Proctor & Gamble _ Marketing Case Analysis

Proctor & Gamble _ Marketing Case Analysis

Market Segmentation and targeting

Proctor &Gamble (P&G) is a leading manufacturer in health and care products for babies and kids, cosmetics, and laundry products. It applies segmentation is used to categorize buyers based on homogenous attributes. P&G divides its large market into smaller segments to offer them ads messages, products, and services that match their unique needs (Haider et al. 2017). The company applies demographic, psychographic, and geographic segmentation.

Demographically, market segmentation is based on various variables; these include age, gender, family size, occupation and level of income (Camilleri, 2018). The company offers different products for different age brackets’- Crest toothpaste and Johnson and Johnson for kids and babies and Crest pro-health for adults. In terms of gender, it has Boss fragrance, and Naomi Campbell performs for the male and female gender, respectively. Regarding family size, P&G has 96-Puffs Plus tissues for a large-sized family and 60 Puffs plus tissue for smaller family size. Gillette containing five blades are for an affluent customer, while Mach3 is designed for low-income customers.

P&G divides its market based on psychographics attributes mainly the social class, personality, and lifestyle (Haider et al. 2017). Here, the fragrance products as well as Braun, Camay, and Cover Girls products middle and upper-class members of the society. The variety of Gillette products are developed to cater to customers with varied lifestyles. The Febreze air freshener is also designed for air-conditioned room by people leading a luxurious lifestyle. In terms of personality, the Millstone Coffee flavour was developed for late nighters and ‘Folgers’ flavour for ordinary users.

The segmentation and targeting align with company brand management strategy of offering a variety of products to meet different tastes and preferences of consumers. In a brand management system, one executive is tasked to manage a specific brand, thus making it easy to focus on their target customers with brands that meet their unique needs. Therefore, segmentation and targeting techniques help brand managers to focus on strategic areas of consumer needs and gain a competitive edge in the market.

Analysis of Competitive Environment

There is no doubt that Proctor & Gamble is one of the skillful distributors of consumer-packaged goods known for its trusted brand portfolios. However, success comes with some challenges in the market, which includes intense competition. The main competitors to P&G include Nestle, Unilever, and ITC in different product categories. The advantage of these brands over P&G is their limited brand categories. Consequently, they can manage their brands more efficiently than P&G. The second advantages in that most of their brands are in the growth stage compared to mature markets in the case of Proctor & Gamble brands.

Challenges of being a market leader in many different categories

The portfolio of P&G has several brands, including Ariel, Pampers, Gillette and Tissues. It is a market leader in 15/21 product categories offered in the market. However, maintaining a leading position in the market comes with many risks and challenges. These challenges include the overdependence of retailers. Ideally, it is not possible for P&G to sell many product categories on its own but have to depend on retailers. Internal competition between brands is another challenge associated with offering so many product categories. The company also faces risks of brand dilution and a decline in profit margin in the consumer goods market. There is also a tendency for companies to prioritize market shares over profit-making to increases sales.

Importance of Social Media Marketing

As people prefer social media over TVs and newspapers, P&G needs to change marketing strategies to advertise more on social media networks such as Google, Facebook, Twitter, and Instagram and less on traditional media. Tariq (2017). Observed that social media platforms can promote online word of mouth to retain its strong brand name. However, P&G can also manipulate the online platform to communicate its brand information. Online shopping is another option for enhancing brand name. Online advertising will create more persuasive emotional appeals in the advertisement to foster deeper connections with consumers.

Possible Risks P&G in the future

Going forward, P&G is likely to face many risks. In my view, the company should be wary of its mature products in mature markets because their sales are likely to decline. P&G has a diverse product portfolio, but many falls in mature categories. The challenges include:

• Cutthroat competition in all categories from the likes of Unilever, ITC, and Nestle
• The reduced profit margin on its products due to the high level of competition
• There is also a risk of declining brand equity if it fails to adopt online marketing tactics
• Low priced unbranded local brands are expected to push down the industry profit margin
• Possible legal barriers in countries of operations as they seek to grow their business
• P&G is likely to have limited room for growth and expansion

Conclusion

The core brands of P&G are market leaders with significant market share and high sales. However, maintaining a leading position in a variety of brand categories is challenged by a high level of competition from Nestle and Unilever. However, most of its leading brand categories are in a mature market. Therefore, without proper marketing, the future market share and sales are likely to decline, thus affecting profit margin.

References

Camilleri, M. A. (2018). Market segmentation, targeting and positioning. In Travel marketing, tourism economics and the airline product (pp. 69-83). Springer, Cham.

Haider, A. A., Zafar, A., Khalid, A., Majid, A., Abdullah, M. A., & Sarwar, M. B. (2017). Marketing Management. Head, B, 22.

Tariq, M. A. (2017). Impact of Social Media Marketing on Consumer Brand Engagement (Doctoral dissertation, Bahria University Islamabad Campus).