Proctor and Gamble - Global Environment

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Economic Environment

Tide Detergent

Proctor & Gamble is increasing prices on some premium Tide brands by almost 25 percent to balance out for a cheaper version of the top selling Tide detergent. The purpose is to reserve margins at the same time as steering away rivals from cheaper cost competitors. Tide “brings in around $2.8 billion in annual sales and holds a commanding 38 percent share of the North America laundry soap business” (Evans, J., 2014). According to Ellen Byron (2011), “in the late 2008, unit sales gains of Proctor & Gamble’s cheaper brands began outpacing its more expensive lines despite receiving far less advertising.” As the recession continued, the United States market share advances for Proctor & Gamble’s inexpensive Gain detergent intensified quicker than it’s fancier-priced Tide brands.

Gain Detergent

Many of Proctor & Gamble’s billion dollar brands have achieved sales by making mass demand. “But with Gain, just 16 percent of users account for 88 percent of sales volume” (Byron, E., 2007). Ellen Byron (2007) mentions that “Gain spends relatively little on advertising: just $12 million in 2005, compared with $65 million for Tide.” Though a little less than half percent of Gain’s sales come from African-American and/or Hispanics consumers, Proctor & Gamble guesstimates, that the business states it does not visibly aim towards them in the brands marketing.

References

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https://patriciaablah.files.wordpress.com/2015/05/creative-brief-tide-detergent.pdf

Brown, B., & Anthony, S. (2011). How P&G tripled its innovation success rate. Harvard

Business Review. Retrieved from https://hbr.org/2011/06/how-pg-tripled-its-innovation

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Bryon, E. (2007). How P&G led also-ran to sweet small of success. The Wall Street Journal.

Retrieved from http://www.wsj.com/articles/SB118885654555916198

Bryon, E. (2011). As middle class shrinks, P&G aims high and low. The Wall Street Journal.

Retrieved from

http://www.wsj.com/articles/SB10001424053111904836104576558861943984924

Evans, J. (2014). How P&G plans to profit in today’s economy. Retrieved from https://evansonmarketing.com/tag/pg/

Klara, R. (2014). How the detergent has reigned for 68 years. Adweek. Retrieved from

http://www.adweek.com/news/advertising-branding/why-clothes-youre-wearing-right

now-have-probably-been-washed-tide-161643

McFarlane, D. (2013). Strategic considerations in brand analysis using the gain brand as an

example. Asia Pacific Journal of Marketing & Management Review, 2(8), 1-14.

http://indianresearchjournals.com/pdf/apjmmr/2013/august/1.pdf

Wiles, R. (2015). Henkel’s challenge: Re-branding detergent that debuted in 1907. The Republic.

Retrieved from

http://www.azcentral.com/story/money/business/consumers/2015/11/28/how-henkel

must-rebrand-hundred-year-old-detergent-persil/75868684/