Free Case Study On Procter And Gamble (P&G) Marketing Case Study
Procter or Gamble more popularly known as P&G is one of the leading companies that produce consumer products. It is a billion dollar MNC that operates its marketing all over the world. It mainly produces different varieties of consumer goods like Cosmetics and Beauty products, baby care products as well as fast consumer goods that operate around all across the globe. It serves people of around 180 countries. In the year 2012 the company has generated about US$ 83.68 billion. It is around 130% of that what its closest competitor has produced. During 2012, the Unilever stood at only US$ 66.33 billion. With about of $26 billion the company holds the brand like Gillette, Pantene and Tide. These brands are one of the most leading brands that attract the attention of the consumers. It is the market leader in its field with different product categories.
But the most important issue that has been considered in this report in the declining growth of the company that is a serious issue that P&G needs to look at to stay in the position of the number one consumer goods producing company (Alexis, 1962). It is important to understand the case to solve the problem of declining growth of the company. The analysis of the marketing situation and the marketing strategy of P&G has been presented to understand the actual situation of the company and some recommendations are provided to solve the concerning issue.
As it is known that P&G is the world leading brand that has more than 6.7 billion customers that is about half of the world’s customer base for consumer products. The company targets to increase its customer base by about another billion in the coming three years. The most serious issue is that, the company needs to meet the target in the competitive and emerging market which is saturated by huge number of competitors. As the market is growing at a high pace, the company sees an opportunity to grow in the coming years (Mullin, 2006). With the analysis of the market it has been observed that the market is growing at a rate of around 5% which is good news for the company to meet its target of increasing the customer base. The company also plans to develop new categories of products that will help them to attract more customers. The major issues that the company faces in the market are as follows:
For the growth of the sales the company needs stronger promotional and distribution strategy that will help the company it attract more customers.
P&G needs to differentiate its products from that of the competitors and provide unique values from the products they deliver to retain older customers and attract more customers.
The company needs to find better ways to decrease the production cost to keep the price of the products constant to attract more customers in the growing economy.
The company faces a high level of competition from its most important rival that is Unilever. Therefore its need better marketing strategy and product differentiation to gain competitive advantage over its competitors.
In order to understand the internal and external environment of P&G in a deeper way, a SWOT analysis has been done to show the company’s Strength, Weaknesses, Opportunities and Threats (Retail marketing strategy: planning, implementation, and control, 1989).
In order to market research P&G has spent $350 million annually to show its dedication in understanding its customers globally.
The company invests a large amount in R&D for innovating new products. In recent year P&G spent around $2 billion in this sector that is 50 % better than its closest competitor Unilever.
Home Care and Fabric Care, core business of P&G, have constituted 32% of the Net Sales figure and 26% of Net Earnings of the company.
The company has achieved success to ensure its brand reach with huge popularity among the people all around the globe, with more than 250 brands from 6 product categories.
One of the core competencies of P&G is the declining of expenses on innovation section.
Sales of the newly launched products have been decreased significantly in the past decade or so and as per numbers breakthroughs in big products have fallen significantly also.
Net earnings have certainly seen a down fall of 6% in core product category of P&G.
Operating income of the company has dropped down as well by 14%.
As far as the opportunities has concerned emerging market of P&G has picked up impressively as the demand of products has improved potentially that leads sales figure to 32% from developing markets only. The estimation figures are quite impressive as it surges from 23%.
As per assumption by 2020 the sum of GDP of developing market will overtake that of current developed market and the consumer spending of the emerging markets will expected to grow thrice faster that of current developed markets, reaching figure $6 trillion by the year 2020.
Increase in global population will generate more demand for non cyclical products which is specialized by P&G.
In order to move global new social networking sites will add boost in the marketing of P&G.
Increase in prices of commodities and production cost.
Increase in number of generic store brands for the consumers products that will make competition harder for P&G.
Rival groups such as Colgate and Unilever aim for the same market as P&G do.
The problems and alternatives
In the current market scenario P&G has to face huge competitive problems in order to make further inroads in the global markets. The marketing strategies of P&G seemed to have lacked a few forces. In the current situation when the company is moving towards new emerging markets such as India, Brazil, China its rival groups Coalgate and Unilever has also eyed the same markets. Therefore P&G has to find out alternative sources and by the virtue of social networks it has found a new dimension to the business (Easton, 1988). In making few changes in the marketing strategies P&G has certainly worked out plans to deal with the present circumstances to gain a strong market in the emerging countries. The challenges are seemed to be extremely difficult though. But in order to make success the company has acted as per planning has concerned.
Marketing strategy plan for P&G
There are specific marketing strategies in product, pricing, placing, promotion and distributing sector.
Product: The marketing plan of product is divided in change the product to expand sale and cover wide market, drop, add or modify product, Change the design or the performance of the product to secure the quality and establishing a permutation of innovation.
Pricing: In pricing the strategies are changes the price according to the condition of the market, skimming policy to reduce volume not increasing price, penetration policy to set low price for a new product to discourage competitors pricing strategy, discount policy to offer quantity discount in pricing to encourage buying greater volume.
Place: The strategies are change channels to change distribution area, improve services in order to set up nationalize service networking channel
Promotion: In promotion the marketing strategies are change the model of selling in order to strengthen sales in market increasing the sales of profitable products, change in advertisement by starting new advertisement campaign increasing company’s image in advertising and increasing advertisement of products in specific portion.
Distribution: In distribution of products P&G has followed 3 ways (Alexis, 1962). Firstly intensive distribution strategy through which company sells its products in many outlets, secondly extensive distribution strategy is implemented through multiple delivery channels and high amount of distribution volume and thirdly specialty distribution that has to be implemented in several markets like India as in the country PGHH Ltd follows this distribution strategy to manufacture necessity products and distrusted in the market.
Procter & Gamble certainly concentrate at the four under mentioned recommendations to reconsider emerging market strategy
Making products to match affordability in developing markets: In order to achieve success in the emerging market P&G has to adopt marketing strategy that will ensure the company to manufacture products that can be affordable in emerging markets to gain rural markets of the developing countries as well.
Concentrating into nontraditional distribution channels: P&G is on the verge of allowing other company’s in its skin care brand to topple other products to achieve further growth in the market (Easton, 1988). To drive the leading market this sort of tactical marketing strategies are highly innovative.
Expand into new categories in developing markets: P&G has got enough scope to expand its products category in the emerging markets such as Brazil and India. By developing new categories such as conditions in hair care segment is an impressive marketing idea.
Alexis, M. (1962). Marketing Laws and Marketing Strategy. Journal of Marketing, 26(4), p.67.
Easton, G. (1988). Competition and Marketing Strategy. European Journal of Marketing, 22(2), pp.31-69.
Mullin, R. (2006). Creating a marketing strategy [marketing development]. Engineering Management, 16(6), pp.40-41.
Retail marketing strategy: planning, implementation, and control. (1989). Choice Reviews Online, 26(11), pp.26-6348-26-6348.
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