turn of the market
However, some changes have taken place in the American market recently, which have had a great impact on Procter & Gamble, forcing it to take corresponding measures. In fact, during the period of 1985, the market share of core products such as diapers and toothpaste declined, which led to the decline of P&G's profit, which was the first time in more than 30 years. The main market changes at that time were:
1. The competition situation is becoming more and more severe, the market growth of the company's products is slow, and the brand loyalty of consumers tends to decline.
2. The American consumer market is becoming more and more subdivided, and new consumer classes have emerged, such as young single aristocrats, dual-income families and the elderly. Their number exceeds P&G's traditional customer group-housewives.
3. Due to the pollution impact of core products such as diapers on the environment, the company is also facing environmental pressure from consumers.
The power of retailers selling Procter & Gamble products is expanding.
P&G is also under pressure from competitors, who have accelerated the launch of a series of improved new products.
6. Procter & Gamble sells the same products all over the world without considering the consistency with local preferences, and it is frustrated in the local market.
Therefore, P&G must cope with the above changes. According to an investigator, Procter & Gamble will change the way consumer goods are produced and sold.
Brand management innovation
One of the key factors of P&G's long-term invincible position is effective brand management. Brand management is a particularly necessary step in the rapid tracking and monitoring of P&G. The company creatively set up a brand manager, which first appeared in P&G more than 50 years ago. The brand manager is responsible for a special brand, such as ivory soap, Crest toothpaste and so on. They compete with other brand managers in the company and brand managers in other companies. They are at the center of the communication network and are the makers of marketing, advertising and promotion strategies. Because P&G implements the internal selection policy, successful brand managers are expected to be continuously promoted in the company.
However, although P&G used to be an industry authority, its top-down bureaucratic structure means that it takes a lot of time to get instructions from the general manager on major marketing decisions. This process includes so-called "one-page notes" (the process of rewriting and rewriting opinions, such as what color should be on the instant coffee pot). All these have consumed a lot of time and energy of brand managers. Because P&G focuses on marketing, brand managers are usually set up separately from colleagues in sales, production, market research and development departments.
In fact, the general manager of Procter & Gamble pointed out that the company's brand management system is a way of "dog pulling sled", and only the leading "dog"-brand manager can clearly know what lies ahead. Brand management law aims to sell a certain brand of goods to consumers with the same tastes and preferences. However, in the mid-1980s, the differentiation of consumer market forced P&G to change its organizational structure. These changes directly affect brand managers. For example, Procter & Gamble has set up a business project team to enable product managers to participate in decision-making and share responsibilities. The initial implementation of the project team method has achieved good results: a project team developed a new flavor of Pinke potato chips and changed its advertising strategy, instead of emphasizing packaging design, it emphasized taste, and as a result, the sales of potato chips increased. Another project team developed a leak-proof cover for Tide detergent. Procter & Gamble hopes that the supervision of the project team will help prevent mistakes caused by the brand management system. For example, the brand manager of Eimo introduced a promotional package to the market, but found that the package did not meet the requirements of supermarket shelves.
At the end of 1987, the company implemented organizational structure adjustment again, divided P&G products into 39 product categories, and established a new position "product category manager". Each product category manager is responsible for all brands of a designated product category, and the brand manager is responsible for reporting to the product category manager, who is fully responsible for the profit and loss of their respective product categories. For example, the product category manager decided to replace the basic packaging bottles of JOYIVOYIAWN three brands of detergent, and use the packaging bottles with lower production cost to reduce the cost without affecting the product category. Generally speaking, product category managers will also help reduce destructive competition among brand managers.
For example, when two detergent brand managers use coupons to promote sales at the same time, the product category managers have the right to make a quick and timely decision. They can allocate $6.5438+0 million to the brand managers and use an innovative way called "talk card" to correct their opinions more quickly through this conversation instead of the traditional memo. As Scott, a consultant of McKinsey & Company, said, "Brand managers have not died out, but they are even scarcer today. The smartest company is nothing more than realizing that the organizational structure of each business unit must be laid off to support its strategy.
In addition to product category manager, the company has also added a new position, namely "product supply manager", which will cooperate with managers of other functional departments such as production, engineering and logistics. A brand manager said: "In the past, we didn't keep enough contact with the production or sales departments. We often go to investigate and ask questions. If they say no, we can only say what you want. In addition, the appearance of product supply manager is stimulated by the fact that P&G branch is always slower than competitors in introducing new products and improving products.
For example, in the highly competitive US disposable diaper market of $3.5 billion, P&G's LUNS Company has a 50% market share. LUNS' HUGGIES brand has a market share of 30%. While P&G was still testing an improved diaper, it was quickly introduced to the market and gained most of the market. The product supply manager is responsible for this phenomenon. Procter & Gamble actively deals with excessive claims made by consumers, because disposable diapers cannot be destroyed by bacteria. Disposable diapers are an important product category of Procter & Gamble. Although it is still the industry leader, the market share of its brand is declining year by year. In order to refute the view that cloth diapers are less harmful to the environment, P&G has studied two kinds of diapers.
The results show that although disposable diapers consume 7 times of raw materials and 90 times of solid waste compared with cloth, the services they provide lead to 3 times of fuel consumption and 9 times of air pollution. In other words, no matter which type is superior to the other in environmental impact. Procter & Gamble also invested millions of dollars to build a fertilizer plant, and at the same time launched a mail-order business of Pampers diaper solid waste to millions of household users, and printed advertisements on its nature of being destroyed by bacteria and its use as fertilizer.
Sales method innovation
For years, P&G has been criticized for its arrogant attitude in dealing with retailers. In fact, its bureaucracy earned it the title of "Soviet government" in the company. However, now, industry merger means that many urban markets are controlled by large retailers, who have the right to decide the shelf space and promotion of products. Happiness magazine reported in 1989 that compared with 15% in 1970, 80% of P&G products were sold by American 100 chain companies. Nowadays, manufacturers use laser scanning and computer technology to track and observe the purchase and sales of product versions in stores, and this function has always been completed by Procter & Gamble, which often makes the sales team in the old sales system of Procter & Gamble feel embarrassed and confused. Now, the sales team has been reorganized, including managers transferred from finance and production departments to help achieve greater retail sales. A sales expert of Procter & Gamble pointed out: "We are changing from product concept to customer concept".
For example, in order to better serve Wal-Mart discount stores, a sales team of Procter & Gamble established a point-in-time ordering and delivery system for disposable diapers. When the stock is reduced, the microcomputer in the store directly gives instructions to the factory, and then the factory automatically distributes more Pampers and lurs diapers to the store directly. This system reduces the cost of P&G and Wal-Mart. In Dimonis and Iowa, Procter & Gamble also cooperated with local supermarket chains to establish an experimental payment export system called "Video". When P&G marked with price is inserted into the card reader of the cash register, when P&G products marked with price are scanned during export payment, a message will appear on a small color screen, telling consumers how much money he saved by buying this product. As an incentive to use this system, consumers can get an "electronic green stamp" magnetic card and enjoy preferential treatment when purchasing goods. This system can not only attract consumers, but also provide information about customers' consumption patterns to Procter & Gamble and stores.
Implement the globalization strategy
P&G also pursues the globalization strategy. As the company 1990 wrote in the year-end report: "Globalization means that the company's products are more competitive than those of any other company anywhere, no matter whether the competition is at home or abroad. Globalization means that no matter where our customers are, we must do better than our competitors in meeting their needs and quality requirements. " In the process of exploring the world market, P&G has shown new flexibility and adaptability in the whole company. Although Procter & Gamble once thought that its "world products" could be sold anywhere, regardless of cultural differences, now it has gradually learned to adjust its strategy in time according to market differences. Edwinatrazt, the manager who has worked in Procter & Gamble International Branch for 9 years, said, "We need to cultivate the ability to transfer the excellent work done in China to other parts of the world. We must adapt to the needs of overseas markets. "
Japan is a good market choice. As the second largest consumer market in the world at that time, Japan was the most critical in product quality, and P&G encountered many problems in its first attempt in Japan. For example, in the early 1980s, Japanese housewives bought diapers through telephone advertisements. Procter & Gamble is a pure American business dubbed in Japanese. The baby diapers themselves are designed according to American preferences, and their hygroscopicity is worse than that of competitors' products. Procter & Gamble mistakenly believes that its marketing strategy, which is very suitable in the United States, can also succeed in Japan. However, after losing millions of dollars, P&G conducted extensive market research activities and learned some simple and basic experiences about the Japanese market. For example, Japanese parents change their babies' diapers more frequently than American parents. Procter & Gamble subsequently introduced a disposable diaper with stronger water absorption-UTA diaper, aiming at keeping babies dry. Because the closet space of Japanese family cabinets is very small, P&G has also improved its diapers to be thinner so that they can be sold in smaller boxes, and asked any manager in Japan to learn Japanese and Japanese culture and establish closer personal relationships with dealers. At the same time, Procter & Gamble is also making sure that its company name is marked in Japanese on all packages and advertisements, because Japanese consumers prefer companies that carry out marketing activities for the brands they buy.
As a result of all these changes, P&G became the market leader of Japanese diapers, and its annual sales quickly reached the peak of $654.38 billion. However, if the company had applied the experience of Latin American managers, its success in Japan might have come earlier. In Latin America, despite cultural differences and economic and political problems, sales still exceeded $654.38 billion. As early as 1950s, Procter & Gamble had realized the importance of adjusting its marketing strategy to meet the local preferences of Mexico and other Latin American countries. ACE detergent is packed in cartons, which highlights the low foam characteristics preferred by South American consumers. But the same product packaging is not suitable for Mexican housewives, who often wash their clothes in a basin of water or a local river, so I hope there will be more foam.
Therefore, after adjusting the formula to increase the foam, Procter & Gamble also used plastic bags to prevent the washing powder from getting wet, and put golf products into a small bag divided into100g to meet the needs of one-time laundry, thus making ACE detergent sell well in Latin America. The latest emphasis on P&G's globalization strategy is that it not only sells products in many different countries, but also develops and opens new products around the world. For example, the formula of Tide detergent was developed on the basis of the investigation of Japanese cleaning institutions. Some Japanese customers wash clothes with cold water.
In addition, in Belgium and other parts of Europe, the content of minerals in water is twice that of the United States, and the Procter & Gamble laboratory in Bruce has developed ingredients to soften hard water to meet the needs of customers. John Cramer, head of Tide product development project team, said? Quot We collect ideas and technologies from all over the world. According to the international division of labor of the company, the development of consumer goods will show less and less localization trend. "P&G's global marketing strategy has paid off; 1990, P&G's total sales outside the United States reached 9.6 billion dollars, while 1988 was only 7.2 billion dollars. 900 million dollars.