1. a) OVERVIEW OF THE COMPANY Candlemaker William Procter (an immigrant from England) and soap maker James Gamble (arrived from Ireland) launched their new enterprise in Cincinnati, Ohio, USA in 1837. During the Civil War, P&G was awarded several contracts to supply soap and candles to the Union armies. These orders kept the factory busy day and night, building the Company's reputation as soldiers returned home with their P&G products. P&G discontinued candle manufacturing in the 1920's. Soap is still one of P&G's core products. Today, Procter & Gamble is a diversified consumer products company, delivering over 300 brands to nearly five billion consumers in over 140 countries.
These brands include Tide, Crest, Pantene, Always, Pringles, Pampers, Olay, Folgers, Cover Girl, Downy, Dawn, Bounty, and Charmin. They have more than 110,000 employees and operations in more than 70 countries. P&G's net sales, dividends, and basic earnings have each consistently increased over the last 5 years. About half of their sales are in North America, with the other half from outside North America.
P&G ranks #39 on the Fortune 500 list, before its main competitor Johnson & Johnson (#57) and Kimberly-Clark (#142). Their new plan for growth is called Organization 2005. b) MISSION Innovation is the primary driver of P&G. This innovation focuses on both existing and entirely new products. P&G intend to be the innovation leader in new and established businesses alike, and in both developed and developing markets. Their mission as a company is to improve everyone's quality of life every day, everywhere.
They also want to create entirely new categories and benefits such as Febreze, an odor eliminating fabric spray; or Dryer, a product that allows consumers to clean and freshen "dry clean only" clothes at home. P&G's innovation mission is based on three key characteristics: o A deep understanding of consumers, their habits and product needs. o A capability to acquire, develop and apply technology across P&G's broad array of product categories. o The ability to make "connections" between consumers' wants and what technology can deliver. c) GOALS Procter & Gamble's goal is to continue to provide products of superior quality and value to the world's consumers. P&G's growth goals include: doubling unit volume in ten years, achieving share growth in the majority of its categories and delivering total shareholder return that ranks P&G over time among the top third of its peer group. Most importantly, P&G's goal is to continue to provide products of superior quality and value to the world's consumers. As a result, P&G's business, people, shareholders and the communities will prosper. P&G's goals are to make it easy for innovation to flow across the business and around the world; to learn directly from consumers as early as possible and to profitably commerci lise the best ideas and inventions quickly.
The value proposition is the promise of benefits that P&G offers to the consumers. Delivering on this promise is what will differentiate it from their competitors. 2. MARKETING STRATEGY P&G defined many marketing strategies. Marketing is definitely an important key to P&G's success. P&G pioneered in brand management, in consumer surveys for marketing research, and in new product research and development.
One reason for P&G's domestic success has been their reliance on a combination of consumer research, advertising, and distribution techniques. P&G have high awareness and they " re looking to build more loyalty for certain brands. They may use programs other than traditional TV and print marketing- like Internet marketing or even direct mail. The packaged goods marketer hasn't changed its brand-oriented, mass-market approach. But there is certainly the opportunity to market complementary products together. In some categories the brand is the hero - like Heinz Ketchup -, but most times, people are looking for solutions.
People don't want to think about what Mr. Clean does for their kitchen floor. Just give them a bunch of products that get them out of the dirt as fast and easily as they can. In other words, give them total solutions. That's what Procter is getting at. Mass marketing is evolving to brand building based on meaningful and individual relationships with consumers - relationships that go beyond product benefits to offer solutions to real and important consumer needs.
STP + 4 Ps of Marketing: STP is the process of segmenting markets, targeting an attractive segment, and positioning the product with potential customers in the target group. Segmentation: Segmentation is the division of the market place into distinct subgroups or segments, each characterized by particular tastes and requiring a specific marketing mix. P&G compete in all the segments. Because the defined market leadership in terms of category share they defend all market segments because segments grow at each others cost.
They realized that they could make several different kinds of products and market them to different audiences. For example, they recently conducted an analysis of hair care consumer needs and aspirations across many important dimensions. They took a look at consumer attitudes and behaviors, physiological and psychological needs -- from understanding hair types and desired styles to understanding their consumers' life stages. This resulted in a rich consumer segmentation model for hair care, which has led to a strategic line up of brands like Pantene, Vidal Sassoon and Physique, all of which are specifically designed for the needs of unique consumer groups.
Targeting: Targeting is the use of 'market segmentation' to select and address a key group of potential purchasers. For example, P&G targets different groups with their different Crest sub-brands. The overall target is for anyone who has teeth. Dual Action Whitening is targeted to those individuals who want to have whiter teeth and want cavity and tartar protection. Crest Extra Whitening is aimed at those who want additional whitening by polishing teeth instead of the abrasive action of the tartar control versions. Crest Kid's Cavity Protection is aimed at children.
Sensitivity Protection is aimed at those individuals whose teeth are sensitive. Positioning: Positioning is the creation of an image for a product or service in the minds of customers, both specifically to that item and in relation to competitive offerings. P&G successfully manages many brands within the same category: Pampers & Luvs; Dawn, Ivory, and Joy; Tide, Cheer, Era, Gain; Cover Girl & Max Factor. Within P&G these competing category brands basically have the same functionality and quality, and are all leading brands. How they are different is in their positioning, pricing and marketing strategy.
Together they generate significantly more revenue and profit for their parent company than if they were combined into one. Below, Crest Toothpaste example was given in order to explain 4 Ps. a) Product: The product is toothpaste in a tube. There are several sized tubes available from travel to family sized tubes. Several new "versions" of the toothpaste have been introduced in recent years, including "multi-care,"complete,"dual action,"kids Crest,"extra whitening,"cavity protection, "tarter protection,"baking soda and peroxide", and "sensitive". The Crest brand, in all its iterations, remains a strong brand name for P&G. b) Pricing: Pricing for Crest products is competitive with other name-brand toothpaste products. The prices are slightly higher than no-name generic products.
P&G uses both push and pull strategies to get consumers to ask for the new products by name and to entice wholesalers and retailers to push the products onto superior placement on the shelves through discount pricing schemes. c) Promotion: With each new iteration of the brand, a new advertising campaign has introduced the product using all mass consumer media including television and print (magazine). In addition, P&G has initiated a number of specialized promotional programs including the "Healthy Smiles 2010" program that is aimed at helping children improve their dental health. P&G works with dentists and dental health professional groups to distribute samples of their products in schools to introduce the concept of good dental health to young people around the world. This promotional strategy makes a "brand loyal" customer from a very young age. d) Placement: Crest toothpaste is readily available at stores on every corner in every town in America. Distribution is through grocery stores, pharmacy / drug stores, convenience stores, and discount stores (like K-Mart). Product is intensively distributed by Proctor & Gamble through its distribution centers to each group of retail stores (grocery stores, drug / pharmacy stores, discount stores).
3. OBJECTIVES of the CSMS Customer Satisfaction Measurement is very important for a company's long term survival. Designing a CSM program is a dynamic process because there is no such thing as a perfect CSM program. Every CSM Program can be improved with an expenditure of time and money. Every firm should develop its own CSM program and custom design it to fit that firm's specific situation because of each firm will have different management, products, objectives, customers, and uses for the data, and each of these will influence the research design. The objectives of CSMS are: 1.
Know the customers. 2. Let the customers define what attributes are important. 3. Know the customers' requirements, expectations, wants. 4.
Know the relative importance of customers' decision criteria. 5. Gather and trust the data. 6. Benchmark the data against the competitors' and identify the competitive strengths and weaknesses. 7.
Develop cross-functional action plans that enhance strengths and correct weaknesses. 8. Measure performance continually and spread the data throughout the firm. 9. Be committed to getting better and better and better. P&G believe that the consumer is their boss.
This is enshrined within their company values and drives them to develop new product and brand experiences that improves the lives of consumers. Their primary function is to grow the equity of their brand. They are entrusted with developing the strategies and detailed execution, which will add value. This is measured in terms of market share, consumer satisfaction and, profit. P&G create and build brands that improve consumers' lives. From the first discovery of an unmet need, to the ultimate creation of brands, consumers not only purchase regularly, but also recommend to friends.
That's why marketing is all about brands. P&G also consider themselves the "voice of the consumer". They are responsible for developing superior knowledge about their consumers and markets. They focus on understanding consumers as individuals - developing a real, personal relationship with them. 4.
QUESTIONNAIRE Instead of using labor-intensive consumer surveys that can take weeks, P&G use the Web to perform surveys in a matter of days at a fraction of the cost. P&G also are weighing the possibility of changing the product as a result. They use the survey results to segment its brands by target consumers. P&G spend roughly $150 million annually to conduct 6,000 surveys worldwide, half of them in the United States. It plans to increase its online market research because surveys are completed 75% faster over the Web-and at half the cost of conventional methods.
P&G have an on-line survey panel, which is called "Consumer Corner". Here consumers tell what they think about P&G's existing products or new product ideas. Sometimes P&G send consumers a trial sample to try, and then ask them to complete an online survey about it. Consumer Corner is used to collect opinions and responses of consumers so that P&G can continue to improve their products and services. The business of Consumer Corner is research.
They have surveys about new products that are not in the market yet, and old, familiar products that consumer may already know about. 5. IMPLEMENTATION of the CSMS P&G's central belief is that the consumer is the boss. The quest for customer satisfaction was the key driver for P&G. Innovation is understanding what's needed and then delivering what's possible. It starts with a focus on the consumer and deep consumer insight. This year, 2.5 billion consumers will purchase a branded P&G product somewhere in the world.
That's over one-third of the world's population. It's 10 times more people than are on the Internet. These purchases are important, because each one represents a chance to connect with the consumer. The mass market is segmenting. Often, this means P&G's classic mass marketing approach is no longer affordable or effective. Instead, they must clearly identify the prime prospect for each P&G brand, and get to know that person intimately.
That is why P&G have so much experimentation going on in consumer and customer marketing. The primary purpose for the consumer marketing team is to bring forward creative ideas to make customers try and love their brands. P&G's goal is to better pinpoint their target consumers, and to create more than a series of transactions with them. P&G want to build a relationship between an individual and a brand.
Consumer insight is just the first step. They also have to deliver on that insight through technology..