P&G to heighten focus on corporate branding

08 March 2010

CINCINNATI: Procter & Gamble, the FMCG giant, is planning to heighten its emphasis on corporate branding in an effort to drive growth, Bob McDonald, its chief executive, has said.

The company recently announced its intention to introduce a large number of new products this year, and is also aiming to add one billion consumers to its customer base by 2015.

Upon taking over as ceo, McDonald expanded P&G's slogan from "Touching and improving lives" to "Touching and improving more consumers' lives in more parts of the world, more completely."

This move, he argued, was intended to reflect the organisation's overall ambitions, and to more effectively communicate its underlying "purpose".

"We've now turned that purpose into a strategy that provides guidance to our employees and also our external partners for what's important," said McDonald.

"The companies that are successful are those that have strong purpose, have strong values and preserve them, but are willing to change everything else in order to grow."

In seeking to engage with a wide range of stakeholders, the owner of Tide and Pampers launched its first multi-brand advertising campaign during the Winter Olympics in Vancouver last month.

"We think there's some advantage to making Procter & Gamble as a company more like a brand," McDonald suggested.

"If you look at investors, they buy our company. You look at the various lists out there – 'Most Admired,' 'Most Respected' companies – they're about the company, not about the brands."

This approach has been more readily apparent in Asia in the past, where McDonald worked in a variety of capacities for around a decade.

"In the ten years I spent in Asia, we always had a Procter & Gamble statement at the end of our advertising: Improving the lives of Filipino consumers, or bringing world-class technology to Japan," he said.

With regard to specific categories, P&G is hoping to enlarge its health and wellbeing stable, which currently contains offerings like Always, the feminine hygiene range, and Crest toothpaste.

"We would like to have a full portfolio in the consumer-directed healthcare field," McDonald revealed.

"We're in pretty good shape with products like Vicks, Pepto-Bismol and Metamucil, but we would like to develop an even fuller portfolio of products, and then we'd like to globalise that."

Simultaneously, the 172-year-old firm will endeavour to enhance its position in emerging economies, where considerable room for growth remains.

In China, for example, McDonald estimated P&G reaches "about 60%" of its possible audience at present, and it is attempting to "extend down" in to rural areas to increase this figure.

"While certainly some of our growth will come from taking market share from our competition, a good part of that growth is going to come from simply creating an economy where one doesn't exist," he added.

This could also involve making further acquisitions, following on from its purchase of Ambi Pur, from Sara Lee, which cost $470 million (€346m; £313m).

"The price has got to be right. The cultural fit has to be right. It's a pretty narrow screen these acquisitions have to get through," McDonald said.

"Long term, the industry is consolidating. That cuts both ways. There are fewer partners to acquire. On the other hand, it's tougher for smaller companies to survive."

Data sourced from Associated Press/Business Week; additional content by Warc staff