This presentation was created by me during a marketing internship under Professor Sameer Mathur, IIM-L

1. HARVARD
BUSINESS
CASE STUDY
KRUNAL CHAKRAVORTY

2. Company Background
Founded in 1837 and Headquartered in Cincinnati , USA
Had become largest cosmetics brand in US in early
1990’s by acquisition of Noxwell
Pursued global expansion from 1930’s and entered Latin
America, West Europe and Japan from 1945-80 period
Expansion included increasing line of business
Since 1980’s worked on developing global brands like
Pringles, Pantene and Whisper/Always

3. Why study this case
P&G – A successful global brand
Large number and wide range of consumers globally
Model organisation in terms of performance and quality with
focus on innovation
Provides good idea of strategies pursued, successes and
failures of such a large organisation

4. ANALYSIS

5. Situation analysis
Operations in 80 countries
Wide range of products ranging from beauty, grooming, snacks,
fabric care, baby care and home care
0
10
20
30
40
50
60
70
80
2008 2009 2010
Net sales of P&G at end of previous decade
Net sales in billion $ Share of developing markets

6. Company expansion
Has expanded to operate in 180 countries
Entered new markets by small scale acquisition or joint ventures,
trial and error and understand how to succeed before full scale
expansion
42%
21%
15%
9%
13%
Global Sales Distribution
North America
Western Europe
Asia
Latin America
Central and Eastern
Europe+Middle East+Africa

7. Previous structure
Previous structure was of clear hierarchy
- often prevented ideas from reaching the top or was very slow
Had business units on geographic units
- Less focus on individual brand
Also had focus less on design of product and completely on
functionality, performance and price
- less consumer connect

8. Leaders in the organisation
Durk Jager – ex CEO
A.G Lafley – succeeded Jager as CEO
Bob McDonald – CEO who succeeded Lafley
Jim Stengel – Chief
Marketing Officer
Claudia Kotchka – Vice President, Design
Innovation and Strategy

9. New structure
Shift of structure from geographic to global business units (GBUs) based on product categories
Three support teams for GBUs – venture team(to acquire new brands) business development teams
(innovate in current sectors) and market development team (perform intensive market research)
Segments P&G caters to:

10. Shift of strategy
Shift to global business units due to sales drop and connect-and-develop
strategy (explored in depth later)
Freshly emphasis and focus on design to complement existing product
characteristics of performance and functionality
Move from process oriented to consumer centric marketing
Also aided to understand customers better
Goal reach more consumers globally
Structure was also varied to decentralise and bring ideas to surface faster

11. Changes made to organisation structure to enhance newly adopted strategy
VP, Design and strategy was given wide ranging powers equivalent to CMO to ensure
faster decisions and intense focus on design
Called in cross functional teams from across the world at Cincinnati for 10 weeks to
create new brand designs
Improved P&G’s product development and innovation process
Also helped consumers understand and recognise products better, and some cases
even imagine its functions more easily
Shift of strategy

12. Commitment to consumer
P&G – history of rigorous product and market testing
Invested more than any other company on market research
20000 research studies annually in almost 100 countries interacting
with 5 million consumers
Qualitative methods of research
Focus group discussions
Interview consumers at home
In-context visits
Store interviews
VocalPoint – Word-of-moth program which enrolled 600000 women to pitch
it’s products
Quantitative methods of research
Firm gathered wide range of data by
blind tests
Also used concept and use tests
Quality monitoring
Large scale study of consumer habits

13. Advertising
Celebrity association has been well used by P&G with strong
association with focus on women, especially under CoverGirl line
Was a consequence of large number of beauty products it acquired
Also engaged with sports stars like Roger Federer and Rahul
Dravid under its Gillette brand ads
Also sponsored many events like NFL games to engage more
number of people and potential users
Raised visibility of brands by becoming a sponsor Olympics

14. Lets now look at
Challenges faced
Failures
Brand adaptability
Successes
Of P&G

15. Challenges faced
Connect and Develop strategy
Highlighted P&G’s caution while choosing partnerships
Involved identifying proven technologies, packages and products to
improve and scale up in market by itself or by partnerships
Resulted in successful product introductions like Olay Regenersit and
Crest Spinbrush
Initially Cost of to was very high, and firm struggled to control costs
Stock slid from $118 to $52 due to this

16. Challenges faced
Connect and Develop strategy
Also had to combat the centralised structure of P&G and internal focus
Eventually was key to firms successes
Parameters were set while choosing potential partners
Had to represent ideas that could benefit from existing P&G
technologies, marketing, distribution
Company used chess boards to evaluate how technology acquisition in
one area affected others

17. Challenges faced
Connect and Develop strategy
Employed 70 tech entrepreneurs to develop firms’ needs list and
adjacency maps and maintain and connect with innovation hubs like
labs, universities and suppliers
Six connect-and-develop hubs in India, China, Japan, Western
Europe, Latin America and USA)
Also relied on outside facilitators to make viable connections
Contacted suppliers to solve its’ problems and NineSigma to connect
science and technology with other innovation hubs mentioned

18. Challenges faced
Return on market investment (ROMI) calculation
Difficult as type of marketing’s success could not be measured directly
Used data from Project Apollo by Nielsen and online usage and grocery purchase
to understand customer needs
Finally was evaluated by developing metric to measure brand loyalty and customer
relationships
Other Challenges
Initially Gillette acquisition resulted in a Gillette’s businesses drag on P&G’s top line;
lots of senior staff of brand leaving and P&G stock lag
Dot-com bubble burst was challenge since P&G had expanded digital marketing and
had to return to TV and print

19. Failures
Luvs failure
Was positioned as premium disposable diaper with lots of
additions to Pampers but taught it many lessons strategically
1.One brand shouldn't cause consumer switch away from
other in-house brand
2.Treat every brand as the only one
3.Determine whether innovation is generic or brand-specific
4.Competition follows technology not brand
5.Market becomes worst case scenario if options not well
defined

20. Failures
Despite strong push the firm struggled behind rivals in 2009; eventually
resulted in strong push towards sponsorship and improving brand
recognisability
Online failures
Some online initiatives “Sunset Heat ” used to promote Escada perfume
failed and bored viewers
Using Facebook to connect with consumers
- each brand setup accounts with “friends”
- large number of connects but took till 2010 how to use this to enhance
connect with these people

21. Brand
One of the main reasons why company has been so successful globally
and across segments
Marketing strategy variations
• Has adapted different strategies for each brand in each market with
ads varied to connect with consumers of that region
• During recession attracted consumers with instore coupons and
special offers
Always brand was varied to appeal to women globally, being first
feminine hygiene product in many of these markets

22. Brand
Varied its ads to focus on adding design and emotion drive in
addition to central theme of functionality
Was necessary to improve connect with people, as previously ads
focussed on product superiority and functional benefits of
product
Was part of 2002 re-strategizing to better meet global markets
Added men's’ website (Manofthehouse.com) to cater specifically
to men, who often used women's websites for recipes, stain
removal information, cleaning the house etc.

23. Successes
Has a large number of first and successes to it name
Connect-and-develop strategy has worked well
By 2006, resulted in 35% of new products with elements from
outside the firm
R&D productivity increased by 60%
Cost of innovation decreased
Investment decreased from 4.8% to 3.6% as percent sales

24. Successes
Campaigns was conceptualised with the end in mind and thought of
If it doesn’t work in the store it’s a miss
Ivory – first product directly sold to customers
P&G innovated by sponsoring daytime radio shows and dramas
In 2009, despite tough economic situation maintained marketing budget and shifted ad
costs and simultaneously broadening customer base

25. Successes
Active community interaction
Enhanced brand image and sales of Tide by helping in post
Hurricane Katrina efforts and T-shirts sold to raise funds
under “Loads of Hope” campaign
New initiatives have complemented function based ads by
adding emotional touches like “Thank you, Mom”
Has built on strengths of strong R&D, consumer research
and product performance

26. Successes
TIDE
Was a breakthrough product at end of World War 2
Since new product, could skip blind tests, retests, polling consumers,
redeveloping product and other intermediate steps
despite risk of harming P&G as a whole
Got attractive new logo designed by famous industrial designer
further increasing visibility and popularity

27. Successes
PAMPERS
Brand that revolutionised disposable diaper market
Success also could be attributed demographic trends
Post world-war 2, and subsequent baby boom.
Main reason for success was manufacturing efficiencies of
P&G, keeping costs low and making product affordable for
large number of users

28. Successes
CREST
Another category defining product
Became household name and was first toothpaste with Fluoride and tie-up with American
Dental Association helped increase use
ALWAYS
Sanitary pads launched in 1984
Was one biggest innovation in feminine hygiene with equally successful variation in terms of
size and constant improvement
Achieved global appeal very rapidly

29. Alternatives possible
Leveraging various brands’ strong presence for even stronger
multi-branding strategy
In-store promotions to club various products of different
categories which may complement users requirements.
E.g.: Offering Tide and Crest toothpaste together at special rates
Associating with new TV series content developers like Netflix to
improve brand visibility and further broaden customer base

30. RECAP
Company background
Why study this case
Situation analysis
Strategy shift
Challenges faced
Failures
Brand adaptability
Successes
Alternatives possible ahead

31. This presentation was created by me during a marketing internship
under the guidance of Professor Sameer Mathur, IIM-L.
DISCLAIMER