Procter & Gamble's Brand Management Techniques and Practices

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Brand Management
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Table of Contents
Introduction...................................................................................................................... 3
LO1.................................................................................................................................. 4
LO2.................................................................................................................................. 9
LO3................................................................................................................................ 12
LO4................................................................................................................................ 15
Conclusion..................................................................................................................... 17
Reference list................................................................................................................. 18
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Introduction
Brand management tactics involve the development of public perception regarding the
brand through management of the intangible and tangible elements within the
operational structure of the brand. The tenets of brand management ensure the
development of the organisational identity within the market sector that improves the
profitability of the organisation. The following study would provide detailed information
regarding the value and significance of managing brands within the organisational
context of Proctor and Gamble (P&G), the study would provide relevant information
regarding the effectiveness of various branding techniques that would benefit the
company. Founded in 1837, the organisation offers a wide variety of products to the
consumer and serves the global business segment with efficiency (Us.pg.com, 2019).
Conducting business in more than 180 countries, the business garners annual revenue
of £53 billion with annual sales of £42 billion by providing value products to the intended
consumer demographic (Pg.com, 2019).
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LO1
Explain the importance of branding as a marketing tool and why and how it has
emerged in business practice
The process of developing a brand is performed through a continuous process of
ensuring the success of the organisation in the competitive market scenario. Branding
acts as a marker for the organisation on the products, they offer to the consumers
through development and quality management (Heding et al., 2015). It is essential in
improving the situation of organisations with a variety of brands in their portfolio. The
strategy of managing the various elements within each brand allows the market
development of the company in conducting their business.
Branding is considered as an essential marketing tool as it provides the company to
enhance their market presence through proper communication of aspects of the brands
by developing public perception regarding the company. Branding techniques include
the development of brand value, brand image and brand identity in the market sector
to form an emotional attachment with the consumer. The development of brand
identity through creation of logos enables the consumers to develop a bond with the
company and the product (Wheeler, 2017). Branding techniques within P&G ensures
their target consumers are aware of the products that the company offers and develops
an attachment with the company through the transactional process. The companies
develop brand identity by communicating their values and beliefs to the target
consumer groups (Gürhan-Canli et al., 2016). Improvements to brand elements include
forming methods that would enhance the image and identity of the brand as well as the
personality of the brand in collaboration with brand equity.
These tactics attract consumers to the company and ensure brand loyalty retains
within the consumer demographic. P&G developed their brand image in the competitive
market scenario by creating a holistic market presence and developing their business
with 65 brands segregated into ten major product categories.
Figure 1: Brands within P&G
(Source: Pginvestor.com, 2019)
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P&G ensures their brands are operated through equal importance and the values of the
company are illustrated through the individual business strategies belonging to P&G.
The company develops their brands through various brand extension and line
extension tactics that ensure individual products from various brands within the
company are of appropriate quality and uphold the brand value of P&G. The company
manages the brand within their organisation through the application of effective brand
equity. This enables P&G to establish their presence in the competitive market sector
through the branding strategy of house of brands (Pginvestor.com, 2019). The
branding technique allows P&G to separate 65 brands operating under the parent
company into 10 major product groups. Every product form each group carries the
brand logo and the trademark of P&G. This ensures the consumers are aware of the
value the product within the company.
Figure 2: Ways to develop a brand
(Source: Pearson, 2016)
It is beneficial for companies to integrate the tactics of enhancing brand value and brand
equity in order to gain the emotional perception of the consumers through their
business operations. P&G generates brand value by ensuring the quality of their
products is appropriate and markets the value of the commodities in a way that is
favourable to the consumers. The corporate strategy followed by P&G is successful as it
allows their customers to recognise the quality of business performance conducted by
the organisation (Grayson and Hodges, 2017). Branding is accepted as an effective
marketing tool as it allows the companies to generate demand for their products through
the conveyance of their values and mission to the consumers. P&G succeeds in
incrementing the demand for their products through the development of their brands
within their organisational market strategy. The tactics of line and brand extension
allows the company to generate better profit through the enhancement of products
within each category.
Evaluate how brands are managed successfully over time using application of
appropriate theories, models and concepts
Analyse the key components of a successful brand strategy for building and
managing brand equity
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Brands operating within the company are developed as per the demand and sales
generated through transactions in the competitive market scenario. This resides on the
ability of the company to market and label the products developed by the company. As
per the notion developed by Urde (2016), brand management among organisations
are created through three major aspects: cultural, communal and personal approaches
to brand management. However, it is observed that the major theoretical frameworks of
brand management followed by companies in order to generate maximum profit and
gain consumer loyalty are by the application of the following strategies:
Brand loyalty
This type of branding enables the institution to align their products and brands with the
public perception. The allocation of brand identity and loyalty towards the consumers
allows the company to generate better value in the market regarding their product lines.
P&G developed their company through the creation of the house of brands strategy
where every brand operating within the organisation aims to generate their own market
share and creates value of their products. The P&G trademark on every product is
beneficial for the company as it allows individual brands to generate revenue through
transactions. The downfall to this procedure is that it enhances the risk of detrimental
value to the company as well as the other existing brand if any aspect of production,
marketing or quality from the house is affected. The situation with Gillette’s advertising
affected almost every product from the P&G house due to controversial advertising
techniques leading to loss of revenue for the company (Forbes.com, 2019).
Brand equity
The element of brand equity is identified as the process of generating value for their
products through the generation of better products by creating memorable and
recognisable trademarks and unique marketing plans. P&G created successful
marketing strategies as well as their product quality in every brand operating under their
company. A strategic development of brand values in the product-line of the company
ensured the company was able to generate better results through their transactional
process. Brand equity follows three major components that encourage the success of
the company and the brand- the customer perception regarding the brand, negative
or positive outcomes from the business transactions and the resultant value of the
business process. P&G develops their brand equity through the integration of effective
procedures in their market development and product segregation methods. By following
the tactics of House of brands, every brand operating within P&G have their own value
in the market and are able to generate profits and market share on their own volition.
Brand strategy components for managing brand equity
P&G developed their branding strategy through the initial steps of product and market
segregation. The branding strategy followed by the company is identified as single
brand identity. This enables the venture to operate with products that are popular and
hold effective value in the market sector. This ensures P&G offers every brand
operating under each product sector to generate their own value and function
separately as a unit. Line extension and brand extension allows the company to
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generate better results for providing the organisation with improved opportunity to
create variety in their product portfolio. The aspects of brand equity are observed
through the model developed by Aaker (Çifci et al., 2016) and Keller’s CBBE model of
brand equity.
Aaker’s model of brand equity
Figure 3: Aaker’s model
(Source: Christodoulides et al., 2015)
The model provides information regarding the value of the brand among the consumers.
The brand equity model enables the management to identify the aspects of brand equity
that would enhance the ability of the organisation to generate better profit (Gabrielli and
Baghi, 2016). The tenets of brand associations, assets of the brands, loyalty,
awareness and perceived quality of the products offered by the brand develops the
prospect of gaining better results from the transaction process. P&G ensures their brand
equity development operations are conducted through the improvement of each brand
and product equally.
Keller’s model of brand equity
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Figure 4: Keller’s model
(Source: Keller and Brexendorf, 2017)
This model presents the organisations to measure the level of brand equity within the
market regarding their product quality and consumer perception. Improving brand
identity and meaning within the market segment would allow the organisation is to
generate brand value and equity to generate better results in the market sector. The
relationships maintained by the organisation with the consumers and stakeholders
along with the response from the business scenario enhance the overall results of the
organisation through transactional process.
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LO2
Analyse different strategies of portfolio management, brand hierarchy and brand
equity management
Portfolio management within P&G is performed using the technique of modern
portfolio management theory. This allows the company to manage their products
within their brands as per the returns generated through revenue collection (Dimmock et
al., 2019). This strategy of portfolio development performed by P&G through single
branding technique and it allows the company to promote individual products and
brands equally within the competitive market sector. The brand hierarchy of P&G is
maintained through the house of brands model that provides equal importance to
every brand within the institutional structure.
Figure 5: House of brands hierarchy
(Source: Pginvestor.com, 2019)
P&G follows a house of brands strategy of brand hierarchy as it provides equal
importance to every brand operating under the primary institution. The ability of the
brands to function with equal importance gives them the opportunity to generate better
profit through transactions. The success of this hierarchy is identified through the
improved popularity of brands within P&G. The hierarchy within P&G is identified to be
singular as the venture gives equal efforts in marketing and developing all the brands.
The company experiences demand and awareness of all the brands existing within the
organisation. As per the tenets of modern portfolio management, the ability of P&G to
experience this type of success from every brand ensures that the company apply equal
stress on every brand under each product line to develop better results. The success of
implementing singular hierarchy within the house of brands structure, P&G is able to
generate value for all their products.
These techniques are beneficial for the organisation as it allows the company to offer
equal importance to every brand and generate marketing strategies individually for the
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brands operating under P&G. The venture is able to gain results through their
transactional efforts by applying the hierarchical structure of unity in their business
procedure as it allows the brands to operate as single entities and gain profits through
their separate marketing tactics. The drawback to these aspects of portfolio
management, equity and hierarchy is that these increase the risk of reputation damage
to the whole institution in case of crisis of a single brand. The issues of animal testing of
their beauty products, price fixing in regards to home maintenance products and the
advertising strategy of Gillette reduced the market share and overall profitability of the
company despite the brands operate separately.
This can be managed by P&G through the development of their brand equity using a
holistic and strategic application of Keller’s CBBE model. Implementation of this model
would be effective for the institution to garner expected results from their brands, as it
would allow the company to avoid crisis in case a single brand fails.
Critically analyse portfolio management, brand hierarchies and brand equity
using appropriate theories, models and frameworks
Application of Keller’s equity model within the house of brands structure would allow
P&G to develop their brands in the market sector as per the need of the organisation.
According to the customer-based brand equity (CBBE), structure of the brand equity
framework operates in relation to the opinion of the consumers regarding the brand and
the house.
Figure 6: CBBE model for brand equity
(Source: de Oliveira et al., 2015)
P&G would benefit if they apply the model in every operational brand within the
structure, as it would allow the organisation to generate better brand value in the market
scenario. By creating marketing tactics, business policies and quality management in
respect to the various markers within the model, P&G would gain benefits through
business performance. The benefits of this model are observed in the increased
profitability and sale of products from every line within the company. The disadvantage
of applying this model in increasing the brand equity is observed through the lack of
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coordination among the brands functioning within the organisation. Individual brands
may not gain equal awareness among the consumers through the business procedure.
P&G develops their business operations by offering the customers variety of products
through their 65 brands. They incorporate changes within every brand as per the
consumer demands and every brand under the house operates separately in taking
decisions regarding the marketing procedure.
Thus, it can be stated that applying the CBBE model would benefit P&G in enhancing
their market presence and develop their brand values in a sustainable manner.
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LO3
Evaluate how brands are managed collaboratively and in partnership both at a
domestic and global level
The significance of brand extension for P&G is evident and they have to use some
specific techniques for increasing their presence in domestic market. They have to use
some strategies to ensure that their brands are extended in domestics as well as
international levels. Therefore, it will be necessary for them to use some specific
strategies and Ansoff Matrix will be an ideal framework to help them in it. It will let them
leverage their brands more easily.
Figure 1: Ansoff Matrix
(Source: Grünig and Morschett, 2017)
Product development
P&G can have their brand extended in domestic market through making a new product.
They can either develop a product or acquire it by collaborating up with another
company. It can become a major turning point for P&G because they already have
stronghold at their domestic market. They have been quite dominating this section and
can use it to their advantage. An extensive market research can find out many
valuable data about recent trend in various products they are willing to sell. A research
tem, who has significant experience in marketing and surveying should be appointed for
extensive research. The research should focus on various segments of domestic market
and consider everyone’s choices. P&G serves customers of different financial
background and therefore, their market research should divide each segment and
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