Question

QUESTION 1: Advertising is important for most companies, especially companies such as P&G that sells mostly to endcustomers. But, most people already know about P&G products like Charmin bathroom tissue and moist towelettes, Crest toothpaste, and so on. Does P&G really need to constantly put money into advertising when its products already have a strong hold in the global marketplace?

QUESTION 2: P&G is cutting its marketing and advertising agency roster by 50 percent over the past three years from around 6,000 to 3,000 companies in a bid to increase its marketing productivity, efficiency, and effectiveness. At a $9 billion worldwide spend on advertising, should P&G have more or fewer marketing and advertising agencies doing its advertising?

QUESTION 3: By consolidating and cutting 100 brands from its consumer portfolio of brands, does P&G run the risk of ultimately losing out on global market opportunities?

Answer 1

1. Companies like P&G have their customer base consisting on end customers whose choice of toothpaste and towels which can change depending on multiple influencers like cost, other attractive features in competitors, freebies etc. Thus a strong customer focus and reach is essential to even retain the current customer base. Thus these companies need to focus on advertising to remain competitive in the current market atmosphere.

2. The numbers of advertising companies can be appropriately engaged based on cost and effectiveness as long as there are sufficient companies customizing the advertising and marketing efforts for the region in focus. If there are too many agencies running the advertising, the cost could be very high. If the number of agencies are decreased to too low and same advertising efforts are used in different type of demographic regions, the impact and effectiveness of the advertising could be less and not as effective as required. Thus choosing the sufficient number of agencies to reach all the required demographic regions is essential to balance the cost and effectiveness of advertising.

3. Innovation will always be rewarded in the current market atmosphere. If we look at the current market position of P&G, seeing that the they are currently placed in a good position with good presence in multiple products for different customer segments. Thus after studying the market and weighing all the aspects, it could make sense for P&G to consolidate and cut the less profitable businesses.