Procter & Gamble Announce Change in Marketing Strategy
Global retail giant Procter & Gamble are shifting their marketing strategy from "unsustainable" value giveaways to a more innovative approach.
In a speech at the IGD Convention in London today, Procter & Gamble's UK Managing Director Irwin Lee explained that the business model of boosting sales via promotions is not sustainable because although this tactic might increase sales in the short term, the long term key to success is in innovation and using business intelligence to drive growth.
Lee commented: "As we went through the last five years, I'll tell you the one stat that keeps me awake at night. It's the amount of value given away via ever deepening promotional offers. Our focus is on value creation to complement, if not offset, the over-reliance on unsustainable value give away. There is nothing proprietary in price promotions. We believe promotions win quarters, but true innovation wins decades."
He added: "We believe the consumer should get better value, but by a combination of benefit performance and price, not price alone. When we choose new businesses to enter, we make sure we can add meaningful value. Consumers get better value despite Febreze's premium price."
P&G is now focusing its marketing strategy around combining in-store and online commerce, working more closely with retailers on product campaigns and turning big data into "smart data". Furthermore, they will use real-time marketing on social media platforms and Amazon's Kindle Fire tablet.