P&G Branding & Greatness Compilation

P & G Case Study

This case discusses the evolution and growth of the brand management system of the US based FMCG major -Procter & Gamble (P&G). It describes in detail how the 'brand management' in the 1940s evolved into 'category management' in the 1980s, as the brand portfolio of P&G expanded. Finally, the case focuses on how category management is gradually evolving into 'cohort management' at P&G in the initial years of the new millennium. The case also examines in detail the best practices followed by P&G in managing brands.

"The brand-management aura has propagated one of the biggest myths about P&G, that it does nothing but influence consumers to buy the company's products. P&G has always been misunderstood as a marketing company. The fact is that P&G's fortunes have been built on product innovation. Brand management is an integral aspect of it, and it's the way the business is managed.

- John Smale, Former Chairman, P&G.

"Our brand is our bond with consumers. When we succeed, we convert a trademark into a trustmark, and another P&G brand becomes a valued and trusted member of the household.

- John Lafley, President & CEO, P&G.

Introduction

Based in Cincinnati, US, Procter & Gamble (P&G) was one of the largest manufacturers of fast moving consumer goods (FMCG) in the world. For the financial year ending June 2003, P&G reported revenues of $43.38 bn and net earnings of $5.18 bn. In 2003, the company was ranked 31st among the Fortune 500 companies. P&G had operations in 80 countries globally, with an employee-strength of around 1,10,000 worldwide. Analysts attributed the evolution of P&G, from a small soap and candle maker into a multi-billion dollar company, to its highly successful marketing and brand management strategies.

In 2003, the company marketed more than 300 brands to nearly five billion consumers in 160 countries across the globe. P&G had a significant market share in several product segments including laundry and cleaning (Tide, Cascade, Dawn), paper goods (Bounty, Charmin, Pampers), beauty care (Pantene, Olay, Cover Girl), food and beverages (Folgers, Pringles, Duncan Hines), and health care (Crest, Scope, Metamucil). Commending P&G's exceptional growth, an analyst said, "Within a paternalistic corporate culture, P&G pioneered in brand management, in consumer surveys for marketing research and in new product research and development.

A pioneer in introducing a formalized brand management system way back in the 1930s, P&G constantly modified its brand management strategies as and when the company expanded its product & brand portfolio and its business operations globally.

Background Note

Procter & Gamble was established in 1837 when candle maker William Procter and his brother-in-law, soap maker James Gamble merged their small businesses. They set up a shop in Cincinnati and nicknamed it “porkopolis” because of its dependence on swine slaughterhouses...

The Brand Management System

The Initial Decades

The brand management system at P&G came into existence in 1931 when Neil H. McElroy (McElroy), P&G's Promotion Department Manager, formed a marketing division based on competing brands, controlled by a group of employees. The system enabled P&G to design and customize its marketing strategies for each brand...

The Category Management Model

Under the CMM, the brand managers did not compete against each other with similar product brands -contrary to the idea envisioned by McElroy. For instance, in the detergent product category, brands like Tide and Cheer shared the available marketing expenditure and other financial resources but were not allowed to compete for the same segment of customers.

Hence, while Tide was positioned as the premium brand, Cheer targeted the customers in the economy segment...

The 'Glocal' Branding Strategy

By the early 1990s, as P&G's operations expanded globally, the top management felt the need for further streamlining the brand management system. Earlier, P&G was known as "the one-page memo company." The brand managers of P&G were asked to offer their ideas, suggestions, or business plans in just one-page...

Branding Under Organization 2005

In July 1999, P&G launched Organization 2005, a six-year long organizational restructuring exercise. Under this exercise, P&G sought to reorganize its organizational structure from having four geographically-based business units to five product-based global business units.

There were four important components of P&G's new organization structure - global business units (GBUs), market development organizations (MDOs), global business services (GBS) and corporate functions (CF). Under the new structure, the GBUs defined the brand equity for each of their brands...

Bundling Brands Around Consumer Groups

During the initial years of the new millennium, P&G introduced its new brand management strategy that grouped brands together to appeal to consumers with similar attitudes and needs.

The strategy (coined by Forrester Research as 'cohort management') focused on bundling many brands into online as well as offline marketing efforts aimed at similar consumer groups. This was contrary to P&G's previous practice of grouping brands according to similar product categories...

Asia Social Media Report 2008 (Can Brands Have A Social Life?)

Check out this SlideShare Presentation:

Asia Social Media Report 2008 (Can Brands Have A Social Life?)

View more presentations from Nicholas Guan.

AT&T win in Olympics & Brand building via Web.

WEBSITES dedicated to the brand is potentially the most powerful brand building tool, in part because it can be tailored to the needs of the brand and the customer/brand relationship.

Moreover it can Marshall all the power of the web to create and reinforce associations.

There are various examples which can demonstrate the above, we can take example of AT&T and analyze how they were successful in creating brand awareness via internet.

AT&T sponsored 1996 summer Olympic Games and as a part of it they developed a Web site intended to provide a virtual experience of being at the Olympics.

One page let site visitors view the Olympic village live, a vantage point otherwise only available only to athletes and Olympic officials. Elsewhere on the site, a visitor could stroll through the Olympic Museum, obtain updates of athletic events, or participate in "Virtual Event" games and compare their scores to those of other players. Of course, Users could also access the AT&T home page.

The site was rewarding to the visitors not only it was informative and interesting but also it provided unique inside look at the Olympics. In addition to delivering exposure to the AT&T brand (more the THREE HUNDRED THOUSAND page exposure per day) the site created key associations. The visitors active involvement linked AT&T to the Olympics with much more strength and depth than advertising could, and it also enhanced the possibility that the prestige and excitement of the Olympic would be linked to the AT&T brand.

And since the site was also a demonstration of the power of telecommunications, it indirectly reinforced some key AT&T brand values.

How Websites build Big Brands?

There are few unique characteristics of the web. Most traditional media advertising assumes that the audience members are passive recipients of the message; the brand builder controls not only the content but also the context surrounding it.

Traditionally, the most successful brand builders are those who have maintained a relentless focus on purity of the brand monument.

In the web environment the role of the audience is active one (lean forward rather than lean back attitude).

The Unique property of the web like:

· Interactive and involving,

· Current, rich information,

· Web Personalizes,

These three property was amazingly exploited by AT&T, the section of the AT&T site for people starting up a business allows visitors to choose whether they are more interested in saving time or saving money then delivers the presentation tailored to their preference.

Brand Building websites:

There are basically 5 effective brand building tool… Five guidelines:

1. Create positive experience:

A website should deliver a positive site experience by having three basic characteristics.

· Easy to use

· Deliver Value

· Interactive, Personalized and timely.

2. Reflect and Support the Brand:

Too often, making the site functional & simple results in a bland experience that does not create or support key brand associations. The brand Identity, not creative pressure, should be the driver.

· Core associations can be directly supported on the web.

· Feeling and Emotional content.

· Brand symbols can sometimes be key drivers of the brand’s association.

When a brand is conceptually and visually strong and the site is well done, then users feel of being in brand’s world e.g.

Harley-Davidson black, Duracell orange on black, Crisp and feel of a Gap store, etc.

3. Look for synergy with other communication programs:

When a website is created and developed by a group of people who have their own vision and style, the result is always a silo orientation- a website creating synergy and not integrating with any communication vehicle but rather represents an isolated effort.

The website, however injects a whole new dimension into integrated communications. It has the potential to be, if not the media vehicle, the structure and glue that holds it all together.

· Providing Flagship-Store impact

· Supporting advertising

· Supporting sponsorships

· Supporting promotions

· Supporting publicity

· Attracting visitors

4. Provide a Home for the Loyalist:

The website should be home for the loyal group of the customers. Taking an example of Harley-Davidson, they provided all kind of technical, financial, and other details on their website. A customer can ask any kind of query and get any kind of detail on the website.

Customer seeks the brand heritage story: Customers always have this eagerness to know about the history and origin of the brand, it helps them to understand the brand identity and creator of the brand. Knowing the root of the person, place & creator help in the bonding, and relationship building.

5. Differentiate with strong and sub-branded content:

--

Source :

Rex Briggs & Nigle Hollis "Advertsing on the Web"

Jason Stavers & Andy Smith Journal

Endorsement

Today 'Celebrity Endorsement' has attracted immense debate on whether it really contributes to the brand building process or whether it is just another lazy tool to make the brand more visible in the minds of the consumers. Although it has been observed that the presence of a well-known personality helps in solving the problem of over-communication that is becoming more prominent these days, there are few undesirable impacts of this practice on the brand. The theories like 'Source Credibility Theory, Source Attractiveness Theory and Meaning Transfer Theory' provide a basis on which the methodology of celebrity endorsement works and also explains how the process of the celebrity endorsement influences the minds of the consumers.

Firms invest huge amounts as advertising expenditure for hiring the right celebrity. However there lies uncertainty with respect to the returns that the company might be able to garner for the brand. The issue of matching the values of the celebrity with the brand values is also very important, i.e. getting the right celebrity to endorse the right brand. Consumers perceive the brand as having superior quality because it has been endorsed by a credible source. This makes endorsement as one of the indictors of quality for any brand.

Corporate credibility along with endorser credibility plays a significant role in the attitude of the consumer towards the brand and the advertisement respectively. On the other hand, the over popularity of the celebrity sometimes overshadows the brand. If the celebrity is involved in multiple endorsements, it tends to create confusion among consumers and hence negatively affects the perception of the advertisement and the brand. Hence, to say clearly whether the practice of celebrity endorsement impacts positively or negatively to the brand still remains a debate.

Analysis of different case studies on Adidas & Nike

It starts in 1948, we all know Adi Dassler the founder of ADIDAS. Adidas was formed after the personal conflict and family dispute in Dassler Company which was established in 1926 by German shoe maker “Dassler”. The other company was later named as Puma owned by Adi’s brother.
Adidas was founded along with its identifying trademark, the three stripes. From its inception, Adidas has faithfully adhered to three guiding principles embedded deep into its DNA: produce the best shoe for the requirements of the sport, protect the athlete from injury, and make the product durable. As time has passed, Adidas has evolved and is now one of the premier global leaders in sporting brands offering athletic footwear, apparel and accessories. This feat has been cultivated through continuous innovation and a broad product portfolio.

Phil Knight an sports enthusiast, was an inventor and entrepreneur who valued craftsmanship, quality, and dedication to innovation founded NIKE in 1964 with the intention of importing low-price Onizuka athletic shoes from Japan to the United States.

Initially, what started as Blue Ribbon Sports in 1962 became Nike Inc. in 1972, based in Beaverton, Oregon. Nike was named for the Greek winged goddess of victory. The founders were Bill Bowerman, a track & field coach and Phil Knight, a runner under Bowerman. From their modest start, Nike has grown to be a global leader in the sporting goods industry. It is recognized as the world's leading designer, marketer and distributor of athletic footwear, apparel, and accessories for a wide variety of sports and fitness activities. For Nike, an established and growing organization, a strong Internet presence felt like a natural extension to their already globally focused strategy.

Ok… Let’s not deviate from our point… Actually I haven’t introduced what is the point of writing this post.

I am comparing the branding strategies of “Adidas & Nike”

People talk about e-commerce and role of internet in building brand, But dear, internet officially come in 1968, “www” launched in 199o. And by that time Adidas and Nike were already a billion dollar company & a big brand.

Detailed analysis in next post.....

Coming Soon.....