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ICMR Center for Management Research

P&G’s Brand Management System

This case was written by Gupta V, ICMR Center for Management Research (ICMR). It was

compiled from published sources, and is intended to be used as a basis for class discussion

rather than to illustrate either effective or ineffective handling of a management situation.

2003, ICMR Center for Management Research

ICMR, Plot # 49, Nagarjuna Hills, Hyderabad 500 082, India

Email: [email protected].

www.icmrindia.org

P l e a s e n o t e t h a t y o u a r e n o t p e r m i t t e d

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P&G‟s Brand Management System

“The brand -management aura has propagated one of the biggest myths about P&G, that it doesnothing but influence consumers to buy the company’s products. P&G has always beenmisunderstood as a marketing company. The fact is that P&G's fortunes have been built on

product innovation. Brand management is an integral aspect of it, and it's the way the business ismanaged.”

1

- John Smale, Former Chairman, P&G.

“Our brand is our bond with consumers. When we succeed, we convert a trademark into atrustmark, and another P&G brand becomes a valued and trusted member of the household.”

2

- John Lafley, President & CEO, P&G.

INTRODUCTION

Based in Cincinnati, US, Procter & Gamble (P&G) was one of the largest manufacturers of fastmoving consumer goods (FMCG) in the world. For the financial year ending June 2003, P&Greported revenues of $43.38 bn and net earnings of $5.18 bn. In 2003, the company was ranked31st among the Fortune 500 companies. P&G had operations in 80 countries globally, with anemployee-strength of around 1,10,000 worldwide.

Analysts attributed the evolution of P&G, from a small soap and candle maker into a multi-billiondollar company, to its highly successful marketing and brand management strategies (ReferExhibit I for P&G‟s competitive advantage in branding). In 2003, the company marketed morethan 300 brands to nearly five billion consumers in 160 countries across the globe. P&G had asignificant market share in several product segments (Refer Exhibit II) including laundry andcleaning (Tide, Cascade, Dawn), paper goods (Bounty, Charmin, Pampers), beauty care (Pantene,Olay, Cover Girl), food and beverages (Folgers, Pringles, Duncan Hines), and health care (Crest,Scope, Metamucil). Commending P&G‟s exceptional growth, an analyst said, “Within a

paternalistic corporate culture, P&G pioneered in brand management, in consumer surveys formarketing research and in new product research and development.”

3

A pioneer in introducing a formalized brand management system way back in the 1930s, P&Gconstantly modified its brand management strategies as and when the company expanded its

product & brand portfolio and its business operations globally. The company introduced thecategory management model in the 1980s, focused on the „glocal‟ branding strategy in the early1990s and made changes in its brand management system under the Organization 2005 restructuring exercise4 in the late 1990s.

1 In the article titled “1931 Memo First Devised Role of the 'Brand Man,'” by Cliff Peale, The Cincinnati Enquirer , May 20, 2001.

2 In the article titled “Report on the Business 2000 Annual Meeting of Shareholders,” in www.pg.com,

May 4, 2001.3 In the article, “Corporate Watch: Procter & Gamble,” in www.corporatewatch.org.uk. 4 The detailed description about P&G‟s organizational restructuring under Organization 2005 and its

implications is covered in the ICMR case study, “Restructuring P&G.”



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In 2000, P&G introduced the „cohort management strategy‟ for managing brands. The strategyinvolved grouping of brands to appeal to similar consumer groups. Describing the future of cohortmanagement strategy, Robert Rubin (Rubin), Director of Netquity at Forrester Research,5 said,“The days of reaching large audiences with generic messages and promotions will give way to a

new era in which individuals will be targeted and measured based on their behavior. To compete,consumer packaged goods (CPG) manufacturers will abandon brand and category managementand discover new marketing efficiencies as they learn to use Internet technology to focus oncohorts of consumers.”

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BACKGROUND NOTE

Procter & Gamble was established in 1837 when candle maker William Procter and his brother-in-law, soap maker James Gamble merged their small businesses. They set up a shop in Cincinnatiand nicknamed it “porkopolis” because of its dependence on swine slaughterhouses. The shop

made candles and soaps from the leftover fats.

Since the very beginning, P&G laid major emphasis on developing brands. The earliest brands ofP&G, which were advertised in a Cincinnati newspaper in 1838, were Palm Oil soap, Rosin soap,Toilet and Shaving soap, and Tallow candles. By 1859, P&G had become one of the largestcompanies in Cincinnati, with sales of $1 mn.

In 1879, P&G introduced Ivory, an all-purpose soap, for the first time in the US. Ivory could beused for both personal cleansing and household cleaning. Soon Ivory emerged as the most popularsoap brand in the US. By the 1880s, P&G sold brands like White, Famous, Perfect, Queen Olive,Topaz, Handy, Town Talk, Good Luck, Blue, Princess Olive, Duchess Olive, Very Good,Countess Olive, Toilet, Green Seal, Polo, Japan Olive, Simon Pure, Yellow Erasive, GermanOlive, Lenox, Velvet and Golden Bar.

By 1890, P&G was selling mor e than 30 different varieties of soap including „Ivory.‟ At that time,

P&G‟s advertising comprised of full-color print ads in national magazines. The advertisementswere very creative, resulting in a growing demand for its soaps from consumers.

P&G encouraged the promotion of rival brands within the company to compete against oneanother. In the early 1920s, when Lux, Palmolive and Cashmere Bouquet soaps were introduced

by P&G‟s competitors, P&G introduced Camay. When Camay did not perform well, the

management felt that it was because it had not been allowed to compete head-to-head with Ivory.This episode resulted in the development of a brand management system at P&G.

THE BRAND MANAGEMENT SYSTEM

THE INITIAL DECADES

The brand management system at P&G came into existence in 1931 when Neil H. McElroy(McElroy), P&G‟s Promotion Department Manager, formed a marketing division based on

competing brands, controlled by a group of employees. The system enabled P&G to design andcustomize its marketing strategies f or each brand. The concept of a „brand man‟ (later known as

brand manager) was also introduced in P&G‟s brand management memo. The memo listed the

duties and responsibilities of a „brand man‟ (Refer Exhibit III).

5 Based in Massachusetts (US), Forrester Research focuses on the implications of technological changes on business.

6 As quoted in the ar ticle “The Internet Will Force Brand Management to Evolve to Cohort Management by 2005,” posted on www.forrester.com, September 7, 2000.



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When a product emerged from the R&D department of P&G and was ready to be marketed, it wasassigned to a brand manager. P&G‟s brand management system empowered the brand manager

significantly. A brand manager focused on a single product or a small family of products. He/Shecoordinated activities ranging from market research and manufacturing to sales, package design

and advertising. Brand managers were given the responsibility of identifying and understandingthe consumers‟ needs, sharing customers‟ feedback about their products with the R&D depar tmentand monitoring their product trials across the world. Each brand manager was also maderesponsible for the financial performance of his/her brand(s).

In the late 1940s, in an attempt to build a healthy competition and keep its salesforce alert,McElroy introduced new brands to compete with the existing brands of P&G. For instance, thelaunch of Tide affected P&G‟s already established „Oxydol‟ brand. Soon, P&G introduced „Cheer‟

in the same product line. Commenting on this innovative measure, TIME magazine in its coverstory in October 1953 reported, “McElroy thought of a free -for-all among brands, with no holds

barred. He was really responsible for the refinement of the system, which led to individual brandscompeting against one another.”

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P&G‟s brand names were typically one or two syllables long, easy to pronounce, distinct and easyto remember. P&G looked for design elements consistent with the brand‟s positioning. For

instance, the Tide graphics conveyed power and heavy duty. The baby on Pampers suggestedgentle softness. The shape of Mr. Clean bottle resembling its mascot – Mr. Clean, a character withthe cross-armed stance, suggested the strength of the product. P&G attempted to maintainconsistency while presenting its brands to the consumers and was very cautious about changinganything about the brand that the consumer had become familiar with, including logo, packagedesign, colors or flavors.

P&G brands had different performance characteristics and provided distinguishable consumer benefits. For example, when Tide was introduced as the first heavy duty synthetic detergent in1946, it was claimed to be the most effective detergent in the market. Soon, other effectivedetergents were introduced in the market by P&G to compete with Tide. Some were positioned tocompete head-to-head with Tide; others offered additional benefits such as cleaning andwhitening. A few other brands that were introduced by P&G later were positioned for differentapplications such as cleaning delicate fabrics. All these brands competed with one another aroundthe edges, but they stood for different primary benefits.

P&G did not seem to believe in product life cycles and took steps to ensure that its brands did notmature. The company regularly revitalized its brands by improving their performance or addingfunctionality. In the 1950s, white cotton was the predominant fabric. So P&G improved Tide‟s

whitening power with fluoresces. In the 1960s and 1970s, brighter colors and synthetic fabrics became more popular resulting in clothes that were tougher to clean. P&G‟s “Extra Action” Tide

came with new technology that facilitated soil removal for all kinds of clothing. In 1984, a liquidversion of Tide was introduced. In the case of Crest, the development of tartar control technology

was a major achievement and added vitality to the brand. P&G also evolved a product throughdifferent forms, such as gels and pump dispensers. Typically, P&G introduced a new brand forevery significant technological innovation that occurred.

As the operations of P&G grew over the decades, multiple product lines were introduced, each havingseveral competing brands resulting in a major expansion of P&G‟s brand portfolio. This led to a

gradual transformation of the brand management system, prevalent at P&G during the 1940s and1950s. During the mid-1980s, P&G introduced the new „category-management

8 model‟ (CMM).

7 In the article titled “1931 Memo First Devised Role of the Brand Man,” by Cliff Peale, The Cincinnati Enquirer , May 20, 2001.

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Category Management is a distributor/supplier process of managing categories as strategic business units(SBUs), producing enhanced business results by focusing on delivering consumer value. Category



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THE CATEGORY MANAGEMENT MODEL

Under the CMM, the brand managers did not compete against each other with similar product brands – contrary to the idea envisioned by McElroy. For instance, in the detergent product category, brands likeTide and Cheer shared the available marketing expenditure and other financial resources but were notallowed to compete for the same segment of customers. Hence, while Tide was positioned as the

premium brand, Cheer targeted the customers in the economy segment.

Though the brand managers enjoyed the same autonomy, they were accountable to the categorymanagers. The category managers were made responsible for the inventories, sales and profits of anentire product category or product line. The brand managers under each category worked together inclose coordination with each other. For instance, Bobbie Jo Ehlers (Ehlers), the brand manager ofP&G‟s personal cleansing division, comprising Olay bar soaps and body wash, worked in closecoordination with the brand manager of Olay facial care. Ehlers also had to work in coordination withother soap brands such as Zest on joint merchandising programs, resulting in common store displays.Highlighting the importance of such coordination as a core element of category management, Ehlersexplained, “From the retailer‟s point of view, he or she is buying the category. There‟s still some

healthy competition. But we have a broader portfolio now, and it would be silly of us to ignore the power of that portfolio, to ignore this lever that we didn‟t have before.”

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The CMM also increased the responsibilities of brand managers. Noel Geoffroy (Geoffroy) wasthe brand manager for Dryel, P&G‟s home dry-cleaning kit, launched in the late 1990s. In the firstyear of Dryel‟s launch, Geoffroy had to travel extensively and visit approximately 300 shopping-mall demonstrations. Two brand assistants and a brand administrator extended their support toGeoffroy. They met once a week and coordinated the activities of sales, finance, productdevelopment and packaging divisions related to the Dryel brand. Geoffroy also had to maintain aregular contact with Dryel‟s advertising agency, Leo Burnett US (based in Chicago). The brandmanagers at P&G also performed some of the functions of a general manager (like overseeinginventory stocks), in addition to their marketing functions. Commenting on the dual role, Geoffroy

said, “To me, that‟s what makes Procter unique, you‟re doing both of those things. I truly feel likeI‟m running a company called Dryel. I run this business, I‟m closer to consumers. I know what

works and what doesn‟t.”10

The CMM enabled P&G to manage its brands more effectively. Moreover, it also helped in further professionalizing the sales team and their efforts. For instance, prior to the implementation of thismodel, P&G‟s sales representatives focused on promoting an individual product or brand. Now, they

had to promote all product brands under one category. Hence, the focus shifted from promotingindividual brands to improving the profitability and market share of the entire product category.

THE „GLOCAL‟ BRANDING STRATEGY

By the early 1990s, as P&G‟s operations expanded globally, the top management felt the need forfurther streamlining the brand management system. Earlier, P&G was known as “the one-pagememo company.” The brand managers of P&G were asked to offer their ideas, suggestions, or

business plans in just one-page. The plan was communicated to the respective functional unitheads and the top management, who reviewed the document and returned it back for necessarychanges. This process continued until the memo was finally accepted.

management includes six inter-related components, of which two – Strategy, and Business process - aremost essential and called the „core‟ of category management. The other four are called enabling

components and include scorecard for SBU performance, Organizational capabilities, InformationTechnology, and Collaborative relationships between trading partners.

9 In the article titled “Branded for Success at P&G,” by Cliff Peale, The Cincinnati Enquirer , May 20, 2001.10 In the article titled “Branded for Success at P&G,” by Cliff Peale, The Cincinnati Enquirer , May 20, 2001.



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P&G decided to replace the one- page memo by a „talk sheet.‟ The talk sheet was an informaloutline that allowed brand managers at several levels to develop and refine a business proposalthrough discussions, rather than through written memos alone. P&G also emphasized greatercooperation among different functions. For instance, in the past, if a P&G brand manager putforward a proposal; it had to pass through the hierarchy of functional unit heads and the topmanagement. Under the new approach, teams were often put together. These includedrepresentatives from different functional areas who were involved right from the start of the

proposal. This enabled P&G to cut costs, reduce product development time and increase sales.

By the mid 1990s, P&G had established global strategic planning groups (GSPGs) that constitutedof 3 to 20 individuals, for each of its product categories. Each GSPG was assigned several tasks.They developed global manufacturing & sourcing strategies and gathered data about the country-specific marketing strategies. The GSPGs were also responsible for developing global and local

brand policies that involved decision-making on the elements of brand strategy that had to bestandardized across the world, and the elements that had to be customized according to the localmarkets. They were also responsible for gathering knowledge and best practices of variouscountries and disseminating them globally. Explaining the function of GSPGs, Kerry Clark,

P&G‟s President of Market Development and Business Operations said, “With a typicaltransnational customer, we conduct business on a day-to-day basis with our local teams in each ofthe customers‟ countries. However, we coordinate this work via a very lean, global multifunctionalteam that quickly and efficiently shares and builds best practices across borders.”

11

While the GSPGs were responsible for developing branding strategies, the implementation of thesestrategies was carried out by a global category team (GCT). Each of the product categories of P&Gwas handled by a GCT which was headed by an executive vice president. The GCT constituted topmanagement executives handling different line responsibilities like production, marketing andresearch & development for their respective product categories within their assigned geographicalregion. Hence, there were no organizational barriers in carrying out decisions. The country specific

brand managers implemented the branding strategy in local markets.

P&G encouraged „branding teams‟ at the country level to develop their own brand building programs. When a branding program was highly successful in a country, it was tested in othermarkets and implemented immediately. For instance, in 1985, P&G acquired Pantene Pro-V. Thecompany faced difficulties expanding the product into markets outside the US and France. In 1990,the branding team in Taiwan discovered that the image of models with shiny hair reflected thecustomer‟s aspirations for healthy hair. Soon the team introduced a new tagline in itsadvertisements – “Hair so healthy it shines.” The campaign was very successful and Pantene Pro-V emerged as a market leader in Taiwan within six months of the launch of the campaign. Soon,the global strategic planning group of the hair care product category tested the concept and itssupporting advertising, and subsequently introduced it in 70 countries.

BRANDING UNDER ORGANIZATION 2005

In July 1999, P&G launched Organization 2005, a six-year long organizational restructuringexercise. Under this exercise, P&G sought to reorganize its organizational structure from havingfour geographically-based business units to five product-based global business units. There werefour important components of P&G‟s new organization structure (Refer Exhibit IV) – global

business units (GBUs), market development organizations (MDOs), global business services(GBS) and corporate functions (CF).

Under the new structure, the GBUs defined the brand equity for each of their brands. For instance,Pantene‟s brand equity, as the consumers perceived, was providing „healthy, shiny hair.‟ ThePantene Team falling under the Beauty Care GBU was responsible for further building on this

brand equity. The whole brand equity building exercise would start with the launching of a new

11 In the article titled “How P&G Leverages Its Scale,” posted on www.emmconsulting.net dated March 2003.



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product or the upgradation of existing products. In a majority of the cases, a new product waslaunched simultaneously around the world. The marketing campaign communicated the samefundamental benefit and the product was manufactured according to the standardized globalformula and package specifications.

The MDOs were responsible for promoting the sales of the „Pantene brand‟ in their region. Forexample, in the US, this could imply focusing on sales through Wal-Mart‟s stores. This required

working in close collaboration with the GBUs for developing large size packages as per thedemand of the stores that wanted to maximize the value for their shoppers. On the contrary, thefocus in Asian countries like India could be on developing small product packages like sachetssince the consumers in India usually bought products in lesser quantity, avoiding majorexpenditure on hair care products in one go.

The GBS provided business services including accounting, employee benefits and payroll, ordermanagement, product logistics and systems operations to the branding team in its area. Forexample, GBS located in Costa Rica served the US markets while the GBS located in Manilaserved the Indian markets. Each CF worked as a consulting group and ensured that the brand

building teams were leveraging upon the latest information and best practices prevalent in the product category. The extent of support lent by the CF depended upon the number of peopleassociated directly with a brand, including members of both GBUs and MDOs.

BUNDLING BRANDS AROUND CONSUMER GROUPS

During the initial years of the new millennium, P&G introduced its new brand managementstrategy that grouped brands together to appeal to consumers with similar attitudes and needs. Thestrategy (coined by Forrester Research as „cohort management‟) focused on bundling many

brands into online as well as offline marketing efforts aimed at similar consumer groups. This wascontrary to P&G‟s previous practice of grouping brands according to similar product categories.

The „cohort management‟ strategy also helped in developing better consumer relationships byusing behavioral data about consumers gathered from traditional and online retailers.

The new strategy led to the emergence of cohort managers whose primary responsibility was toidentify and segment consumers into groups of individuals who possessed similar needs,

preferences, attitudes and the ability to purchase. The cohort managers were required to possessstrong analytical capabilities in order to capitalize on the information gathered about consumer

behavior. Differentiating between the role of cohort and brand managers, Rubin explained,“Cohort managers operating across brands will decide which ads and promotions to present to

consumers based on continuous consumer information. Brand managers will focus on detailedoperational issues like inventory and product formulation.”

12

According to analysts, the best cohort management initiative by P&G was the introduction of itswebsite „www.homemadesimple.com,‟ launched in mid 2000. The website targeted household

consumers by offering them special promotions, inviting them to participate in online contests,making them free offers, sweepstakes, and offering new and innovative products before these

products were available in retail stores. It also posted content/articles on household management,explaining how P&G‟s five brands – Swiffer (household sweeper system), Dawn (dish washliquid), Mr. Clean (multipurpose cleaner), Febreze (fabric spray and laundry aid) and CascadeComplete (dishwashing detergent) – could help in maintaining a clean household and makehousehold activities simpler. The website also offered consumers an option to subscribe to a freemonthly e-mail newsletter offering valuable advice and informative articles on householdmanagement. By February 2002, the website had 1.16 million unique visitors (Refer Exhibit V)while more than 2.4 million individuals subscribed to its free e-mail newsletter.

12 As quoted in the article, “The Internet Will Force Brand Management to Evolve to Cohort Management by 2005,” posted on www.forrester.com, September 7, 2000.



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The cohort management strategy enabled P&G to market complementary products together. Itincreased the marketing efficiency of P&G by reducing the number of consumers the companytargeted and maximizing the time it had with each consumer. Explaining the significance of theInternet to target consumer groups, Andy Walter, Director, „HomeMadeSimple‟ project, said, “The

Internet adds significant value to the cohort concept and really allows you like no other medium totake this cohort and bring it to life.”13

By mid 2002, P&G launched the „Golden Households‟ program that involved bundling of 16 of

the company‟s key household brands and marketing them jointly through direct mails, e-mails andother marketing media rather than on an individual basis. The program aimed at identifying thosecustomers who contributed the highest revenue & profit and had high loyalty for each of these

brands. It also aimed at cross-selling other P&G brands to high value customers and building longterms relationships with them.

Analysts felt that the program was in the right direction towards an effective cohort managementstrategy. Throwing light on the rationale behind launching this program, Alan Middleton,Marketing Professor at Schulich School of Business, York University, Toronto, said, “This is an

attempt to see if by bundling different brands together, the consumers can get the same overallsolution. It makes a lot of sense for what consumers want and it‟s also more cost -effective.”

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Explaining the importance of measuring the customer value in the cohort management strategy,Rubin said, “The real value of each brand to consumer packaged goods (CPG) manufacturers will

become evident once they‟re able to identify and measure their most profitable consumers across

all their brands. The ability to link specific marketing activities to product purchases at anindividual level will form the basis of lifetime value analysis and will enhance today‟s analysis

based on raw sales volume metrics.”

QUESTIONS FOR DISCUSSION:

1.

P&G was a pioneer in introducing a formalized brand management system. Discuss theevolution and growth of the brand management system at P&G. What according to you is thesignificance of having a formalized brand management system for managing a large portfolioof brands? Elaborate.

2. P&G‟s „brand management system‟ of the 1930s had gradually evolved into a „category

management system‟ by the 1980s. Briefly describe the category management concept and itssignificance. How did it differ from the earlier brand management system in practice at P&G?

3. In the initial years of the new millennium, P&G started bundling brands around consumergroups, also known as „cohort management‟ strategy. Comment on the efficacy of this strategy

in maximizing the potential of individual brands of a vast brand portfolio of P&G.

4.

According to Rubin, “Consumer packaged goods (CPG) manufacturers will abandon brandand category management and discover new marketing efficiencies as they learn to useInternet technology to focus on cohorts of consumers.” In the light of this statement, comment

on the future of cohort management strategy. Do you think CPG manufacturers will abandon brand and category management and adopt cohort management?

13 As quoted in the article, “P&G Online Strategy Challenges Martha Stewart,” by Jack Neff,www.adage.com, April 8, 2002.

14 As quoted in the article, “Packaged Goods Marketers Test Solutions-Based Approach,” by Ber nadetteJohnson, www.strategymag.com, February 25, 2002.



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Exhibit I

P&G‟s Competitive Advantage

P&G‟s core strength is its ability to build big, leadership brands. The company‟s goal is to

continue doing that better and more consistently than any other company in the world. Itssuccess in building brands is based on three factors:

Understanding consumer needs: P&G talks with more than 5.5 million consumersworldwide every year. The company uses a variety of approaches, from in-home visits toconcept and product testing via the Internet. In this way, it is able to discover new, unmetand often unarticulated consumer needs.

Inventing new product technologies: This is what P&G calls “connecting what‟s needed

with what‟s possible.” The company has more than 27,000 patented technologies and, as aresult, can simply find more innovative ways to turn its best ideas into improved productsthat meet consumer needs better.

Commercializing and expanding new products globally: On the strength of P&G‟s

marketing and distribution partnerships, the company can introduce big, new ideas fasterthan ever before. These capabilities have helped it win consumers around the world.Shoppers buy P&G products more than 20 billion times a year – which is the basis for agreat deal of confidence in the company‟s future, and in the strength of P&G‟s core

competencies as an innovator and marketer.

Adapted from www.pg.com.



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Exhibit II

P&G‟s Business Segments

Segments Products Important Brands

Revenues

(2002-03)(In $ billion)

Fabric &

Home Care

Laundrydetergents and

bleaches, fabricconditioners,household cleanersand dish washingdetergents

Tide, Ariel, Downy, Lenor, Gain,Cascade, Ace Laundry, Cheer, Bold,Swiffer, Bounce, Dash, Dawn, Fairy Dish,Joy, Febreze, Ace Bleach, Era, Bonux,Dreft, Daz, Vizir, Salvo, Mr. Proper, Mr.Clean, Flash, Fairy Laundry, Viakal,Dryel, Alomatik, Ivory Dish, MaestroLimpio, Rindex.

12.56

Baby,

Feminine,& Family

Care

Diapers, facial

tissue, toilet tissue, paper towels, babywipes, feminine

protection.

Pampers, Luvs, Dodot, Prima, Always,

Whisper, Tampax, Lines Linidor, Evax,Ausonia, Orkid, Charmin, Bounty, Puffs,Tempo, Codi Feminine Care

9.93

Beauty

Care

Facial cleaners andmoisturizers, handand body lotion,

personal cleaning,color, cosmetics,skin carecosmetics,

deodorants,shampoos, hairconditioners, hairspray.

Pantene, Olay, Head & Shoulders, CoverGirl, Clairol Herbal Essences, Max FactorCosmetics, Hugo Boss, Secret, SK-II SkinCare, Zest, Safeguard, Rejoice, VidalSassoon, Clairol Nice ‟n Easy, Old SpiceDeodorant, Pert, Ivory Personal Care,Sure, Camay, Laura Biagiotti, SK-II

Cosmetics, Old Spice Fragrance,Physique, Noxzema, Giorgio, Muse.

12.22

Health

Care

Toothpastes,toothbrushes,mouthwashes,allergy remedy,stomach remedy,cold remedies,decongestant,

sinus remedy,throat drops, pharmaceuticals.

Iams, Eukanuba, Crest, Asacol, Actonel,Vicks NyQuil, Metamucil, VicksVapoRub, Fixodent, Scope, Pepto-Bismol,Didronel, Vicks/Wick, Macrobid, PUR,Vicks DayQuil, ThermaCare, Vicks 44,Kukident, Cacit, Vicks Sinex, Dantrium.

5.80

Food &

Beverages

Folgers, Pringles, Sunny Delight,Millstone, Punica, Torengos.

3.24

Source: www.pg.com



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Exhibit III

P&G‟s Brand Management Memo (1931)

This May 1931 memo, written in part to defend the hiring of two new people, describes a brand

management team consisting of a “brand man,” an “assistant brand man” and several “fieldcheck-up” men. The following excerpt describes the duties and responsibilities of the “brand

man.”

Brand Man

(1) Carefully studies shipments of his brands by units.

(2)

Where brand development is heavy and where it is progressing, examines carefully thecombination of effort that seems to be clicking and tries to apply this same treatment toother territories that are comparable.

(3)

Where brand development is light:

(a) Studies the past advertising and promotional history of the brand; studies the territory personality at first hand – both dealers and consumers – in order to find out the trouble.

(b) After uncovering the territory‟s weakness, develops a plan that can be applied to thislocal sore spot. It is necessary, of course, not simply to work out the plan but also to besure that the amount of money proposed to be sent can be expected to produce results ata reasonable cost per case.

(c) Outlines this plan in detail to the Division Manager under whose jurisdiction the weakterritory is; obtains his authority and support for the corrective action.

(d) Prepares sales help and all other necessary material for carrying out the plan. Passes it

on to the districts. Works with the salesmen while they are getting started. Followsthrough to the very finish to be sure that there is no let-down in sales operation of the plan.

(e) Keeps whatever records are necessary, and makes whatever field studies are necessaryto determine whether the plan has produced the expected results.

(4) Takes full responsibility, not simply of criticizing individual pieces of printed word copy, but also for the general printed word plans for his brands.

(5)

Takes full responsibility of all other advertising expenditure on his brands (such as in-storedisplays and promotions)

(6) Experiments with and recommends wrapper (packaging) revisions.

(7) Sees each District Manager many times a year to discuss with him any possible faults in the promotion plans for his/her respective territory.

Adapted from www.pg.com



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Exhibit IV

Organization Structure under „Organization 2005‟

The new organization structure has four pillars including Global Business Units, Market Development

Organizations, Global Business Services, and Corporate Functions.

Global Business Units and Market Development Organizations

Pillars Global Business Units Market Development Organizations

Comprises Baby, Feminine and family Care

Baby, Feminine and Family Care

Beauty Care

Fabric & Home Care

Food & Beverage

Health Care

North America Asia/ India/ Australia

Northeast Asia

Greater China

Central-Eastern

Europe/ Middle East/ Africa

Western Europe

Latin America

Philosophy Think Globally Act Locally

General Role Create strong brand equities, robuststrategies and ongoing innovation in

products and marketing to build majorglobal brands.

Interface with customers to ensuremarketing plans fully capitalize on localunderstanding, to seek synergy across

programs to leverage Corporate scale,and to develop strong programs thatchange the game in our favor at point of

purchase.

Global Business Services and Corporate Functions

Pillars Global Business Services Corporate Functions

Comprises GBS Americas located in CostaRica

GBS Asia located in Manila

GBS Europe, Middle East & Africalocated in Newcastle

Customer Business Development

External Relations

Finance & Accounting

Human Resources

Information Technology

Legal

Marketing

Consumer & Market Knowledge

Product Supply

Research & Development

Workplace Services

Philosophy Minimize Administration Costs Be the Smartest/Best

General

Role

Bring together transactional activitiessuch as accounting and ordermanagement in a single organization to

provide services to all P&G Units at best-in-class quality, cost, and speed

Ensure that the functional capabilityintegrated into the rest of the companyremains on the cutting edge of theindustry. We want to be the thoughtleader within each CF

Source: www.pg.com



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Exhibit V

Ranking of Top Ten FMCG Marketers & Lifestyle Magazine Sites (February 2002)

Rank Site No. of Visitors (000s)

1 candystand.com (Kraft foods) 2,319

2 MarthaStewartOnline (Martha Stewart Omnimedia) 1,162

3 homemadesimple.com (Procter & Gamble) 1,157

4 epicurious.com (Conde' Nast) 882

5 postopia.com (Kraft Foods) 606

6 S-Mag.com (Procter & Gamble) 378

7 verybestbaking.com (Nestle USA) 234

8 marsbrightideas.com (Masterfoods) 151

9 healthiercat.com (Nestle USA) 134

10 realsimple.com (Time Inc.) 118

Source: ComScore Networks



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Additional Readings & References:

1.

Make It Simple, www.businessweek.com, September 9, 1996.

2. Category Management: A Matter of Joint Optimization, www.library.nijenrode.nl,

January 1998.

3.

Peale, Cliff, Hall Recognizes Business Herigate, The Cincinnati Post , August 11, 1998.

4.

Dryel is Ready to Go, www. mywebpages.comcast.net, June 12, 1999.

5.

Maddox, Kate, P&G: Interactive Marketer of the Year, www2.iona.edu, June 15, 1999.

6. Horstman, Barry, Neil McElroy: He served at P&G, Pentagon, The Cincinnati Post ,July 6, 1999.

7.

Tucker, Randy, P&G Changes Its World, The Cincinnati Enquirer , August 1, 1999.

8.

ANA Annual Conference Focuses on Brand Building for the 21st Century,

www.ana.net, November 16, 1999.

9.

Aaker, David, and Joachimsthaler, Erich, The Lure of Global Branding, Harvard Business

Review, November-December 1999.

10.

P&G 2000 Annual Report, www.pg.com, 2000.

11.

Maney, Russ, and Flink, Cheryl, and Lietz, Chris, Consumer Centric Marketing,

www.seurat.com, February 2000.

12.

Aaker, David, and Joachimsthaler, Erich, Brand Leadership, Brand Week , February 21, 2000.

13.

Clean Sweep: P&G Puts Dryel Through Its Paces For Mall Visitors,

www.promomagazine.com, March 1, 2000.

14. Buss, Dale, Procter & Gamble Faces the Future, The Standard , April 3, 2000.

15. Spethmann, Betsy, Guerrilla Grows Up, www.promomagazine.com, June 1, 2000.

16.

Larkin, Patrick, Ad Agency to Handle Two P&G Detergents, Cincinnati Post , July 22, 2000.

17. Kiesewetter, John, Bob Wehling, a Patron Saint For Children‟s Causes, The Cincinnati

Enquirer , August 6, 2000.

18.

The Internet Will Force Brand Management to Evolve to Cohort Management By

2005, www.forrester.com, September 7, 2000.

19. Lyons, Kate, Webs Gets Tastier for FMCGs, www.bandt.com.au, September 29, 2000.

20.

Stammen, Ken, Cincinnati A Center For Brand Identity, Cincinnati Post , December 4, 2000.

21.

Procter & Gamble and Magnifi Partner to Provide Enterprise Marketing ManagementService, www.procter.se, January 23, 2001.

22.

Larkin, Patrick, P&G to Market Business Skills, The Cincinnati Post , January 23, 2001.

23. Managing „Cohorts,‟ Not Brands, May Best Serve Customers, www.gwsae.org, March 2001.

24.

Gupta, Prashant, Procter & Gamble e-Strategy, www.susus.biz, April 3, 2001.

25.

Roberts, Bill, Rediscovering Corporate Treasure, Knowledge Management Magazine,

May 2001.

26. Report on the Business 2000 Annual Meeting of Shareholders, www.pg.com, May 4, 2001.

27. Peale, Cliff, Branded For Success at P&G, The Cincinnati Enquirer , May 20, 2001.



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28.

Peale, Cliff, 1931 Memo First Devised Role of the 'Brand Man,' The Cincinnati Enquirer ,May 20, 2001.

29.

Peale, Cliff, Branded For Success at P&G, The Cincinnati Enquirer , May 20, 2001.

30.

Shriver, Fried, and Jacobson, Major Matters Archive, www.ffhsj.com, October 5, 2001.31. P&G Shines With Pantene Pro-V, C&K Management Ltd., 2002.

32.

Johnson, Bernadette, Packaged Goods Marketers Test Solutions-based Approach,

www.strategymag.com, February 25, 2002.

33.

P&G Ranked 7th

on Fortune, www.pgcareers.com, March 3, 2002.

34. Neff, Jack, P&G Shifts $75 Million Account, www.adage.com, April 5, 2002

35. Neff, Jack, and Elkin, Tobi, P&G Vs Martha, ComScore Networks, April 8, 2002.

36. Neff, Jack, P&G Online Strategy Challenges Martha Stewart, www.adage.com, April 8, 2002.

37.

Neff, Jack, The Surprising Power of „Cohort‟ Web Sites, www.adage.com, April 8, 2002.

38. Anfuso, Dawn, Interview: Forrester Research‟s Rob Rubin, www.imediaconnection.com,June 10, 2002.

39. E-Centives & Forrester Research Sound the Call for New Consumer Packaged Goods

Marketing Imperative, www.e-centives.com, June 28, 2002.

40. P&G Fact Sheet, www.pg.com, August, 2002.

41.

P&G‟s High Flying Stunt to Stand High Above Crowd, www.bandt.com.au, August 15, 2002.

42.

Brooker, Katrina, The Un-CEO, Fortune, September 3, 2002.

43.

Bechtold, Vivienne Lee, Winning in a Wal-Mart World, www.forrester.com,October 20-21, 2002.

44. Bob Wehling, www.start.pgalums.com, October 26, 2002.

45. Neff, Jack, Inside P&G‟s Intranet Marketing Intelligence System, www.adage.com,October 29, 2002.

46.

Neff, Jack, and Chura, Hillary, P&G Issues List of Sweeping Ad Account Realignments,

www.adage.com, November 15, 2002.

47.

P&G Aligns All Brands Under Grey and Public Networks, www.pg.com, November 15, 2002.

48.

Boyle, Matthew, Dueling Diapers, Fortune, February 4, 2003.

49. How P&G Leverage Its Scale, www.emmconsulting.net, March 2003.

50.

Profile, www.reveries.com, April 15, 2003.51.

1890-1945: A Company Built on Innovation, www.pgbalkans.com.

52.

Emerge, Global Leader! www.themanagementor.com.

53. Marketing Program, www.indstate.edu.

54.

Neil McElroy, www.infoplease.com.

55. Category Management, www.fmi.org.

56. Neil McElroy, www.adage.com.

57. Corporate Watch: Procter & Gamble, www.corporatewatch.org.uk.

58.

www.pg.com.



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Books Referred:

1.

Swasy, Alecia, Soap Opera: The Inside Story of Procter & Gamble , Simon & Schuster, 1993.

2. Decker, Charles, “P&G 99: 99 Principles and Practices of Procter and Gamble‟s

Success,” Harper Collins Business, 1998.

Related Case Studies:

1. Nestlé‟s Brand Management Strategies, Reference No. 503-060-1.

2.

Intel – The Component Branding Saga, Reference No. 502-079-1.

3. L‟Oréal – Building a Global Cosmetic Brand, Reference No. 503-076-1.



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