Posted by Dale Buss on May 27, 2013 12:06 PM
The world will soon see whether the departure of Bob McDonald and return of A.G. Lafley as CEO leads to crisper financial and market-share results for Procter & Gamble. A conservative management culture like P&G's doesn't undergo such a wrenching change lightly, so the appetite for immediate results will be enormous.
But in the meantime—and only for the meantime—two personal brands are ascendant in this sea of change at P&G: Lafley, of course, and activist investor Bill Ackman.
Lafley didn't exactly go quietly into "retirement" when he left P&G in the leadership of his hand-picked successor, McDonald, in 2009. Joining the private equity firm that also wooed Jack Welch post-GE, he's been busy as a business guru.
As the architect of P&G's golden era—doubling sales, quadrupling profits, boosted its market value by $100 million, launching hit products such as Swiffer and Febreze, acquired Gillette and built a global reputation for innovation management during his decade-long tenure at the company's helm—Lafley hasn't exactly been laying low since he left.Continue reading...
Posted by Dale Buss on May 24, 2013 12:10 PM
Procter & Gamble's board is hoping that A.G. Lafley can pull a Steve Jobs and return to the helm of the CPG giant to make vast improvements, quickly.
Lafley is abruptly coming back to the CEO post from which he retired in 2010 after 33 years, this time to replace the soon-to-depart Bob McDonald, according to a P&G press release. Yet there will be enormous pressure on Lafley from the start to demonstrate that such a move—uncharacteristic of the conservative culture at P&G—was justified.
The changing of the guard, which will see McDonald formally exit on June 30 while Lafley returns as Chairman, President and CEO "effective immediately," surprised most P&G investors and employees, especially as the bombshell dropped before the Memorial Day holiday weekend in the U.S. But perhaps it became inevitable when McDonald, after improving the company's financial and market performance for a while last fiscal year, stumbled in late April by reporting weak sales growth, following on a tumultuous year for the company and its embattled leader.
During his four years at the top, P&G had lost a step to rivals such as Unilever in terms of market share and profitability. Despite the fact that McDonald had launched the popular Tide Pods product line, a $10-billion cost-cutting program and had managed to improve P&G's position a bit during the second half of 2012, he couldn't do enough, quickly enough.Continue reading...
sip on this
Posted by Dale Buss on May 23, 2013 12:38 PM
It didn't work for JCPenney. But will a new strategy on pricing work for PepsiCo?
PepsiCo is adjusting its pricing strategy for its beverage brands in some sections of the United States in an effort to wean consumers off the habit of buying soda only when it's on sale, Reuters reports. Pepsi's "Hybrid Everyday Value" strategy involves narrowing the gap between soda prices on holidays and regular days by cutting discounts on holidays. With Memorial Day approaching, there's no better time for PepsiCo teo see if this new approach migh work.
Under the new plan, the price for a 12-pack of 12-ounce cans of Pepsi would settle somewhere between $2.50, which is how low it can get now with holiday discounting, and $5.99, which is about as high as the current "everyday" price gets.Continue reading...
Posted by Dale Buss on May 16, 2013 07:01 PM
Old/new JCPenney CEO Mike Ullman keeps reaching backward into his pre-2012 bag of tricks for things that will revive the brand that he ran, then lost, and is now running again in the post-Ron Johnson era. But unfortunately, he hasn't yet been able to reach back to a time when the company still made money: Still smarting from the damage done during Johnson's tenure, JCPenney reported a worse-than-expected loss of nearly $350 million for the first quarter on Thursday afternoon.
Ullman had told investors to anticipate about a 16 percent drop in sales for the fiscal first quarter from a year ago, when Johnson was just putting his "reforms" into place. But the bottom line for the just-concluded period was much worse that analysts had expected, a loss amounting to $1.58 a share when the consensus forecast called for a loss of just 43 cents a share.
"Our objective is to put JC Penney back on a path to profitable growth," Ullman said in a press release, according to USA Today. "We are looking forward, not back, and undertaking initiatives to ensure that we have a successful future."Continue reading...
Posted by Dale Buss on May 14, 2013 02:49 PM
Maybe all that JCPenney really needed to turn things around was to get rid of Ron Johnson as CEO. A couple of weeks ago, the chain apologized for how the brand had behaved under him in 2012 and told consumers it was listening to their concerns. Now, it appears that JCPenney management believes the worst is over—and already is thanking customers for coming back.
It might be a bit premature for JCPenney to be running its new ad in which it claims, "Now, we're happy to say, you've come back to us. We're speechless, except for two little words. Thank you." After all, later this week the brand expects to report that fiscal first-quarter sales dropped by another 16 percent compared with a dismal 2012, a further decline beyond the $4.3 billion in sales that JCPenney lost for all of last year, as former CEO Johnson attempted to "transform" the brand.Continue reading...
brands under fire
Posted by Dale Buss on May 6, 2013 07:14 PM
JCPenney's Magical Makeup Tour continues. Right after it posted a video mea culpa and launched a new Facebook and Twitter campaign to reach out to disaffected consumers, #jcpListens, the brand has made another major flip-flop in the interests of appeasing its traditional customer base. It's one of the handful of interesting attempts at brand forgiveness going on these days, which also include Mtn Dew, General Motors and Hyundai.
The retailer has reversed field and now plans to restore the house brand St. John's Bay, a $1 billion marque that was eliminated by since-ousted CEO Ron Johnson amid the many other mistakes he made in attempting to transform the venerable retailer. JCPenney announced that St. John's Bay emerged as tops in its poll on Facebook asking what JCPenney brand was the voter's favorite.
"We heard you," JCPenney said after the poll results were in. "St. John's Bay is back! What will you snag first, pants or shirts?" the brand posted on Facebook.Continue reading...
Posted by Dale Buss on May 1, 2013 06:12 PM
JCPenney's brand-resuscitation efforts continued today with a digital-era form of a classic corporate move: the mea culpa.
The company launched a virtual apology tour on Facebook, YouTube (watch below) and Twitter to get the message out to customers—those same customers that now-ousted CEO Ron Johnson in large part ignored for more than a year—that the brand is sorry and wants them to come back.
According to Bloomberg, the campaign was developed on Johnson's watch and implemented by Sergio Zyman, the former Coca-Cola marketing executive who will go down in history as the architect of the New Coke fiasco.Continue reading...
Posted by Dale Buss on April 29, 2013 01:45 PM
Is JCPenney doing a dead-cat bounce, or is there real life remaining in the venerable retail brand in the post-Ron Johnson era?
George Soros is betting the latter. The famous (or infamous) investor has taken a 7.9 percent stake in JCPenney, a development that immediately sent the stock up by nearly 7 percent late last week. Soros's stake is still less than half that of hedge-fund manager Bill Ackman, who recruited Johnson as JCPenney CEO, and then helped sack him earlier this month. But at least, arguably, Soros is buying low.
Goldman Sachs has placed a bet as well on the possibility that new JCPenney CEO Myron Ullman (who also was CEO before Johnson's tenure of little more than a year) will be able to restore JCPenney if not to greatness, at least to long-term viability. The financier gave the company a five-year, $1.75 billion loan secured by JCPenney's real estate across middle America.Continue reading...