Harvard Business School Case

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Who

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Global Leader in Branded Consumer Goods.

Iconic category defining products.

Two – dozen $1 billion brands known world-wide.

First to Advertise Directly to Consumers.

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1945-80…Expanded in Latin America, Western

Europe, Japan.

Kept on acquisitioning companies such as

Charmin Paper Mill, and established its presence

in different markets.

Acquisition of Gillette made them top consumer

good company.

Innovation in products kept them blooming.

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Sales in Different Regions

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Sales

North America

Western Europe

Asia

Middle East Europe, Africa,etc

Latin America

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Exhibit 1

• Ivory soap – its purity says it all. P&G spent about

$3 million on the promotion

• Tide - Originally developed during the height of

World War II, Tide (called Product X) was not just

a new soap, but a new synthetic formula for a

detergent—a breakthrough product .

• Tide’s two-year lead on the competition made

speed-to-market an ingrained imperative for the

firm, having an impact on all aspects of the P&G

system 7

Exhibit 1

• Pampers - A blockbuster brand that almost single-

handedly created the disposable diaper category for

the mass market.

• Luvs, P&G’s “premium” disposable diaper

brand, gave P&G the chance to offer additional

features, but also forced the company to learn several

difficult lessons as the market became commoditized

and competitors matched Luvs’ premium feature 8

Exhibit 1

• Crest - The first toothpaste with fluoride, Crest was also a

category-defining product that had gained iconic status along

with P&G’s other household names.

• Crest’s brand franchise beyond toothpaste, with Crest

Whitestrips and, through an acquisition, the Spinbrush, both in

2000.

• Always - Always sanitary pads, launched in 1984, became

P&G’s first truly global product, the first feminine hygiene

product ever marketed to consumers.9

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Innovation and R&D

• Toothpaste with Fluoride (Crest)

• Anti-dandruff Shampoo (Head & Shoulders)

• Disposable diapers (Pampers)

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but…

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Issues to be addressed

Brand Dilution

Product Design

Increasing Rivals22

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3 changes to the company

Jim Stengel as chief marketing officer

Creating new design unit separate from P&G’s other business units

Focus on product functionality and price

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What did design unit did ?

Design-Tasting, design case studies for top 200 executives.

P&G design board similar to Mattel and Nike

Helping consumers imagining the functions of products.

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Two

moments of

truth26

oFirst Moment of Truth – On the store

shelf

oSecond Moment of Truth – Decision of

customers on satisfaction on product’s

delivery

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Are they going to

measure the return on

marketing investment in

same traditional way in

the era of T.V. ads and

Direct Communication?28

surely not …

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Setting New Metrics

Partnered with firms such as Project Apollo, a

joint venture between media and marketing

Research firm Arbitron Inc. and VNU, the

Dutch media company that owned Nielsen.

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Setting New Metrics

They collected tracked the media habits of 30,000

households representing 70,000 consumers.

The data collected, along with information about

online usage and grocery purchases, and frequent

surveys of attitudes and lifestyle choices, helped

subscribers such as P&G understand its

marketing tactics’ performance.

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Setting New Metrics

Measuring brand loyalty and Customer

relationship.

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Commitment to Consumers

Rigorous product and market testing

Process-oriented

Over 20000 research studies, invested $500 million

Gathered data on consumer’s habits and practices who purchased P&G products.

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Psychological Surveys

Accurately measured the consumers need

Successfully identified the consumer’s need

Delivered the products satisfying the

consumers globally.

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EEG technology measured the electrical

activities in brain as subject were exposed to

the commercials.

This approach held that feelings affected

decisions and human behaviour.

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Example-

Pantene41

The psychological surveys discovered that

women felt less ―hostile,‖ ―ashamed,‖

―nervous,‖ ―guilty,‖ or ―jittery,‖ depending on

the hair product they used, while at other

times they said they felt more ―excited,‖

―proud,‖ and ―interested.‖

The same study found that users of a new

version of Pantene ―reported more joy than

those in the control group.‖42

What kind of

advertisement

did P&G did?43

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P&G leading in advertisement

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However they face challenges in

wining consumers in

sophisticated globalizing market

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• P&G, a U.S. Olympic team sponsor for the 2010

Games, became a worldwide sponsor, exposing to

emerging markets.

• National Football League (NFL) sponsorship gave

consumers opportunities to engage with the

NFL, ―just for choosing P&G brands,‖

• NFL’s Play 60 initiative, a national youth health and

fitness campaign focused on fighting childhood obesity 49

• P&G’s acquisitions of several beauty companies in

the 1990s had brought a number of celebrity

endorsers into the P&G stable, including CoverGirl

spokespersons Christie Brinkley, Drew

Barrymore, Ellen DeGeneres, and Queen

• Taylor Swift also joined the company for the

CoverGirl brand.57 Eva Mendes and Naomi Watts

were announced as new spokesmodels for Pantene

shampoo in the spring of 201150

• The launch of pampers.com, served as an interactive

forum.

• BeingGirl.com, launched in 2000, provided

information and expert advice on embarrassing

issues.

• P&G launched its first mobile marketing ad

campaign in 2006 to promote Crest Whitening Plus

Scope toothpaste. 51

• P&G’s line of ―My Black is Beautiful‖

products, targeting African American

women, introduced two web series in 2010 to

showcase its products.

• Old Spice television commercial and YouTube

sensation, ―The Man Your Man Could Smell Like,‖

gave P&G its greatest exposure in the online

community in 2010 52

• In 2007, P&G launched two social media

sites: Capessa for women on Yahoo! Health

and the People’s Choice

Community, associated with the People’s

Choice awards.

• Manofthehouse.com, which featured

household advice for men, including tips. 53

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• P&G continued to push toward reaching 5 billion

consumers served worldwide, its evolving marketing

capabilities took center stage.

• Digital environment with efforts like ―The Man Your

Man Could Smell Like‖ and Manofthehouse.com

• Emotional efforts such as the ―Thank you, Mom‖ and

―Loads of Hope‖ campaigns.

• Building on its strengths in R&D.

• Evolve and innovate as the world’s largest marketer. 57

DISCLAIMER

Created by Ritesh Ghorse, PICT Pune, during

a marketing internship, by Prof. Sameer

Mathur, IIM Lucknow.

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