A G Lafley, ceo of household products giant Procter & Gamble, told analysts last week that his company needed to “bring some real innovation, creativity, and more discipline to our marketing expense”. This was necessary to counter the increasing cost of media and marketing.
“We can enjoy some advantages in purchasing media, trial activity, and sampling... that’s where we've got to be more creative, innovative, and disciplined,” said Lafley, adding that P&G marketers were focusing on greater efficiency and productivity – prerequisites as media becomes increasingly fragmented and the company step-up its investment in marketing to customers at the retail level, as well as local marketing drives.
Lafley also gladdened the hearts of the entrail-rakers with news of a 9% net income increase in P&G’s second fiscal quarter, thanks to a 2% sales increase – its first in over a year – and cost-saving measures such as job cuts.
The heightened emphasis on marketing innovation and creativity will not be at the expense of brand-building and product innovation. Over the past eighteen months P&G had been striving for the “right balance” of resources and staff, Lafley told the seers, admitting that too much of both had been allocated to new product activity.
The company was also seeking a more reliable way of tracking market share, following Wal-Mart’s decision to withdraw its sales data from Information Resources, Nielsen, and other scanner data providers. This had resulted in anomalies between IRI and Nielsen data and P&G's own numbers, the former indicating that total US cross-category sales were virtually flat – whereas unit volume for the year had actually increased by 4%.
News source: BrandWeek.com