Posted by Dale Buss on August 19, 2014 04:39 PM
The first time around running Procter & Gamble, CEO A.G. Lafley was in an expansionary mindset that prompted the CPG giant to acquire Gillette, swoop up and deploy outside innovations such as the Crest Spinbrush, and beef up brand after brand and market after market to transform the company into a global consumer-good marketing juggernaut.
Not so much this time around. In his second turn as chief, Lafley is addressing questions about P&G's business model that are just as fundamental as during his first tenure. But the answers he's been coming up with are much less pleasant, as he forges a strategy based on cutting costs, reorganizing operations and shedding many of the 100 underperforming brands that he's currently reviewing as he tries to re-energize a company beaten down by the slow-growth economy and challenged as never before by CPG rivals. His idea is to turn fewer, better-performing brands into greater growth engines for the company.
News of possible gambits for Lafley, quite naturally, have been popping up since he announced the strategy earlier this month. Braun shavers—which just returned to TV thanks to a new partnership with the NFL—and Duracell batteries are the two largest assets likely to be divested, Reuters reported based on sources. Cheer and Era laundry detergent brands may also end up on the chopping block, the Wall Street Journal reported. Continue reading...
Posted by Sheila Shayon on August 5, 2014 07:54 PM
Subscription services are all the rage these days, and no wonder why: "You can acquire a customer once and potentially keep him for life as long as you provide a service or product that he wants and values," said Alex Zhardanovsky, co-founder PetFlow.com, which calls the retail model "the holy grail."
More recent subscription success stories include Dollar Shave Club and HelloFlo, both of which found a niche and have rocketed to success. With affordable, quality products and a rocking brand story to match, it's no secret why the startups have found immense success in the overcrowded personal care industry.
Interestingly, HelloFlo, which was bootstrapped by former American Express marketing director Naama Bloom, partners with P&G to supply feminine products—the same CPG giant that Dollar Shave Club is challenging with its low-cost, high-quality razors. On track to make $60 million in sales in 2014, Dollar Shave Club accounts for 6 percent of the US razor cartridge market, according to AdAge, and it only has plans to expand.Continue reading...
Posted by Dale Buss on August 1, 2014 01:07 PM
Procter & Gamble CEO A.G. Lafley finally took the biggest step of his second tenure in reshaping the company for the future, announcing that P&G plans to cut more than half of its brands globally as it restructures to focus on its top 70 to 80 brands.
That means the company will be divesting, discontinuing or merging about 100 of its existing brands over the next year or two. While they account for more than $8 billion in sales annually, these sleepy brands have seen sales declining by 3 percent and profits declining by 16 percent on average, Lafley told investors, and have margins less than half the company average.
Meanwhile, P&G’s “keepers” include iconic brands such as Tide and Pampers that have accounted for 90 percent of company sales and 95 percent of profits over the past three years. Most of these brands are leaders in their industries or categories; 23 have sales of $1 billion to $10 billion a year, and most of the remainder have sales of $100 million to $500 million.Continue reading...
Posted by Sheila Shayon on July 25, 2014 05:33 PM
As consumer demand for greater transparency by brands increases, companies are stepping up their commitment to sustainability.
Procter & Gamble is partnering with the Malaysia Institute for Supply Chain Innovation to help small farmers improve their palm oil and palm kernel oil production as part of its zero deforestation goals set in April after the consumer packaged-goods company was targeted by Greenpeace.
“We already work with larger suppliers to trace the origin of our supply chain, but small farmers—in places like Malaysia and Indonesia—account for 35 to 45 percent of palm oil production,” said Len Sauers, VP P&G Sustainability.
But brands aren't the only ones having to make decisions with sustainability in mind. New tools and online tracking technologies aim to help better understand consumer behavior with respect to sustainability such as supercookies, browser fingerprinting, location-based identifiers and behavioral tracking.Continue reading...
Posted by Dale Buss on July 3, 2014 11:51 AM
One of the most influential marketers in the world, Procter & Gamble, executed a big shift in its organization this week. On July 1st, its entire marketing function relaunched as “Brand Management” in a sweeping reorganization that gives a broader purview for brand-centric marketing and thinking.
The move comes as P&G's former CEO, Bob McDonald, is in the news after President Obama nominated to him to take over and make over the troubled Veterans Administration.
With P&G now led (again) by A.G. Lafley, the company's brand-led restructuring, announced by the company in February, is aimed at creating “single-point responsibility for the strategies, plans and results for (each) brand,” a spokesperson told Ad Age.
The shift away from "marketing" towards "brand" changes titles and locks down broader responsibilities for hundreds of marketing directors and associate marketing directors at the world’s biggest advertising spender, now officially brand directors and associate brand directors. Eliminating "marketing" from titles doesn't mean marketing is a thing of the past, however.Continue reading...
Posted by Sheila Shayon on June 26, 2014 05:49 PM
Gender bias and societal expectations are skillfully addressed in Procter & Gamble’s latest stereotype-squashing video, "Like a Girl," for its Always brand of feminine products.
At the heart of the video by Lauren Greenfield is the question, "When did doing something 'like a girl' become an insult?"
The Always campaign, which focuses on girls going through puberty, commissioned research that found that "half of girls report a drop in confidence after their first period.” "We felt strongly we needed to do something about it," Always Brand Director, Amanda Hill, told Ad Age.Continue reading...
Posted by Sheila Shayon on June 12, 2014 01:36 PM
After a successful pilot run of Duracell "Powermat Spots," Starbucks is rolling out wireless phone chargers across the US. The powermats, which are seamlessly integrated into tables and countertops in Starbucks and Teavana cafes, will begin wider distribution starting in the San Francisco Bay Area.
"The way we interact with power today is unchanged since the time of Thomas Edison," Powermat president Daniel Schreiber told The Verge. But Powermat and Starbucks are moving customers beyond "sticking two pieces of metal into a hole in the wall" by creating "something invisible and part of the furniture in the most literal sense of the word."
The partnership with Duracell Powermat—a joint venture between Procter & Gamble's Duracell brand and Powermat Technologies—and Starbucks “is transforming the way consumers get power to their phones, in much the same way it made WiFi a standard amenity in public places,” said Stassi Anastassov, President of Duracell at Procter & Gamble, in a press release. “This endeavor is a critical step in Duracell’s vision to make dead battery anxiety a thing of the past.”
Over the next three years, more than 100,000 table chargers will be installed in Starbucks' 7,500 company-owned stores in the US, which follows the brand's improvement of its in-store Wi-Fi network. "Starbucks believes this is another step in staying ahead of the curve when it comes to in-store technology," Adam Brotman, chief digital officer at Starbucks, told USA Today.Continue reading...
Posted by Dale Buss on June 2, 2014 06:14 PM
Procter & Gamble has plenty on its plate these days as returned CEO A.G. Lafley fights to restore the CPG giant to some semblance of the sales-and-earnings juggernaut that he created a decade ago. But now more than ever, the brand is facing pressure to perform in an area that didn't much have to concern Lafley in his first stint with the company: sustainability.
A leader by many measures, a laggard by others, P&G was dropped last year by the Dow Jones Sustainability Index from its list of 100 North American companies deemed leaders in that field after the company had been on the list for seven consecutive years. The index declined to explain the move to USA Today. P&G also is getting dinged as the second-highest producer of greenhouse gases among CPG companies, according to Bloomberg, and for not cutting greenhouse-gas emissions and energy consumption by as much as rival Kimberly-Clark, percentage-wise, though P&G noted it’s much bigger.
And yet P&G also recently joined with Walmart in the $100 million Closed Loop Fund to help US cities boost recycling programs. The company said by 2018 it will cut water content in laundry detergent by 25 percent, saving 45 million gallons of water annually. And P&G has responded to Greenpeace protests by vowing to begin policing its entire palm oil supply by next year.Continue reading...