MARKETING CAPABILITIES

A 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”
h a t ’s
a n d w
m e r ,
c o n s u
h e r ? ’
y o u r b o u t
o i s n t a
‘Wh e r e
dif f
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
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

Wh e n pe o pl e k n o w a br a n d i s f r o m P&G, t h e y
f e e l be t t e r a bo u t t h e br a n d

An d w h e n t h e y k n o w P&G h a s a l l t h e s e
b r a n d s , t h e y f e e l b e t t e r a b o u t P&G
COMMITMENT TO THE CONSUMER
5 m i l l i o n co n s u m e r s i n a l m o s t 10 0 co u n t r i e s

• 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
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