Procter & Gamble

About the CompanyThe company managed two dozen $1 billion brands known worldwide, including Bounty, Crest, Downy/Lenor, Febreze, Gillette, Iams, and Pampers

P&G had pioneered marketing strategies that were considered standard industry practice

Global leader in Branded consumer goods

Goal

As of 2010……

• Sales –$78.94 billion

• Net income –$12.74 billion

• market capitalization –$186.63 billion

North America - 42% Western Europe - 21%Asia - 15%Central and Eastern Europe and the Middle East and Africa - 13%Latin America - 9%

Sales Geographically

Company BackgroundP&G’s 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”

P&G focused on three specific choices: 1. To grow P&G’s core brands and categories with an

unrelenting focus on innovation2. To build our business with unserved and

underserved consumers 3. To continue to grow and develop faster-growing,

higher margin businesses with global leadership potential

Steps taken for Innovation and R&D

• In June 1999, under then-CEO DurkJager, P&G reorganized to boost growth after net sales slowed to 2.6% growth from the previous year

• P&G cut 15,000 staff and promised to deliver more innovation

Durk Jagger

Seven global business units (GBUs) based on product categories replaced the company’s four geographic business units

Three new teams supported the GBUs:

1. A business development team focused on innovating in existing categories

2. a venture team tasked with acquiring brands in new areas and nurturing ideas created by the business development team that did not relate to an existing brand

3. market development organizations that would perform intensive market research to ensure global products’ success in local markets

Result

• The firm struggled to control costs, and its stock slid from $118 to $52 over 18 months.

• Lafley, who took over as CEO in 2000, remained committed to the reorganization and was convinced it would deliver the innovations promised

Analysing the Marketing Strategies

I. Overall Marketing strategy

When Lafley took over, he set a goal to make P&G the top product-design company in the world

Lafley

She sought to bring design to every step of product development and introduce a culture of design to P&G through a number of actions

• The influx of design had a strong impact on P&G’s product development

• Design informed the innovation process

• Changed the function of some products, such as the Tampax Pearl’s more comfortable applicator

Result

Shift to a more consumer-centric marketing approach

Lafley’s shake-up and design emphasis articulated more clearly that P&G’s brands faced two moments of truth:

1. On the store shelf

2. When the consumer used the product and decided whether it delivered on its promise

The lobby of P&G’s Cincinnati headquarters featured a faux home and store, so that employees could physically view and experience the “two moments of truth” every day

In 2008, P&G wooed recession-wary consumers with more focused attention to in-store promotions such as coupons, displays, special offers, and other promotional materials.

Pampers’ 2008 campaign, which donated funds for one tetanus vaccine in developing markets for each pack of specially marked diapers sold, was a success story

II. Commitment to the Consumer

Innovative approach: VocalPoint, P&G’s word-of-mouth program that enrolled more than 600,000 women to pitch its products

June 2010, P&G announced a partnership with Tobii, a leader in eye tracking, which objectively identified visibility and attention that consumers gave to packaging, displays, and advertising

Result

The firm leveraged new and innovative ways to learn directly from consumers, while also building the opportunity to create more direct, one-on-one relationships with the target audiences

III. Advertising

One of the first examples was P&G’s successful advertising campaign for the 2010 Winter Olympics, which combined 18 P&G brands under a common message and featured a commercial that thanked moms around the globe for their efforts.

Soap Operas

The daytime drama As the World Turns was launched in 1956 to specifically target women in their homes

Another World, The Young and the Restless, and Guiding Light were other longtimeP&G-sponsored daytime dramas

A Hurdle

It faced challenges in winning new customers in less familiar markets outside the Americas and Western Europe, where it encountered local and global competitors

Overcame by…..• Working with agencies, P&G began by first developing a

“media neutral” idea that could be translated across a range of media

• With Tide, the idea was that the detergent “works wonders on the fabrics that touch your life.” The story could then be translated into locally relevant messages

III.a. Sponsorships

III.b. Celebrity Endorsements

Tennis star Roger Federer was featured in Gillette Fusion Products ads in the U.K. in 2010

The YouTube version attracted over 2 million visitors to the Gillette YouTube channel!

In 2010, Sebastian Vettel, the “youngest ever”61 Formula One champion, secured a long-term sponsorship with P&G to promote Head & Shoulders shampoo

The same year, P&G also had at least 16 U.S. Olympic athletes in individual

sponsorship deals!

IV. Media Spending

In early 2009, as the recession took hold, then-CEO Lafley announced that despite the poor economic climate, P&G would maintain its marketing budget

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

Result

Their media campaign has been successful and it increased their revenues

V. Digital Marketing

Pampers.com: The website contained product information, similar to the other brand websites under P&G, but also provided information for new and expectant mothers and served as an interactive forum

P&G slowed its digital push after the dot-com bubble burst, and through the early 2000s focused its efforts primarily on television

and print advertisements

The company was back online when it undertook aggressive marketing of its over-the-counter heartburn treatment Prilosec, after a 2006 study found that most people dealing with heartburn conduct research online before making a purchase

P&G launched its first mobile marketing ad campaign in 2006 to promote Crest Whitening Plus Scope toothpaste

P&G’s line of “My Black is Beautiful” products, targeting African American women, introduced two web series in 2010 to showcase its products: Buppies and My Black is Beautiful, showcasing the collection of P&G products in a makeover setting.

Buppies attracted over 2 million views online after its launch, while My Black is Beautiful averaged 3.6 million viewers in its second season on BET!

P&G’s 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, and bridged the power of digital and social media

Result

The digital marketing helped the company enter the market in an innovative and way and

increased its brand equity!

VI. 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

In 2010, P&G began using Facebook as a marketing tool and, by 2011, had 15 brands with “friends” in the six-figure range. Pringles

and Old Spice had 9 million and 1.3 million fans, respectively.

P&G rounded out its earlier social media efforts with Manofthehouse.com, which featured household advice for men,

including tips on grilling burgers, cleaning toilets, and disciplining children.

Result

The social media outreach helped P&G to increase their customer base with minimal cost for advertising

About the

company

Innovation

and R&D

I. Overall Marketing strategy

II. Commitment to the consumer

III. Advertising

I. Sponsorships

II. Celebrity Endorsements

IV. Media Spending

V. Digital marketing

VI. Social media

DisclaimerCreated by Madhav Agrawal, BITS Pilani Goa Campus during a

marketing internship by Prof. Sameer Mathur,IIM Lucknow