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19 October 2022
P&G focuses on demonstrating value across pricing tiers
Money & financePricing strategy
Procter & Gamble, one of the world’s largest consumer packaged goods companies, is focusing on demonstrating value across its products as it continues to navigate increased costs and currency challenges.
“Consumers are facing inflation levels not seen in the last 40 years," said Jon Moeller, CEO, president and chairman of the board. At the company's 2022 Annual Meeting of Shareholders, he added: "The best response to the uncertainties and challenges [is to] double down on the integrated set of strategies that have been delivering very strong results.”
The strategy includes:
a portfolio of daily use products and categories where performance drives brand choice;
superiority across product, package, brand communication, retail execution and value;
productivity in everything the company does;
constructive disruption across the value chain.
Importance of giving consumers choice
“Noticeable superiority is increasingly important in an inflationary environment, as consumers reassess value across all elements of their budget,” Moeller said. “We've been very intentional in building a strong presence across all relevant price tiers and retail channels, so consumers have a choice of different price points and value propositions within our portfolio.”
He explained that this position is different from the last economic slowdown, enabling the company to offer “a much better portfolio of products that allow consumers to trade down” if they need to.
For example, P&G's laundry detergent Tide has different price points for the US market, from 50 cents per load down to about 20 cents, depending on the type of product chosen.
Moreover, superior cold water performance also gives P&G a strong competitive advantage in the laundry category at a time when energy bills are high and many consumers are looking to cut back.
Communicating superior performance
As P&G seeks to demonstrate product performance across all parts of the marketing ecosystem, emphasising value is important for reaching consumers at the point of sale.
“We continue to emphasise superior performance of our offerings through strong value-based messaging, in copy, on packaging and at the shelf, physical or virtual," said Moeller. The CEO used the example of Dawn, the company's dishwashing soap that promises to clean up to 2,000 more dishes than a leading competitor. This communicates that customers can clean more and save more.
P&G is also trying to educate consumers on the mileage benefits of its products and the savings that accrue through that mileage, by saving water or energy consumption, for example.
Innovation is also essential for customers, with Tide Power PODS helping to drive category growth – “the only growth our retail partners care about,” Moeller said.