PROCTER & GAMBLE: Using Marketing Research to Build Brands As of 2011, Procter & Gamble (www.pg.com) delivered products to nearly and answer questions about them. In the process, P&G also collects valuable 4.2 billion consumers in more than 180 countries around the world. Its portfolio marketing research information. of brands included 50 leadership brands that are some of the world's most Social Sometimes new-product plans result from Internet marketing research. well-known household names. Its revenues amounted to $79.57 billion in 2010. Media P&G has discovered that Internet research offers a more representative The company began operations in the United States in 1837 and has continued to feel for consumer reactions, and P&G is leveraging the Internet and expand its global operations. The stated purpose of the company is to "provide social media to understand consumers. This was the case when P&G decided to products and services of superior quality and value that improve the lives of the launch Crest White Strips not on television, but on the Internet. The Crest White world's consumers." Strips product launch was one of the most successful product launches in history. ONLINE VIDEO CASE 9.1 Over time, Procter & Gamble (P&G) has proven to be an innovator in The Pampers brand also presents an example of understanding brand equity; creating brands and understanding consumers by making extensive use of the brand has recently been redefined from one about absorption to one about baby marketing research. Building brands has been a cornerstone of P&G's success. development. Focus groups and surveys revealed that parents are very emotionally The marketers at P&G use marketing research to determine a brand's equity and involved in the development of their babies. This simple but deep change from a then make sure everyone understands it, because it drives every decision made functional equity to a broad emotional one has resulted in a whole different look for about the brand. P&G always thinks about the consumer and why a particular Pampers diapers, a whole different look in the advertising, a different media plan, product is relevant to the consumer. P&G always asks "What is in this for the and a totally new product plan. consumer?" This strategy has served the company well. It believes in catering to P&G is always conducting marketing research to discover new ways to reach the consumer. With that in mind, P&G has spent a tremendous amount of money, out to consumers, sometimes by developing new products and introducing new effort, and innovation on marketing research. product categories. P&G invented disposable diapers, home dry-cleaning, and the A focus group talking about a product is simply not enough; the marketers very popular cleaning tool the Swiffer, which was designed after extensive marketing at P&G dig deeper to try to really understand consumer behaviors. Leonara research. P&G marketing has been innovative and pioneering over the years, and Polonsky, the marketing director at P&G, one would expect the same from it in the future. describes the intensity with which P&G pursues PROCTER & is marketing research efforts. Some of these Conclusion efforts include shopping with consumers and The case presents P&G's strong culture of understanding its consumers by conducting GAMBLE spending several hours in consumers' homes. In fact, Polonsky describes her own experience at marketing research and innovating to meet their needs and desires. P&G, with its long spending time at consumers' homes in Caracas, and rich legacy, has continuously evolved newer ways to connect with its consumers making coffee with them and trying to understand and gain insights into their behavior. P&G has been adept at adopting newer technolo how these consumers think about coffee. This marketing research initiative is an gies, such as the Internet, and leveraging marketing research to enhance its under- innovative approach that puts the consumer at the center of everything P&G standing of its consumers. P&G is constantly using marketing research to solve the does. P&G now thinks much more holistically about the consumer's entire problems of today and to build brands that will continue to be leaders tomorrow. experience related to its brands, and so it pays much more attention, for example, to the in-store experience Questions P&G's basic marketing principles have not changed, but its methods of 1. Discuss the role that marketing research can play in helping P&G build its targeting and identifying consumers have changed to meet the increasingly various brands. complicated consumer base. In the early days, P&G would mass market through 2. P&G is considering further increasing its market share. Define the television and other sources, because this was the most effective strategy at the management-decision problem. time. P&G has changed its key strategy from mass marketing to consumer targeting. 3. Define an appropriate marketing research problem based on the According to Jim Stengel, P&G's Global Marketing director, targeting is the future of management-decision problem you have identified. brand marketing and brand building, because the better a company understands its 4. Formulate an appropriate research design to address the marketing research market the better its marketing will be. problem you have defined. One of the areas that P&G constantly researches is the consumers' 5. Use the Internet to determine the market shares of the major toothpaste in-store experience, viewing it as another way of connecting with consumers and brands for the last calendar year. making their experience better. One of the ways it does this is by partnering with 6. What type of syndicated data will be useful in addressing the marketing retailers to develop in-store experiences to please consumers, which has research problem? become more difficult because consumers have less time and higher 7. Discuss the role of qualitative research in helping P&G to increase its share expectations. of the toothpaste market P&G realizes that it is no longer possible to shout at consumers. It has to 8. P&G has developed a new toothpaste that provides tooth and gum protection talk to them when they want to listen, and it is the consumers who choose the time for 24 hours after each brushing. It would like to determine consumers and the place for this communication. That time and place, today, is increasingly response to this new toothpaste before introducing it in the marketplace. If a becoming the Internet. An excellent example is the Pampers Web site, where survey is to be conducted to determine consumer preferences, which survey caregivers can get helpful parenting information. The Pampers site is P&G's way method should be used and why? of connecting with consumers on their terms. All parents want information about 9. What role can causal research play in helping P&G increase its market share? babies, and Pampers provides information about babies. The Pampers' Web site 10. Illustrate the use of the primary type of scales in measuring consumer is not about selling diapers, but about helping parents understand their babies preferences for toothpaste brands.11. If marketing research to determine consumer preferences for toothpaste References brands were to be conducted in Latin America, how would the research 1. www.pg.com, accessed February 20, 2011. process be different? 12. 2. Chris Isidore, "P&G to Buy Gillette for $57B," http://money.cnn.com/2005/01/ Social Illustrate the use of the primary type of scales in measuring con- 28ews/fortune500/pg_gillette, accessed September 3, 2005. Media sumer preferences for diaper brands in social media. 3. Jack Neff, "Humble Try: P&G's Stengel Studies Tactics of Other Advertisers-and 13. Discuss the ethical issues involved in researching consumer preferences for Moms-in Bid to Boost Marketing Muscle," Advertising Age (February 18, toothpaste brands. 2002): 3