MARKETING CAPABILITIESA HARVARD BUSINESS SCHOOL CASE

COMPANY PROFILE

• Founders : William Procter & James Gamble

• Founded : 31 October, 1837

• Head Quarters : Cincinnati, Ohio, United States

• CEO : David S. Taylor

• Area Served : Worldwide (Except Cuba and North Korea)

CEOS

COMPANY BACKGROUND

• Acquisitions : Charmin Paper Mill (1957), Folgers Coffee (1963)

• During 1960s : Pampers – Disposable Diapers

Downy – Liquid Fabric Softeners

Bounce – Fabric Softener Sheets

• During 1980s : Always/Whisper, Pringles, and Pantene

Soft drink producer Crush International Limited

Citrus processing company Frostproof

Norwich Eaton Pharmaceuticals (1981)

Richardson-Vicks (NyQuil and Vicks)

G.D. Searle’s nonprescription drug division (Metamucil)

• During 1990s : Acquisition of Noxell (CoverGirl and Noxzema) in 1989

Max Factor in 1991

Pet food manufacturer Iams

• During 2000s : Gillette in 2005

STRATEGY FOCUS

1. More Consumers

Lower price offering with superior performance.

2. More Parts of the World

Innovating and expanding into new markets.

3. More Completely

Attracting new consumers into the existing brand franchises and broadening the products used by the current consumers.

CURRENT STRATEGY

• Consumers will pay a premium price for products that offer improvements over either private label products or the brands they have bought for years.

• Product innovation must be regular with visible improvements year constantly.

• Product innovation must be designed to constantly “up-scale” consumer preferences.

• These strategies of innovation and pricing can be used to break into developing economies.

INNOVATION AND R&D : P&G MARKETING’S SECRET SAUCE

• Setting up of an analytical lab for the company, one of the first of its kind.

• Products Launched: Crest toothpaste, Head & Shoulders dandruff shampoo, Pampers disposable diapers.

• Issue: Net sales slowed to 2.6% growth from the previous year

Action: Cut 15,000 staff

Global Business Units(GBUs) set up

MARKETING STRATEGY

Jim Stengel appointed as Chief Marketing Officer (CMO)

Claudia Kotchka named Vice President for Design Innovation and Strategy

Works done by Kotchka:-

• She hosted a “design tasting,” featuring design case studies for P&G’s top 200 executives

• She created a P&G design board

• She created the Clay Street Project, bringing cross-functional teams from their jobs elsewhere across the firm’s global footprint to Cincinnati for 10 weeks to create new brands based on design

Result of this system: Design informed the innovation process and even changed the function of some products, such as the Tampax Pearl’s more comfortable applicator

“CONSUMER CENTRIC MARKETING”

To ensure this, 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

‘Who is yo ur co nsumer , and what ’s

diff er ent about her ? ’

CUSTOMER-CENTRIC MARKETING ALSO FOCUSED P&G ON WHAT HAPPENED IN THE SHOPPING EXPERIENCE

• In-store promotions : Coupons, displays, special offers, and other promotional materials.

• Pampers’ 2008 campaign :

Donated funds for one tetanus vaccine in developing markets for each pack of specially marked diapers sold.

“The ‘1-pack = 1 vaccine’ stickers”

ISSUE: AVOIDING BRAND PRODUCT CANNIBALIZATION

When peo pl e kno w a br and i s f r om P&G, t hey f eel bet t er about t he br and

And when t hey kno w P&G has al l t hese br ands, t hey f eel bet t er abo ut P&G

COMMITMENT TO THE CONSUMER

• Conducted research studies

• Ran focus group discussions, interviewed consumers at home, and performed in-context visits and in- store interviews

• Blind tests, large-scale studies of the habits and practices of consumers who purchased P&G products

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

5 mi l l io n co nsumer s in al mo st 100 co unt r ies

P&G’S WAYS TO ENGAGE AND MEASURE CONSUMER INTERESTS, HABITS, AND SATISFACTION

Case : Pantene

• How its customers felt about having a bad hair day

• 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.”

ADVERTISING

• Ivory, the first product to be advertised directly to consumers.

Other brands such as Crisco, Camay, and Oxydol soon followed

• Sponsorship of daytime radio dramas

Television commercials

SPONSORSHIPS

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

• A National Football League (NFL) sponsorship

NFL’s Play 60 initiative

CELEBRITY ENDORSEMENTS• CoverGirl spokespersons :

Christie Brinkley, Drew Barrymore, Ellen DeGeneres, and Queen Latifah

• Television show Modern Family actress Sofia Vergara was named spokesmodel for CoverGirl cosmetics in May 2011

• Eva Mendes and Naomi Watts were announced as new spokesmodels for Pantene shampoo in the spring of 2011

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

• Sebastian Vettel secured a long-term sponsorship with P&G to promote Head & Shoulders shampoo

• 16 U.S. Olympic athletes in individual sponsorship deals

DIGITAL MARKETING

• pampers.com : provided information for new and expectant mothers and served as an interactive forum

• BeingGirl.com : provided information and expert advice on “issues that teenage girls might be too embarrassed to ask a parent or doctor about, such as menstruation, eating disorders, acne and dating.”

• Released TV commercials and print advertisements, and had an online presence

Expenditure : 5% of P&G’s $3.2 billion was spent on online marketing

SELECT P&G ICONIC BRANDS’ MARKETING

• Ivory

• Tide

• Pampers

• Crest

• Always

ORGANIZATIONAL STRUCTURE

P&G 2010 NET SALES

P&GS BILLION- AND HALF-BILLION-DOLLAR BRANDS