Case Study : Procter and Gamble (P&G) Marketing Capabilities

PROCTER & GAMBLE: Marketing capabilities

WHAT IS1 ??

P&G is one of the largest and amongst the fastest growing consumer goods companies in the world, P&G touches and improves the lives of about 4.4 billion people around the world with its portfolio of trusted, quality brands.

PORTFOLIO OF P&G

P&G INFO AND FACTS◦P&G was a global leader in branded consumer goods.

◦Manages 2 dozen of 1$ billion brands known worldwide.

◦The first company to advertise directly to consumers, invented soap operas.

◦P&G was a seasoned marketer with strong consumer research, a powerful innovation network, an evolving marketing strategy, strong marketing talent, and the world’s largest financial commitment to advertising.

WANT BIG IMPACT?Use big image.

OVER THE YEARS P&G HAS GROWN INTO A:

P&G WAS FOUNDED BY JAMES GAMBLE AND WILLIAM PROCTER

◦ P&G pursued international expansion as early as the 1930s, and from 1945 to 1980 it began to enter markets in Latin America, Western Europe, and Japan

◦ Expanded into new lines of business through acquisitions,

◦ Entered new markets was via acquisition or joint venture on a small scale, and through trial and error.

NOW…

• PROCTER AND GAMBLE TODAY IS ONE THE MST SKILFUL MARKETERS OF CONSUMER PACKAGED GOODS IN THE WORLD AND HOLD ONE OF THE MOST POWERFUL PORTFOLIOS OF TRUSTED BRANDS.

• IT SUSTAINED MARKET LEADERSHIP ON A NUMBER OF DIFFERENT CAPABILITIES AND PHILOSOPHIES.

CASE ANAYSIS

OBJECTIVES OF CASE ANALYSIS

1.To deduce the and learn the many and best marketing practices used by P&G

2.To understand the marketing strategies◦ how to

develop marketing innovation

◦ How to apply it across different categories.

◦ How strategies changes with culture and geography.

3.To analyse nad suggest some improvements and understand some risks in the future developments.

1.Established the foundation for a professional R&D division in the company.

SOME DEVELOPMENTS IN THE EXPANSION WERE:

TRIAL AND ERROR METHODS FOR NEW PRODUCTS

P&G took a scientific approach and connected R&D with the company’s sales and marketing

P&G hoped the net result would be “bigger innovations, faster speed to market, greater growth—innovation vitality.

SOME DEVELOPMENTS IN THE EXPANSION WERE:

2.Seven global business units (GBUs) based on product categories replaced the company’s four geographic business units. P&G felt the GBUs would help with global product development and quick-to-market strategies.

SOME DEVELOPMENTS IN THE EXPANSION WERE:

3.Few roles which GBU’s focused on:◦ 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

◦ Market development organizations that would perform intensive market research to ensure global products’ success in local markets

SOME DEVELOPMENTS IN THE EXPANSION WERE:

4.P&G’S NEW APPROACH “CONNECT AND DEVELOP”

• P&G aims to partner with the world’s most innovative minds.

• Connect and develop helps inventors and patent holders to meet needs across P&G business.

RESULTS OF CONNECT AND DEVELOP◦More than 35% of P&G’s new products had elements that originated from outside the firm.

◦45% of P&G’s initiatives had key elements discovered externally.

◦P&G’s R&D productivity increased by nearly 60%

◦Innovation success doubled◦Drop in cost of innovation

Markeing Strategies

Cleaned colours safely

Contained bleach

P&G had pursued a multi-brand strategy, and it managed brands across a category carefully, with each getting individual support and satisfying a segment of the market. P&G’s detergent category illustrated this:

Fresh scent Premium brand

Markeing Strategies • Function • Performance • PriceIntensified focus was put into the design aspect of the product along with the above aspects of a finished product.

DESIGN

“THE FIRST MOMENT OF TRUTH”

◦ Designed the communication experience .

◦ Designed the user experience.

DESIGNED EVERY COMPONENT OF THEPRODUCT

The influx of design had a strong impact on P&G’s product development; design informed the innovation process and even changed the function of some products.

The new emphasis shifted he company toward a more consumer centric marketing approach.

SHIFTED FROM TRADITIONAL TO DIGITAL MARKETING.BUT WHY??

To measure ROMI (return on market investment)

P&G shifted from TV, Print

Soap Operas,Radio and TV broadcasts

TO Digital and Direct Marketing

How Digital marketing helps?The data colllected along with information about online usage and grocery purchases, and frequent surveys of attitudes and lifestyle, helped P&G understand its marketing tactics performance.

Social Cause Marketing

P&G’s Tide Loads of love team providing relief services by washing laundry for families impacted by Texas floods

Leveraging secondary associations by sponsorship

EMOTIONAL BRANDING

CELEBRITY ENDORSEMENTS….

YOUTUBE CHANNEL….

NEW TECHNOLOGIES ALSO CONTINUED TO PROVIDE WAYS TO ENGAGE AND MEASURE CONSUMER INTRESTS HABITS AND SATISFACTION.

SOME ADVANCED TECHNOLOGICAL APPLICATIONS WERE

EYE TRACKING

NEUROMARKETING EEG

• Integrating these new technologies in an attempt to gain more hard data on consumers dovetailed with P&G’s culture of performance-driven products, as the firm leveraged new and innovative ways to learn directly from consumers, while also building the opportunity to create more direct, one-on-one relationships with the target audiences.

MORE ON TV P&G slowed its digital promotions and focused its efforts primarily on television and print advertisements, along with its product websites.

LESS ON SOCIAL MEDIADigital marketing efforts were a large part Of P&G. But, In 2010, only 5 percent of P&G’s $3.2 billion was spent on online marketing.

SOME GAPS IN THE MARKETING STRATEGIES

Some improvement points might be:

• P&G should increase its presence online by collaboration with e commerce websites.

• Should do more promotions on Facebook, twitter, and other social media websites.

• Should do live promotions and should do more sponsorship.

• Should maintain a strong brand in which it is a market leader.

• Should the maintain the spirit and aim behind the company which it is buying.

• Online quizzes and flash sales would be very helpful and handy.

Some Risks might be:

• Competition from local products which may be cheaper.• Limited growth for innovation may not satisfy

consumer’s expectations.• Marketing a large number of products may lead to less

effective promotions.• Brand dilution• May lead to less identification of a brand due to many

products in many different categories.• The failure of a brand extension may lead to harming

the parent brand.

DISCLAMER

Created by Sarthak Rahate, VNIT Nagpur during a marketing internship by Prof Sameer Mathur, IIM Lucknow.(see www.IIMInternship.com)

Sarthak Rahate

Prof. Sameer Mathur