Procter & Gamble (P&G) Marketing Case Study: Strategies and Challenges

This case study analyzes the marketing strategies of Procter & Gamble (P&G), a leading consumer goods company. It explores P&G's target markets, emphasizing segmentation based on demographics and psychographics, and how the company uses differentiation targeting strategies. The study examines P&G's competitive landscape, including key competitors like Unilever and Colgate-Palmolive, and analyzes its multi-brand portfolio and brand image across social media platforms like YouTube, Facebook, and Twitter. It also addresses the challenges P&G faces, such as market leadership risks, brand dilution, and the need for innovation to stay ahead of competitors. The case study concludes by identifying the risks P&G encounters in the FMCG industry, including competition, government regulations, and supply chain disruptions, highlighting the importance of maintaining market share through effective marketing strategies. The references include relevant sources discussing P&G's segmentation, marketing strategies, and competitive environment.

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Marketing
Case Study: Procter & Gamble (P&G)
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MARKETING 1
Introduction
In business, marketing is essential for companies to create a position within the target
market and a consumer base which is possible by segmentation consisting common
application and needs for relevant products and services. Segmentation is based on the
behavioural, demographic, psychographic, or geographic lines while targeting the market and
its audience (Vizard , 2019). For instance, P&G is one of the largest consumer packaged
goods maker boasting brands of billion-dollar for health and home. The company attains
various opportunities while working in multiple locations developing, succeeding, designing
and growing with its products. P&G is committed towards the ideas of innovation, leadership
and citizenship along with its talented teams helping to grow across the globe ethically and
responsibly. Also, the company is governed to be transparent and open while protecting the
environment and supporting good causes (Albert, 2016). This essay will focus on the
company’s target markets chosen as an example which is Procter & Gamble (P&G) with the
use of segmentation strategies relating to brand management strategies of the company as
well. The discussion will also cover the company’s competitors based on competitive
strategies of product or service along with its portfolio as per P&G strong brand name across
the globe. In this essay, challenges linked with the company being a market leader is also
going to be described along with its social media presence and risks P&G can face in future.
P&G target markets
In developed countries, P&G is a leading player operating within different segments
based on corporate and retail where the target audience is segmented based on generic
demographic variables consisting women of 18 to 49 years old and “smart audiences” using
differentiation targeting strategy for the availability of products to specific customer
(Brunsman, 2019). Thus, the company is categorized into two “Global Business Units”
dividing with business segments consists of grooming, pet care and snacks, beauty, family
home care and baby care, healthcare, and home care and fabric care segment (Morgan, 2015).
The company generate benefits from their different target segments based on the gender
audience where single brand holds multiple positions. The brand strategies used by the
company for positioning is based on psychographics and demographics consisting channels,
products and services, image, and people with product differentiation and unique benefits
(Bryan, 2019).

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Competitors of P&G
P&G has the competitive advantage of strong product line and its market presence in
relation to numerous brands within particular categories of product. Also, the company sells
its products in over 180 countries as per fully owned business units with a successful
distribution network. P&G competitors are Colgate-Palmolive, Unilever and Johnson &
Johnson following multi-brand strategy. The company uses generic strategy of differentiation
for competitive advantage to attract target customers based on the value and quality of
consumer goods (Young, 2018). The competitive strategy for product or service used is of
acquisition along with strengthening its position by making alliance and entering in strategic
agreements based on P&G’s position within the target markets and increasing market share.
The advantages of P&G’s competitive advantage are by the company’s profitability as per
improvement in its gross profit margin efficiently with the impact of higher commodity costs.
The company’s marketing strength where P&G invests almost $5 billion in advertising every
year, and its cash returns with the raise in dividend yield (Kalogeropoulos D. , 2017). The
only disadvantage P&G face is at the time of economic weakness and consumers are forced
to switch towards cheaper options.
Portfolio of P&G
P&G divides its business into five segments globally comprising vast portfolio of
oral, hair, feminine, personal and skin, bay care product, and family lines. The brands of
P&G get a way of moving towards “creative partnerships” aiming to have an editorial instead
of pure tone of promotion in its marketing (Handley, 2019). P&G follows multi-brand
approach as well associated with facing challenges where the brand can be affected. One of
the challenges is scandal of undoing good customer relationships having with other brand’s
customers impacting the company’s market positioning and financial status adversely. Any
minor mistake committed by the company can lead to negative publicity due to consumers’
feedback. There is an issue of lack of price sensitivity as well which might hampers the
growth of company in long-term. Due to facing such challenges, competitors like Unilever
gains market share significantly while making improvisation in market positioning and
successful innovations along with threatening the market leadership of P&G (Hobbs, 2015).
Thus, this conclude the retailer dependence increment along with brand’s internal
competition, brand dilution, decline in profits within FMCG markets, and giving market
share a priority more than profits.

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Brand image of P&G
P&G includes multiple brands such as Bounce, Gillette, Ace, Pepto, Crest, Bismol,
Pampers, Swiffer, Puffs, Tide, and Old Spice. The company uses several sites of social media
such as YouTube, Facebook and Twitter along with less presence on Google+ and Pinterest.
P&G having the biggest market in China does not use any Chinese sites because of no access
as per the government ban. This requires the company to channel more resources for
achieving enough reach through social media. Also, P&G requires to organise campaigns for
maintaining strong brand names and helping to improve society overall along with
publicising (Kalogeropoulos D. , 2018). Thus, the company need to use marketing tactics
while using such platforms, to make online shopping easier, managing word of mouth online
through social media, to manipulate for disseminate information, and use of extra incentives
to give such as buying points and coupons.
Risks faced by P&G
Under “FMCG (Fast-Moving Consumer Goods)” industry, there is a presence of
tough competition for P&G along with facing multiple risks such as natural calamities,
government regulations, risks associated with stakeholders, and side risk of demand and
supply affecting the company’s way of functioning (Kumar & Goswami, 2019). The
company can also face the risk of cut-throat competition from competitors along with brand
equity risk; there can be presence of legal barriers, performance and relative prices from
unbranded local products, and limited room for growth and expansion. There can be reason of
such risks of association with third party relationships such as distributors, external business
partners, suppliers and contractors (Smith, 2018). Hence, the major risk for P&G in terms of
marketing is to lose its market share based on using strategies and brand names within the
target markets of selected audience.
Conclusion
Conclusively, P&G’s marketing is based on the company’s customer knowledge,
target market by using segmentation strategies, product innovation and quality strategy, and
use of multi-brand strategy along with its extension along with having a strong and sustained
market leadership and aggressive sales force. The company faced multiple challenges as well
with the risk of losing its market share among many others due to its large competitors. But,

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no matter with all the hurdles, P&G maintained its market position and strong brand image
across the globe.

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References
Albert. (2016, April 11). Procter & Gamble’s Company did the segmentation in their powder
laundry detergent field. Retrieved from Deakin Business School:
https://mpk732t12016clusterb.wordpress.com/2016/04/11/procter-gambles-company-
did-the-segmentation-in-their-powder-laundry-detergent-field/
Brunsman, B. (2019, August 8). P&G cuts annual ad spend by $350M as it targets 'smart
audiences'. Retrieved from Bizjournals:
https://www.bizjournals.com/cincinnati/news/2019/08/08/p-g-cuts-annual-ad-spend-
by-350m-as-it-targets.html
Bryan, K. (2019, August 13). P&G Shifts To Propensity Marketing, Leveraging Massive
First-Party Database. Retrieved from Insights:
https://insights.digitalmediasolutions.com/articles/procter-gamble-q4-2019-results
Handley, L. (2019, September 5). P&G moves away from ads and toward TV shows that go
way beyond product placement. Retrieved from CNBC:
https://www.cnbc.com/2019/09/05/pg-moves-away-from-ads-and-toward-creative-
content-partnerships.html
Hobbs, T. (2015, July 29). Three brand challenges that await new P&G boss David Taylor.
Retrieved from Marketing Week: https://www.marketingweek.com/three-brand-
challenges-that-await-new-pg-boss-david-taylor/
Kalogeropoulos, D. (2017, February 13). 3 Ways Procter & Gamble Co. Is Beating the
Competition. Retrieved from The Motley Fool:
https://www.fool.com/investing/2017/02/13/3-ways-procter-gamble-co-is-beating-the-
competitio.aspx
Kalogeropoulos, D. (2018, August 9). How Procter & Gamble Can Overcome Its Biggest
Challenges. Retrieved from The Motley Fool:
https://www.fool.com/investing/2018/08/09/how-procter-gamble-can-overcome-its-
biggest-challe.aspx
Kumar, G., & Goswami, M. (2019). Sustainable supply chain performance, its practice and
impact on barriers to collaboration. International Journal of Productivity and

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Performance Management, 68(8), 1434-1456.
Morgan, P. (2015, July 9). An Overview of Procter & Gamble’s 5 Segments, Product
Categories. Retrieved from Market Realist:
https://marketrealist.com/2015/07/overview-procter-gambles-5-segments-product-
categories/
Smith, R. (2018). Leap: How to Thrive in a World Where Everything Can Be Copied.
Research-Technology Management, 61(6), 56.
Vizard , S. (2019, July 30). P&G shifts from targeting ‘generic demographics’ to ‘smart
audiences’. Retrieved from Marketing Week: https://www.marketingweek.com/pg-
targeting-generic-demographics-to-smart-audiences/
Young, P. (2018). A practice-based model of effective marketing based on an auto-
ethnographical observation of brand management training at Procter & Gamble
(P&G). Marketing Review, 18(3), 243-269.