Lessons from Procter & Gamble – Branding

 

 All companies and executives know about branding but many are not familiar with how to use it or how it can affect the bottom line.  Over the years P&G has become a master of this and has many multi-billion dollar brands as a result.  A strong branding strategy can increase the awareness of a company’s products in such a way that establishes strong feelings and reactions and a favorable view towards the company as a whole.  Successfully out-branding your competitors is a continuous battle for the hearts and minds of your customers.  The proposition your brand strategy makes must be very compelling, attractive and unique among competitive offerings.  Done correctly, branding is that extra margin that companies achieve over generics or even store brands.

 

Building on the inherent values of a brand should be the core of any branding strategy.  Winning brand strategies starts with top-notch research.  Your target customer will determine your success.  Research with consumers will identify needs and then it is up to your branding to make the fit of your offerings fill those needs.  Consistency is a key here, since all aspects of the branding must fit together.

Make it your mission to get as detailed information as possible on their age, gender, income, shopping habits (online and off) and anything else of relevance you can determine. If you’re targeting a business market, these criteria will differ, depending on the industry. Understanding your target market and what they want is key to developing a winning brand.

 
The research will lead to the brand promise.  It states the benefit of buying and using your company’s products or services.  A great deal of time and effort at Procter & Gamble is spent on finding the right promise and making it competitive so that it stands out in its industry or category.   They know that it must be specific because specific is exponentially more memorable.

Creating a positive emotional association in your market for your product or service is key. It can create want and desire by the mere mention of your brand, product or service name. Needless to say, that’s powerful. For instance, the mere mention of Tide detergent makes buyers think of clean clothes. 

To create a brand promise that creates such emotional connections, it should be:

1. Grounded in the brand’s core values.
2. Clearly relevant and engaging to your target market.
3. Able to create some sort of positive emotional attachment beyond just being “good”.
4. Adaptable to the business climate in terms of how the basic promise is presented although the promise itself does not change.
5. Continually reinforced and consistent across advertising and marketing.

 

It is clear that branding can make a significant difference in the success of a brand and a company.  Without intentional effort, unintentional positioning will occur and that can spell disaster.

 

The Moon & Stars team have had long experience and great success over the years with branding and have developed solid procedures to help clients.  We are happy to share these with you.

 

Thanks,

 John

John Maver
Founder and Managing Director of Moon & Stars Consulting
President Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – Integrity

 

 

We have written several times about core values of an organization.  Our experience at Procter & Gamble made us believers and we became accustomed to dealing with colleagues with integrity.  Those that didn’t got weeded out quite quickly as they came into the global headquarters.

Here is how integrity was explained at P&G. 

Integrity - We always try to do the right thing.  We are honest and straight-forward with each other.  We operate within the letter and spirit of the law.  We uphold the values and principles of P&G in every action and decision.  We are data-based and intellectually honest in advocating proposals, including recognizing risks.

As we formed Moon & Stars Consulting LLC, all with ex Procter people, we naturally assumed that integrity would be a normal part of our lives together.  Building on it we expected to develop a strong business that would apply that same integrity to our clients for their success too.

One can’t assume integrity in some others no matter what the pedigree.  You have to take the practical steps to confirm it.  You will find that the conclusions are not surprising, but so easy to overlook as you look for the best in people.

1 “Trust everyone but cut the cards.”  This is an old poker message and it means make sure that you keep a personal eye on the finances with regular review.  It isn’t enough to have a summary supplied by one person unchecked.  Go to the source and verify.

2 Never let one person handle the finances alone.  Make certain that there are at least two signatures on the bank accounts.

3 Work together and build together.  If you don’t give lack of integrity a chance to get started you can avoid much trouble later. 

4 If you find lack of integrity, rid the company of it immediately.  It is like a cancer and will spread.

These are simple actions and can avoid a great deal of pain to a company.  Don’t be misled by appearances.

If you need some help on this issue with your company, contact us.  We would be happy to help.

Thanks,

 John

John Maver
Founder and Managing Director of Moon & Stars Consulting
President Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – Valuing Experience and Expertise

What is the greatest challenge facing executives today?  It isn’t opportunity or drive or brain power.  Today’s executives are faced with more challenges, but less time than ever before.  Most are relatively new to their jobs as the average length of tenure for a CEO is just over two years.  They are being asked to handle issues like the experienced executives of old who have a great deal of expertise. 

      

 

Despite being very smart with boundless energy, the new management can be babes in the senior management ranks.

 

It would seem to make sense that the senior executives and particularly the CEO gets some help, at least in the short term, to do, teach and mentor.  The impact on not just productivity but on the business acceleration can be significant.  This doesn’t have to be a full time hire. Getting an experienced consultant with expertise can be the most cost effective.  Use them to provide the short term boost and then handle the business as before, but with the benefit of the new training.

 

At Procter & Gamble throughout our years, there were many senior managers available to help with a specific need.  They had faced the challenges before and had both the expertise and expertise to guide us.  As a result we didn’t have the struggles learn and understand how to best capitalize on the opportunities.  At Moon & Stars Consulting, we do the same for our clients.

 

Take advantage of the “grey hairs” and benefit from their expertise and expertise.

 

Thanks.

 

John

John Maver
Founder and Managing Director of Moon & Stars Consulting
President Maver Management Group
(925) 648-7561
Maver Management

Lessons from P&G – Favorite places to work

For many years, Procter & Gamble has been one of the favorite places to work.  It was renowned for its training.  The quality of the people and the quality of the CPG brands made it an ideal environment.  Last year world-wide there were more than two million applications for less than one thousand entry positions in Marketing.  Many other CPG companies tried to duplicate the P&G culture, including Clorox an ex-P&G company here in the Bay Area.

There are many CPG companies of varying sizes here in the Bay Area.  However, based on a survey done by “The Business Times” they are not appearing as favored places to work.

Here is the summary of the survey by industry.

The criteria for this survey were:

·       Trust top execs (honest, capable of leading the organization to prosper, integrity in dealing with all stakeholders)

·       Trust other employees (loyalty to each other, camaraderie and teamwork, integrity)

·       Longevity (Employee length of service, invite friends to apply)

·       Satisfaction with what the employee does each day (feeling challenged and engaged, feeling positive about the company and the other employees)

·       Feeling Valued (talents noticed and cultivated, seen as essential contributors)

Having spent several decades at P&G and been at the Executive level and now consulting in the Bay Area, the differences for CPG are obvious.  Most of the larger ranked companies value training and work environment.  They take advantage of senior management and have them serve as teachers and mentors to the more junior managers.  With the significant cost of replacing and recruiting talent, providing this development support is not only prudent but very cost effective.

You may know that P&G has a strong promote from within policy and therefore the impetus was on each layer of management to develop those below them since they will be associated with them and their abilities for years to come.  Their personal performance was going to be influenced by the productivity and expertise of those who report to them.

But in the Bay Area, given the exigencies of business and the heavy workloads being carried by senior management, from where should this expertise come in companies who are not a promote from within?  The obvious answer is to take advantage of either consulting senior executives who have the experience or bring in on a temporary basis retired executives from other companies.  Both are going to have significant cost benefits and higher overall productivity.  

As you can see from the chart, most of the companies are in industries that have strong startup or growth phases.  The founders are in constant contact with the employees. This helps support the favorite company status.  For those other industries like CPG, the message is clear.  If you want the top performers and you want to keep them, provide the mentoring and development support.

Thanks

John 

John Maver
Founder and Managing Director of Moon & Stars Consulting
President Maver Management Group
(925) 648-7561
Maver Management

Lessons from P&G - Integrity

 

We have written several times about core values of an organization.  Our experience at Procter & Gamble made us believers and we became accustomed to dealing with colleagues with integrity.  Those that didn’t got weeded out quite quickly as they came into the global headquarters.

Here is how integrity was explained at P&G. 

Integrity - We always try to do the right thing.  We are honest and straight-forward with each other.  We operate within the letter and spirit of the law.  We uphold the values and principles of P&G in every action and decision.  We are data-based and intellectually honest in advocating proposals, including recognizing risks.

As we formed Moon & Stars Consulting LLC, all with ex Procter people, we naturally assumed that integrity would be a normal part of our lives together.  Building on it we expected to develop a strong business that would apply that same integrity to our clients for their success too.

One can’t assume integrity in some others no matter what the pedigree.  You have to take the practical steps to confirm it.  You will find that the conclusions are not surprising, but so easy to overlook as you look for the best in people.

1 “Trust everyone but cut the cards.”  This is an old poker message and it means make sure that you keep a personal eye on the finances with regular review.  It isn’t enough to have a summary supplied by one person unchecked.  Go to the source and verify.

2  Make certain that there are at least two signatures on the bank accounts.  In small companies, never let one person handle the finances alone. 

3 Work together and build together.  If you don’t give lack of integrity a chance to get started you can avoid much trouble later. 

4 If you find someone who lacks integrity, rid the company of it immediately.  It is like a cancer and will spread.

These are simple actions and can avoid a great deal of pain to a company.  Don’t be misled by appearances.

If you need some help on this issue with your company, contact us.  We would be happy to help.

John

 

John Maver
Founder and Managing Director Moon & Stars Consulting
President Maver Management Group
(925) 648-7561
Maver Management

Lessons from P&G Values in Partnerships

Partnerships or limited companies like Moon & Stars Consulting Group, a company of P&G Alumni, can find itself with significant problems brought on by one or more of the principals who are not in alignment with the values of the partnership. This article is not to dwell on the problems caused, but rather to identify some issues from the Procter & Gamble Values and Principles that are worth highlighting and may be of use to you in your “partnership” endeavors. Here are the P&G elements, many of which you may have adopted for your company: Integrity • We always try to do the right thing. • We are honest and straightforward with each other. • We operate within the letter and spirit of the law. • We uphold the values and principles of the company in every action and decision. • We are data-based and intellectually honest in advocating proposals, including recognizing risks. Trust • We respect our colleagues, customers and consumers, and treat them as we want to be treated. • We have confidence in each other’s capabilities and intentions. • We believe that people work best when there is a foundation of trust. Respect for All Individuals • We believe that all individuals can and want to contribute to their fullest potential. • We value differences. • We inspire and enable people to achieve high expectations, standards and challenging goals. Mutual Interdependency • We work together with confidence and trust across business units, functions, categories and geographies. • We take pride in results from reapplying others’ ideas. • We build superior relationships with all the parties who contribute to fulfilling our Corporate Purpose, including our customers and suppliers. In a partnership that is just starting out and not a large company that has been in existence for several hundred years, it is easy to take these traits for granted. We assume that all members will operate in the same manner in which we personally operate. This is particularly true when we think we know their background. But do not be fooled. Commonality is not always the case, no matter how rosy the initial period might be. In some cases there is not commonality of values and selfish issues can tend to creep in and can become more and more prevalent with some individuals. They start to operate independently and not in the best interests of the company and your stake in it. This has to be weeded out quickly. It is difficult to test for values since most people talk a good game. So stay alert and watch what is happening. Hopefully, you will be able to see the problems before they become crippling and find a means to exit the damaging individual. One suggestion, beyond taking the extra time at the start of the relationship, is to continually make all of the financial transactions totally transparent. Let us know if you have problems or questions. We can help. Thanks, John Maver President Maver Management Group (925) 648-7561 Moon & Stars Consulting Group Founder and Managing Director Maver Management

Lessons from Procter & Gamble – Creating The Vision

Do you have 20/20 vision? How clearly can you see? How clearly can you see into the future?

Does your company have 2020 vision? That is to say, does your company have a clear view of what it wants to accomplish by 2020? You may see this as just a clever play on words. However, it is much more than this. Without a clear vision that is known and understood throughout the company, chances are that your company will not maximize its success. It is like trying to operate without your own 20/20 vision. Things just get blurry. Since it is all about sight and that is best from high up, not surprisingly, it is commonly the responsibility of the CEO to articulate and lead activities toward achievement of the vision.

A well-conceived vision consists of two major components: core ideology and envisioned future. Core ideology defines what the company stands for and why it exists. It is made up of core values and core purpose. We recently wrote about core values, both in general and in specifics, for Procter & Gamble. We also wrote about core purpose, “why do we exist”, the second part of the core ideology. These two elements are unchanging and complement the envisioned future. The envisioned future is what we aspire to become, to achieve, to create.

Vision captures both of these elements and does so in terms of defining a future state. A vision is a picture of what success will be at a particular time in the future. It encompasses answers to an array of questions: What does your organization look like? How big is it? For what are you famous? Why does anyone care about what you do? How do people who work there feel about their jobs? A great vision is inspiring. It gets you and everyone in the organization excited to come to work. This is not mere wishful thinking. A vision must also be strategically sound. You have to have a reasonable shot at getting there. Vision provides guidance about what core to preserve and what future to stimulate progress toward. But vision has become one of the most overused and least understood words in the language, conjuring up different images for different people of deeply held values, outstanding achievement, exhilarating goals, motivating forces, or raisons d’etre.

Companies that enjoy enduring success have core values and a core purpose that remain fixed while their business strategies and practices adapt to a changing world. The dynamic of preserving the core while stimulating progress is the reason that companies such as Procter & Gamble, Hewlett-Packard, 3M, Johnson & Johnson, Merck, Sony, Motorola, and Nordstrom became elite institutions, able to renew themselves and achieve superior long-term performance. In Built to Last: Successful Habits of Visionary Companies, the authors found that these companies have outperformed the general stock market by a factor of 12 since 1925.

The second primary component of the vision framework is envisioned future. At Procter & Gamble in their strategic planning process, this is called the Objective. It is a qualitative statement of what the company targets to accomplish. In some ways Objective is somewhat paradoxical. On the one hand, it conveys concreteness, something visible, vivid, and real. On the other hand, it involves a future time with its dreams, hopes, and aspirations.

Procter & Gamble and other visionary companies use bold mission statements as a powerful way to stimulate progress. These serve as a unifying focal point of effort and act as a catalyst for team spirit. They have a clear finish line, so the organization can know when it has achieved the goal.

supports the envisioned future with an engaging and specific description of what it will be like to achieve the Objective. It translates the vision from words into pictures, of creating an image that people can carry around in their heads. Passion, emotion, and conviction are essential parts of the vivid description. Perhaps the most dramatic statement of a vision was President Kennedy’s announcement that the US would put a man on the moon within ten years. Not only was this a rallying cry but it also guided action and resource allocations. They made it happen!

We have found that many executives struggle with mission statements and vision statements. They overanalyze or underallocate effort to the process. These statements turn out to be an ill-defined mix of values, goals, purposes, philosophies, beliefs, aspirations, strategies and descriptions. They are usually a boring, confusing, stream of words that evoke the response “True, but who cares?” They fail to preserve the core and stimulate progress. A true vision simply provides the context for bringing this dynamic to life.

This may seem like a simple process. It isn’t. As you can see, it combines the analytical with the creative and then necessitates alignment across the organization, if it is going to be successful. We have had experience both at Procter & Gamble and with many other companies in our consulting business. We know the powerful results that can come from the investment of time and energy in creating a sound vision for the company.

How is your foresight? Does your company have 2020 Vision? Do you need help with your 2020 Vision?

Thanks

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble –Focus for Market Leadership

Getting profitable and staying profitable is what it’s all about for companies. Being the 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 22 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 22. During this period, the company’s revenue has doubled from $40 Billion to $80 Billion.

As you may have read in our last article about Core Values, 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.

There are many benefits to being the market leader and we will highlight some in a separate article.

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?

Here are 5 tips I learned from my time at 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.

Market leadership brings with it many benefits that help companies get profitable and stay profitable. Look for our next article that highlights some of those benefits.

Thanks.

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – P&G’s Core Values

We recently wrote about the importance of Core Values as an integral part of strategy for companies. A book written by ex-senior Procter & Gamble management, “When Core Values are Strategic” has just been released. Given my 23 years with the company, the values I espouse for Maver Management and for our clients are among those covered in detail in the book. We were all grounded similarly. The book tells personal stories of how the basic values of Procter & Gamble transformed leadership at Fortune 500 companies. The track record for most senior P&G executives, both with P&G or subsequently with other companies, has been outstanding.

Adherence to Core Values, such as the ones below, has been instrumental in that success. Here are the Procter & Gamble Core Values:

People - We attract and recruit the finest people in the world. We build our organization from within, promoting and rewarding people without regard to any difference unrelated to performance. We act on the conviction that the men and women of Procter & Gamble will always be our most important asset.

Leadership - We are all leaders in our area of responsibility, with a deep commitment to deliver leadership results. We have a clear vision of where we are going. We focus our goals to achieve leadership objectives and strategies.

Ownership - We accept personal accountability to meet the business needs, improve our systems, and help others improve their effectiveness. We all act like owners, treating the company's assets as our own and behaving with the company's long-term success in mind.

Integrity - We always try to do the right thing. We are honest and straight-forward with each other. We operate within the letter and spirit of the law. We uphold the values and principles of P&G in every action and decision. We are data-based and intellectually honest in advocating proposals, including recognizing risks.

Trust - We are determined to be the best at doing what matters most. We have a healthy dissatisfaction with the status quo. We have a compelling desire to improve and to win in the marketplace.

Passion for Winning - We respect our P&G colleagues, customers, and consumers and treat them as we want to be treated. We have confidence in each other's capabilities and intentions. We believe that people work best when there is a foundation of trust.

Do Procter & Gamble’s Core Values help you understand the base upon which P&G has built a multi-billion dollar global business? Interestingly, if you review the histories of the company, you will find that these Core Values, stated in some form, have been consistent throughout the 150 years that the company has existed.

Do these values trigger opportunities or ideas for you with your company? If we can help you define your Core Values and make them a sound basis for your strategic planning, contact us. We have had great success with companies from Fortune Top 10 to startups.

Thanks

John


John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – Core Values and Their Strategic Nature

Core Values are often overlooked as an important, in fact vital, part of strategic planning for a company. While Core Purpose is the Mission and identifies why the company exists, Core Values fundamentally outline what the company is and how it will operate. Hence, it is a critical base upon which to build the company’s plan.

Core Values are essential and enduring tenets which prescribe the attitude and character of an organization. They are a small set of timeless, guiding principles that require no external justification, but have intrinsic value and importance to those inside the organization. Therefore, there is no universally right set of Core Values. Companies generally have only 3-5, since only a few values will be truly core.

Can you see the critical strategic importance of the Core Values stated below for these four companies? They clearly define and help shape the direction of the company. You will note that only one mentions honesty and integrity. That doesn’t mean that the others do not value it. In most cases, it is a given. Companies just cannot survive in any business without it and so it is generally not stated for inclusion. Look at the values and see the impact that they have on their organizations. I suspect that you will be nodding in agreement with most of them as you reflect on each company.

Merck
 Corporate social responsibility
 Unequivocal excellence in all aspects of the company
 Science based innovation
 Honesty and integrity
 Profit but profit from work that benefits humanity

Nordstrom
 Service to the customer above all else
 Hard work and individual productivity
 Never be satisfied
 Excellence in reputation; being part of something special

Sony
 Elevation of the Japanese culture and national status
 Being a pioneer – not following others; doing the impossible
 Encouraging individual ability and creativity

Walt Disney
 No Cynicism
 Nurturing and promulgation of wholesome American values
 Creativity dreams and imagination
 Fanatical attention to consistency and detail
 Preservation and control of the Disney magic

What are your personal Core Values? What are the Core Values for your company? How closely are they aligned? If they are not well aligned, you had better start looking for a new company because you will ultimately become very unhappy.

If we can help you with not only crystalizing the Core Values, but helping you to build the strategic plans on them, contact us.

Thanks,

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Social Media Award

AVG just won the Best Use of Social Media award from Computer Weekly Social Media Awards. James Garner accepted the prize in the picture above. They have been clients of ThoughtLabs, a social media strategic company that brings customers closer to companies through technology. They have been working together for three years.



Why are we posting this news item on our blog? Two reasons. The first is that it indicates how important the right social media strategy and plan can be to companies today to give them a competitive edge. That competitive edge can drive business acceleration and increased profitability in a number of ways. The second is that one of the founders and partners is John Maver Jr. and we are very proud of him, awards or not.

If you are looking for business acceleration analysis and plans, contact us. If you are looking for business acceleration social media efforts contact ThoughtLabs.

Thanks

John


John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – Leaders

John Smale, an ex CEO of Procter & Gamble, passed away last week. He was a remarkable leader and made some very significant contributions to P&G. He also took leadership positions from the Board at General Motors, where he turned the company around and revamped it. He was active in his community, restructuring the City of Cincinnati and then working for youth education among other activities.

During my 23 years at P&G and in the subsequent 18, there have been 8 CEO’s at the company. In addition to John Smale, the most memorable ones for me are John Pepper, Howard Morgans, Ed Harness, Ed Artzt and A.G. Lafley. They all made substantial contributions to the company. While some have written books, the important learnings from each have been captured in internal memos and have been shared broadly across the company. All are different and have varied skills, but there are some commonalities. This is not surprising, given Procter & Gamble’s policy of promotion from within and the fact that all of these men had years of training, learning from each other, as well as from many others who helped shape their careers.

They all exhibited strengths in the following:

Values
They all were committed to trying to do the right thing in all they did. Doing the right thing is much more than a cliché, since who would attempt to do the wrong thing per se. In this case, it is seeking to do what is right instead of what is most profitable or most expedient or most popular. The clearest example of this is the removal of Rely tampons from the market when there was an initial suggestion that extended use of the product might be associated with toxic shock syndrome. The company took the product off the shelves immediately until there could be absolute, conclusive proof that it had no impact. The cost was in the millions of dollars and took P&G out of the feminine protection business for several years, but it was the right thing to do and drove home that message and value to all employees.

Focus on the consumer
P&G has maintained a relentless focus on the consumer throughout its years as the global leader in Consumer Packaged Goods (CPG). A.G. Lafley wrote “Everything begins and ends with the consumer. If you focus on the consumer and what your brand is doing to serve the consumer, you will win most of the time". P&G was the first company to conduct deliberate, database driven,, consumer market research. This forward-thinking approach enables the company to improve consumer understanding, anticipate needs and respond with products that improve their everyday life. P&G also was one of the first companies to formally respond to consumers by establishing a Consumer Relations department. Several years ago, P&G realized that though it talked to a lot of people, it wasn’t really hearing them. It has overcome this barrier by taking one of the industry’s more traditional market research organizations and turning it into a consumer-understanding powerhouse and consumer-insight generator. By investing more than a billion dollars in consumer-understanding research between 2002 and 2007 and conducting research with more than 4 million consumers a year, P&G has moved away from traditional, behind-the-mirror focus groups to more immersive research techniques. This leads to richer consumer insights, which helps identify innovation opportunities that are often missed by traditional research.


Dedication to product superiority and to superior products
The CEO’s are dedicated to leading the company with a product philosophy of “We will provide branded products and services of superior quality and value that improve the lives of the world's consumers. As a result, consumers will reward us with leadership sales, profit, and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper.” It is not enough just to have product superiority. The company must have products that are superior. Hence, the development and sale of the first shortening for baking and cooking. The first detergent. The first workable disposable diaper. The first two in one shampoo/conditioner. Despite the pressures to deliver above average quarterly earnings, the CEOs have consistently over invested in R&D, compared to most companies.

Commitment to people
The “people” philosophy of these men in simple terms is “Recruit the best. Train and develop all. Promote from within. Treat each fairly.” As a result, P&G has had some outstanding long term employees and many others have left the company to lead other significant operations. The company believes in its people, even in departure. Having been part of the first worldwide global initiative of reductions in force, I was treated extremely fairly and with great respect by my Cincinnati management. As a former CEO, Richard R. Dupree said in 1947, "If you leave us our money, our buildings, and our brands, but take away our people, the Company will fail. But if you take away our money, our buildings, and our brands, but leave us our people, we can rebuild the whole thing in a decade."

Worldwide view and globalization
P&G has long had an international business. In fact, I was part of it in the Canadian operation, several times. The company really got serious when it appointed Ed Artzt as President of P&G International and then promoted him to become CEO of the entire company. Today P&G has 24 billion dollar brands, most with a global sales base. As current CEO Bob McDonald says, “Our objective is to touch and improve lives. Why would we stop with operating in only some countries? Our business is driven by demographics and economics--you have to go where the babies are born, where the households form, where the incomes are rising--and they’re growing a lot faster outside of the U.S.” P&G has product usage with 4 Billion customers and the majority of their products are made outside of the USA. They have established a worldwide research and development network, with research hubs in the United States, Europe, Japan and Latin America.

There have been many tributes to John Smale, deservedly. John Pepper, himself a favorite CEO of the employees, said, "John brought together wisdom and courage, concern for people, and commitment to the long term in a manner I've never seen exceeded." "The man's character was defined by all the things character is defined by: his wisdom, his courage, his persistent commitment to doing what's right for the longer term -- absolutely right down the line. Never compromising.”

Procter & Gamble has had superb leaders. The impact that they have had on the company pales by the impact that they have had on the employees.

Thanks,

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – A Marketing Checklist

Procter & Gamble’s marketing plans are often quite sophisticated and extensive. They use research in almost every element of the plan to insure that they get the maximum effect from each. Then they monitor the progress, making adjustments as required. This can be expensive and very labor intensive. But, with billion dollar global brands the cost per package is quite reasonable and the incremental sales make the payout quite profitable. You may not have the billion dollar brands of the extensive research facilities. So here are the key elements that Procter & Gamble reviews and that you can do, as well. It fits with both the sale of products or services.

Plan
• There is a written plan in place and it has been communicated throughout the organization.

Positioning
• The target market has been defined and our potential clients or customers, their usage habits and practices, as well as their buying channels and patterns are known.
• The problems, issues and challenges they are facing have been identified.
• The benefit that they will obtain from the use of my product as the solution to their problem has been clearly articulated. It answers the client/customer question “what’s in it for me, the customer?”
• Some form of research has been conducted to determine if the benefit that I am suggesting is actually seen and understood as a value to my targets and has an inherent unique and meaningful competitive advantage that explains why I am different than my competition.
• The benefits I am claiming can be supported by proof in some form through testing, referrals or in market experience.
• The tone of my positioning will resonate with my target and enable them to accept my offerings in the most positive frame of mind.

Execution
• Everything about my business, including my personal presentation, marketing materials, etc. are presented in a way that truly supports all aspects of the positioning.
• Distribution channels are in place that make your product or service readily available to potential customers.
• Multiple promotional and marketing channels for delivering your message are being used to reach customers most effectively and are appropriate for that channel.
• My products or services, what I do and how I do it, are clearly presented and how they solve clients problems.

Measurement
• There is a clearly identified tracking system in place for each of the FEW key measures so that changes can be made to plans quickly to optimize their impact.
• MY BUSINESS IS RESPONDING TO THE MARKETING PLANS!

These are admittedly, simplistic measures for your plan. We would be remiss if we also did not include the need to have available the expertise required to create and operate a high powered plan. You will note that Procter & Gamble employs, trains and upgrades a very large body of expertise from junior managers through senior executives. This doesn’t mean that you have to duplicate their organization. Most companies can do this with experienced consultants, either on a project basis or retainer. That is the most cost effective.

Let us know if we can be of assistance to you.

Thanks

John


John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – Downsizing, Rightsizing, RIFs

Most companies have been faced with the need to cut costs over the past several years and many people and jobs have been eliminated from the workforce. You will note that we have the highest level of unemployment as one of the impacts. The personnel reductions have come under the heading of downsizing, rightsizing or just reductions in force (RIFs). The net result in addition to lower costs is a substantial change in the way that companies have to operate.

At the same time, technology has made tremendous progress and we now have available significant capabilities that never existed before. The idea has been that companies can do much more with much less. Believe it or not, when the first computers were being introduced, there was an expectation that the work week would shrink to less than a day a week. Computers would do the rest. You know personally from your now extended work weeks that this was not the case and was, at best, a wild dream. And yet companies expected that technology could overcome the impact of the lost personnel.

Procter & Gamble is no exception. In 1993, well before this became common practice, P&G undertook a worldwide cut back in personnel under the heading of strengthening global effectiveness. SGE was designed to streamline work processes, drive out non value-added costs, eliminate duplication and speed productivity through a leaner organization. Initially, it was directed at the manufacturing operations but the idea quickly spread to the rest of the company. Up to 10,000 people/jobs were eliminated. The objective, just as it has been the objective of most companies, was same or greater productivity with less cost.

Unfortunately, that hasn’t happened. It didn’t happen at P&G and it isn’t happening with many other companies. Certainly, some aspects worked as expected. But in many cases, the people and jobs were eliminated, yet the work required remained.

This did produce a short term profit bump after the reorganization costs were passed through as a “one time hit” to earnings. However, as Stephen Covey outlined in his book the 7 Habits of Effective People, the golden goose was maimed if not killed outright. The reductions in force often targeted the higher salaried, longer term employees. Companies lost years of very valuable experience and expertise. As a result many companies faced substantial redesign, slower process, business and profit losses.

What made it worse for many companies is that the personnel reductions came on a “chain saw” basis and not a “surgical” basis. This means that cuts were made across the board. The result was reductions in one department greatly affected what was left in other departments or functions, to the detriment of the business. This has led to renewed needs for reorganizations and then further rightsizing. In fact, that is exactly what has happened at Procter. They have had several full company reorganization plans. They have offered several waves of early retirement and outplacement packages to employees around the globe.

What’s the lesson? Clearly it is taking the long view. It is an in depth understanding of what is really required to operate profitably and then providing the technology and human resources required to deliver the objectives. Short term solutions just don’t work. Second, it means focus. It means being choiceful on what activities are really required to operate profitably and to achieve the corporate goals. Other activities that are just nice to do, have to be eliminated. Finally, it is deciding on what data is required to operate. Most companies are buried under an overload of information. Layers of the organization are employed to develop the data, analyze it and interpret it and then try to find meaningful actionable conclusions. The loss of the experience and expertise caused by the cuts has led to much of this wheel spinning over-analysis.

If your company is experiencing “sludge” in your operations and slower speed to market, you might consider relooking at some of the experience that was cut out in the rightsizing. Interestingly, many companies are hiring back ex-employees as consultants at a higher cost to do the same job that they originally did.

Since we have had experience both at Procter & Gamble with SGE and similar programs at other companies, we can help you. Just contact us.

Thanks,

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – Value of Branding

Procter & Gamble is one of the premier brand companies in the world. Their branding extends from their many billion dollar brands to the company itself and in many cases to its people. Being a Procter & Gamble brand assures consumers of quality, even though the company generally doesn’t market its brands under the corporate umbrella. Being the Procter & Gamble sales representative opens many doors. Investors have confidence in their investments as they buy stock in the company. Many of these investors are company employees. Having Procter & Gamble on your resume is a major positive. As you can see, the value of branding goes well beyond just the products.

How does one calculate the dollar value of a brand? There are a number of formulas and all work on the basis of capturing the extent that the company can sell its goods and services at a premium price and profit. Brand Sales = (Cost + Margin) * Volume. Your brand gets you one of two measurable outcomes: margin or volume. Comparing your margins to the competition is one way to assess the value of your brand, if you take heed of the caveat about other factors which may change margin. Comparing volume is less likely to yield a good estimate of brand value, because you can in many markets drive higher volumes with no brand value at all by charging lower prices.

For example, Coke despite its secret formula is flavored water just like RC Cola. However, Coca-Cola’s margin is 15.6%, while RC Cola - Cott’s is 5.3%. The typical company has an operating margin of 5-7%, so Coca-Cola’s margin is phenomenal. But there is more. Part of Coke’s value comes from its significantly larger gross volume sales because consumers are loyal to the Coca-Cola brand. That too generates significant value. How much? That depends on what measures you want to use but it is safe to say it is in the billions. According to Aswath Damodaran, professor of finance at New York University’s Stern School of Business, if Coca-Cola suddenly lost its brand name tomorrow, its operating margins could drop to around 5.28%, and it would lose $64.2 billion of value.

Branding is clearly a competitive advantage. It is the reason why larger companies with lots of managerial horsepower tend to spend a lot of time and money on branding. The most important value in a brand is the value that it holds for actual customers. This value is very difficult and expensive to build and fragile and easy to destroy. The difficulty of building and maintaining a brand is one reason why managers the world over tend to avoid spending much time or money on branding, especially in smaller companies. This is a shame, because a well-managed brand is so powerful that it can overcome almost any other competitive advantage.

In previous articles we have outlined many of the competitive advantages that branding can bring to a company. We won’t repeat them now but check the other articles if you are interested.

Since you are a consumer in addition to a brilliant business person, think about some of the brands with which you are familiar. Apple has built a group of very loyal customers and while they may not dominate the computer space, they have used their fan base to launch other products like the iPod, iPhone and iPad where they do dominate. They consistently break records for new product launches before the product is actually available. Valuable brand name for the largest company on paper in the world at one time this past year?

At Procter & Gamble, the Tide brand has now been applied to many types of fabric care, building on its strong base of removing dirt from clothes. Crest has a product for everyone, from first tooth to last and even dentures. Swiffer seems to be cleaning up everywhere (pun intended).

What value have you determined for the brands of your product, company and people? Have you made a conscious effort to create the positive brand and secure the benefits that come with it? If you need assistance, contact us. We can help. We have created and managed some very strong brands and can apply our experience to your business as well.

Thanks.

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – Their Brand Positioning Strategy Worksheet

We have been sharing some learning from Procter & Gamble based on my 23 years building brands and businesses with them. The most recent articles have focused on brands, branding and product positioning. This article provides an outline of how P&G creates their positioning strategies for their brands. You may also know this as the Copy Strategy or the Advertising Strategy or the Branding Strategy, in addition to the Positioning Strategy. This is important since in many cases the support of the brand goes beyond just the advertising.

A Brand Positioning Strategy identifies the basis upon which we expect our brand to be purchased in preference to competition. The content emerges directly from the product or service and the basic consumer need that it is intended to fill. It should state clearly the basic benefit which the brand promises and which constitutes the principal basis for purchase. It should also include a statement of the product characteristics that make this benefit possible and the tone or character that is desired to be built for the brand.

This will provide direction for the basic message of the brand which should remain consistent across all communication vehicles, although the execution of the message may change. It is inherently competitive since it is the basis for preference vs. competition.


Developing the Strategy through use of the Creative Work Plan
Start at the top and work down through the rest of the elements.

1 Key Fact
A single piece of known information relating to the brand which is agreed to be the leading factor influencing or describing the brand performance. It may be information about the brand itself, the competition, the customer, innovation etc. but it must be a single fact.

2 Problem the advertising must solve
This is a consumer problem. It describes the awareness, perception or behavior of the prospective user which has resulted in the Key Fact and which we wish to change.

3 Advertising Objective
Usually, simply the counterpart to the problem, although there are a great many distinct options. Eg "Persuade consumers to try my brand" Or "use more of my brand." Or "use my brand in a different way." Persuade them that my brand is a viable alternative to brand x".

4 Strategy
a) Prospect Definition
Both demographics and psychographics.
b) Principal Competition.
Not just a list of competitors but a description of the segment from which we wish to obtain business
c) Promise
The single most persuasive agreement one can advance for the brand framed with the customer and the competition in mind.
d) Reason Why
The strongest piece of support for the promise. Occasionally there may be more than one piece of support but never a list
e) Tone/Character
The tone that messages should convey to provide personality to the message and bring it alive. This is not executional.

As you can see, the format is very simple. However, like everything at Procter & Gamble, the use of the simple tool is handled by experts in the field. That is what makes the tool so effective.

If you would like to have the benefits of this simple tool support your brand or your business and need the expertise to use it most effectively, contact us. We would be happy to assist you.

Thanks.

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble - What is a brand?

Procter & Gamble is well known for its brands. As we have said in earlier articles, many people mistakenly believe that a brand is a product. While that is in part correct, it isn’t the whole story. A brand is an image in the customer’s mind. The thoughts customers have about products are brand impressions. These brand impressions are the major influences on the purchase decision. Customers form impressions of products every time they come in contact with them. Once products or companies are out in the market, you already have a brand, whether you want it or not. The only issue left to consider is what kind of brand you want to have.

Brands are inferred, not implied. Branding isn’t something companies do to customers. After experiencing a product or a company, a customer has an impression of that product and decides how to "brand" that product in their own mind. In other words, a brand isn't what a marketer says it is. It is what a customer thinks it is.

However, companies can do a lot to influence the impression that customer/consumers have about them and their brands. Often we think of brands from big companies like Nike and Coke who use the brute-force of mass marketing to "impress" their message on people. Brute force is becoming a less and less effective method for branding, because it's gotten harder and harder to tell today's discerning customers how to think.

Only a very few companies, like Nike and Coke, can afford to brand with brute force. Now the method of choice seems to be primarily via some form of social media in addition to the traditional advertising/marketing vehicles. Companies like ThoughtLabs specialize in bringing customers closer to their clients.

Branding isn't just something that applies to big, national companies with large advertising budgets. For all types of persuasion, thought is always a prelude to action No matter how the product is marketed; it all must start with positioning. It is in this effort that companies attempt to set their desired image in the minds of the customer. This is key!

People's thoughts and beliefs drive their actions. The goal of the interactions with a customer is to encourage them to create a brand impression in their mind that motivates them to act in a way that helps my product. By focusing on what they think, I am forced to pay attention to everything I do that affects what they think about me and my product. I can't just make an independent decision about what I want my brand to be and create beautiful advertising that "declares" what my brand is -- I have to orchestrate all of the experiences they have with my product in a way that encourages them to create the right brand impression in their mind.

So . . . what do you want your customers to think about your products . . . and you?

If you have not clearly defined the positioning for your company or its products or the results are not meeting expectations, we can help. Contact us.

Thanks

John

This is one of a series of articles that share some of the learnings from twenty three years in marketing at Procter & Gamble.

John Maver
President
Maver Management Group(
925) 648-7561
Maver Management