So Procter and Gamble’s CEO David Taylor just got a raise. Even though the company fell short of sales and profit growths. But so what? Whoever said appraisal systems need to be geared for the good of the many, was never a high performer himself. Only fair that if you give more, and bring more to the table, you receive more.
The second thing people disregard is the vision and gumption it requires to head a restructuring of this scale. To truly understand the magnitude, think of it like a Brexit of the marketing world. From 166 to 65 brands. That’s not easy.
Which begs the question – Is P&G’s pursuit to streamline brands having a bearing on it’s growth? Or are it’s investments in research and development taking the toll? The jury’s out.
It sold it’s beauty business to Coty, Duracell to Berkshire Hathaway, pet food business to Mars Inc. Of course, it’s doing other things, like targeting women in Europe online. It gave Iran another shot.
P&G’s year-over-year revenues have dropped every quarter since 2013.
Then there’s Tide Spin, something P&G is terming the “uberization of laundry,” where consumers order laundry pickup & delivery from Tide-branded couriers though a smartphone. Tide Spin is for the new millennial youth snuffling between cities, that dude who likes his apartments with a view (or ones that he can afford in downtown cities), constantly moving to densely populated cosmopolitan and financial capitals of the world where apartments often either come without washers and driers, or with a paid option.
Ok so now let’s talk about the elephant in the room. P&G and Walmart: Neither can live while the other survives? Even a college semester in marketing will be enough to tell you that it was only a matter of time before the student became the master. Before GREAT VALUE posed a threat to national players.
Brands like Clorox that make more than a quarter of it’s revenue from one retailer, need to find alternate streams of revenue or will be doomed.
And in a part of the world where the retailer is king, can big CPG companies really afford to put all their eggs in one basket? Maybe that’s why they’re all trying to circumvent traditional channels and riding on new fads(?) like that of consumer delivery services. Unilever, being the latest to join the bandwagon.
Rethinking products for the millennial economy is key. Especially in the wake of Walmart acquiring online retailer Jet. In an era characterized by the diminishing importance of shelf space as Amazon and it’s dash button and novel ways of marketing and reaching consumers, gathers steam.
As HBS Professor Theodore Levitt puts it “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!”. That’s the first part of the argument that calls for revaluating people’s needs, motivations and desires. We should also do well to remember that it’s been a while since P&G created magic. Well, in the product scene atleast. (Their advertising is a juggernaut that few can stop, blowing us away one Olympics at a time.)
Which brings me to a Henry Ford quote “If I asked people what they wanted, they’d have said faster horses”. Over to you P&G. Come at us with everything you have and dazzle us. We’re waiting.
Then there is obviously the price problem.
Every great value product might be inferior in quality and performance to a P&G product, but the bone of contention is – do consumers feel the incremental price justifies the incremental value?
While the world hopes for another Gillette from the stables of Procter and Gamble, I will leave you with a maxim articulated by former P&G CEO Bob McDonald that will keep ringing in the ears of every P&G product manager
“Promotions may win quarters, innovation wins decades.”
And amen to that.