Getting profitable and
staying profitable is how we help our clients, the critical element
for all companies. Being a market leader,
while not an easy task, is certainly one way to help make that happen. P&G has the largest lineup of leading
brands in its industry, with 21 brands with over $1 billion in annual sales and
another 19 brands generating about $500 million or more in annual sales. In 2000, there were 10 brands over a Billion;
today, they have 21. During this period,
the company’s revenue has doubled from $40 Billion to $80 Billion.
Procter & Gamble is
very clear on their objective to have superior products, not just in
performance, but in consumer preference.
They have sharpened their focus on how to deliver this. This sharpened focus has meant selling off or
discontinuing a number of very successful brands, but brands that did not fit
with an opportunity for global market leadership.
The company used to market
a stable of brands and achieve market leadership through the combined
sales. For example, when I joined
P&G in the early seventies, in laundry detergents, the company marketed
Tide, Cheer, Bold, Gain, Duz, Dreft, Era, Liquid Tide, Ivory Snow and the first
detergent, Oxydol. There were probably
several others as well that just don’t come to mind. Combined, this provided market leadership.
However, it resulted in
increased costs. The brands competed
against one another for sales force time, retailer promotions, shelf space,
advertising, media time slots, in-store offers and most importantly, Procter
& Gamble management attention. As a
Brand Manager, my task was to get a larger share of company effort so that I
could increase my brand’s impact with consumers. It was not uncommon for a great idea to be
expended on one of the smaller brands and thus dilute its impact. The company realized that it would be far
better served to focus its efforts on the lead brands and make them clear
market leaders. The billion dollar
brands are the result.
Today, Procter & Gamble
has a very clear path for its mega brands to achieve market dominance. All of the very best people, ideas, support
and processes are given to one brand and not spread across multiple brands. In fact, there has been an increasing tendency
to “borrow” from one mega brand in one category to assist another in a separate
category.
But what is the value of
the Procter & Gamble experience for your business if you do not have a
stable of billion dollar brands or are not the market leader? How can you capitalize on the learnings from
P&G’s experience?
Here are 5 tips learned from
Procter, building the smaller brands or opening up new categories and
industries for the company.
1.
Be
choiceful in selecting the market / industry / geography in which you will
compete. Make certain that you have an
opportunity to be able to gain a leadership position in the arena that you
select, perhaps not immediately, but within a reasonable time frame.
2.
Focus
your resources to build a solid base in one area and become successful before
you move to additional areas.
3.
Hire
and use “A” class people. Your best
investment will be in your people. Skimp
in other areas if needed since the great people will be able to over
compensate.
4.
Take
good care of your customers. You would
be surprised at how many companies we see that overlook their current customers
in the drive to get new ones.
5.
Take
advantage of consulting and contracting help to both capitalize on their
expertise and keep your costs down overall.
This may sound self-serving, since we are consultants, but there is no
substitute for experience. We have used
our P&G learning and knowledge to build substantial profitability for many
companies
Market leadership brings
with it many benefits that help companies get profitable and stay
profitable. We can help you. Contact us anytime.
Founder & Managing Director of Moon & Stars Consulting
President Maver Management Group
(925) 648-7561
Maver Management
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