MD4100 - P&G's Marketing Strategy: Consumer Goods Industry Report

This report provides an analysis of Procter & Gamble's (P&G) marketing strategies within the consumer goods industry, focusing on the effectiveness of their differentiation and cost leadership approaches. It examines the company's competitive advantages, responsiveness to market needs, and challenges faced in different global markets, including Brazil, Russia, and the US. The report also suggests an alternative strategy centered on broader implementation of cost leadership to enhance customer base and profitability, particularly in economically challenged regions. The analysis concludes that while P&G's strategies have been effective in certain areas, a more widespread adoption of cost leadership could further improve their market position and growth prospects.

Running head: MARKETING STRATEGY AND PLAN
MARKETING STRATEGY AND PLAN
Name of the Student
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Table of Contents
Introduction....................................................................................................................2
Strategy used by the company........................................................................................2
Effectiveness of the strategy..........................................................................................3
Levels of responsiveness of the strategy........................................................................3
Reason behind activeness of the company in specific markets......................................4
Key challenges facing the company...............................................................................5
Alternative strategy that can be used by the company...................................................5
Ways of implementing the strategy................................................................................6
Conclusion......................................................................................................................6
References......................................................................................................................7

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Introduction
The Procter & Gamble Company (P&G) is an American multinational organization
which operates in the industry of consumer goods based industry. The headquarter of the
organization is located in downtown region of Cincinnati, Ohio and was founded in the year
1837 by British American William Procter and Irish American James Gamble (Us.pg.com
2019). The company specializes in the manufacture of different products that are based on
consumer health, hygiene and personal care. The products of the company are further divided
into different segments which include, Grooming, Beauty, Health Care, Family Care and
Feminine care. P&G recorded net sales of more than 83 billion Dollars in the year 2014
(Us.pg.com 2019).
The report will be based on the analysis of the strategy which has been implemented
by Procter & Gamble in order to operate in the consumer goods based industry. The
challenges which are faced by the company will also be analysed and alternative strategy will
be recommended.
Strategy used by the company
The generic growth based strategy has been applied by Procter & Gamble in order to
achieve effective levels of competitive advantage in consumer goods based industry. The
major focus of Porter’s generic strategy is based on the competitiveness of the organization.
The main emphasis of the strategy implemented by Procter & Gamble is mainly related to
value and quality. The factors related to quality of the product and value have been helpful in
the efforts that are made by the company to maintain leadership in the industry. The
competitive strategy which has been implemented by the organization is related to long term
operations of Procter & Gamble (Andersen and Andersson 2017).

3MARKETING STRATEGY AND PLAN
The differentiation based strategy has been implemented by the organization in order
to maintain its position in the industry. The organization thereby highlights the quality levels
which are offered by different products and value provided based on price levels as well. The
major aim of differentiation strategy is to ensure that the marketing strategies can be
implemented in an effective manner. Some examples of products offered with respect to the
differentiation strategy are the cleaning agents of the company. The organization has also
implemented cost leadership based strategy for some specific products which are offered to
the consumers based on low prices. For example, products like Pantene are provided to the
customers at lower prices (Barney 2017).
Effectiveness of the strategy
The differentiation based strategy which has been implemented by Procter & Gamble
has proved to be highly effective for increasing the levels of profitability. The products of
Procter & Gamble have been able to create an effective position in the consumer goods based
industry. The growth of Procter & Gamble is totally based on the quality of the products and
value which is offered to the consumers. The differentiation based strategy has thereby
helped the organization to penetrate the market in an effective manner (Doz 2017). The
organization has been successful in developing its effective position in the industry in
comparison to the other consumer goods based organizations. The strategy has proved to be
effective for the ways by which Procter & Gamble has created a loyal customer base by
developing them high value for the goods that are purchased (Ethiraj, Gambardella and Helfat
2017).
Levels of responsiveness of the strategy
The differentiation strategy has been highly responsive in nature and has been able to
attract the customers towards the products which are offered by the organization. The

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efficiency levels of the products offered by P&G in the consumer goods based market is quite
high which is mainly based on the response that is provided to the strategy. The strategy
based on differentiation has been helpful for the organization in order to meet different needs
and demands (Frynas and Mellahi 2015).
The levels of disruption which have been faced by P&G in the industry have been
managed by the organization with the help of differentiation based strategy. The brands that
operate under P&G can be managed by the organization in an effective manner with the help
of the strategy and the value which is offered to the consumers as well. The reach of the
organization on the other hand is increased with the help of some products that follow the
cost leadership based strategy. The FMCG organization has been successful in developing a
leadership position in the consumer goods based industry (Hanson et al. 2016).
Reason behind activeness of the company in specific markets
P&G has been able to increase the sales of its products in some major countries of the
world. The sales have improved in Brazil, Russia and many European countries as well. The
US based market has been also been able to show stable levels of growth in the FMCG
industry. The organization has however spent many years in trying to increase the sales in
different emerging countries. The customer base which has been developed in the emerging
countries has started growing in a robust manner. Brazil has been able to surpass the US in
the sales and revenues which have been earned in the industry. The growth of middle class
population is considered to be one of the major reasons behind the increase in revenues of
Procter & Gamble in some major countries of the world. The organization has thereby been
highly successful in some markets and has not been able to attract the consumers towards the
products in some other areas as well.

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Key challenges facing the company
Procter & Gamble has faced some major challenges in the consumer goods based
industry with respect to the lack of proper growth in some countries and areas of the world.
The levels of profitability of the organization have not been able to show effective growth in
the recent years and the health of business operations has also been affected in a huge
manner. The economic crisis which has taken place in different countries like, Nigeria and
Saudi Arabia has been able to affect the growth and profitability levels of the organization in
the consumer goods industry (Hill, Jones and Schilling 2015). The organization has started
losing the margin of its operating profit due to the lack of a large customer base in different
countries. The strategy based on differentiation has not been able to provide a huge customer
base to the organization in some countries of the world which are facing high levels of
economic crisis (Michael, Storey and Thomas 2017).
Alternative strategy that can be used by the company
Procter & Gamble has implemented the cost leadership based strategy for some of its
major products in the consumer goods industry. However, most of the products are sold by
the organization with the help of implementation of differentiation strategy. This has further
led to the higher prices of products in some of the areas. The high prices have reduced the
growth levels of the organization and profitability as well (Morschett, Schramm-Klein and
Zentes 2015). The profits of the company have been affected by the low number of customers
and lack of proper growth in some countries as well. The organization thereby needs to
implement the cost leadership based strategy for the products on a larger scale which can help
Procter & Gamble to increase its customer base. The organization will be successful in
improving its position in the retail industry with the help of proper pricing of the products
based on the needs and demands of the consumers (Teece 2017).

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Ways of implementing the strategy
The cost leadership strategy can be implemented by Procter & Gamble with the help
of effective pricing of the products that are offered to customers in different parts of the
world. The low pricing of products will be able to increase the levels of growth of the number
of customers in different countries. The customer base of the organization will be affected in
a positive manner by the implementation of cost leadership based strategy for different
products that are developed by Procter & Gamble. The company will be able to reach
different customers who are a part of the middle class group with the help of lower priced
products (Wheelen et al. 2017). The growth of number of middle class customers will play a
key role in the ways by which the customer base can be increased.
Conclusion
The report can be concluded by stating that Procter & Gamble has been able to
develop a position in the consumer goods based industry with the help of its products that are
priced according to the needs of consumers. The use of differentiation strategy has been
useful for the company in some markets, while it has not proved to be effective in some other
areas. The organization thereby needs to implement cost leadership strategy on a larger scale
in order to increase the levels of profits. The implementation of cost leadership strategy on a
larger scale will have a major impact on the prices that are set for the products. This will play
a major role in the ways by which the organization can ensure high levels of growth in
different countries and markets.

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References
Andersen, T.J. and Andersson, U., 2017. Multinational Corporate Strategy-Making:
Integrating International Business and Strategic Management. In The Responsive Global
Organization: New Insights from Global Strategy and International Business (pp. 13-34).
Emerald Publishing Limited.
Barney, J.B., 2017. Resources, capabilities, core competencies, invisible assets, and
knowledge assets: Label proliferation and theory development in the field of strategic
management. The SMS Blackwell handbook of organizational capabilities, pp.422-426.
Doz, Y.L., 2017. Strategic management in multinational companies. In International
Business (pp. 229-248). Routledge.
Ethiraj, S.K., Gambardella, A. and Helfat, C.E., 2017. Reviews of strategic management
research. Strategic Management Journal, 38(1), pp.3-3.
Frynas, J.G. and Mellahi, K., 2015. Global strategic management. Oxford University Press,
USA.
Hanson, D., Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2016. Strategic management:
Competitiveness and globalisation. Cengage AU.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2015. Strategic management theory. Cengage
Learning,.
Michael, S., Storey, D. and Thomas, H., 2017. Discovery and coordination in strategic
management and entrepreneurship. Strategic entrepreneurship: Creating a new mindset,
pp.45-65.

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Morschett, D., Schramm-Klein, H. and Zentes, J., 2015. Strategic international
management (pp. 978-3658078836). Springer.
Teece, D.J., 2017. A capability theory of the firm: an economics and (strategic) management
perspective. New Zealand Economic Papers, pp.1-43.
Us.pg.com 2019. P&G brands and products. [online] Us.pg.com. Available at:
https://us.pg.com/brands/ [Accessed 7 Jan. 2019].
Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic
management and business policy. pearson.