Procter and gamble marketing capabilities- Case Study- Harvard Business Review

1. PROCTER
AND
GAMBLE-
Marketing
capabilities
A HARVARD BUSINESS SCHOOL
CASE

2. Company profile
 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 the
United Kingdom.
 CEO : Alan G. Lafley
 Headquarters : Cincinnati, Ohio, United States
 Founded : October 31, 1837, Cincinnati, Ohio, United States
 Subsidiaries : Wella, Braun, Max Factor, Clairol, Gillette India Ltd., more
 Founders : James Gamble , William Procter

3. 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
(Metamucil)

4. • During 1990s : Acquisition of Noxell (CoverGirl and Noxzema) in 1989
Max Factor in 1991
Pet food manufacturer Iams
• During 2000s : Gillette in 2005

5. P&G Mission Statement
We will provide branded products and services of
superior quality and value that improve the lives of the
world's consumers. As a result, consumers will reward
us with leadership sales, profit, and value creation,
allowing our people, our shareholders, and the
communities in which we live and work to prosper.

6. Case Facts
 Global Leader in Branded Consumer goods
 Has 2 dozen $1bn brands known worldwide
 First company to advertise directly to consumers.
 2010, total sales=$78.94bn
 Net Income=$12 bn
 Market capitalization=$186.63bn

7. Business Operations
 Three main units -
 Beauty care
 House hold care
 Health and well being
 Others -
 Baby care
 Pet care
 Grooming segment

8. Organizational structure

9. Business Goals
Three main focuses –
 Maintaining popularity of existing product
 Developing new related products
 Innovating and introducing new products from scratch

10. Current strategy
 Consumers will pay a premium price for products that offer improvements
over either private label products or the brands they have bought for
years.
 Product innovation must be regular with visible improvements year
constantly.
 Product innovation must be designed to constantly “up-scale” consumer
preferences.
 These strategies of innovation and pricing can be used to break into
developing economies.

11. Innovation and R&D : P&G marketing’s
secret sauce
 P&G took a scientific approach and connected R&D with the company’s
sales and marketing.
 Seven GBUs were formed supported by three teams
 Business development team which focused on innovating in existing
categories.
 A venture team tasked with acquiring brands in new areas.
 A market development organizations that would perform intensive market
research.

12. Why collaboration and innovation is
important ?
Better
management
Better sharing of
information
Improving
Productivity
Minimizing
production cost
Improving quality
Reducing R&D
costs

13. Products

14. Brands

15. P&Gs Billion- and Half-Billion-Dollar
Brands

16. Major Competitors

17. Previous Systems and Problems
 Existing methods for collaboration and innovating and developing new ideas wasn’t
good enough.
 No better collaborative system. Email was used for collaboration .
- Senders controls the flow of information.
- May fail to send mail to colleagues when they need it most
 processes for sharing knowledge were notoriously inefficient
 For companies like P & G one vendor simply isn’t enough to satisfy their diverse
needs. e.g. Google search was inadequate.
- Doesn’t always link information from within the company
- Reliance on keywords isn’t ideal for all of the topics for employees might search.
 when P&G executives traveled to meet with regional managers, there was no way
to integrate all the reports and discussions into a single document.

18. Marketing strategy

19. Consumer centric approach
Designing and innovation
Return on marketing investments

20. SWOT Analysis of Marketing Strategy
Favorable Unfavorable
Strengths:-
• Diversified Brand portfolio
• Research and Development
• Strong distribution network
Weakness:-
• Online media and leadership
• Media- social, digital
Opportunities:-
• Diversification if it’s products
• Capitalization of online media
• Growth in India FMCG market
Threats:-
• No new innovation
• Competition
• Government regulation

21. Connect & Develop
 P&G started this strategy in which 50% of
innovation and new products came from
P&G‟s network of labs, and 50% through
the labs—that is, through partnerships and
connections with non-P&G scientists and
engineers. This structure led to successful
product introductions such as the Swiffer
Dusters, Olay Regenerist, Crest Whitestrips,
and Crest Spinbrush.

22. Research on consumer
Qualitatively Quantitatively
Group discussions
Interviewed consumers at home
performed in-context visits
in-store visits
gathered data on consumers utilizing
blind tests
concept and use tests
quality monitoring
large-scale studies of the habits and
practices of consumers

23. “Consumer centric marketing”
To ensure this, the lobby of P&G’s Cincinnati
headquarters featured a faux home and store, so that
employees could physically view and experience the
“two moments of truth” every day
‘Who is your consumer , and what ’s
dif f er ent about her ?’

24. Digital Marketing
 Began with the launch of pampers.com.
 Launched BEINGGIRL.com in 2000 to provide expert advice to
teenage girls and used it to advertise P&G tampons and offer
free samples.
 Launched a mobile marketing ad campaign to promote Crest
Whitening Plus Scope toothpaste.

25.  Unique “Thank you mom” campaign helped it to connect
with consumers emotionally

26. Advertising
 First company to advertise directly to its consumers and
sell its products through “soap operas” by sponsoring
radio and TV programming that targeted women.
 To meet challenges in new markets P&G introduced a
“media neutral” idea, meaning customizing advertising
campaigns for different regions.
 Lafley ,Stengel and Kotchka shifted towards design and
emotion driven-advertising to make the brands
inspirational.

27. Sponsorships
 P&G, initially a U.S. Olympic team sponsor for the 2010 Games, became a worldwide
sponsor, specifically to raise its visibility in emerging markets, for the 2012 winter
games to be held in Russia and the 2016 summer games in Brazil.
 Sponsored NFL and engaged with consumers through national youth health and
fitness campaign focused on fighting childhood obesity and increasing wellness.

28. Social Media
 In 2007, P&G launched two social media sites: Capessa for
women on Yahoo! Health and the People’s Choice
Community .
 P&G began using Facebook as a marketing tool & used
Facebook as a marketing supplement, not a replacement. It
identified 2010 as the year to acquire Facebook friends, but
the years beyond that were for figuring out how to use
them.
 In 2011, when company research showed that men were
going to women’s sites for information, P&G started
Manofthehouse.com, which featured household advice for
men. In contrast to other similar sites Manofthehouse.com
aimed to “speak to the whole man.”

29. Celebrity Endorsements
 P&G received a no. of celebrity endorsers for its
acquired beauty companies and products like
Pantene & Cover Girl Cosmetics.
 Sports stars like Roger Federer were hired to
promote brands like Gillette & Head &
Shoulders shampoo in TV commercials, print
and online ads .

30. Select P&G Iconic Brands’ Marketing
 Ivory
 Tide
 Pampers
 Crest
 Always

31. How is P&G different from others?
BRAND LOYALTY
DISTRIBUTION CHANNEL
INNOVATION
PRICING STRATEGY
QUALITY OF THE PRODUCT

32. P&g 2010 net sales

33. Company’s Corporate mission
Bob McDonald, P&G’s CEO,2010
To improve the lives of its customers through continued innovation to reach
“More Consumers, In More Parts of the World, More Completely”. P&G
focuses 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
 continue to grow and develop faster-growing, higher margin businesses
with global leadership potential.

34. Next for P&G
 Building on its strengths in R&D
 Consumer research
 Product performance
 Innovate as the world’s largest innovator

35. Conclusion
 Treat every brand special and do full justice to it
in every aspect including advertisement, promotions
etc.
 Never give your consumer any reason to switch
away from your brand.
 After defining your options, always test worst case
scenarios.
 Competition will always follow your technology, not
your brand.

36. Disclaimer
 Created by Aman Kumar, IIT Roorkee during a marketing Internship under
Prof Sameer Mathur IIM Lucknow.