Marketing Capabilities

Harvard Business School Case

• P&G was a global leader in branded consumer goods

• The company managed two dozen $1 billion brands

• The first company to advertise directly to consumers

• P&G was a seasoned marketer with strong consumer research, a powerful innovation network, an evolving marketing strategy, strong marketing talent, and the world’s largest financial commitment to advertising

P&G’s Financial Commitment to Advertising

ADVERTIZING BUDGET(2010): $ 8.68 billion

SALES(2010): $ 78.94 billionNET INCOME(2010): $ 12.74 billionMARKET CAPITALIZATION: 186.63 billion

Sales In 2010Net Sales Segment wise

BeautyGroomingHealth CareSnacks and Pet CareFabric Care and Health CareBaby Care and Family Care

Earnings in 2010Net Earnings Segment Wise

BeautyGroomingHealth CareSnacks and Pet CareFabric Care and Home CareBaby Care and Family Care

Net Sales

2008

2009

2010

75 75.5 76 76.5 77 77.5 78 78.5 79 79.5 80

Sales in $ billion

Sales in $ billion

Company Background

To be recognized as the best Consumer Products and Services company in the World.

We will provide branded products and services of superior quality and value that improve the lives of consumers across globe.

1837

Started International Expansion

in 1930s

Innovation and

R&D:P&G Marketing’s Secret Sauce

• P&G established one of the first corporate labs in the field of consumer goods in 1887.

• This helped them replace the trial-and-error method at that time.

• Company took a scientific approach and connected R&D with sales and marketing.

Crest toothpaste(1955), the first toothpaste with fluoride

Head & Shoulders anti dandruff Shampoo

Pampers(1961) disposable diapers

Were some of the first-time products.

Connect And Develop: New Ways to Innovation

Connect and Develop is P&G’s idea of partnering externally to accelerate innovation. It forced P&G to adapt and develop new skills

Global Networks Under Connect and Develop

Connect & Develop’s Success

P&G’s R&D productivity increased by nearly 60%, and the firm’s innovation success doubled, with a simultaneous drop in cost of innovation. R&D investment as a percentage of sales dropped from 4.8% in 2000 to 3.4% in 2006.

Marketing Strategies that have made

P&GThe Worlds Largest Marketer

Product Innovation And

design

Customer centric marketing Approach

Return on

marketing

investment

Market and marketing research

Research methodsQUALITATIVE• Group Discussions• Interviewed consumers at home• In Store InterviewsQUANTITATIVE• Gathered data on consumer utilizing blind tests• Concept and use test• Quality monitoring• Large scale studies of the habits and practices of

consumers

• P&G’s staple TV ads focused on P&G’s product superiority and the clear functional benefits of its products.

• Lately P&G has shifted towards more design- and emotion-driven advertising.

• Equity of great brands has to be something that a consumer finds inspirational and an organization finds inspirational.

Celebrity Endorsements

Digital

marketing

Averaged 3.6 million viewers in its season on BET

• 13.7 individual views on YouTube• 2 billion media impressions• A milestone in P&G’s transition from a mass to one-to-one digitized marketer

• Product based websites.• Facebook page for more than 15 brands

with more friends in 6 figure range.• Capessa for women on Yahoo!• Manofthehouse.com offered advice on

household care to men. Rather than focusing on single men and heavy sex advice Manofthehouse.com aimed to “speak to the whole man.”

Interactive CommunityPromotion

Loads of hope

• P&G was a company with strong R&D and consumer research, powerful innovation, evolving marketing strategy, strong marketing talent, and strong commitment on media spending budget.

• P&G must be more focus on digital marketing trends and developing interactive brand communities because word of mouth through the social media and brand community becomes a powerful promotional tool to the consumers today.

This presentation is created by Anurag Kumar, IIT Roorkee during a marketing internship under the guidance of Prof.

Sameer Mathur, IIM Lucknow