Procter & Gamble : Marketing Capabilities

Harvard Business School Case

WhatIs

P & G

Procter & Gamble Co.• An American multinational consumer goods company.• Headquartered in downtown Cincinnati, Ohio.• Founded by William Procter and James Gamble.

It holds one of the most powerful portfolios of trusted brands.

Who are the players ?

• CEO A.G. Lafley • CEO Bob McDonald• CEO Durk Jager• CEO Jim Stengel• Claudia Kotchka, o Vice-president, Design unit• Marc Pritchard, o Global Brand Building Officer

SITUATION

ANALYSIS

Has good company

background

Enters new market with a mission and

decisions

Takes scientific approach to connect

with people

Brings in a design unit as a part of

marketing strategy

Shift from product based marketing to consumer-centric

marketing

Communication through direct & digital

marketing & sales promotion

Multibranding

Tries to move forward with an aim to reach 5 billion new consumers

Connect &

Develop

o Know about the design , implementation & interpretation of product development & marketing strategies.

o Evaluate primary and unique communication strategies and money spending.

o Innovation , R&D and acquisition

ANALYSIS OFNET SALES

ANDEARNINGS

Growth of P&G’s core brands & categories with an unrelenting focus on innovation & design.

Building business with unserved & underserved consumers through consumer-centric , digital & direct and neuromarketing , multibranding and interactive community promotion.

Continue to grow & develop faster-growing higher margin businesses with global leadership potential.

Is “INNOVATION and R&D” The Secret Sauce

of Marketing for P&G ?

Growth of P&G’s core brands &

categories with an unrelenting

focus on innovation & design.

I

Building business with unserved &

underserved consumers through

consumer-centric , digital & direct and

neuromarketing , multibranding and

interactive community promotion.

II

MARKETING STRATEGY

• A new design unit was created for design innovation & strategy. A culture of design was introduced in P&G which complemented function-driven process.

• A consumer-centric marketing approach was followed which allowed customization on the basis of needs of people.

COMMITMENT TO THE

CONSUMER

o A lot of innovative approaches were introduced in product and market research that gained qualitative and quantitative information from the consumers , in-turn resulting in better products and positive buying behaviour.

o Word-of-mouth advertising was followed , especially in relation with females through campaigns like “Thank you Mom” & “Loads of Hope” which acted as a means of emotional branding.

o The pre and post purchase behavior towards products were measured by online grocer sites & Neuromarketing which helped in building one-to-one relationship with customers.

ADVERTISING

o It was the first company to sell its products directly to consumers through dramas , T.V commercials and operas instead of including wholesalers and retailers in the chain.

o To compete in less familiar markets , it developed “Media neutral” idea that could be advertised in different and relevant local languages.

o Lafley , Stengel and Kotchka aimed towards design and emotion driven-advertising along with benefits and function driven one.

SPONSORSHIP

o It sponsored the U.S. Olympic team in 2010 and raised its visibility as a worldwide sponsor for 2012 winter games in Russia and 2016 summer games summer games in Brazil.

o It engaged its consumers in fitness campaign through NFL sponsorship whereas the major campaign “Thank you Mom” still remained the best in touching everyone’s heart.

CELEBRITY ENDORSEMENTS

• P&G endorsed many celebrities and spokesmodels for its acquired beauty companies and products like CoverGirl cosmetics and Pantene shampoo.

• Gillette and Head & Shoulders ads featuring sportspersons were advertised through YouTube, T.V., online and print media.

• P&G also pursued a host of promotion, sponsorship, and endorsement relationships as well as other nontraditional outlets, such as product placement in television and film.

MEDIA SPENDING

o During recession in 2009 , P&G shifted to coupons and in-store promotional activities to maintain its media presence while shifting ad costs.

o In 2010, P&G increased ad spending by $1 billion, with a 20% increase in media impressions.

o McDonald, who became CEO in 2010, stated that P&G would maintain the same level of spending, while shifting dollars to digital advertising and other new media to broaden the audience.

DIGITAL MARKETING

o Digital media enabled niche experimentation targeted to specific customers, including online serials , video games, and YouTube channels for specific products.

o P&G launched its first mobile marketing ad campaign in 2006 . The campaign also released TV commercials and print advertisements, and had an online presence.

o P&G’s line of “My Black is Beautiful” products, introduced two web series in 2010 to showcase its products.

o Old Spice television commercial and YouTube sensation, “The Man Your Man Could Smell Like,” gave P&G its greatest exposure in the online community.

o From mass marketer , P&G became one-to-one digitized marketer.

SOCIAL MEDIA

• 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.

• P&G used Facebook as a marketing supplement, not a replacement. It identified 2010 as the year to acquire Facebook friends, but the years beyond that were for figuring out how to use them.

INTERACTIVE COMMUNITY PROMOTION

P&G used T-shirts having slogans and endorsed celebrities like Katrina Kaif to promote sale of products like Tide. The T-shirts were worn by celebrities and were sold online and proceeds went to hurricane affected families.

Continue to grow & develop faster-growing higher margin businesses with global leadership potential

III

MOVING FORWARDDigital marketing with campaigns,Emotional, design and function driven marketing , R&D , consumer research & product performance.

DisclaimerCreated by Abhay Rathore, NIT Raipur during Marketing Internship under Prof. Sameer Mathur, IIM Lucknow