4.2 Procte & Gamble: Using Marketin ;.

Res arch to Build Brands

As of 2006, Procter & Gamble ( ucts under 300 brands to nearly more than 140 countries around t about 110,000 employees in ap worldwide. Its revenues amounte The company began operations in 856 .pg.com) delivered prodve billion consumers in e world. P&G employed roximately 80 countries to $56.7 billion in 2005. the United States in 1837 and has continued to expand its global operations, recently to Algeria. The stated purpose of the comp . "provide products and services of superior quality an, that improve the lives of the world's consumers." P&G is the number one U.S. maker of househol ucts, with nearly 300 brands in five main categories:

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feminine, and family care; fabric and home e; beauty care; heath care; and food and beverage. P&G als makes, pet food and water filters, and produces the soap ope s Guiding Light and As the World Turns. TwelveofP&G's bands are billiondollar sellers (Always/Whisper, Ariel, B unty, Charmin, Crest, Downy/Lenor, Folgers, lams, P pers, Pantene, Pringles, and Tide). The company purchas hair care giant Clairol (Nice & Easy, Herbal Essences, Aus ie) from BristolMyers Squibb in 2001. The company acqu ed Well a AG in September 2003". On January 28, 2005, P cter & Gamble announced the largest acquisition in its hi ory,agreeing to . buy Gillette in a $57 billion deal that cob ned some of the ! world's top brands. [ Over time Procter & Gamble has prove to be aninnovat tor in creating brands and understanding c sumers by making extensive use of marketing research. B lding brands has .been a cornerstone ofp&G's success. The arketers atP&G undertake. marketing research to determin a brand's equity it, because that '"and then make sure everyone understand ,; drives every decision made about the brand. P&G thinks of marketing in many of same ways that they used to. They have always thought a ut the consumer ;,and why the product would be relevant to t consumer. They ;, believe in catering to the experience of th consumer. Their ~,principles of marketing haven't changed, b their methods of 'targeting and identifying consumers have c ged to meet the increasingly complicated consumer base. n the early days P&G would mass market through television nd other sources because this was effective, at the time. T y have changed their key strategy from mass marketing to c sumer targeting. Marketing research has revealed targetin as the future of brand marketing and brand management. &G believes this es much more than a focus group, and t ey want to spend ime with consumers and understand thei behaviors. Their arket research is so extensive that they en develop new roducts based on research to meet the emands of conumers. P&G's innovative approach puts t consumer at the enter of everything they do. P&G has also ligned their busiess to go along with each brand. They ve integrated all epartments under each brand because the want consumers o think of the brand as a unified entity to provide them ith an integrated experience, I One of the, areas 'that P&G researche constantly is the n-store experience of the consumer. They ee this as another ay of connecting with consumers and m . g their experience better one. One of the ways they enhance is is by partnering ith retailers and developing the in-store e erience to please eir consumers. Pleasing the consumers as become more fficult today because the consumer has I ss time and more pectations. Packaging is also important i conveying ames . ge to the consumer, It is a key challenge b ause labeling has orne more complex and consumers are d anding more. The Internet is also becoming an im ortant marketing search tool for P&G. They have i~crease the services they " , rovide on the Internet in order to reac out to more con.sumers , This has proven effective, and th y have even used the Internet as their sole source for some marketing
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campaigns. They also use the Internet to gain new ideas and share them. throughout the company. , P&G marketing has been innovative and i#QtJeeri~g over the years, and one would expect the saIi1e'fi6rtr'ihefu in'the future. They are constantly Using marketuig'r~search to solve' the problems of today and to build brands that will.continue to be leaders tomorrow. ' " ,,'

Questions 1: Discuss the role

2. 3. 4. S. 6. 7. 8.

9. 10. 11. 12. 13. 14. 15.

that marketing research can play in helping . P&G build its various brands, P&G is considering further increasing its market share, Define the management decision problem. Define an appropriate marketing research problem based on the management decision problem you have identified. Formulate an appropriate research design to address the marketing research problem you have defined. Use the Internet to determine the market shares of the major toothpaste brands for the last calendar year. What type of syndicate data will be useful in addressing the marketing research problem? Discuss the role of qualitative research in helping P&G to increase its share of the toothpaste market. P&G has developed a new toothpaste that provides tooth and gum protection for 24 hours after each brushing. It would like to determine consumers' response to this new toothpaste before introducing it in the marketplace. If a survey is to be conducted to determine consumer, preferences, which survey method should be used and why? What role can causal research play in helping P&G increase its market share? lllustrate the use of the primary type of scales in measuring consumer preferences for toothpaste brands. lllustrate the use of Likert, semantic differential, and Stapel scales in measuring consumer preferences for toothpaste brands. Develop a questionnaire for assessing consumer p:referencesfor toothpaste brands. What sampling plan should be adopted for the survey of question 8? How should the sample size be determined? How would you recruit and train the field workers conducting the survey of question 8? According to the P&G vice' president of marketing, cavity and gum protection, whiteness of teeth, taste, fresh breath, and price are all independent variables that affect the preference for a toothpaste brand, Assume that in a survey, each of the leading toothpaste brands is evaluated on each of the independent variables using a 7-point scale with 1 = poor, and 7 = excellent ' Preference for toothpaste brands is also measmed on a 7-point scale with 1 = not at all preferred, and 7 = greatly preferred. Each respondent rates Crest and three competing toothpaste brands on all the independent variables as well as brand preference. What s~tisticiU technique(s) would you use to answer the, following questions: a. Is brand preference related to each of the independent variabies considered individually? What is the nature of the relationship you expect? b. Is brand preference related to all the independent variables considered simultaneously? c. Do the respondents evaluate the toothpaste more favorably on cavity and gum protection than they do on whitenessof teeth?
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d. The sample isdivided into two groups and users of other brands. Do thes terms of their ratings of Crest.on pric e. The sample is divided into three grou light users of toothpaste. Do the thre of preference for Crest? . f. Can the three groups of heavy, mediu ferentiated in terms of their evaluation gum protection; whiteness of teeth, price, when these variables are consid g. Can the evaluations of Crest and its and gum protection,' whiteness of te and price be represented by a few un h. Can the respondents be divided into groups based on their ratings of Crest i. into how many groups? Discuss the role of MDS in assessin of toothpaste brands.

regular us~s of cres~ two groups differ in . : heavy, medium, and groups differ in termJ

16. What charts would be useful in presenting'

YOUT

result

. and light users be difof Crest on cavity and te, fresh breath, and ed together? . ompetitors on cavity th, taste, fresh breath, dying dimensions? I latively homogeneous the five factors? If so,

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management? 17. If marketing research to determine consumer prefer toothpaste brands were to be conducted in Latin Arne would the research process be different? 18. Discuss the ethical issues involved in researehing co preferences for toothpaste brands.

References
1. www.pg.com, accessed on February 20, 2006. 2. Chris Isidore, "P&G to Buy Gillette for $57B," http://monq.cnn.com/2005/01/28/newslfortune500/pg~i accessed on September 3,2005. 3. Alan Mitchell, "Supermarkets Get the Message,' Times (London) (May 17,2002) (Inside Track): 16. 4. Jack Neff, "Humble Try: P&G's Stengel Studies Other Advertisers-and Moms-in Bid to Boost Muscle," Advertising Age (February 18,2002): 3.
on

Fin Tacti Mark ."

.consumer perception

j. How would you treat missing values,

of the respondents had missing data?

suming that 15 percent