Proctor & Gamble Marketing Mix - Research Paper Example

? Marketing Mix Chosen Company – Proctor & Gamble Introduction Proctor & Gamble began its operations as a partnership company a way back in 1837 and in the span of 175 years became a largest consumer packaged goods manufacturing and marketing company in the world. It will be most appropriate to divide the entire span of P&G’s operations in two time scales: the one that began with its inception and lasted until 1964 when the Neil Borden, the president of the American Marketing Association, first coined the term “Marketing Mix” and the second one is the post 1964 era when marketing philosophy had started taking its root as a theory and practice and its applicability had become vogue among marketing experts. The paper attempts to explore how each element of the “marketing mix” such as product, price, place and promotion were understood, and practiced by the company during two different time periods. The Concept of “Marketing-Mix” during Pre-1964 Era With a humble beginning in the 1830, P&G spearheaded its growth through forward thinking and by 1890 the company was selling more than 30 different types of soap. Varieties of soaps were produced to meet varied consumer needs and the innovative techniques were used to market those products that include product sampling, and radio "soap operas". A way back in 1924, the company realized the importance of the market research department and formed the one to study consumer buying habits and their preferences – perhaps the only one of its kind during those days. In 1926, Camay, a beauty shop, was introduced in the market as an outcome of the in-house research that spoke about the consumer preference toward perfumed shops. In 1931, the company establishes a marketing department to manage various brands in the competitive market. Dedicated groups of people were given responsibility to formulate marketing strategies for each brand and perhaps that is how the brand management system came into being. P&G launched Tide detergent in 1946 and the product became highly successful in the market due to its superior quality. The product provided much needed growth to the company into many new markets of the world. Between 1947 and 1952, the company launched a wide range of products such as shampoos, household cleaning products, granulated and liquid detergents that were largely liked and accepted by the consumers. Crest, a fluoride based toothpaste became an all time success soon thereafter fulfilling a long need of the customers. The product was endorsed by the American Dental association. The company came along with the several other products such as toilet tissue paper, disposable diapers called Pampers during 1961. It is astonishing to learn that though no marketing guru had firmly established the philosophy of marketing mix by then as effective marketing tools in the form of product, price, promotion and place in the market place yet P&G was already practicing the marketing philosophy mixing these four elements successfully for last several decades (P&G 2012). Kotler (2010) emphasizes that the firm uses various marketing patterns in the form of product offering, the pricing structure, the distribution system (place) and the promotion activities so as to satisfy the market needs and thereby the organizational objectives. Accordingly, various combinations of these elements of marketing mix were harnessed strategically by P&G to spearhead the growth of the company. P&G's success in the market place is attributed to its business model that derives its strength from its ability to discover what consumers need and want. With this insight, they develop noticeably superior products. Just developing a product is not enough if its superior quality is not communicated to the target customers effectively and P&G has been quite successful in doing so through various means such as advertising, demonstrations and visuals. If the product is not priced appropriately, then the very purpose of developing a superior product is defeated and P&G has always priced them most appropriately. The company also ensured that all its products were available to the targeted consumers at the nearby outlets without any inconveniency even during those early years and that was also one of the reasons of booming sales. A wide acceptability of P&G products among consumers during those years proves the point that P&G did apply the concept of marketing mix skillfully making a deep penetration across all product lines. “Marketing-Mix” Concept in the Post-1964 Era Post-1964 period saw an accelerated pace of product development in many new areas establishing the company as a giant in the world market. P&G's core strength lies in designing innovative products focused at improving people's lives. Needless to say that P&G lays a great emphasis on product development. The company aims at exploring the unarticulated needs of consumers thus understanding consumers much better than many of its competitors. In order to translate consumer desires into reality the company develops new products through innovation. This is done at the scale that can provide efficiency and products at affordable price. The company makes available their products at the right place and time. Brand building is a constant effort done by the company consciously through meaningful advertising and brand-building campaigns. All new and old products thus, find a place among consumers leaving a lasting imprint in their minds. P&G introduced Ariel in 1967 in the detergent segment with the sole purpose to get established as an overseas brand followed by Era in 1972. Pringles (potato chips) was launched to get a stronghold in food business. The aggressive growth strategies had a stumbling block when the company was charged with the antitrust violations by the Federal Trade Commission. Honoring the judgment of Supreme Court, P&G divested newly acquired Clorox brand and did not acquire any grocery business for at least 7 years; however, the company continued to improve many of its products providing more value to the customer. In that line, Bounce Fabric Softener for the dryer launched by the company in 1972 was a radical success. P&G has been in forefront in understanding the consumer needs. Anthony (2012) argues that many P&G products were developed out of keen observations. P&G's Swiffer Quick cleaning product came into being when the company realized a frustrating experience of a house wife while spilling coffee on the floor and carpet. Currently, a small but highly useful product grosses sales of over $1 billion as annual revenue. Kotler (2011) defines product development in terms of quality, design, and features culminating into a brand that helps consumers to associate with the product firmly. Also, most of the products from P&G are provided with varied packaging sizes for the convenient use at the customer's end. That gives customers a wide choice as per their consumption levels. This strategy has increased the sales of P&G products manifold. It is always a bigger task to foster the culture of innovation and continue with the zeal of finding newer and newer solutions to the issues that customers face in their daily life. Anthony (2012) states that when A.G. Lafley became the CEO of Proctor and Gamble in 2000, he observed that somehow the company had lost its way for which the company was known the world over for its deep customer oriented approach. He worked hard to reemphasize in the organization: "customer is boss." P&G must put extra efforts to know what the consumers want but unable to articulate. For that, he made it compulsory for everyone to spend some time with consumers. Usually, customers always reported that they liked the way Tide's packaging was done but through probing he came to know that women used scissors or screwdriver to open the Tide packaging which in reality they never liked because it could damage their nails. That forced him to improve the packaging of Tide so that it became more convenient for users to open the Tide box without employing screwdriver or scissors or any other tool. It is quite obvious to mention here that fiscal 1985 operating results gave a big jolt to the company when it reported its first decline in earnings after 1953. There were quite a few changes in shopping patterns of consumers. In the mid-1980s, television viewership had gone down substantially from 92 percent to only 67 percent. Many of the companies employed micro-marketing techniques in contrast to mass marketing techniques adopted by P&G. P&G changed its mode of campaigning swiftly and reduced its dependency on network television and began its brand-management based on a "matrix system" – a single manager responsible managing several brands in the given territory. The company has been quite alert in adjusting the pricing of its products if the situation warrants. During late ‘90s when the company’s brand equity, due to weak economy, came into pressure then the company came out with its novel scheme called “Every Day Low Pricing” for 50 to 60 percent of its products that included Cascade dish soap, Pampers and Luvs diapers, Jif peanut butter. That helped consumers to buy those products and boosted the sales. The scheme was supported through lower promotional deals for wholesalers and retailers. This value-conscious positioning was appreciated by consumers across all sections of the society (Referenceforbusiness, 2012). Conclusion P&G has seen many ups and downs during its entire span of operations of 175 years but each time the company has come out victorious. P&G currently owns close to 300 brands and markets them in more than 160 countries of the world and that is certainly not a mean achievement. Its total revenue surpasses GDP of the many third world countries. The company operates in numerous household sectors such as home care, health care, beauty care, family care, baby care and commands leadership role in many of its brands. The company is the largest advertiser and most aggressive marketers in the world. It is worth noting that the product innovation, brand management system, extensive market research to ascertain the needs and wants of the consumers are the pioneering techniques that P&G taught to the world when marketing experts had not written anything about it. That is what can be seen from the study of marketing techniques that P&G employed during pre-1964 era of the company. Post-1964 period witnessed much more aggressive stance in employing time-tested marketing techniques to capture the global market and become world leader in many of the product lines. It is not wrong to say that P&G is an institution in itself where numerous marketing techniques have been invented and implemented successfully using the concept of marketing mix. References Anthony, S. (2012). 3 Ways To Predict What Consumers Want Before They Know It. fastcodesign.com. Retrieved November 16, 2012 from http://www.fastcodesign.com/1669070/3-ways-to-predict-what-consumers-want-before- they-know-it Kotler, P (2011). Marketing Management. Prentice-Hall, New Jersey. Print. P&G (2012). Proctor and Gamble: A company History. pg.com. Retrieved November 16, 2012 from http://www.pg.com/translations/history_pdf/english_history.pdf Referenceforbusiness (2012). The Procter & Gamble Company. referenceforbusiness.com. Retrieved November 16, 2012 from http://www.referenceforbusiness.com/history2/83/The-Procter-Gamble-Company.html Read More