Procter and Gamble – Corporate branding vs multi-branding

Procter and Gamble (P&G) is the American, fast-moving consumer goods company behind many brands you are likely to have lying around your house: Ariel, Bounty, Pringles and Gillette – just to name a few. These brands are probably familiar to you. Hence, their strategy to date of promoting multiple brands to target different market segments has been highly effective. However, this has hitherto been at that expense of promoting their corporate brand. Thus, P&G have reviewed their promotional mix; now, the company plans to promote their corporation’s environmental credentials through T.V. advertising in the U.K . Their belief is that if consumers perceive P&G to be a green company, then they will actively seek out their brands. This coincides with the lauch of their new environmental sustainability vision.

 

Simply, P&G are moving away from a mutli-brand strategy to a corporate branding strategy. But surely there are advantages and drawbacks of each approach?

Firstly, what has made P&G so successful? As mentioned before, effective multi-branding is the answer. This allows P&G to tailor different features that appeal to different consumers – note in the picture above: they manufacture both Head & Shoulders and Pantene shampoo. As a result of this, the company can take a differentiated approach to marketing. Thus, long-term relationships are developed with customers by closely satisfying their wants and needs with products that have a competitive advantage over their competitors. Although P&G have overcome the most common drawback of using a multi-brand strategy – that each brand may only obtain a small market share – they do suffer from a lack of corporate publicity.

Unlike P&G, Unilever and Reckitt Beckinser, their major competitors ,have already started to promote their corporate brand – as opposed to their products’. Unilever distinctively display their logo on their advertisements; while Reckitt Beckinser has started to raise their corporate publicity among students to highlight the graduate job opportunities they offer. So already P&G are playing catch-up with their micro-environment.

This means that above-the-line promotion is needed, in the form of advertisements, to quickly raise their corporate profile. This would account for the creative advertising, below, which has already been aired in the U.S.

Take note of the ending: although they highlight the relevant product range to Mothers – a key market segment – the main emphasis is on the company, P&G. This is an indication of how they aim to undertake corporate branding in the U.K – sponsorship of the 2012 olympics that emphasises their environemtal sustainability and healthy living ethos. Thus, like how Mothers in the U.S. may seek out products from various P&G product lines, health and environmental concerned consumers in the U.K. will theoretically look out for P&G products.

Moreover, I believe that this corporate branding strategy will provide even more longer-term benefits for P&G, that may not even be a part of their marketing objectives. Namely, as consumers trust and recognise P&G, the more willing they may become to try new brands they launch. For instance, Heinz’s traditional labeling has become synonymous with high-quality food products. This develops deeper consumer relationships. If P&G can achieve a similar brand positioning – in the minds of their consumers – then product development becomes less risky and, therefore, innovation becomes more effective.

However, in order for corporate branding to be a success, the company must have a good reputation – a slightly obvious observation I know. But still, a poor reputation is a major weakness. As such, Kraft Foods – unlike others mentioned so far – are still emphasising their product brands other their corporate identity following the consumer backlash over their unethical behaviour during the takeover of Cadbury Chocolate.

Ultimately, I believe a corporate branding strategy will work for P&G – albeit it being implemented a little late. However, I do not feel that it will be sufficient to promote their apparent environmental considerations; environmental impact varies so much on a product-to-product basis. Hence, each one of their products has different degrees of sustainability – it is the brand of the product that will prevail over the brand of the company on ethical issues. But, more importantly, corporate branding is likely to be a huge success for the P&G in terms of making consumers more receptive to the high-quality innovation that the firm has yet to receive credit for.

© Joshua Blatchford, author of Manifested Marketing and Bitcoin Marketing Consultant 31/12/2010

Leave a comment

8 Comments

  1. Hey, great post!

    I am not sure if what you said about market share in multi-branding strategy is entirely right. I havent seen any research or numbers, but by my guts I can tell that share of people who use Pampers instead of any other brand (which I cant even think of), or Always or Gillette…is huge! So basically what I think that not with all the products they capture a small market-share: some of them obtain quite a percentage. :)

    Also, when you said they were going to move to TV ads, I instantly thought – ohhh, what a shame. If they will only stick to it, not any print or billboards – this way is not effective. Unless you target 50-60 year olds that rely on a TV.

    Oh and I love the ad, haha, what can sell more than kids and sports….

    And…overall I think that its about time they did that, even though they have chosen the easiest and the most cheesy edge: sustainability. But eh, lets see what happens.

    Thanks!

    Reply
  2. Hey

    Thanks for the comment. I am not sure I made the following point clear:

    “Although P&G have overcome the most common drawback of using a multi-brand strategy – that each brand may only obtain a small market share – they do suffer from a lack of corporate publicity.”

    What I meant to say was that using multi-brand strategies can often mean that your product portfolio only captures a small market share. However, this is not the issue with P&G’s strategy. Their problem is that their brands are so well promoted at the expense of their coropration’s reputation. So, P&G is an exception to the rule. :)

    Hope this clears things up!

    All the best
    Josh

    Reply
  1. Pepsico – Environmental Sustainability « Manifested Marketing
  2. Reckitt Benckiser – Cross-branding « Manifested Marketing
  3. Aston Marketing Society Event – Agathe Blanqurt from Shell « Manifested Marketing – Marketing Blog
  4. Apple – An introduction to Marketing Strategy « Manifested Marketing – Marketing Blog
  5. The Co-Operative Group – Brand Repositioning « Manifested Marketing – Marketing Blog
  6. HP, Intel & Nissan – Corporate Celebrity Endorsements | Manifested Marketing - Marketing Blog

Tell me what you think!

%d bloggers like this: