Marketing Capabilities

Case Study

Overview• History• Brands • Case Analysis• Organizational Structure • Objectives • Conclusion• Disclaimer

History of Procter & Gamble

- Founded in 1837 by candle maker “William Procter“ and soap maker “James Gamble”.

- It was the first company to advertise in the 1880’s.

- The company started it’s international expansion in the 1930’s and In 1945-1980 began to enter market in Latin America, Western Europe and Japan.

- It is considered to be a global leader in the branded consumer goods and known for category defining products .- It expanded into new lines of business through acquisitions , such

as Chairman paper mill(1957) which opened up the household Paper product market for the company. And Folgers coffee giving P&G a presence in food category.

Brands

- Innovation helped round out the company portfolio: disposal diapers (Pampers), first marketed in the early 60’s.

- In the 1980’s , P&G ramped up its global expansion and developed its first global brands including Always, Pringles , and Pantene. - The $57 billion acquisition of Gillete in 2005 made P&G the top consumer goods company Gillete business drag on P&G’s top line ,most of the senior manager left and stock lagged.

- In terms of product they specifically focuses on three choices: to grow P&G ‘s core brands and categories with an unrelenting focus on innovation; To build our business with unserved and undeserved consumers; and to continue to grow and develop faster growing, higher margin business with global leadership potential.

Case Analysis….

Beauty Grooming0%5%

10%15%20%25%30%

% of Net sales% of Net Earning

Health Care

Snacks and Pet

Care

0%4%8%

12%16%

% of Net Sales% of Net Earning

Organizational Structure Source: Procter and Gamble 2010 Annual Report

Fabric Care and Home

Care

Baby Care and Family

Care

0%

10%

20%

30%

% of Net sales% of Net Earning

P&G 2010 Net Sales

NET Sales(in $ Billions)

$75.50 $76.00 $76.50 $77.00 $77.50 $78.00 $78.50 $79.00

200820092010

- Above given charts are the Net sales and Organization structure - Net sales in developing countries has increased marginally from 2008 to 2010.

-The company has a firm belief in innovating and constantly improving their product’s and their brand.

-The company aim to serve 5 billions consumer’s worldwide.-The company has very great brand portfolio and also great application of brand extension.

-P&G is a company with good background and is also the market leader in the fast moving consumer goods(FMCG)

- North America represented 42% of net sales, western Europe represented % of net sales , Asia 15%, Central and Eastern Europe and Middle East and Africa 13% and Latin America 9%- Developed countries represent 66% of total net sales in 2010.

- To Know about the different marketing channels used by P&G.- To Study about the Marketing Strategy used by P&G.- To know about the how the R&D play an important role in success of P&G.

Innovation and R&D: P&G Marketing Secret Sauce

- P&G recognized to boost growth after net sales allowed to 2.6% growth from the previous year.

- Seven global Business unit(GBUs) based on product categories replaced the company’s geographic business unit. P&G felt that the GBUs would help with global product development team focused on innovating in existence categories.

- Overall ,the new structure and approach to innovation ,called “connect-and-develop”, Identified proven, Technologies , packages and product’s that P&G could improve, scale up and market on its own or through partnerships.

- 50% of innovations come from labs and 50% of innovations came through the labs partnership and connection with non- P&G Scientists.

- However the firm struggle to control costs and its stock slids from $118 to $52 over 18 months

- The influx of design had a strong impact on product development of P&G.

- P&G used design as an compliment helping consumers recognize, understand even if they try to imagine to figure out the given product.

- Jim Stengel as chief marketing officer of P&G created a new design unit and named it as “Claudia Kotchka” as vice president for design innovation and strategy and decision making responsibility equal to CMO and head of R&D.

- “Claudia Kotchka” introduced a culture of design such as-- Design Tasting feature design case study for P&G ‘s top 200 marketing executives.- Creation of “clay street” project bringing cross functional teams to create new Brands based on design.

Marketing Strategy: P&G Focus on Design

Multi Brand Strategy & Brand Extension

- The firm is well known for marketing several brands in the same products category.

- Some examples- are Head & Shoulder and Pantene, Oral B and Crest, Tide and Ariel etc.

- They are also known for producing brands in several sizes and forms and launching of new brands under the name of parent brand.

- They also used emotional branding which is evident from “Thank You Mom” Campaign .

- P&G mostly relied on commercial, dramas, and opera to sell their products.

- The ads were based on their product superiority and clear functional benefits of the product.

- P&G with the help of other agencies tried to develop the media neutral ideas that could be translated across the range of media.

- The firm aimed to shift their advertisement towards more design and emotion driven advertising

- P&G involved in many Sponsorship activities.

- The firm was the US team sponsor in the 2010 games also sponsored in 2012 games, also sponsored in 2012 winter gams of Russia

- This helped the firm to increase its visibility

- They also tied up with play 60 initiatives

- The firm used the celebrity endorsements to promote their brands.

- Roger Federer featured in Gillette fusion product ads.

- NHL player named Alex Ovenchkin was named the brand ambassador of Gillette and TV Commercial promoting Gillette fusion razors.

- Digital Marketing enabled a raft of niche segmentation targeted to specific consumers including several online serials, video games and YouTube channels for various products.

- P&G also used mobile marketing campaign to publicize crest whitening plus toothpaste in 2006.

- The firm launched websites such as Pampers.com , Womensofthehouse.com, which provide product information and also served as interacting forum.

- In terms of Social Media Facebook is used as marketing supplement.

- P&G need for identifying the needs of their consumers and providing an alternative for it an example of this is manofthehouse.com.

- P&G maintained its marketing budget despite the recession in 2009.

Conclusion: Point need to be focus by P&G,

P&G should more active in social media and work out on more effective ways .

- They should also develop their websites and keep updating the current scenario.- They should also keep eyes on their competitors and just be ready to answer their any move.

This Presentation is made by Arunav Pratap Shandeelya, IIIT Bhubaneswar ‘ under the Guidance of Prof. Sameer Mathur , IIM Lucknow, durning internship of Marketing Management