Breaking Through Normal Purchase Behavior: P&G’s Commitment to Product ‘Superiority’

Procter & Gamble (P&G) has established its presence in the consumer goods industry through deliberate and strategic efforts. According to Chief Financial Officer Andre Schulten, the company’s dedication to achieving “true superiority” has provided its brands with a competitive advantage, shielding them from the impact of private label products.

Schulten recently shared these insights at the Morgan Stanley Global Consumer and Retail Conference, where he highlighted P&G’s focus on product superiority as a driving force behind its brand growth, particularly in the face of private label competition in Europe.

P&G’s strategy revolves around prioritising product quality to disrupt normal consumer purchasing patterns. Schulten emphasised that the company’s absolute volume sales in Europe have been on the rise, even as private label products continue to gain traction in the market.

The deliberate shift towards product superiority reflects P&G’s intention to “reset” its portfolio, increasing the proportion of superior products to an impressive 80% in recent years. This strategic decision was made to counterbalance the potential risk of complacency in certain brands due to an overly high ratio of superior products.

To ensure that its products maintain the highest standard, P&G has tightened the criteria for defining what qualifies as superior in each product category. The company aims to offer products that stand out as significantly better than others in their respective categories, delivering exceptional value to consumers. This commitment to product superiority, alongside investment in innovation, forms the core of P&G’s growth strategy.

In addition to focusing on product quality, P&G has also prioritised efficiency in its marketing expenditure. The company is dedicated to maximising the impact of its savings by channelling a majority of the funds into innovation, go-to-market capabilities, and media. Schulten revealed that P&G is continuously exploring opportunities to enhance the efficiency of its marketing expenditure, with a strong emphasis on achieving a 100% return on investment (ROI) driven approach.

Furthermore, P&G is testing new marketing strategies, such as “dual track marketing”, which involves incorporating “two messages” in media campaigns rather than the traditional single-message approach. The company is also increasing the frequency and reach of its marketing efforts in pursuit of optimal results.

Overall, P&G’s emphasis on product superiority and efficient marketing expenditure positions the company for further growth and success in the marketplace. By consistently delivering superior products and maximising the return on every marketing pound spent, P&G is setting a new standard for excellence in the consumer goods industry.