Analysis of case study by Harvard Business School. Marketing Capabilities of Procter & Gamble.

1. Procter & Gamble:
Marketing
Capabilities
-Case Study Material: Harvard Business School
-Analysis by: -Email: hvasudha18@gmail.com
Vasudha Harlalka -Mentor: Prof. Sameer Mathur
VIT University, Vellore IIM Lucknow

3. Who Is P&G?
• A global leader in branded consumer goods
• Iconic category-defining products such as Ivory
soap, Crisco shortening, and Tide laundry
detergent.
• The 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.

4. • It was the first company to advertise directly to
consumers, in the 1880s, and it invented “soap
operas” by sponsoring radio and TV programming
that targeted women.
• From these early marketing campaigns to recent
experiments in digital media for its men’s hygiene
brand, Old Spice.
• P&G is a seasoned marketer with:
-strong consumer research
- a powerful innovation network
- an evolving marketing strategy
- strong marketing talent, and the world’s largest
financial commitment to advertising

6. Firsts by P&G.
• Analytical lab laid foundation for a professional
R&D division and establishing one of the first
corporate labs in the field of consumer goods.
• It replaced the trial-and-error methods
commonly pursued at the time, P&G took a
scientific approach and connected R&D with the
company’s sales and marketing.

7. Current Mission:
• Corporate mission 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.”

8. Company Focus:
It always focused on growth and was not afraid to make big
bets globally.
It focused on three specific choices:
1.to grow P&G’s core brands and categories with an unrelenting
focus on innovation;
2.to build business with un-served and underserved consumers;
3.to continue to grow and develop faster-growing, higher
margin businesses with global leadership potential

9. How is cannibalization prevented?
• P&G has pursued a multi-brand strategy, and it
managed brands across a category carefully,
with each getting individual support and
satisfying a segment of the market.
Example: P&G’s detergent category illustrated
this; Tide was offered as the premium brand;
next came Cheer, which “cleaned colors safely”;
Gain “had fresh scent”; at the bottom sat Oxydol,
which “contained bleach.

10. Why study this case?

11. OBJECTIVE: (1/3)
• To understand how a multi brand company
engages in marketing.
• Segmentation done to prevent cannibalization.
• Timeline of P&G and marketing changes over
those years.

12. OBJECTIVE: (2/3)
• Change in priorities while marketing product
over the years.
• Restructuring done by different CEOs

13. OBJECTIVE: (3/3)
• Emergence of P&G as market leader.
• To evaluate how policy, plan and marketing
strategies helped P&G grow.

14. TIMELINE:-

15. -2000
• Durk Jager: CEO
• Focus on R&D and innovation.
2000-10
• Lafley: CEO
• Top product designing
2010-
• McDonald: CEO
• Digital advertising and other new media

16. Druk Jager period:
• 7 global business units (GBUs) based on product categories
replaced the company’s 4 geographic business units.
• For help with global product development and quick-to-
market strategies.
• Three new teams supported the GBUs:
-a business development team focused on innovating in
existing categories;
- 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; and
- market development organizations that would perform
intensive market research to ensure global products’ success
in local markets.
P&G hoped the net result would be “bigger innovations, faster
speed to market, greater growth—innovation vitality.”

17. Lafley & product
design:

18. Ideology:
“We have an innovation process and we want to make
sure that design is plugged in at the front end”.
“We want to design the purchasing experience—what
we call the ‘first moment of truth’; we want to design
every component of the product; and we want to
design the communication experience and the user
experience. I mean, it’s all design. And I think that’s
been hard for people to come to grips with.”

19. Positions given:
• Jim Stengel as chief marketing officer (CMO).
• Lafley then created a new design unit, separate
from P&G’s other business units, and named
Claudia Kotchka as vice president for design
innovation and strategy, giving her decision-
making responsibility equal to that of P&G’s
CMO and head of R&D.

20. Claudia Kotchka:
• hosted a “design tasting”
• 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
• P&G did not use design as an antidote to its
function-driven process but rather as a complement,
helping consumers recognize, understand, and in
some cases even imagine the functions of a given
product.

21. Jim Stengel:
• He moved P&G’s marketing approach away from its
traditionally process-oriented and template-driven
culture toward a deeper understanding of who the
product was for, what was different about that
consumer, and how that consumer expected to use
the product.
• He said, “Consumer-centric marketing makes no
assumptions. It begins with ‘Who is your consumer,
and what’s different about her?’ ” is a crucial
question to address.

22. • Lafley and he developed metrics that measured
brand loyalty and customer relationships, in
addition to sales.
• Stengel says, “If you go back at Procter &
Gamble, and in a lot of the industry, we often
thought of our brands in terms of functional
benefits. But the equity of great brands has to be
something that a consumer finds inspirational
and an organization finds inspirational.”

23. Lafley, Stengel and Kotchka:
• Together they reorganised entire P&G with fresh
breath of designing which gave way to
innovation and marketing schemes which had
never been undertaken before.
• Also the campaigns, advertisements were tailor
made for the prevalent scenarios, with
modification in marketing to suit a recession hit
economy.

24. McDonald: digital advertising
• P&G would maintain the same level of spending,
while shifting dollars to digital advertising and
other new media to broaden the audience
• the firm planned to reach a billion new
customers by 2015. The firm’s worldwide
Olympic sponsorship, announced in 2010, was
one part of this effort. As P&G’s global
marketing head noted, these kinds of
sponsorships were aimed to “build our
developing markets.”

25. Other Innovative
Marketing Methods:

26. • Neuromarketing played an increasingly
important role. P&G employed psychological
surveys to measure mood and
electroencephalography (EEG) technology to
measure electrical activity in the brain as
subjects were exposed to commercials. The
approach held that feelings affected decisions
and human behavior.

27. Partnerships to understand markets:
• In 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.
• In 2008, P&G took a stake in Ocado, a U.K.-
based online grocer, for understanding how
consumers used the Internet and engaged in e-
retailing

28. Traditional with a Twist:
 Sponsorships: It has engaged in sponsoring
Olympics and numerous other such events. Also
it utilised for spreading love and
campaigning, “Thank You Mom”
for emotional connect.

30. • Celebrities: Its brands give it access to celebrities
from the likes of Taylor Swift, Ellen DeGeneres,
to sportsperson like Roger Federer.
Thus, helping in endorsements
from the same.

32. Old Spice’s catchy Ad:

33. “Loads of Hope” campaign,
post-Katrina

34. Hypothesis:
1. The P&G history and habit of rigorous product
and market testing, attention given to every
aspect ranging from function, price and design
enables the company enormous multi-brand
company.
2. The change with time after appropriate market
research to shift priority from: functionality in
90s, to design in 2000s, to digital in 2010s has
been beneficial for the company.

35. Hypothesis: (cont)
3. Pioneering connect and develop, the permeable
boundaries allow innovation seamlessly.
4. The struggle around 2009s was due to lesser
focus on advertisements, and also recession hit
in 2008s, and the effects and scare prevailed.

36. Decisions in accordance:
• The decision of re-orgaisation taken by Lafley
was well timed and provided the company a
much needed edge.
• Decision options being:
-continue focus on functionality
-product designing
• Decision criteria:
-emergence into market leader
-changes made in history of P&G

37. -money returns on investment made
• Evidence:
-growth under Lafley
-company survival through global recession
period of 2007-08
-easy shift into digital advertisement
-acquisitions which allowed market entry and
expansion.
- “my black is beautiful” line for African countries.
- “Loads of Hope” campaign success post-Katrina
- “Thank You Mom” for sensitization and brand
loyalty

38. Strenghts:
• Insight into timely changes which are crucial
after market analysis over time.
• The survival and emergence into leader in cut
throat competitions reason has been assessed.

39. Shortcomings:
• The data of decade wise, or year wise analysis in
comprehensive sense has not been used.
• The impact made by celebrities, sponsorships or
any other marketing practice individually has
not been assessed.
• The data is 4-5 years old by now, so relevance
decreases.