Procter & Gamble looks to brand extensions

08 January 2010

CINCINNATI: Procter & Gamble, the consumer goods giant, is looking to use brand extensions as a means of driving growth and establishing a presence in new categories.

The Cincinnati-based firm hopes to increase the number of items it brings to market by around 30% this year compared with 2009, in an effort to attract shoppers without cutting prices.

Bob McDonald, P&G's chief executive, has previously outlined the intention of introducing a variety of "horizontal innovations" as part of this process.

One such offering will be a bodywash linked to Olay Total Effects, and which was developed to fight the appearance of wrinkles.

The product will cost $5.99 (€4.18; £3.77) for an 8.4 ounce bottle, and its launch will be supported by ads in women's health and beauty magazines, and TV spots, in February and March.

As well as listing seven features that are said to help reduce the impact of ageing, communications will focus on "Introducing a body wash that thinks like an anti-aging cream."

Olay Total Effects operates alongside Olay Complete and Olay Professional Pro-X, with prices across these sub-brands starting at $7, and rising to as much as $60.

Certain lines in the CoverGirl stable also now carry the Olay logo, a trend that has even applied to Dawn Plus Hand Renewal, the washing-up liquid.

Total Effects is currently P&G's top-selling facial range, making it a logical candidate for further extension.

"We built a large following on Total Effects," Kevin Hochman, North American marketing director for Olay body products, argued.

Virginia Drosos, president of global female beauty and grooming at P&G, added that the consistent tone used in all of Olay's TV ads has played a key role in this area.

Similarly, the fact that these spots always include the tagline "Love the skin you're in" has unified a diverse selection of goods.

Axe, owned by Unilever, is the biggest player in the US bodywash category, with sales of $54 million for the year to 29 November 2009, excluding Wal-Mart and club stores, according to Information Resources.

Store brand alternatives also delivered revenues of $44m during the same period, compared with the figure of $13m posted by Olay's Ultra Moisture.

However, Candace Corlett, president of WSL Strategic Retail, the consultancy, warned that having a collection of sub-brands can cause confusion among consumers.

"When presented with so many choices, it's hard to understand why one is different than the other," she said.

As such, it could be the case that customers may "get to the shelf after they saw an Olay ad for a product, but can't remember exactly which one it was."

Corlett also suggested that there is "a large niche of women out there who want to buy anything with 'anti-ageing' on it".

Other recent initiatives at P&G have included launching a premium version of Tide with extra additives, and a basic option available at a low price.

Bounce, the company's fabric softener, also added a new "Dryer Bar", which is installed directly into dryers.

Febreze, the fabric care brand, has similarly expanded into a range of other areas, from scented candles to "flameless luminaries."

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