NEW YORK: Procter & Gamble, the FMCG giant, is focusing on four key areas to drive its business forward, including driving greater returns from its marketing investment.
Jon Moeller, Procter & Gamble's chief financial officer, told delegates at the Morgan Stanley Global Consumer and Retail Conference that operating total shareholder return (TSR) was the firm's main gauge of success.
"Value creation for consumers and shareowners is our top priority," he said. "Operating TSR is an integrated measure of value creation at the business unit level requiring sales growth, progress on gross and operating margin, and strong cash flow productivity."
A second point of emphasis involves improving the organisation's overall productivity - covering everything from its use of materials to logistics to its marketing spend.
"Our return on our marketing investments, measured in sales, ranges from less than $1 to over $25 for every dollar invested," Moeller said.
"We spend roughly $14bn annually in advertising and non-advertising marketing spending. If we increase the return on the spending by just 50 cents, we could free up several billion dollars to either reinvest or take to the bottom line."
Procter & Gamble's third objective takes the form of "improved execution and operating discipline" across the entire corporation, from "only airing" ads which generate significant payback to staying ahead of regulation.
"It's not about exhorting the organisation to do better. It is about rigorously following tried-and-true work processes that deliver results," said Moeller.
A final priority incorporates making strategic investments in its innovation and go-to-market capabilities, augmenting the new-product pipeline and extending its sales coverage across countries and categories.
"Budget increases in R&D will enable us to strengthen our near and mid-term innovation pipeline. Go-to-market investments will improve sales coverage in our fastest-growing markets and fastest-growing channels," Moeller said.
Jon Moeller, Procter & Gamble's chief financial officer, told delegates at the Morgan Stanley Global Consumer and Retail Conference that operating total shareholder return (TSR) was the firm's main gauge of success.
"Value creation for consumers and shareowners is our top priority," he said. "Operating TSR is an integrated measure of value creation at the business unit level requiring sales growth, progress on gross and operating margin, and strong cash flow productivity."
A second point of emphasis involves improving the organisation's overall productivity - covering everything from its use of materials to logistics to its marketing spend.
"Our return on our marketing investments, measured in sales, ranges from less than $1 to over $25 for every dollar invested," Moeller said.
"We spend roughly $14bn annually in advertising and non-advertising marketing spending. If we increase the return on the spending by just 50 cents, we could free up several billion dollars to either reinvest or take to the bottom line."
Procter & Gamble's third objective takes the form of "improved execution and operating discipline" across the entire corporation, from "only airing" ads which generate significant payback to staying ahead of regulation.
"It's not about exhorting the organisation to do better. It is about rigorously following tried-and-true work processes that deliver results," said Moeller.
A final priority incorporates making strategic investments in its innovation and go-to-market capabilities, augmenting the new-product pipeline and extending its sales coverage across countries and categories.
"Budget increases in R&D will enable us to strengthen our near and mid-term innovation pipeline. Go-to-market investments will improve sales coverage in our fastest-growing markets and fastest-growing channels," Moeller said.
Data sourced from Seeking Alpha; additional content by Warc staff
