Proctor and Gamble, Skillful Marketers of Consumer Packaged Goods

Only available on StudyMode
  • Download(s) : 179
  • Published : March 18, 2012
Open Document
Text Preview
Babe Ruth was known as the “Sultan of Swat” in baseball, Wayne Gretzky

was known as the “Great One” in hockey, and then, there is Proctor & Gamble, “The

Innovators” of marketing.  “Proctor and Gamble (P&G) is one of the most skillful

marketers of consumer packaged goods.  It employs 138,000 people in more than 180

countries: is a global leader in the majority of the 22 different product categories in which

it competes; has 23 billion dollar goal brands; and has total worldwide sales of more than

$76 billion a year” (Kolter & Keller, 2009, p. 239).

Currently, there are ten Proctor and Gamble philosophies that directly relate to

marketing.  I will choose five of these capabilities:  customer knowledge, product

innovation, quality strategy, aggressive sales force, and manufacturing efficiency and

cost cutting.

“P&G studies its customers, both end consumers and trade partners, through

continuous marketing research and intelligence gathering” (Kolter & Keller, 2009, p.

239). Proctor and Gamble understands the importance of customer knowledge and

consumer interaction.  Therefore, according to the P&G website, they claim to interact

with over five million customers spanning approximately 100 countries.  Proctor and

Gamble also claims that no company devotes as much time into market research as they

do.  For example, each year, P&G conducts roughly 20,000 studies that determine exactly

what their customers’ wants and needs are.  Its studies like this that help P&G gain an

advantage over the competition and keep them being the leader and the innovator in their

field (P&G, 2011).

To take this a step further Proctor & Gamble’s new President/CEO, Bob

McDonald has acknowledged that his customers are telling his organization that they

need help. Consumers that were once buying P&G products have now begun to purchase

cheaper/generic products instead. Next, as a result of the economy being in such a

downward spiral and the fact that people are losing their jobs and homes on a daily basis,

families have needed to tighten their belts and save, even if it means sacrificing quality

for quantity. The bottom line is that due to consumers “stretching their dollar” and going

generic, Proctor & Gamble’s earnings have begun to stumble (Kimes, M., 2009). To

combat falling profits and lack of consumer loyalty, P&G decided to lower prices on

products inorder to give its consumers “more bang for their buck”. Knowing that if a

person had the opportunity to purchase Scope mouthwash for $3.99 or a generic brand for

$3.99, people will lean towards the name brand item. Therefore, due to gathering

customer insights as to what their wants and needs were, P&G was able to deliver and get

back on track. For example, Proctor & Gamble was able to grow more than 7% just by

reducing prices by 1%, which ultimately led to P&G garnering an impressive 5% to 6%

growth in value (Trefis Team, 2011).  
“P&G is an active product innovator, devoting $1.8 billion (3.5% of sales) to

research and development, an impressively high amount for a packaged goods company”

(Kolter & Keller, 2009, p. 239).  Did you know that Proctor and Gamble also employs

more PhDs than top universities such as Harvard, Berkeley, and MIT combined? Plus

P&G seeks innovations not just from fellow Proctor & Gamble teammates, they even

seek ideas from outside the organization as well. P&G offers a website called “connect +

develop”, inviting innovators an opportunity to present their ideas to P&G. Proctor &

Gamble even explains how the popular Swiffer duster got its big break. Its “Outside the

Box” thinking like this that has allowed P&G to generate 3000 patents per year and crush its competition.  These patents that have been developed by PhDs have produced

products such as Febreeze; Mr. Clean Magic Eraser, a personal favorite of mine...
tracking img