I love pies. And cakes. But no matter how hard I try, I still haven’t quite aquired a taste for Humble Pie. It’s tough when you have to admit that you were wrong about something or, even worse, that somebody else was right. But sometimes there’s no getting around it and when that happens it’s best to put on a big smile, learn your lesson and make the best of it. And that’s exactly what Procter and Gamble has done. After years and years of doing things “the P&G way” they’ve decided to completely change their branding strategy and, having had a nice big piece of humble pie, are falling into line with the competition. But who the heck is P&G and why is this such a big deal?To bring you up to speed, P&G, as those in the know call it, is one of the largest companies in the world. It operates in 80 countries and in 2011 generated sales worth $82.6 Billion (uh-huh, that’s billion with a “B”). Have you heard of products such as Pantene, Herbal Essences, Duracell and Gillette? Yep, they’re all P&G’s.
The reason you might never had heard of them until now is that they didn’t use to visibly put their name on their products… until now. But why change after so many years? For four good reasons:
• P&G will save money by creating communication campaigns that leverage across the entire company including all of its brands, instead of designing multiple campaigns for each of its products.
• The competition is doing it, and is increasing its brand equity.
• The corporation has also experienced a decline in sales as a result of the economic crisis.
• The sales of companies such as Sainsbury’s and Wal-Mart, who offer multiple, less expensive product lines within their private labels have increased.
As a result, we can expect to start seeing the P&G logo on all packaging and advertising and to see more of the company online. They already have three websites (Petside.com, LifeGoesStrong.com, and DinnerTool.com) which are great to look at if you’re at all interested in content curation.
In fact, you may have noticed that P&G also sponsored the 2012 Olympic and Paralympic Games. Not only did it create a special corporate logo for the occasion, but very astutely, it launched a campaign called “Thank You, Mom” which, through 30 of its brands and in collaboration with 150 athletes, acknowledged what a tough job it is to be a mother, especially if your kid is an Olympian. Of course, this struck a chord will all mothers- the same ones that buy household products.
Of course, none of these things come cheap. The cost of including the corporate name on their product packaging is estimated to be about $100 million a year. But over five years the $500 million invested is estimated to have a potential identifiable return of $6 billion , which added to the fact that the company has planned to reduce its operating budget by £6 billion by 2016, it is safe to say that P&G will see a significant increase in profits in coming years.
How about that? It looks like P&G won’t be eating any more pie any time soon. Instead, it’ll have its cake and eat it, too.