Case Study: Procter & Gamble - Innovators in Branding
Procter & Gamble has been at the forefront of branding and brand management. In 1931, the birth of brand management occurred with Neil McElroy’s now famous three page memo. The idea that the brand had a perceived value or equity that could be increased or leveraged was unheard of. In the 1980’s, an urban legend linking the Procter & Gamble brand and logo with Satanism triggered a rebranding campaign. P&G has survived the creation of brand management and a rebranding campaign and is now an internationally recognized brand consisting of approximately 300 brands in 160 plus countries.
P&G has received the ZIBS award for consumer branding. It received this award for its embrace of innovation. P&G is well known as the maker of consumer products and carries many individually branded items. The P&G organization has branded its organization, product ranges, and individual products.
With the appointment of A.G. Lafley to the CEO position in 2000, changes occurred to strengthen the brands of P&G. The brand had lost strength due to several factors. The first was the increasing strength of in-house or private label brands during the 1990’s. The next problem facing P&G branding was the dilution of importance of the 30 second advertising segment. This dilution occurred due to the increasing importance of alternative media, such as consumer generated media on the internet. Additionally, the increase in information to consumers led to more sophisticated consumers with more options in the marketplace, causing difficulty in strong branding.
One change that occurred to strengthen the brands of P&G is the reorientation of product development. P&G focused its innovations around the consumer and created a Vice President for Design, Innovation and Strategy. This division’s design strategy was two-fold: to hire a diverse pool of designers, with experience from other companies and industries. Paired with the R&D staff, they could create products that met consumers’ needs. The second part of the plan entailed growing towards their target of 50% of innovation in ideas, products and technologies from outside sources. This strategy would ensure a constant flow of fresh, innovative ideas.