CASE STUDY SOLUTION

Q 1) P&G’s impressive portfolio includes some of the strongest brand names in

the world. What are the some of the challenges and risks associated with being
the market leader in so many companies ?

Ans - P&G adopts a multi-brand approach a portfolio of over 300 brands, with 25
brands making over US$1billion in annual sales in 2012, but it faces many key
challenges. It uses a multi-brand strategy, there are drawbacks: with this multi-brand
strategy, one brand could easily affect another through association. A scandal relating
to another P&G brand could undo all the good customer relationships built by another
brand with a customer. This is potentially disastrous, because if one or more of P&G’s
brands erode significantly, their financial status and market positioning will be
adversely affected.

As the market leader, consumers pay closer attention to the company as such, mistakes
committed by the company would usually gain more negative publicity.

Lack of price sensitivity also hampers the company’s long term growth, since a
growing middle class might not be willing spend on premium household products
despite higher disposable incomes, with cheaper local alternatives available.

Consequently, P&G has lost its customers in developed countries like Europe to
cheaper and equally capable products made by rivals such as Unilever. As such, rivals
have gained significant market share with more successful innovations and improved
their market positioning , threatening P&G’s market leadership. Some of the
Challenges and risks they are facing are –

• Increasing retailer dependence.

• Increasing internal competition within the brand .

• Declining Profits in FMCG markets.

• Brand Dilution.
 • Prioritizing Market shares over profits .

Q 2) With Social Media becoming increasingly important and fewer people

watching traditional commercials on television, what does P&G need to do
to maintain its strong brand images ?
Ans - P&G uses the major social media sites Facebook, Youtube and Twitter. It
has only a minor presence on other sites such as Pinterest and Google+. Also, none
of the Chinese sites are used, despite China being a big market for P&G, and that
the Chinese have no access to the three sites due to government ban. Therefore,
P&G has to channel more resources towards the other major sites such as Google
+ as Chinese sites in order to achieve enough reach.

• Marketing tactics using platforms like Facebook, Google etc.

• Online shopping must be made easier.

• Social media should manage online word of mouth.

• Online platform should be manipulated to disseminate information.

• Extra incentives like coupons, buying points should be given etc.

Q 3 ) What Risks do u feel P&G will face going forward ?

Ans – The risks P&G will face going forward are –

In my opinion, P&G should be aware about its mature products in largely mature
markets.
 Procter & Gambler’s portfolio is diverse, but filled with products in mature
categories.

In addition, the company’s core brands are all category leaders, with material market
share and impressive sales. Very often the categories in which it operates are
growing slowly, it at all, leaving market share gains as ten times means of increasing
revenues. That is a challenge, since the company competes with large and equally
well-financed companies. Losing market share may be a greater risk than not gaining
market share, since Just maintaining market can be hard when you are number one
in a category.

• Cut throat competition from Nestle, ITC, Hindustan Unilever Limited etc.

• Relative prices & Performance from unbranded local products.

• Risk of Brand Equity.

• Legal Barriers

• Limited room for expansion & growth.