Harvard Case Analysis

1. Procter & Gamble
Marketing capabilities

2. P&G’s Establishment
• In 1887, a nephew of one of P&G’s founders, with a chemistry degree, set up an
analytical lab for the company.
• This laid the foundation for a professional R&D division and established one of
the first corporate labs in the field of consumer goods .
• P&G were the pioneers in scientific approach and connected R&D with the
company’s sales and marketing.

3. • First-time products included Crest toothpaste (1955), the first
toothpaste with fluoride; Head & Shoulders dandruff shampoo;
and Pampers disposable diapers (1961).

4. P&G’s sales in 2010
Global Sales in 2010
north america western europe asia central&east europemiddle&east africa lat
Sales
1st Qtr beauty&grooming health &well being

5. P&G’s Total Revenue in 2010
Advertising $8.68 billion
Total sales $78.94 billion
Net income $12.74 billion
Market capitalization $186.63 billion

6. Companies Background
• International expansion was
done in early 1930’s
• Later From 1945 to 1980 ,
expansion was done in Latin
America , western Europe,
Japan

7. P&G’s Approach In Entering
New Markets
•‘’Acquisitions or joint venture on a small
scale, and through trail and error ,learn
the formula for success before making a
major commitment.’’

8. P&G’s acquisitions
P&G
Folger coffee (1963)
Charmin paper
mill(1957)
Frost proof (1981)
Norwich eaton
pharmaceuticals(1981)
Richardson vicks
(1985)

9. Commitment For Consumer Satisfaction
• Innovative approaches to consumers lead to new marketing and
promotional opportunities .
• P&G invested more in market research than any company in the
world.
• The firm conducted over 20,000 research studies each year, and
invested nearly $500 million into developing and executing these
studies. P&G took on consumer research through various research
methods.
• It’s interaction with more than 5 million consumers in almost 100
countries shows its commitment.

10. • Research methods done by P&G:
• Conducted group discussions.
• Interviewed consumers personally.
• Conducted in-context visits and instore interviews
• Gathered data on consumers who purchased P&G products and
further quality monitoring tests were done on the basis of their
feedback to improve their products.

11. To measure consumer interests in 2010
P&G had partnership with Tobii, to
know how customers are attracted to
products by visibility of packing

12. In 2008 P&G took a stake in
Ocado ,a UK based online grocer
to see how consumers use
internet
It also uses EEG(electroencephalography)
technology to measure electrical activity in
brain as subjects were exposed to
commercials

13. ADVERTISING
P&G Sponsored daytime Dramas

14. Main focus of advertisement is to make
people know about product superiority and
clear functional benefits
It developed media neutral idea that can be
translated across a range of media.
Each advertisement were customized by region.

15. In Pakistan they developed the above super
hero commander safeguard which became
very popular

16. In south Korea it advertised with greater emphasis
on huge outdoor displays at Seoul shopping
centre. There it limited its advertising to only few
niche television channels

17. Sponsorships
Us Olympic sponsor for 2010 games with inspiring
ideas “thank you mom for helping me play and grow’’

18. It is the main
sponsor for
the 2016
summer
games held in
Brazil

19. Celebrity endorsements
P&G’s acquisitions of several beauty companies in the
1990s had brought a number of celebrity endorsers into
the P&G stable.
In the next slides we will see the celebrities along with
the brand they are advertising

24. Ivory soap
• This is the first product by P&G to be marketed directly to the
consumers.
• P&G relied heavily on magazine advertising which focused on a clear
message of Ivory’s purity (99 and 44/100ths% pure).
• The marketing strategy was mass mailing enclosing samples of Ivory,
along with a booklet compiling the brand’s advertisements.
• These were followed up with a letter, sent to women, aimed at
making them “patronesses” for Ivory.

26. Tide detergent
• It is a breakthrough product for P&G.
• Initially developed during the height of World War II.
• Tide (then called Product X) besides being just a soap is a new synthetic formula for
a detergent.
• To gain a two-year lead on the competition, the company decided to risk going
straight to market, despite the chance Tide would cannibalize P&G’s other laundry
soap products.

27. • Branding efforts began immediately, with the tag line being “Oh,
Tide makes oceans of suds.”
• With the introduction of top-loading washing machines, P&G
played up Tide’s compatibility with the new appliances, which
were enjoying huge popularity after World War II.
• Tide’s two-year lead on the competition made speed-to-market
an ingrained imperative for the firm, having an impact on all
aspects of the P&G system.

29. Pampers
• A brand that single-handedly created the disposable diaper category for the
mass market, Pampers evolved out of P&G’s experiments in expanding its
paper products line in the 1950s.
• Demographic trends, such as the post-war baby boom, made it clear
disposable diapers would find a huge market.
• P&G had no indication that disposable diapers would replace cloth, only
predicting that about 6% to 7% of cloth users would switch to disposables.
• The true secret to Pampers’ success was the manufacturing efficiencies P&G
managed to achieve, keeping up with demand while keeping costs down and
making the product affordable for the average family

30. The diaper wars taught P&G five strategic lessons:
• Never give your consumer a product-based reason to switch away from your brand.
• Think of every brand that we have, and treat every brand that we have, as though it
were our only brand.
• Always determine whether a product innovation is brand-specific or generic.
• Competition will always follow your technology, not your brand.
• After you have defined your options, always test your worst-case scenario in the
market. If you don’t, and if you have made the wrong move, the market will be the
worst-case scenario.

32. CREST
• The first toothpaste with fluoride, Crest was also a category-defining
product that had gained iconic status along with P&G’s other
household names
• As the product (and others with fluoride) improved dental health,
P&G worked with professional organizations such as the American
Dental Association to persuade dentists that their lucrative
restorative services, which were in decline due to improved dental
health, could be offset by preventative care.

33. • However, Crest’s success also helped ensure the generic status of
fluoride toothpaste
• In the 1980s, Crest slipped in the market as baking soda and
whitening additives bolstered competitors’ offerings.
• P&G responded to these market threats by expanding Crest’s
brand franchise beyond toothpaste, with Crest Whitestrips and,
through an acquisition, the Spinbrush, both in 2000.