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Procter & Gamble : Marketing Capabilities

Procter & Gamble : Marketing Capabilities Harvard Business School Case

PG&What is ?

Procter & Gamble Co. , also known as P&G , is an American multinational consumer goods company headquartered in downtown Cincinnati , Ohio , the U.S. , 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, Vice-president, Design unit Marc Pritchard, Global Brand Building Officer

SITUATION ANALYSIS

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

Evaluate primary and unique communication strategies and money spending

Innovation , R&D and acquisition

ANALYSIS OF NET SALES AND EARNINGS

Growth of P&Gs 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.

ONE MAJOR QUESTION

Is INNOVATION and R&D The Secret Sauce of Marketing for P&G ?

Growth of P&Gs core brands & categories with an unrelenting focus on innovation & design.1st ISSUE

P&G pursued international expansion as early as the 1930s, and from 1945 to 1980 it began to enter markets in Latin America, Western Europe, and Japan. P&Gs approach to entering new markets was via acquisition or joint venture on a small scale, and through trial and error, learn the formula for success before making a major commitment.

In 2010, P&Gs stated corporate mission was to build on its company purpose to improve the lives of its customers through continued innovation to reach More Consumers, In More Parts of the World, More Completely. Connect and Develop : A step towards innovation , research and development of products

Building business with unserved & underserved consumers through consumer-centric , digital & direct and neuromarketing , multibranding and interactive community promotion.2nd ISSUE

MARKETING STRATEGY

Historically, P&G had pursued a multibrand strategy, and it managed brands across a category carefully, with each getting individual support and satisfying a segment of the market.

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.

The firm leveraged its products through multibranding , focused on Return On Marketing Investment and shopper marketing experience.

COMMITMENT TO THE CONSUMER

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.

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.

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

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.

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

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

SPONSORSHIP

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.

It engaged its consumers in fitness campaign through NFL sponsorship whereas the major campaign Thank you Mom still remained the best in touching everyones 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

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

In 2010, P&G increased ad spending by $1 billion, with a 20% increase in media impressions; higher revenues led to an increase in dollars spent. 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

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

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.

P&Gs line of My Black is Beautiful products, introduced two web series in 2010 to showcase its products. This attracted a lot of views online . Collection sales and market share increased.

P&Gs Old Spice television commercial and YouTube sensation, The Man Your Man Could Smell Like, gave P&G its greatest exposure in the online community and bridged the power of digital and social media.

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 Peoples Choice Community, associated with the Peoples 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.

In 2011, when research showed that men were interested in work generally done by women in houses , P&G rounded out its earlier social media efforts with Manofthehouse.com, which featured household advice for men .

Social media was a way to speak to its audience virtually.

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.

A similar mass promotional activity was held in Times Square in 2006 , targeting holiday shoppers. It generated YouTube ads and attracted a lot of viewers , mainly youth.

A large blue neon sign in the middle of a Broadway block read Restrooms and led people up an escalator into a lounge with flat-screen TVs, leather couches, a fireplace, and 20 shiny, spotless toilets. The ad was used to promote Charmin toilet paper, and tourists loved it.

Continue to grow & develop faster-growing higher margin businesses with global leadership potential3rd ISSUE

MOVING FORWARD

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