A.G. Lafley is back.
Last week P&G’s board appointed Lafley CEO after Bob McDonald stepped down. This isn’t a new assignment for Lafley; he was CEO from 2000 to 2009.
A look at P&G’s May, 2013 Brand Saver coupon booklet suggests he has some work to do. A few questions to consider:
-Is investing in the P&G brand really a good idea?
P&G is spending a lot of money and time promoting its corporate brand. The May Brand Saver includes a huge ad for P&G. The headline: “Thank you, mom, for seeing the potential in every child.” The ad goes on to proclaim that P&G is the “proud sponsor of moms.”
This just can’t be a good use of money. Do consumers in the U.S. know or care what brands P&G owns? Do you?
A quick test: which of these are P&G brands?
I’ll put the answers below. If you didn’t get most of them correct, then you really have to question the P&G branding initiative.
-Why launch a Fusion disposable razor?
Gillette has had a consistent formula for building profits: introduce a series of high-end razors, each with outstanding quality and higher prices. Then count on refills to drive profits. Play in disposable razors but focus on the reusable segment.
Now, however, Gillette is changing course and embracing disposable razors. P&G is currently rolling out a disposable version of Fusion, its premium product. The headline: “Upgrade to Gillette’s 5-Blade Disposable.”
I haven’t studied recent trends in razors but this feels like a desperation move. When there aren’t any big ideas around, it is easy to launch a cheap version of a premium brand.
This usually does not end well; there is a short-term profit jump and then the brand erodes.
-Do brand mashups really make sense?
P&G has fully embraced the concept of a brand mashup. The May Brand Saver includes the following products:
Gain + Mr. Clean
Gain + Febreeze
Gain + Swiffer
Head & Shoulders + Old Spice
Gillette Venus + Olay
There is logic to some of these pairings. But it gets confusing.
What is the combination of Head & Shoulders + Old Spice? Is that a deodorant that prevents dandruff? Is arm pit dandruff a big issue for people? Or is it a shampoo that smells like a deodorant? That seems unappealing.
A brand mashup can work but taken too far mashups lead to confused consumers and weak brands.
P&G is one of the world’s great marketing companies but some of these recent moves appear focused on driving short-term profits more than building great brands.
It is good to have A.G. Lafley back at the helm.
Here are the results to the quiz:
Irish Spring: No
Let me know how you did!
In my perspective; a brand-mashup works best when
1. The benefits can be easily observed and attributed to the components and
2. It appears like a match of separate equals
For instance, while buying a premium car it does matter whether the integrated sound system is by Bose or Bang & Olufsen and not a generic because after all; what is a new car other than an extension of my Iphone ☺. Mentally, this allows me to distinguish why a car with or without a premium sound system may not offer the same utility.
Secondly, bringing together of different brands works if it appears that they are separate but equal players – each bringing their own credibility and customer loyalty. While there is nothing wrong with brand mashing, it appears counterintuitive when P&G is heavily promoting the fact that they are all really under the same umbrella. If that does succeed, any benefit from mashing up brands will all attributable to the same parent company – and doesn’t feel ‘novel’ or worthy of a premium.
A Duracell powered Tesla – now that feels more like it!
It’s unfair to be critical without having a solid understanding of the business.
Is investing in the P&G brand really a good idea? Do consumers in the U.S. know or care what brands P&G owns? Do you?
Of course it is. When you evaluate an investment, you never look at the costs, you look at the ROI. Outside of the sales, the P&G Thank You, Mom campaign generated a ton of PR, positive WOM, and digital buzz. Building credibility and awareness of the mother brand helps with raising that of daughter brands (i.e. P&G makes Charmin? I love Charmin. Maybe I’ll try Bounty too, it must be of the same great quality). It helps drive trial and household penetration. As simple as it sounds, that’s the reality of basic consumer behaviour. Investing in P&G is like investing in a “stamp of approval.”
Why launch a Fusion disposable razor?
Disposable razors are a rapidly rising trend. Many other razor-producing giants are capitalizing on this trend, so why not Gilette? Of course it wouldn’t make sense for P&G to create an entirely new line in order to prevent dilution of its premium brand. If the market is in disposable razors, why keep innovating premium battery-powered razor systems?
I commend P&G’s efforts to improve themselves, be it through offering more selection or offering peace of mind to the consumers that buy their products.
Though consumers may not know nor care about the ownership of the brands, retailers, Wall Street, and employees certainly do and this is likely a very low cost way for P&G to convey a compelling message to all its stakeholders.
Paul—I agree supporting the corporate brand can motivate employees, regulators and investors. But P&G has been spending far more than necessary to accomplish this; the initiative stretches back to the summer Olympics when P&G devoted about half its media weight to this umbrella campaign. My sense is the balance has tilted to the P&G brand and this is hurting overall performance.
Sure was (past tense) a P&G brand*.
I agree it’s a pointless waste of money. Why would you want a consumer to connect a mascara brand owner with a laundry detergent brand owner?
*As was Secret, back when they had the identical formula. See
That is a terrific blog post…I enjoyed reading it. Thanks for sharing it.
Thought Pantene was Unilever. Thought P&G had Sure. Got the other ones, but I have a weird habit of reading the fine print. Would guess that normal people have no idea. Interesting to compare to ConAgra and their corporate brand promotion efforts of a year or so ago.