PG: Teaching an Old Dog New Tricks
A summary of a special report on innovation
Background
When Procter & Gamble (P&G) acquired Iams, an exclusive and high-priced pet brand, there was some angst that the acquisition would stem the brand growth and adversely affect the brand loyalty of consumers. Initially only available for purchase at pet stores and veterinarians, P&G immediately increased product availability through retail outlets and thus, increased the distribution by 50% overnight. In addition, P&G conducted research focused on the fears of consumers and subsequently, launched products concentrating on pet health and longevity, such as weight-control pet-food formulas and pet medical insurance for Iams-branded MRI scans. By increasing availability and addressing the needs of consumers, P&G enabled Iams to move from the nation’s
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Therefore, P&G not only markets the product, but the consumer’s experience as well. By having the designers’ part of the whole process, it is more likely that the final product will appeal more effectively to consumers. For example, the P&G product design team worked on marketing materials and in-store kiosks for SK-11, its priciest product line ever, and assisted in P&G’s entry into the prestigious cosmetics sector.
Cater for developing markets
It should be considered that what appeals in one market, might not necessarily yield the same results in another. P&G initially generated only 20% of its revenues in developing countries, which is much lower than its competitors were. Consequently, P&G established smarter, more cost effective methods to cater for those markets. Firstly, P&G contracted manufacturers to reduce costs in production. Secondly, P&G engaged the consumers in the developing markets to establish their needs and made slight alterations to products to increase appeal. Resultantly sales in emerging markets increased with 19%.
Know what not to
There are hundreds of pet product distributors around the world. Superstores and discount stores constitute over half of the U.S. pet supply sales. Other types of retailers include internet vendors and veterinarians. This makes the pet product industry highly fragmented. (Entertainment Close-up, 2011)
A proactive move on PetSmart to send letters to customers on the recall of products was a huge strength to their reputation. Customers were thrilled to receive personal notifications on the product recalls. PetSmart is a leader in the pet industry, and they are a national brand recognition.
Through the illustrations of the using of different P&G goods worldwide in a daily basis, the commercial is able to persuade the audience that it is a leading global company that makes little but crucial things. By suggesting hard working, failures, and the support of mom can make an irreplaceable difference to one’s life, P&G added value to its brands. Although everyone has different background and experiences, the mother-child relationship is one of the purest and most natural relationships in the universe. This commercial breaks the barriers and impresses extensive customers by bonding this common emotion with
Although Lafley has had success, the underlying problem remains. How will Lafley return P&G to its rightful place in Corporate America? P&G's solution to its problems is through product line extensions, expansion into non-premium brands, as well as acquisitions, licensing, reinforcing market orientation through consumer focus, and outsourcing. This recommendation was based on following items;
Natural Choice has performed extensive research to develop and market natural pet products in the United States (U.S.) market. A review of the company strategy along with a SWOT analysis will discuss Natural Choices strengths, weaknesses, opportunities, and threats. Looking at variables of the marketing mix will help Natural Choice Pets determine the best strategy to satisfy customers and distributers in the targeted market.
Other factors include communication infrastructure and availability of skilled workers. Most of the Asian countries are embracing new technologies that grow much knowledge of the diverse beverage drinks. Secondly, the demand conditions play a significant role in enhancing competitiveness for the firms. Both Coca cola and Pepsi are an Coca cola has always dominated the markets outside United States unlike Pepsi’s internationalization strategy that took too long.
P&G is an international and famous consumer goods founded in United States by Williams Procter and James Gamble both from the United Kingdom since 1837 about 177 years ago. P&G manufactures diversified range of product such as personal care, cleaning items, beauty product, pets food, drugs, & other beverages. Their products are sold in more than 180 countries around the world through grocery and departmental stores and retailers. They are also among the world’s most profitable consumer product company, with highest amount of sales. Their products are recognized in most part of the world. Their company have an organizational strategy to touch the live of its employees which is the major strength and competitive advantage of the company.
Those that spent higher dollar amounts received the most attention in the form of personal visits, seminar offerings, and trial product samples. Although the ranchers appreciate the visits and the personal attention from the sales representatives, they trust their veterinarians opinion over everyone else. Pfizer has traditionally used two distribution channels for its Animal Health products: Veterinarian Offices and Feed Stores. It has also tended to view the rancher as the end user of its product, but due to the size segmentation it may or may not understand each individual customers need, nor does it grasp its role in the larger supply chain (Ranchers-Feed Lots-Meat Packers-Retail-Consumers). At the time of the case, the beef industry was in a state of decline.
P&G also entered into the Singapore manufacturing industry through a Greenfield venture. The 6,500-sq.-meter-fragrance manufacturing plant was built within a seven month period and it was a multi-million dollar project for P&G (Moneycontrol.com, 2008). This wholly owned subsidiary allows the company to have control over their intellectual property concerning how to manufacture perfumes for their cleaning products and bathing products. According to Proctor and Gamble’s Group President of Asia, Deb Henretta, Singapore was a natural choice to build a perfume plant, since the country focuses on creating an innovative business-friendly environment that is supported with a strong infrastructure (Economic Development Board, 2008).
“You can’t teach an old dog, new tricks.” It’s a quote most of us know, and have even used at some point in our lives. The meaning, basically, is that once one has become set in a certain way of doing something, or in this case, not doing something, you can’t change them and teach them a new way. Often that shows to be true, but is that true for the slackers we know and love in life? Can they be taught something new and indeed change their ways? I say yes. They can. After reading several literary works on slackers from the grasshopper in “The Ant and the Grasshopper, to the father-to-be slacker in the movie, Knocked Up, I have come to realize that slackers, like them or hate them, can be taught something new. Sometimes it's just an act of maturing in life. Kay Hymowitz, author of the book, Manning Up: How the Rise of Women Has Turned Men into Boys, calls it “pre-adulthood,” or emerging adulthood in men. Other times, they just need a jolt in life, a fire under them to push them into the direction of change.
Before Lafley took over for Jager, P&G was stretched to the max, haplessly wasting away resources and opportunities with an overcomplicated business strategy. P&G was raising prices on their best selling brands to cover for missed sales and high production costs for new brands that failed to be a successful [Lafley, 2003]. They had hired too many employees and were involved in several investments that were unprofitable. P&G had not had a hit product since the launch of ALWAYS feminine products in the 1980’s and each additional product flop only stretched their recourses thinner and thinner. Costs were high and moral low with employees not afraid to voice their lacking confidence with P&G’s leadership and direction. Subsidiaries were blaming corporate for their missed earnings and visa versa [Lafley, 2003]. Strategies between the brands at P&G clashed and each were out to safe guard their own interests. The prices of their consumer products were too high while the company failed to deliver customer satisfaction. These factors distracted them from what had originally made them successful – being an industry leader in innovation (Markels, 2006).
In week five we learn about the importance of globalization and how it can help your company’s profits grow. There are many things to look at when selling globally as different cultures need to be looked at differently when making a marketing strategy. If you understand how to market your products to different cultures in different countries you can take advantage of the profits that can be made through globalization.
With the advent of the Internet, decreased shipping costs, and the removal of trade barriers, the world market has shrunk in such a way that everyone can be a player. While many businesses thrive solely on serving a small local area, a globalized company has the benefits of increased customer markets, gross production, and brand awareness. Take for example Coca-Cola; this multi-national corporation offers products in countries all over the world, operates in over 200 of those countries with the help of its franchisees, and is the most well-known beverage companies. It is interesting to note however, that as positive as globalization may seem, there are many negative ramifications and a large population of detractors to this movement. While increased product availability is good for profits, if a local market is inundated with imported products, locally grown or manufactured items may be squeezed out, to the detriment of the local economy. Although it is cost effective to have your product produced in another country with low wages, you are essentially taking away jobs from the people of your own country, negatively impacting your national economy. However, if you manufacture your products in a country with higher wages, you must increase your products’ prices which may be harmful to your profits. While maximizing your companies profits is always of great importance, it is essential that you weigh the pros and cons of globalization and its effects on not only your company, but the areas in which you wish to spread.
Further, healthfulness has almost caught up to price (at 73%) as a factor in food choices.” Beyond the recipes, marketers also realize that people seeking premium products for their pets and the attraction and appeal is often set at the initial image and name. Rebranding pet foods and products extends into interesting names as well as packaging, as they want to demonstrate a sense of trust while reinforcing healthy products and eco-friendly containers. Examples of the imaginative and inspiring pet food marketing includes: Rebel Pet Food Packaging by Heather Raines, organic products: “Every Dog Has Its Day”, “Let the Cat Out of the Bag” and “It’s My Treat”. Others that show incredible initiative: *Omega Paw: “Meowtinis”, “Cranberry Cabernet”, “Meow Merlot”, Meowgarita”, “Meowjito”, “Meowmosa”, *Hamstar: Natural quality hamster biodegradable bedding and foods.
A new product on the market may look all shiny and new and be appealing to customers but what is the story behind the product and what is the underlying future for this product. Where were the original materials from? Is it all legalised? Where did the manufacturing take place? How was the product manufactured? These are all questions that are never properly addressed in the design industry and are just simply overlooked. They are the aspects of designing and producing a new product that need to be carefully looked at to make a good design, and to make sustainable products.