on product categories replaced the

company’s four geographic business units.● Three new teams supported the GBU’s 1. A business development team focussed on Innovating in existing categories 2. A venture team tasked with acquiring brands in new areas and nurturing ideas created by business development team that did not relate to an existing brand 3. Market development organizations that would intensive market research to ensure global products’ success in local market

Connect-and-develop● A new structure and approach to innovation that identified

proven technologies, packages, and products that P&G could improve, scale up, and market on its own or through partnership

● Connect-and-develop had to combat P&G’s long centralized and internal focus

● Ensure that the best ideas, wherever they come from , rise to the surface

● Exert steady pressure on the culture, to continue to shift mind-sets from resistance to ‘not invented here’

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

● However, the firm struggled to control costs, and its stock slid from $118 to $52 over 18 months.

● Net sales also slowed to 2.6% growth from previous .

Lafley,who took the over as CEO in 2000,remained committed to the reorganization and was conviced it would deliver the innovations promisedAs a result➔By 2006, more than 35% of new products and 45% initiatives

had key elements originated outside the firm➔It’s R&D productivity increased by 60%➔The firm’s innovation success doubled ➔ Simultaneous drop in cost of innovation➔ R&D investment as a percentage of sales dropped from 4.8% in 2003 to 3.4% in 2006

Intensified Focus on Design➢ Lafley goal to make P&G the top product -design company in

the world, a departure from P&G’s past focus on function, performance and price

➢ Appointed Jim Stengel as chief marketing officer(CMO) and Claudia Kotchka as vice-president for design innovation and strategy

➢ Mission to design purchasing experience, every component of product, communication experience and user experience

➢ Kotchka hosted a “design testing”

➢ Created the Clay Street Project

➢ Had a strong impact on P&G’s product development

➢ Helped consumers recognize, understand and imagine the functions of a given product

Consumer centric approach➢ CMO Stengel moved P&G’s marketing approach towards a

deeper understanding of who the product was for, what was different about the consumer, and how that consumer expected to use the product

➢ Employees physically view “two moments of truth” every day at company headquarters lobby’s faux home and store

➢ Sampling programs ran in summers➢ Sharp focus to return on marketing investment(ROMI)➢ Get data about consumers attitudes and lifecycles from

external sources➢ Focus on what happened in the shopping experience

Multibranding, or leveraging the P&G brand to drive sales to its sub-brands, proved to be a good advertising strategy;For example,P&G’s successful advertising for the 2010 Winter Olympics of its 18 brands under a single campaign to thank moms around the world

➢ P&G invested more in market research than any company in the world

➢ Interacting with more than 5 million consumers in almost 100 countries

➢ Conducted over 20,000 research studies with $500 million invested in them each year

➢ Large-scale studies of habits and practices of consumers who purchased P&G products

➢ VocalPoint, word-of-mouth program;enrolled more than 600,000 women to pitch its products

➢ Realized that the most powerful form of marketing is an advocacy message from a trusted friend

Advertising

➢ Mostly relied on television commercials, drama and operas to sell their products

➢ Ads were based on their product superiority and clear functional benefits of the product

➢ With the help of other agencies tried to develop the media neutral idea that could be translated across a range of media

➢ Advertising campaigns for some products were customized by region

➢ Created a brand character named “Commander Safeguard”in Pakistan for safeguard soap

➢ Aimed to shift their advertisement towards more design and emotion driven advertising

Product Superiority and clear functionality of products

Soap Operas and Dramas

Commander Safeguard has its own television show, music videos, and website

Sponsorships● P&G had been involved in many

sponsorships activities● This help the firm to increase its visibility

both on the local and global level

Celebrity Endorsement● Used celebrity endorsements

to promote their products● Helped them to affect the

opinion leaders which helps in the growth of brands

Media

Spending

➢ Despite the poor economic climate, maintain its marketing budget

➢ During recession, shift to coupons and in-store promotional activities;shifting ad costs

➢ Maintained the media presence; always remain in touch with consumers

➢ Higher revenues result in dollars spent in media publicity;continued same spending

➢ Shift dollars to digital advertising; to broaden the audience

➢ Websites

➢ Mobile Marketing

➢ Web series

➢ Youtube commercials and responses on twitter and youtube

➢ Launched social media sites of its own to connect with people

➢ Used Facebook as marketing tool;increasing its fan following

➢ Understanding the consumer needs launched sites giving advices on day-to-day problems

Interactive

Community

Promotion

➢ Tide’s post-Katrina campaign,”Loads of Hope” -> Sold T-shirts with various slogans -> T-shirts worn by celebrities to promote Tide with Frebeze -> All proceedings went toward families affected by the hurricane -> Emotional advertising at mass level ➢ Major campaigns in Time Square targeting holiday

shoppers -> Created nine Youtube channels and generated 20 million views per month -> Attracted the “holy grail” audience for marketers; in the group of under 30 years of age

➢ Continued to push toward reaching 5 billion customers

➢ Proven its ability to navigate digital environment

➢ Incorporated a sense of design into its culture

➢ Aimed to complement its strong function-driven marketing background by adding emotional efforts

➢ Building on its R&D, consumer research, and product performance

➢ Continued to evolve and innovate as the world’s largest marketer

Anything else they can do?

Suggestions● Need to get more active on social media and workout more

effective ways to reach people through social media● Develop their websites and try to improve other social sites

that they have● They should keep a close eye on their competitors and be

ready to answer their move● Incorporate more advertisements and sponsorship

programs to maintain its central brand identity,i.e.,P&G ● Keep the competition among its own brands healthy and

check over for any disputes among them

Let's Have a recap

DISCLAIMERCreated by Akshay Mahajan, IIT Kanpur, during a marketing

internship under Prof. Sameer Mathur, IIM Lucknow.