Procter & Gamble: Marketing Capabilities Harvard Business School Case

What is P&G and where does it come from?

Procter and Gamble(P&G) is the largest manufacturer of consumer products

P&G is best known for its Iconic category-defining products.

One of the top 10 largest companies by market capitalization

Mainstay in American business for over 150 years. $83.62 billion in sales and $14.48 billion profit by

2012

Founded in 1837, headquartered in Cincinnati, Ohio by William Procter and James Gamble

P&G manages two dozen $1 billion brands known worldwide

P&G rich brand heritage

P&G pursued international expansion as early as 1930’s

From 1945 to 1980, penetrated many markets in Latin America, Western Europe and Japan

By the early 1990’s, the company had become the US’s top cosmetic company with the acquisition of Noxell and

Max Factor

The $57 billion acquisition of Gillette in 2005 made P&G the top consumer goods company

IN 2010, P&G set the TARGET to reach 5 BILLION CONSUMERS across globe

What is P&G’s Marketing Secret Sauce?

How did they become so successful?

Well there is no Secret Ingredient

P&G major Asset is their never ending Innovation and Impeccable R&D

In 1887,P&G established an analytical lab, making it the first corporate labs in the field of consumer goods.

P&G took a scientific and connected R&D with the company’s sales and marketing

In 1999, 7 GBU’s based on product categories replaced companies 4 geographic business units to help them in

implementing quick to market strategies

Connect-and-develop strategy was implemented expanding the borders of innovation

P&G stock slid but they maintained their commitment towards innovation

P&G’s Marketing Strategy?

Historically, P&G had pursued a multi-brand strategy with each getting individual support an satisfying a segment of the market.

In 2000, P&G set its goal to become a top product-design company in the world, a departure from P&G’s past focus on function, performance and price.

P&G did not use design as an antidote to its function-driven process but rather as complement, helping consumer recognize, understand, and sometimes even imagine the function of a given product

New Emphasis shifted the company towards more consumer-centric marketing approach

What is Consumer-centric marketing ?

It begins with ‘Who is your consumer, and what’s different about her?’

The Common theme is a deep understanding of the consumers who offer the potential for growth

P&G strove to develop metrics that measured brand loyalty and customer relationship

In 2008, P&G wooed recession-wary consumers with more focused attention to in-store promotions such as coupons, displays etc.

P&G conducted over 20,000 research studies each year, and invested over $500 million into developing and executing these studies.

Qualitatively, P&G ran focus group discussions, interviewed consumers at home, and performed in-context visits and in-store interviews.

Quantitatively, P&G gathered data on consumers utilizing blind tests, concept and use tests, and quality monitoring.

New technologies also continued to provide P&G with ways to engage and measure consumer interests, habits and satisfaction.

P&G’s Advertising Strategy?

P&G had been a marketing trailblazer from the outset

P&G have relied heavily on developing long-standing partnerships with advertising agencies to develop robust brand identities for its portfolio of consumer goods.

One of the first example of P&G’s successful advertising campaign for the 2010 Winter Olympics which featured the commercial that thanked moms around the globe for their effort.

P&G’s advertising had been built around the idea that functionality would sell over emotional connection. Also, they believed that equity of great brands has to something that a consumer finds inspirational and an organisation finds inspirational.

Sponsorships

P&G, a U.S Olympic team sponsor for the 2010 Games . Worldwide sponsor for 2012 winter games and also 2016

summer games in Brazil. P&G sponsor NFL and tied in with the NFL’s Play 60

initiative.

Celebrity Endorsements

P&G brought a number of celebrity endorsers, including stars like Ellen DeGeneres, Eva Mendes and Naomi Watts.

Tennis legend Roger Federer was featured in Gillette Fusion products and soon became huge hit

2010, Sebastian Vettel, the “youngest ever” Formula One champion, secured a long-term sponsorship with P&G to promote Head & Shoulders shampoo.

Digital Marketing and Social Media

Throughout the 1990s, P&G’s digital activity had been limited to its operations of brand websites.

By 1999, P&G expanded its digital content with the launch of pampers.com and expanded it to 49 countries till 2007

P&G launched its first mobile marketing ad campaigns in 2006 promoting Crest Whitening Plus Scope toothpaste

Segmented Campaigns such as “My Black is beautiful” and “ The Man Your Man Could Smell Like” garnered huge success.

P&G used Facebook as a marketing supplement, not a replacement.

Manofthehouse.com was P&G’s earlier social media effort which featured household advice for men.

Building on its strengths in R&D, consumer research, and product performance, P&G continued to evolve and innovate as the world’s largest marketer.

What are future opportunities for P&G moving forward?

Historically the giant told consumers what they needed and wanted, but now it have shifted its focus directly on consumers and asks for their input up front.

This new outlook drives all of P&G’s planning and strategy, which includes broadcasting commercials created by consumers and building online communities dedicated to consumers favourite P&G products.

P&G has found that consumers will build the brand themselves.

Major Products

1. Ivory – is a soap 2. Tide- is a brand of laundry detergent. 3. Pampers- is a brand of disposable diaper 4. Crest- is a brand of toothpaste 5. Always- is a brand of sanitary pads

P&G had a network of 70 technology entrepreneurs to maintain its pace with the latest research.

Its key strategy ,Connect-and-develop had to combat P&G’s long-standing centralization and internal focus.

Over its Journey, P&G have been successful in keeping the cost of innovation low as a percentage of sales.

Conclusions As we know this market, also known as FMCG market

have many competitors for P&G. During its time in the arena, P&G have focussed and

targeted the middle class segment for increasing the sales as well as market shares.