P&G champions new products

22 October 2010

CINCINNATI: Procter & Gamble, the consumer goods giant, is introducing a campaign encouraging existing customers to try new additions to its portfolio.

The "Have you tried this yet?" initiative aims to encourage the 99% of US and Canadian households that already buy P&G products to trial several recently-launched extensions.

More specifically, this effort focuses on 18 products, including Bounce fabric softening dryer bars, Charmin Sensitive toilet paper and Pringles Multigrain potato chips.

A temporary store in New York City will give shoppers the opportunity to sample offerings like Olay anti-aging body wash and CoverGirl Clean foundation makeup, as well as to buy these goods online.

This promotional push is the brainchild of Melanie Healey, brought in last year to head up the North American division of the world's biggest consumer products company.

The region accounted for 42% of the organisation's $78.9bn (€56.6bn; £50.2bn) revenues last year, indicating its vital importance.

While emerging markets offer growth opportunities, American consumers continue to bolster expensive products such as Tide Total Care detergent and Olay Pro-X skin cream.

This is reflected in spending patterns, with US customers investing around $100 a year in items from P&G's stable, compared with $20 in Mexico and $3 in China.

The challenge in the US must be to stem P&G's declining sales outlined in Sanford Bernstein's analysis of Nielsen figures spanning the 12-week period ending October 2.

According to this research, Procter posted a 1% drop in US sales despite offering a 1% lower average price than the previous year.

Healey believes experience working in her native Brazil and other regions of Latin America has yielded useful insights into recession-hit American consumers.

She understands increasing price sensitivity, commenting to the Wall Street Journal: "I see more similarities today than I saw when I first arrived in the US nine years ago."

Economic uncertainty has also "heightened the importance of value; it's not just about the price, it's about what I get for that money."

However, Healey remains optimistic, arguing: "The bottom line is there's a lot of growth in North America to be had."

"Our whole organisation is focused on how we get more P&G households to carry more P&G products."

The new campaign to extend P&G product usage builds on last year's internal effort, "Just One More", targeting the 8% of North American households using between ten and 11 P&G products on average.

Healey observed: "If I got that same 8% of households to carry 11 to 12 P&G products, instead of ten to 11, that's another $1bn to $3bn."

Research has shown that many consumers who buy Crest toothpaste don't necessarily purchase related products like whitening strips, mouthwash or Oral-B toothbrushes.

To encourage trials in other product categories, P&G developed bundling promotions like the "3D White Collection", providing an opportunity to stress the benefits of using products in combination.

Another strategy has been to employing P&G coupons to boost interest in other products.

Duracell batteries, Pampers diapers and Prilosec heartburn medicine have thus all been supplied to consumers with books of vouchers.

A further innovation is the inclusion of "bonus" products in packaging, for example by offering a free Gillette Venus razor with packs of Olay body wash.

Healey said this approach is "a way to deliver value to our consumers at a time when they need value", and "also enables us to drive household penetration of additional P&G brands."

Data sourced from Wall Street Journal; additional content by Warc staff