Transcript
PROCTER AND GAMBLE- MARKETING CAPABILITIESA HARVARD BUSINESS SCHOOL CASE
P&G- AN OVERVIEWFounded in Cincinnati, Ohio in 1837 by two relatives due to they married sisters
1) William Procter - Candlemaker2) James Gamble – Soapmaker
High quality products boosted the national reputation
COMPANY BACKGROUND• Acquisitions : Charmin Paper Mill (1957), Folgers Coffee (1963)
• During 1960s : Pampers – Disposable Diapers Downy – Liquid Fabric Softeners Bounce – Fabric Softener Sheets
• During 1980s : Always/Whisper, Pringles, and Pantene Soft drink producer Crush International Limited Citrus processing company Frostproof Norwich Eaton Pharmaceuticals (1981) Richardson-Vicks (NyQuil and Vicks) G.D. Searle’s nonprescription drug division
PORTFOLIO OF P&G
Vision
"Be, and be recognized as, the best consumer products and services in the world"
MISSION
• "Procter and Gamble will continue to serve consumers by continuously innovating products that will allow us to be leaders in household and personal care, health care, and food products. To produce products with the utmost care to give nothing but quality to our communities. And to continue to grow so that we can maximize our shareholder's wealth" (Procter & Gamble. 2010)
CASE FACTS
Global Leader in Branded Consumer goodsHas 2 dozen $1bn brands known worldwideFirst company to advertise directly to consumers.2010, total sales=$78.94bnNet Income=$12 bnMarket capitalization=$186.63bn
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
• 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.
P&G’S NEW APPROACH“CONNECT AND DEVELOP”
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
LEVERAGING SECONDARY ASSOCIATIONS BY SPONSORSHIP
P&G SHIFTED FROM TV, PRINT
SOAP OPERAS,RADIO AND TV BROADCASTS
YOUTUBE CHANNEL….
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.
EMOTIONAL BRANDING
CELEBRITY ENDORSEMENTS….
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.
SOME GAPS IN THE MARKETING STRATEGIES• 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 MEDIA• Digital 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.
P&g 2010 net sales
P&G- US SHIFTING Focus on differentiated market demand
Growth in the amount of brands and products
Change in market demand
Improve integration and decision efficiency
P&G- EUROPEAN STRUCTURE SHIFTING
• Issues• Profitability was directly related to country
managers instead of to brand managers• The local managers, were very resistant to
adopt global brands and make their own brands global
• Aim of the shift• Cross border cooperation• Changing the focus from country
management to product management
P&G- ORGANIZATION IN 2008Dismantling the Matrix structure, replacing by:
1. 7 Global Business Units (Profit responsible)
2. 7 Market Development Organizations (Market responsible and sales growth)
3. Global Business Services (Internal business processes)
Objective: Improve the speed to innovate
Looking for "Standardization & Globalization"
High growth expectations• Sales Growth: 6-8%• Profit Growth: 13-15%
WHY DID P&G ADOPT THIS STRUCTURE?• The necessity to ensure a long-term scalability across the
innovation• The prevention of a future failure acting as a risk-adverse
businessThe cost and performance dilemma • To improve the alignment and cut costs through The
exchange of ideas• The technological connection and fast transfer of technology
from one to another business
KEEP OR CHANGE THE STRUCTURE?• Keep the structure• Centralization is important, improve the resource efficiency• Don’t come back to complete Matrix structure• Reduction of the layers – Improve the process efficiency –• Long-term view focus on investing in innovation
• The structure needs more time to succeed • Implement a committee conformed by personal from different parts
of the structure forecasting the cost cutting• The statements were overestimated Alignment all employee to the
change – engage people
DISCLAIMER• Created by Shagun Kansal, IIT Roorkee during a marketing
Internship under Prof Sameer Mathur IIM Lucknow.
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