P&G plans marketing push

30 October 2012

NEW YORK: P&G executives are making changes to the firm's product development, marketing and brand management practices in order to boost sales.

Speaking to Ad Age, Marc Pritchard, the US FMCG giant's global brand-building officer, indicated that the company will focus on emphasising "superiority messaging" in upcoming communications.

Pritchard also suggested that P&G was seeking a return to the traditional "one brand, one manager" approach across its international network – a strategy which could simplify the FMCG firm's corporate structure.

"We actually found our business was getting too complex because we had too many handoffs," he said. "What we've got now is in the local markets a brand manager who's bringing it together."

Pritchard told the news source that the company planned to roll out new, category-creating products in the months ahead, a process that has previously been dubbed "discontinuous innovation" by P&G CEO Bob McDonald.

Last year, P&G invested approximately $2bn in R&D to facilitate innovation. This total is around 45% larger than the innovation spending of the firm's major FMCG rivals.

Pritchard suggested the disruptive new product launches would in turn lead to a return to marketing campaigns that pointed out the benefits of P&G products when compared to other brands.

"We have a lot more superiority and competitiveness than we've been putting out there, and I want to push that more," he added.

"The prices [of FMCG brands] aren't that much, so they can switch quite a bit. So you have to be noticeably superior and tell people what that product is."

In its latest quarterly earnings report, released last week, P&G revealed that its organic sales had increased by 2% year on year.

Chinese sales were up by 7%, cementing the nation's place as P&G's second largest market behind the US.

Bill Schmitz, an analyst at Deutsche Bank, credited this success to a series of product innovations rolled out by the FMCG firm in China over recent years. These have included a new green tea-flavoured variant of Crest toothpaste and skin-lightening creams from Olay.

"They made the investments early and their brands have great cachet now," Schmitz told Ad Age. "So, they're kind of like the team to beat."

Data sourced from Ad Age/Reuters/Warc; additional content by Warc staff