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Consumer Packaged Goods In THE NEXT Six Segments Marketing Essay

Procter and Gamble is a global multinational company, headquartered in Cincinnati Ohio Proctor and Gamble Wikipedia 2012. It manufactures through internal and alternative party manufacturers (3PM) consumer packaged goods in the next six segments (Beauty, Grooming, Healthcare, Pet Care, Fabric and home care, Baby & family care) according to its 2011 Annual report.

Closely linked to its current product portfolio of products, P&G's vision is: "Be, and be named, the best consumer products and services company on the globe" whereas its mission statement is: "We will provide branded products and services of superior quality and value that enhance the lives of the world's consumers. As a result, consumers will reward us with leadership sales, profit and value creation, allowing our people, our shareholders, and the communities where we live and work to prosper. " (P&G Annual Report)

It was not only until 2011 that the Pringles brand was under the P&G umbrella. P&G sells a myriad of products with multiple segments, target consumers and specific positioning. It is so mind boggling that it might range between a Duracell battery to SKII a premium skin care product made in Japan. In Australia, a bottle of 75ml facial treatment essence- one of its more popular SKUs - sells for AUD100.

The beauty segment offers cosmetics, female antiperspirant and deodorant, female personal cleansing, female shave care, hair care, hair color, hair styling, pharmacy channel, prestige products, salon professional, and skin care products. The Grooming segment provides electronic hair removal devices, home small appliances, male blades and razors, and male personal care. The Health Care segment comprises feminine care, gastrointestinal, incontinence, rapid diagnostics, respiratory, toothbrush, toothpaste, water filtration, and other oral care. The Pet Care segment offers pet care products. The Fabric Care and Home Care segment includes laundry additives, air care, batteries, dish care, fabric enhancers, laundry detergents, and surface care products. The Baby Care and Family Care segment contains baby wipes, diapers, paper towels, tissues, and toilet papers products. (P&G Profile, Yahoo! Finance)

P&G's vision of the greatest consumer products and services company on earth seems realistic and attainable as it's constantly ranked as one of the among the Most Admired Companies in the Fortune ranking (CNN Money, World most admired companies); earning top spot in the consumer products industry and No 9 overall on the 2012 list. Above the modern times, P&G has regularly earned the top spot within the Consumer Packaged Goods (CPG) industry while ranking in the top 10 of the overall list. Whereas P&G's mission statement is within tandem with its actions as it's the CPG on earth based on sales revenues; and is constantly on the strive for sustainability in its business actions.

It is currently the world's most significant producer of household and personal products by earnings standing at USD82billion for 2011. P&G's products reach 4 billion people worldwide and have 22 brands with over USD1billion in annual sales with another 19 brands making over USD500 million in sales. The USD1billion brands include Tide, Pampers, Gillette, Pantene, Bounty, Oral B etc.

With marketing spend of practically $10 billion yearly on TV, print and internet marketing, P&G is the world's greatest marketer. (P&G ad spending hits $9. 3 billion, Marketwatch 2012) However, the company has recently discovered the benefits associated with cost effective social and digital media and is gradually gaining traction in that arena which is mainly they believe was less expensive and equally efficient as compared to traditional media.

In the competitive FAST PACED Consumer Goods (FMCG) industry, P&G's brands are essential to the company. They have spent a great deal of money and time to establish its brand image by developing superior products through considerable Research & Development (R&D), ground breaking packaging, ensuring it's on shelf availability and backing it with engaging integrated marketing communications and reliable service. However, the company seems to suffer from the fame of its company rather than its brands as compared to say it's close competitor Unilever. Many people have no idea of the company Unilever but have heard of its brands like Lipton, Magnum, Dove, Knorr etc. Whereas for P&G, many folks have strong associations and recognition of the business but when you ask visitors to mention its billion dollar brands, people normal stumble over that.

Because of the competitive landscape, P&G is takes the initiative to attain out to the voice of the consumer through multiple consumer insight activities. They may have realized that in the centre with their success is a successful marketing strategy. P&G's products are based on a sound understanding of who their customers are. This of course doesn't imply that the company manufactures products to meet up with the whims and fancies of every consumer. However, P&G aggressively exploits opportunities in the market to their advantage and are continuously vigilant in the monitoring of these opportunities. Customer knowledge is thus important to P&G which studies both end consumers and trade partners through continuous market research and intelligence gathering. As proof of their commitment, P&G currently spends more than $100 million - no small change - on over 10, 000 formal consumer studies annually and generates more than 3 million consumer contacts via its email and phone center. In addition, it emphasizes getting its marketers and researchers out in to the field, where they can interact with consumers and retailers in person in their environment. (P&G kisses up to the boss, Advertising Age)

P&G's market oriented strategy continues to play a vital role in the company with the financial downturn and the onslaught of private label brands and consumers increasing demanding low price and good quality products. Currently, P&G brands still dominate the premium end of almost all of the categories where they compete in even though their aspirational qualities resonate with consumers, P&G will have to stay at the top of the game in the fickle consumer goods market.

Issue 2: P&G's leading market position (Top 3) in virtually all its categories provides it with significant competitive advantage. However, with the economical slowdown and consumers needs to penny pinch, it is increasing difficult for branded product manufacturers like P&G to keep up their sales volume and revenue growth while preventing discounting which dilutes brand image.

Looking at the SWOT Analysis (Datamonitor), we can identify the current P&G position:

Strengths

Strong R&D and innovation culture. Spends more than twice on R&D compared to its nearest rival - Unilever.

Leading market position in most categories

Diversified Product Portfolio

Strong brand portfolio- 24 USD1 billion brands.

Weaknesses

Increasing instance of product recall thus implication of poorer manufacturing quality

Dependant on Walmart and few other major retailers for most its revenues

Too many products, easily to get overextended, fight for capital amongst brands

Opportunities

Expansion in developing and emerging markets in Brazil, Russia, India China(BRIC) &Mexico, Indonesia, South Africa, Turkey(MIST)

Future growth plans and new segments

Threats

Regulatory environment

Slowing global economical conditions

Raw material cyclical prices

Counterfeit goods or rip offs of innovation by Chinese manufacturers

Other competition like Unilever, Reckitt Benckiser (RB)

Essentially P&G is its own competitor. It's strength of having such a diversified product portfolio is also it's weakness because with so many products, it's possible for P&G management to get distracted, what more so its consumers who might be confused with too many choices. One of its main weaknesses is over-reliance on Walmart for majority of revenues. To improve distribution choices, P&G could consider selling via its own website considering the popularity of ecommerce. Although, since this is not its core competency, it could not be a feasible strategy with some market research and feasibility studies. It's main external threats are controlling its cost base and also stiff competition between other FMCG giants. To control cyclical raw material prices, P&G could work out permanent handles raw material prices and it needs to focus on bettering its value proposition to its customers to prevent price wars.

Customers: P&G's customer base is exclusive. Because not only would P&G's customers include those in the modern and traditional trade. In addition they encompass the end consumers - both me and you.

Modern trade identifies retailing at large format stores whereas general trade identifies retailing at the thousands of independent retail, wholesale and mom and pop stores. Some examples of its customer would include Walmart, Carrefour and Tesco who are more prevalent and dominant in the developed world. Whereas, the smaller mom and pop stores will be the distribution channels of preference in developing economies like India or Mexico where consumers buy sachets worth a few cents with higher frequency than a sizable shop.

P&G's biggest customer is Walmart, contributing more than 16% or income in 2011 down from 20% in the early 2000s. (Wikinvest) In cases like this, customer power with Walmart is very strong and P&G normally must concede to Walmart's obtain certain promotions or price discounts. Currently, P&G has not yet discovered what other to Walmart and may have to yield to their demands. Alternatively, P&G could use this to their advantage, using the judo move and utilizing the clout of Walmart and sell more products with sustainable profits.

In conditions of end consumers, end consumers are fickle and are put through "Moments of Truth". The very best known is the First moment of Truth (FMOT), coined by P&G where in just 3-7 seconds, a shopper encounters something on the store shelf and decides in those short moments whether to buy it. If the buyer does not find the merchandise, she progresses to a competitor's product. There is basically little consumer loyalty when it comes to soap and shampoo.

The Second Moment of Truth (SMOT), is the moment whenever a consumer uses the merchandise and is also another powerful marketing opportunity but it is harder for the maker to regulate because this is when the buyer uses the Pantene shampoo and decides whether she likes the texture, smell or after results of the shampoo.

Then it progresses to the Zero Moment of Truth (ZMOT) where individuals are going online using blogs, facebook to find inspiration because of their own looks and get guidelines from experts or take cues from a popular celebrity.

Because of the progression and the influence of the internet of consumer behaviors, P&G has began to re-evaluate the brand's true "FMOT" which is looking to shift to focus on the notion of "store back" meaning ad agencies need to start formulating ideas at the shop, working backwards to outside the store. This does mean that marketers need focus on their pull marketing strategies which gets demand forecast from consumers, not only the traditional push strategies and find ways to match the two. P&G puts on its priority list the importance that the end consumer always has a consistent and positive experience from ZMOT to point of purchase and beyond, and has strived to enter front of the consumer with the right brand message upstream in the process of discovery and also to continue staying there.

Collaborators: P&G has many collaborators. They might include direct and indirect material vendors like: raw material suppliers, advertising agencies, marketing research firms, independent product testing laboratories, logistics partners, communication companies, banks and financial institutions, travel agencies and hotels etc.

Of special mention would be its supply chain partners which would include warehousing, transportation, software providers and carriers as P&G has one of the world's best supply chain. Within the 2012 survey, it placed in the very best 5 just behind Apple, Amazon, McDonald's and Dell. P&G has showcased its ability to make efficient decisions across the supply network. It is a constant challenge to guarantee the right forecast demand and that shelves are filled, but P&G has were able to find the right balance. Using its best in class, open innovation platform, coupled with an extraordinary new product operational capability that synchronized with its clockwork run supply chain, it taps a deep well of understanding its consumers, aligning with their ZMOT and FMOT, to continue to deliver new products on time and on demand. (The Gartner Supply Chain Top 25 2012)

In order for all cogs to move in sync, P&G has to maintain a win-win partnership using its collaborators to build sustainable competitive advantages.

Competitors: Because of P&G's diverse product range, there is certainly no one for just one direct competitor with this behemoth. A few of P&G's rivals include other FMCG multinationals like Unilever, Clorox, Kimberly Clark, Johnson & Johnson (consumer division) and also Japanese FMCG companies like Kao, Lion etc. It faces strong competition from its opponents and has to constantly innovate, cut cost to keep up its position as the marketplace leader. Its closest competitor will be the Anglo Dutch company Unilever but even then, Unilever's sales income is only half P&Gs. P&G also own an increased operating margin than its competitors at 20. 3% versus Unilever at 14. 8% in the year 2010.

Although P&G has many competitors, it has established itself as market leader which is thus well positioned to ward off competition or make necessary acquisitions of smaller companies. Its last notable acquisition was at 2005 of Gillette, forming the largest consumer goods company on the planet and putting Unilever in second place. This added brands such as Gillette, Duracell, Braun and Oral B with their stable.

Therefore, for new start ups to the consumer goods industry, they would find the barriers to entry pretty high. Whereas for the prevailing opponents like Unilever, Colgate Palmolive, they need to continue to play the catch up game, in conditions of market share.

Context: A PESTLE analysis will be conducted to look at the existing situation for P&G in the global market.

Political: With local businesses in more than a hundred countries, based in different time zones and continents, P&G has to manage the complexity of different political regimes, regulations and political trends influencing its business operations. Similarly, P&G has to adapt and thrive to the changing political pressures in several nations, yet on the other hand, because of its scale and size, it plays integral roles to cooperate and affect municipality policy using its clout and manufacturing size. Therefore, They have considerable clout due to its ability to move and shift hundreds of jobs out of your country.

Economic: The globe economy is having shorter cyclical patterns and P&G is seeing market share stagnant or decline in the developed areas like US and Europe. However, world demand is forecasted to grow in the next couple of years due to growing populations and development of economies in the developing continents like Latin America and Asia. Due to the several nuances and different cultural and consumer habits, P&G needs to be attuned to the changes in order to keep to grow and thrive and it must take note that developments in the various markets and nations will cause an uneven growth situation in various regions. It might thus have to focus its marketing firepower on previously neglected after nations.

Social: P&G has to place great attention and importance to the various social norms when expanding overseas due to various cultural backgrounds in various market in order not to step on any taboo landmines. For example, due to the changing masculinity trends, we've the advent of the metrosexual and the demand for men grooming sometimes appears as a rise area for the FMCG market. Or for example, because of the increasing drive towards being socially responsible, P&G needs to source its raw materials like tomatoes or palm oil from sustainable sources or face wrath from watchdogs like Greenpeace of other tree huggers. Because of this sustainability trend, P&G has focused on developing USD50billion worth of products which may have a sustainable impact.

Technological: As the overall market of fast moving consumer products is very large and diversified, P&G has invested significantly to get technological advantage to be able to keep up and expand its market position. As a result, technology investment in product formulation, packaging, product design is heavy and development is fast. P&G has its own R&D function reporting directly to the CEO and predicated on 2010 numbers; P&G invested practically USD2billion in R&D up from USD1. 95 billion in 2008.

Legal: P&G has to obey and comply with different legal and tax requirements on its products, manufacturing process and business operations. With all the rising prices in commodities, FMCG companies wish to raise prices but are contained by certain price ceilings by governments and therefore P&G must battle with price ceilings yet remain profitable. For example, it tried to improve prices but suffered mandated price cuts in Venezuela and import curbs in Argentina.

Ethical: Because personal products are daily essentials, the quality and safety of the products are extremely important for the brands. Any scandals or rumors about the merchandise can lead to significant and unconceivable damage on the image. For eg the recall in 2011 for their Oral B products due to Microbial contamination in Canada, China, Chile, Columbia and Mexico caused dissatisfaction among consumers in the manner that it was handled where in China consumers who wanted a refund was required to send the empty product bottles, receipt and a copy of these bank-account passbooks to the business's Guangzhou office which caused ire amongst the consumers as it was unreasonable for consumers to keep the bottle once they consumed the mouth wash.

Issue 3: P&G's former CEO A. G Lafley who retired in 2010 2010 coined a solid and simple message that the "Consumer is Boss" and P&G followed his mantra and tried to get the real opinion of its consumers with the fact that the closer they get to the clients, the better it was for these people. (Innovation Machine P&G: 1 Billion $ for Consumer Insights. 2012. )

P&G spends more than USD400 million total annual in external consumer insight activities. In those activities, they touch base with an increase of than 5 million consumers spanning 100 countries. They also conduct over 20, 000 individual clinical tests every year, all of this money and time spent is to comprehend the consumer a bit more better to better identify opportunities for segmentation, product innovation as well as how to create an improved overall service delivery to the consumers. (P&G. com Core strengths)

Apart from external sources, one famous platform that is established in-house by P&G is TREMOR in 2001 under which it created the website www. vocalpoint. com which is an online site for a community of mums to talk about knowledge and exchange opinions. Tremor is the term of mouth marketing organization developed by Procter & Gamble that combines P&G's wide-ranging marketing expertise with key learnings from cognitive science. (Tremor)

It was founded for a dual purpose: market research tool and Person to person (WOM) advertisement. On vocalpoint, it connects about 600, 000 mothers and these mothers have an average of 25-30 touchpoints with other women when compared with 5 for a usual mom. They share product information with other mums which is key for P&G because so many household products are purchased by mothers or women in family members. They get samples and coupons to make a network effect.

However, social media has changed how companies gather information through traditional streams as consumers proceed to an electronic age. It now gathers information about consumers through digital means like Facebook, twitter, launching programs you can use on Smartphones etc and requires on web site traffic and analytics to spot the next trend.

In terms of competitor intelligence, P&G definitely closely monitors its competitors through various online sources and probably outsources this research to external companies. Subsequently, these details is shared through the intranet about competitor intelligence and updates employees on what their competitors are up to. As there is no public information upon this, I am assuming P&G does the same if not more based on my work experience in Unilever.

Competitors that currently represent a threat to P&G would be Unilever, Colgate Palmolive, Clorox etc. The strategic group that P&G is at is the branded consumer goods section. However, P&G isn't a direct competitor across all segments a few of its competition like Unilever still has a sizable part of its revenue from its Food, tea and beverage business. Whereas Johnson & Johnson not only consumer goods, but is also strong in medical and pharmaceutical industries. Its closest competitor in terms of direct product to product lineup in the household products market might be Colgate Palmolive.

At this moment, P&G is probably its own worst enemy. However in conditions of its closest competitors that represent a delicacy, I would think that Unilever, Colgate Palmolive are two or its nearest competitors. One indicate raise is the threat of private labels - brands from supermarkets themselves. This is getting to be a threat especially through the monetary recession when consumers don't differentiate between Shampoo Brand X and Shampoo Brand Y in terms of its value (reduces hair frizz) but on price alone. The waiting for you brands by supermarkets like Coles or Woolworths compete in the same product category but obviously are able to market them at less entry price but higher profit margin. To be able to mitigate this threat, P&G has to spend more on branding and innovation to hopefully induce the willingness to cover its products.

The context of the FMCG industry is definitely dynamic. However, even though P&G often will use market research to stay abreast of latest developments, because of its size, it could not need the overall flexibility to react quickly to changes. It really is clear in conditions of the shift in power of the planet economy; USA is the superpower of days gone by whereas Asia is the new superpower. Using its headquarters still in Cincinnati Ohio, that in a way is a constraint for P&G as it is away from the business centers, from the growth in the developing countries.

P&G needs the help of its collaborators to go to another level as they are all area of the value chain activities. For instance, it could needs its global logistics providers to ensure on time shelf delivery at competitive cost, it would need the 3PM to create quality and competitively priced products, ad agencies to create quality and engaging advertisements etc. To be able to choose the best collaborators, P&G has balanced scorecards in conditions of environmental sustainability to keep up its commitment to reduce its carbon footprint

Issue 4: Among the leaders in marketing, P&G has spared no efforts in its marketing segmentation. For its paper products like tissues and wc paper, it has household brands like Charmin, Puffs, Royale and Bounty. Because of its shampoo segment, it offers famous brands like Head & Shoulders, Vidal Sasson, Pert Plus, Ivory and Pantene, supposedly sufficient to focus on an array of hair: oily, dry, dandruff, coloured, split ends etc. For the laundry segment, one of its cash cows has alone 8 brands accessible in america. This might include Ivory Snow, Dreft, Oxydol, era, Gain, Bold, Cheer and its own crown Jewel - Tide. Because P&G also is based worldwide, they have numerous specially created brands in each category to focus on different international markets. In Latin America, it sells 16 laundry product brands whereas in its EMEA (Europe, Middle East, Africa) geographic segment, it offers an impressive 19 different brands for choice.

P&G's online marketing strategy has evidently shifted from mass market to focus on marketing. It really is aware that consumers have different needs through its elaborate consumer research, it has been trying to build up a product for each and every type of desire a consumer has, it seems that P&G is trying to have a race with itself to build up new products for almost any customer. We can understand the motivation as P&G wants to utilize its economies of scale and brand name to push out its products and expand market share to new and existing loyal customers. Along with the enormous variety of brands in P&G, we'd suppose each brand manager is trying to fight for publicity and capital because of its brand. It is only a hypothetical question, but could the large number of brands become more of an internal fight for importance rather than actually meeting consumer needs?

However, clearly P&G positions itself in the premium section of the FMCG market. It's products like Pantene, Vidal Sasson can command higher prices than a lower end shampoo brand like Sunsilk from Unilever.

As mentioned, the multitude of brands is both the strength and weakness for P&G. For just one, the same laundry products for example will be competing with one another for limited and precious supermarket shelf positioning and space. The fact that P&G introduces several brands in one category might be economies of scale but may possibly also crowd out the marketplace. It might perhaps concentrate its resources on a small number of main brands and focus their targeting on specific customer segments instead of spreading itself too thinly.

Because of the large number of P&G's categories, we will just examine at length its laundry brands in US. To be able to breakdown laundry segments, P&G first has to go through the "job to be done" segmentation. It did research and probably thought that aside from using detergents to get clean clothes, people also want other things from detergent. For instance, mothers might want cheap detergent because with a family of three kids, there would be many dirty clothes and washing cycles to do in a week. Thus, they would want detergent that is economical and powerful to reduce dirt stains. On the same demographics of mothers, you get mothers with babies, and they will need detergents with less (zero) chemicals catered to the sensitive skin of babies. On the other spectrum, it's likely you have some working professionals or yuppies who've a higher willingness to pay and value detergents that had a good fresh smell and are sustainable for the surroundings. Thus, it is no surprise that P&G has launched 8 brands in the US to cater to all the average person niches of customers.

A quick check up on www. walmart. com (Appedix A) and entering in the term "Tide" prompts 65 hits on the detergent in family members essentials segment. The truth is that Tide comes in three forms: liquid, powder, pod forms. It also will come in many shapes, scents and sizes. This results in at the least 65 SKUS first laundry brand.

By segmenting the market for laundry across multiple detergent brands, P&G appears to have covered all bases for consumer laundry needs and wants. Because of this, P&G is the unrivalled leader in the USD7billion US laundry detergent market. Tide alone is the marketplace leader with a respectable 38% market share. Whenever we incorporate all eight of P&G laundry brands, it arises to a 60% share of the market-2. 5 times that of nearest rival Unilever and much more than any single brand could obtain by itself. However, does this imply that market share is because of the actual fact that P&G has that many brands and is successful in its segmentation activities or could it be as a result of overall value proposition P&G's detergents provide to its consumers. Could P&G attain its market share of 60% by optimizing the number of SKUs by half?

P&G recognizes that they can not appeal to all buyers available on the market or at least not to all buyers in the same way. Buyers are too numerous, too widely scattered, and too varied in their needs and buying practices. Moreover, P&G itself varies widely in its skills to serve different segments of the marketplace. Rather than aiming to compete in an entire market, sometimes against superior competitors, P&G has determined the parts of the market that it can serve best & most profitably.

Thus, P&G has been more selective about the people that they would like to capture and retain. It's been a specific leader in moving from mass marketing, toward market segmentation and targeting-successfully identifying market segments after stringent general market trends and studies, selecting one or more of them, and developing products and marketing programs individually tailored to the specific niche. P&G clearly believes the rifle approach is more effective rather than the shotgun approach. They have achieved previous success based on this process, but would this plan continue to be employed by the fickle and fussy FMCG market? It will however be noted that Apple -one of the greatest marketers of technology - thinks differently, with the i phone continues to be managed as a mass marketing concept.

Issue 5: P&G's reputation as being the best in marketing is indisputable. They are regarded as at least 5 years ahead of competitors in terms of how each goes to market. They continually train and spend money on their employees at the start of the careers and prefer to promote from within. They spend enormous amounts of money training their visitors to become world class marketers and a lot of their people leave P&G to lead others as their Chief Marketing Officer.

P&G evidently puts the buyer first. As such, their online marketing strategy is dependant on deep consumer insights. This might mean their advertising probably won't be the most creative, nevertheless they will capture income and market share. This however, might end up being a stumbling block with the changing demographics in the developing world.

P&G's marketing orientation makes business sense strategically. With a market orientation and micro marketing approach, P&G can adjust to the 4Ps. In conditions of Price, P&G's premium pricing shows that it can be moved with lower charges for the more cost sensitive developing countries. In conditions of product categories, it competes in 35 product categories in US but only present in typically 19 product categories globally. Therefore, P&G is focusing on the launching more product categories in more countries, targeting expansion of the global average to occurrence in 24 product categories by 2014-15. In relation to place, P&G currently distributes broadly through four channels: 1) supermarkets - mass volume retail, 2) mom & pop stores which are still prevalent in the 3rd world countries particularly when shops are inaccessible, 3) wholesale and 4) modern retail stores. As part of new channel strategy, P&G is concentrating on expansion in the international pharmacy and e-commerce channels. This shall donate to P&G products being offered by more outlets. (P&G's market share strategy set to pay off- Seeking Alpha)

The P&G brand plays a huge role in its marketing strategy as it's one of the most recognized brands in the world. The P&G brand is synonymous with premium pricing and quality. With all the shift in the demographics, P&G would have to shift to developing countries and the younger age segmentation. In conditions of developing countries, it might be directly on the ball to concentrate on India and China. Currently, P&G is certainly behind the curve for India as Hindustan Unilever is the clear leader in the CPG industry, however, P&G does better in conditions of brand penetration in China. The positioning in China is also very different when compared with India due to different value systems.

P&G might need to re-engineer some of its STP strategies as they were mainly successful for the united states market and may not be relevant to China and India. The efforts on BRIC countries would be 180 degrees opposite from other strategy on developed countries in THE UNITED STATES or Europe. Naturally, P&G would have to cater to enter the market at lower price points to capture the critical mass. To focus on volumes, P&G has adjusted its pricing strategy accordingly and also launched lower priced product extensions of its global premium brands such as Tide and Gillette to meet up with the needs and wallets of consumers with lower disposable incomes; in terms of distribution points, it has also expanded its touch points to cover inaccessible areas by providing support to Mom & Pop owners. As the U. S. and Western Europe continue to constitute over 41% and 21% of sales respectively, gazing in to the crystal ball, it is clear that the growth will result from the developing world, with its demographic divided, spurring the growth of consumer goods. The developing areas especially Asia have been exhibiting exciting and strong double digit growth predicated on the actual fact of its expanding middle income, rising disposable income and education levels and simply it's high population replacement rate. (P&G Growth Depends on Good Execution in China and India, Trefis) Certainly P&G established fact to make use of local experience to tweak its marketing strategies. But for fast growing, demanding territories like China and India, it might need to seek help from local marketing agencies to cater to cultural sensitivities.

Based on the existing stage of things, I'd rate P&G's marketing pedigree to be ahead of the pack. It does well in connecting with consumers, knows how to create demand because of its products through close consumer contact and knows how to segment and position its products. However, it is being chased very closely by Unilever which is not letting up speed in terms of doubling its income by 2020, wanting to reach P&G's income of USD80billion by then.

At as soon as, P&G's annual advertising spend of USD10billion is no small change and the company's marketing spend is up 24% over the past two years despite only a 9% increase in its 2012 Quarter 1 earnings and 6% increase over the same 2 yrs. It's quite clear that P&G's sales growth is lagging behind its advertising spend and the online marketing strategy doesn't appear to be sustainable. This definitely issues warning signs to company management about the direction of its online marketing strategy.

The hard the fact is that something is wrong as for 1st quarter 2012 results, P&G lost global market share in the majority of its major product segments. It got a bump in developing markets but wasn't enough to offset volume declines in its cash cow of big developed markets. As P&G raised prices in mature markets, volumes fell. The outcome was an unfortunate negative mix that reduced net gain 15% to $2. 4 billion. Net sales rose 2%, to $20. 2 billion, 5% of which was pricing. At a business like P&G, this is all about brand management - a balancing act of pricing, advertising, promotion and distribution and its own why focused brand management matters.

Apple appears to have superseded the new P&G as the new P&G and P&G appears to be a shade of its old self. P&G appears to be frenetically endeavoring to grow in every possible direction and the new CEO Bob McDonald's growth strategy has gone to expand distribution beyond its 180-plus countries, up and down all price points, into all seven major retail channels (from four); filling out its product lines to be, typically, in 24 product categories in each country versus 19.

P&G's commitment in gathering market intelligence is a mirage to research companies in these financial downturns. It does not let through to gathering market intelligence as is seen from its No 1 position in the FMCG industry. It would however, need to target more in conditions of focus on digital media. As social media is still a relatively new area, it requires time to develop experience and the learning curve would be steep. It needs time, resources and technology and that would cost money whereas P&G already has much experience under its belt with traditional media. However, with social media and search on the internet now part of the consumer shopping experience, it is inextricable and whether P&G would prosper to successfully integrate in as part of its marketing mix is still to be observed.

With a company how big is P&G, they will have certain faults in their online marketing strategy in conditions of speed and flexibility. However, their pulse on the business can't be faulted plus they seem to understand the current detour they are experiencing on the previously stellar marketing approach. Maybe P&G, following cyclical fashion trends, will revive its outdated approach to organizing itself around individual brands as the mass market orientation might be the spark and focus that they want.

Appendix A

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