Download - P&G Marketing capabilities HBR case
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CASE STUDY
PROCTER AND GAMBLE:
MARKETING CAPABILITIES
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CASE ANALYSIS BY :NISHANT RAJIIT ROORKEE
UNDER THE GUIDANCE OF
PROF. SAMEER MATHURIIM LUCKNOW
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PrOCTER AND GAMBLE
• Global leader in FMCG sector
• More than 2 dozen $1 billion brands
• First company to directly advertise to its consumers
in 1880s
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BRAND PORTFOLIO
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Billion Dollar Brands
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Organizational Control System
• Market Development
Organizations
• Global Business
Services
• Corporate Finance
• Global Business
Units
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Situational Analysis(1)
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SITUATIONAL ANALYSIS(2)
• Dominates FMCG sector through various sub-brands and a huge brand portfolio
• Strong focus on Consumer Research,innovation,marketing and advertisement
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SITUATIONAL ANALYSIS(3)
• In 2010,P&G had a market capitalization of
$186.63 billion with net income of $12.74 billion and sales of $12.74
billion
• P&G showed a global domination with more than
42% sales from North America,21% from Western Europe and 15% from Asia
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ORGANIZATIONAL STRUCTURE : LAG OR lEADS
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HISTORY(2)
• Started its international expansion in 1930s
• 1945-1980 : Entered the markets of Latin America , Western Europe and Japan
• 1957:Charpin Paper Mill acquired and 1963 : Acquired Folgers Coffee
• 1980s : Extensive global expansion
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HISTORY(3)
• 1991: P&G became US’s
top cosmetic company with
Noxell acquisition
• 2005 : Gillette’s acquisition
made P&G top consumer
company for $57 billion
• Company stocks lagged
and senior managers left at
that time
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P&G LOGO EVOLUTION
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WHY STUDY THIS CASE ?
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CASE
OBJECTIVES :
STUDY OF USE
OF INTEGRATED
MARKETING
CHANNELS
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CASE OBJECTIVES :
UNDERSTAND THE
MARKETING
STRATEGIES USED
BY P&G
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CASE OBJECTIVES :
TO UNDERSTAND
THE SECRET SAUCE
TO MARKETING
SUCCESS:
INNOVATION
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INNOVATION :THE SECRET SAUCE(1)
• Year 1887 marked the establishment of earliest marketing division
• Replaced the existing 4 geographical units with Global Business Units
• GBU :
A three team supported unit consisting of
1.Venture teams
2.Business Development Organization
3.Market Development Organization
• Company named the strategy : “Connect to Develop”
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INNOVATION :THE SECRET SAUCE(2)
“50% new products in 90s developed in Labs and rest with non-P&G scientists and engineers”
&
“Products like Swiffer Duster,Olay Regenerist,CrestWhitestrips etc came into existence”
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MARKETING AT P&G
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MARKETING STRATEGY (1)
• Year 2000 : Lafley took over as the new CEO of P&G
• Set up of a new product team…..and the focus shifted to
product design
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THE NEW PRODUCT TEAM(1)
• Claudia Kotcha named as the VP for design innovation
• Jim Stangel appointed as the new CMO and shifted
emphasis to consumer centric marketing approach
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THE NEW PRODUCT TEAM(2)
• Aim was to “design the purchasing experience” i.e. “the first
moment of truth”
• P&G design board created on lines of Nike & Mattel
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THE NEW PRODUCT TEAM(3)
• Focus laid on Return on MARKETING
INVESTMENT(ROMI)-a technique to evaluate the
effectiveness of marketing strategies)
• Surveys designed, data collected and metrics developed
to measure brand loyalty and customer relationships
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CONSUMER FOCUS
“P&G interacts with more than 5 million
customers over 100 countries and conducts more
than 20,000 research studies investing more than
$500 million to execute these studies”
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CONSUMER FOCUS
Key research outputs :
• Advocacy(word of mouth) was the most powerful
marketing strategy as observed under VocalPoint
campaign
• Neuromarketing was the new research area identified
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ADVERTISING
Media – neutral ideas used
could be translated across
a range of media
In 2011,majority of the
advertising was still done
through television
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“A good brand
equity is that in
which both the
consumers and
the organization
feel
inspirational”
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LEADERS OF OLYMPIC SPONSORSHIPS
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SPONSORSHIPS
P&G has used sponsorships to market
its product very well. It has sponsored
various award shows, games and mega
events across the globe
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CELEB ENDORSEMENTS
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CELEB ENDORSEMENTS
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MARKETING DURING
RECESSION
During 2009,the time of
recession, P&G maintained its
budget for marketing . It
resorted to coupons and in-store
promotional campaigns to lure
in consumers during recession
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DIGITAL MARKETING AT P&G
Earliest activities
limited to websites of
brand but it was only
after launch of
pampers.com P&G
was able to provide an
interactive platform….
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Beinggirl.com
was P&G’s unique
digital marketing
strategy to
interact with Girls
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Mobile marketing became an
integrated part of P&G’s
digital-marketing strategy.
Crest Whitening Plus marked
an entry for P&G in the mobile
marketing place….
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Because….
P&G won accolades for its
TV series – “My Black is
beautiful” and this digital
marketing strategy grew its
sales by 20% in first half
of 2010.
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P&G’s OLD SPICE CAMPAIGN
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P&G’s OLD SPICE CAMPAIGN
Campaign went viral on Youtube
and adding as many as 94,000
followers on twitter marking a
shift for P&G from mass marketer
to one-on-one digitized marketer
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SIGNAL…Bringing powerful digital leaders together
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SOCIAL MEDIA Campaigns
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SOCIAL MEDIA CAMPAIGNS
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Brand PHILANTHROPY
Brand Philanthropy
helps in creation of
good image about the
brand as was the case
in TIDE whose sales
got boosted after
Katrina campaign
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ANALYSIS OF P&G’s ICONIC BRANDS
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IVORY-MARKETING IN A RETRO STYLE
IVORY was the first directly marketed product to consumer by P&G. The soap has seen
different types of marketing – from neo-classical marketing to modern marketing.
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TIDE• TIDE was a breakthrough product
and passed several tests including
the risk of P&G brand’s
cannibalization
• The risk of launching the product
two year early bore heavy
returndsin terms of greater market
share.
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PAMPERS – brand that created the diaper market
P&G has managed to keep the costs of diapers low while it has
launched “Luvs” diapers for its premium customers…
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CREST-The FIRST FLOURIDETOOTHPASTE
P&G worked with American Dental Association
Fluoride toothpastes got generic status in 80s and this made it to slip out of the market
P&G responded to the threats by introducing Crest Whitestrips
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ALWAYS
• Always was P&G’s first global brand….Always Infinity
was another remarkable example of P&G’s innovation
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SALES
High potential for P&G in developing countries market for growth
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SWOT ANALYSIS: STRENGHTS
• Strong focus on R&D
• Strong Brand Portfolio
• Strategic Acquisitions
• Consumer Focus
• Strong Marketing Team
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WEAKNESSES
• Increasing
instances of
product recalls
• Poor Website
• Environmental
Issues
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OPPORTUNITIES
• Growing Indian FMCG
market
• Expansion especially in
developing markets
• Growing interest of people
in green products
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THREATS
• Creation of generic
product might lower
its value
• Change in younger
generation
preferences
• Global economic
conditions
• Intense competition
in industry
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•Case Basics
•Situational Analysis
•Marketing Channels
•Marketing Techniques
•SWOT Analysis
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