The P&G branding model’s fallout

Tom Dougherty, CEO – Stealing Share

4 August 2014

It’s a model that doesn’t work for everybody

Proctor & Gamble, the nation’s largest consumer product company, is getting rid of a whopping 90 of its brands. The company said that the brands it will be keeping make up 90% of its business, meaning this is a crack at cutting some of the underperforming brands and streamlining its offerings to satisfy investors.

“Marketing only product benefits only helps you if you are the market leader and the rest of the category is also marketing product benefits.”

 

P&GIt’s the right call, although for an unusual reason. P&G has always had a unique model as a house of brands (a house of many brands), and its approach at branding has been to outspend the competition and promote the product benefits.

In full disclosure, I’ve done some work for P&G in my long ago branding past, including shepherding Tide as well as Pampers diapers.

The way P&G practices branding is not a model to follow. Marketing only product benefits only helps you if you are the market leader and the rest of the category is also marketing product benefits. That way, you become the default choice.

That worked for P&G because it had the resources to basically buy market share by outspending the competition, and introducing fighter brands with large budgets that could keep some lower cost competitors out of the market.

What’s happened now is that P&G has so many brands and it has spent so much money on those brands that it’s affecting its bottom line in a negative way. To keep up the same model, it has to cut brands or there’s money rushing out the door with low return.

Few should ever adopt the P&G model. It’s not branding. It’s throwing money at the problem and P&G is paying for it now. Instead, you can steal market share by being smarter than the competition – marketing the emotional triggers that say why those product benefits are important – rather than just spending more money.

It seems the competition of those failing P&G brands are doing just that.

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1 Comment

  1. Mike Oz

    I’ve always been kinda fascinated by P&G. It’s a monster, but it seems so inefficient from the outside-in.

    Thanks for the peek inside, Tom.

    Reply

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