Procter & Gamble (P&G) is a consumer goods company founded in 1837 that has grown to include over two dozen $1 billion brands through acquisitions and innovation. P&G pursued a multi-brand strategy across categories like detergents. Recently, P&G has shifted to partnering externally through programs like "Connect and Develop" to source over 35% of new products, and to digital and direct marketing from television. However, P&G still spent only 5% on online marketing in 2010 and slowed other digital efforts. P&G restructured in 2007 into global business units to improve innovation speed through standardization.

1. PROCTER
AND
GAMBLE-
MARKETIN
G
CAPABILITI
ES
A HARVARD
BUSINESS SCHOOL
CASE

2. Founded in Cincinnati, Ohio in 1837 by two relatives
due to they married sisters
1) William Procter - Candlemaker
2) James Gamble – Soapmaker
High quality products boosted the national reputation

3. 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

4. PORTFOLIO OF P&G

5. Vision
"Be, and be recognized as, the
best consumer products and
services in the world"

6. MISSION
• "Procter and Gamble will continue to serve consumers by
continuously innovating products that will allow us to be
leaders in household and personal care, health care, and
food products. To produce products with the utmost care to
give nothing but quality to our communities. And to continue
to grow so that we can maximize our shareholder's wealth"
(Procter & Gamble. 2010)

7. CASE FACTS
Global Leader in Branded Consumer goods
Has 2 dozen $1bn brands known worldwide
First company to advertise directly to consumers.
2010, total sales=$78.94bn
Net Income=$12 bn
Market capitalization=$186.63bn

8. MARKEING STRATEGIES
Cleaned colours safely
Contained bleach
P&G had 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. P&G’s detergent category
illustrated this:
Fresh scentPremium brand

9. • P&G aims to partner with the world’s most
innovative minds.
• Connect and develop helps inventors and patent
holders to meet needs across P&G business.
P&G’S NEW APPROACH
“CONNECT AND DEVELOP”

10. RESULTS OF CONNECT AND DEVELOP
◦ More than 35% of P&G’s new products
had elements that originated from
outside the firm.
◦ 45% of P&G’s initiatives had key
elements discovered externally.
◦ P&G’s R&D productivity increased by
nearly 60%
◦ Innovation success doubled
◦ Drop in cost of innovation

11. LEVERAGING SECONDARY ASSOCIATIONS
BY SPONSORSHIP

12. P&G SHIFTED FROM TV,
PRINT

13. SOAP OPERAS,RADIO AND TV
BROADCASTS

14. YOUTUBE CHANNEL….

15. TO DIGITAL AND DIRECT
MARKETING

16. HOW DIGITAL MARKETING HELPS?
The data colllected
along with information
about online usage
and grocery
purchases, and
frequent surveys of
attitudes and lifestyle,
helped P&G
understand its
marketing tactics
performance.

17. EMOTIONAL BRANDING

18. CELEBRITY ENDORSEMENTS….

19. SOME ADVANCED TECHNOLOGICAL
APPLICATIONS WERE
EYE TRACKING NEUROMARKETIN
G
EEG
• Integrating these new technologies in an attempt to gain more
hard data on consumers dovetailed with P&G’s culture of
performance-driven products, as 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.

20. SOME GAPS IN THE MARKETING
STRATEGIES
• MORE ON TV
• P&G slowed its digital
promotions and
focused its efforts
primarily on
television and print
advertisements,
along with its product
websites.
• LESS ON SOCIAL MEDIA
• Digital marketing
efforts were a large
part Of P&G. But, In
2010, only 5 percent
of P&G’s $3.2 billion
was spent on online
marketing.

22. P&g 2010 net sales

23. Focus on differentiated market demand
Growth in the amount of brands and products
Change in market demand
Improve integration and decision efficiency

24. • Issues
• Profitability was directly related to country
managers instead of to brand managers
• The local managers, were very resistant to
adopt global brands and make their own
brands global
• Aim of the shift
• Cross border cooperation
• Changing the focus from country
management to product management

25. Dismantling the Matrix structure, replacing by:
1. 7 Global Business Units (Profit responsible)
2. 7 Market Development Organizations (Market responsible and
sales growth)
3. Global Business Services (Internal business processes)
Objective: Improve the speed to innovate
Looking for "Standardization & Globalization"
High growth expectations
• Sales Growth: 6-8%
• Profit Growth: 13-15%

26. WHY DID P&G ADOPT THIS STRUCTURE?
• The necessity to ensure a long-term scalability across the
innovation
• The prevention of a future failure acting as a risk-adverse
businessThe cost and performance dilemma
• To improve the alignment and cut costs through The exchange
of ideas
• The technological connection and fast transfer of technology
from one to another business

27. KEEP OR CHANGE THE STRUCTURE?
• Keep the structure
• Centralization is important, improve the resource efficiency
• Don’t come back to complete Matrix structure
• Reduction of the layers – Improve the process efficiency –
• Long-term view focus on investing in innovation
• The structure needs more time to succeed
• Implement a committee conformed by personal from different parts
of the structure forecasting the cost cutting
• The statements were overestimated Alignment all employee to the
change – engage people

28. DISCLAIMER
• Created by Shagun Kansal, IIT Roorkee during a marketing
Internship under Prof Sameer Mathur IIM Lucknow.