175th anniversary of the common business of soap maker and candle maker
The joint venture of soap maker James Gamble and candle maker William Procter became the largest company in the world in 175 years. Procter & Gamble today represents about 300 brands in more than 160 countries around the world. the site decided to trace the history of the company, which is inextricably linked with discoveries in household chemicals.
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The history of Procter & Gamble begins in 1837. It was in this year that candlemaker William Procter met soap maker James Gamble. Soon they began to work together - on August 22, an official contract was concluded. Each contributed $3,596.47 to the common cause.
Already in 1859, the company's sales reached 1 million US dollars. Procter & Gamble had 80 employees at the time.
Interestingly, during Civil War USA 1861-1865 Procter & Gamble received large contracts to supply soap and candles to the northern army.
In 1879, the son of the company's founder, James Noris Gamble, a certified chemist, developed a formula for an inexpensive white soap similar in quality to imported high-quality soap based on olive oil. The soap was named Ivory.
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The national weekly newspaper The Independent first began publishing advertisements for Ivory soap in 1882. It was Harley Procter, William Procter's son, who convinced the partners to spend $11,000 to advertise the soap nationally. It was then that the whole country learned about the purity of Ivory soap and its ability to stay afloat.
In 1915, the company expanded beyond the American market for the first time, building its first production facilities in Canada. The Canadian plant has a staff of 75 people. It produces products under the Ivory and Crisco brands.
In response to the rapidly growing popularity cosmetic soap with fragrances, the company introduced Camay soap to the market in 1926.
It is with the Procter & Gamble company that the common expression “soap opera” is associated. The fact is that in 1933, the radio series “Ma Perkins” was broadcast in America, sponsored by Oxydol washing powder from Procter & Gamble. The popularity of the series leads to the company beginning to sponsor other soap operas. Fans of radio shows become loyal customers of Procter & Gamble products in stores.
At the same time, Dreft appeared - the first synthetic detergent (SMC) for household use. The invention of SMS was the basis for a real revolution in the field of cleaning and detergent technologies.
In 1937, Procter & Gamble celebrates its centenary. The company has sales of US$230 million.
Just 5 months after the advent of television in the United States, P&G placed its first TV ad during a baseball game, an advertisement for Ivory soap.
1946 is the year of the appearance of the “magic laundry detergent” - Tide laundry detergent. Tide's new formula provides best quality washing from all products available on the market. By 1950, Tide's combination of superior quality and reasonable price made it the market leader. detergents.
The first appears in 1955 toothpaste with fluoride Crest, clinical trials which confirms that the paste protects teeth from caries.
In 1956, Procter & Gamble achieved sales of US$1 billion.
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1961 - the year Pampers diapers appeared. A trial run of baby diapers is arriving in stores in Peoria, Illinois. After some improvements, better and cheaper disposable diapers are appearing on the market. Gradually, they are becoming the most convenient way to swaddle babies, replacing traditional gauze diapers.
P&G entered the global coffee market by acquiring the Folgers brand in 1963.
In 1967, Ariel washing powder appeared on the market, which over time became one of the company's leading products among SMS on a global scale.
In 1983, the company launched Always/Whisper, excellent quality women's sanitary pads. After 2 years, the product reaches a leading position in its category.
In 1986, P&G invents the same product for washing and caring for hair - Pert Plus/Rejoice (2-in-1 shampoo and conditioner). This product is quickly becoming the world leader among shampoos.
In 1987, the company expanded its presence in the personal care category in the European market by acquiring the Blend-a-Med and Blendax line of toothpastes.
Two years later, P&G entered the perfume and cosmetics market by acquiring Noxell and its world-famous brands Cover Girl, Noxzema and Clarion. The company's sales reached 20 billion US dollars.
In 1990, the company expanded its presence in the men's personal care market by acquiring the Old Spice brand.
A year later, the acquisition of Max Factor and Beatrix strengthened the company's presence in the global market for cosmetics and luxury perfumes.
In 1991, Procter & Gamble entered the Eastern European market, opening offices in Czechoslovakia, Hungary, Poland and Russia in 1991.
In 1992, P&G introduced Pantene Pro-V to the market. Soon this small brand, acquired as part of Richardson Vicks, becomes the fastest growing shampoo brand in the world.
In 1993, for the first time in the history of the company, more than 50% of sales were made outside the United States.
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The company is expanding its presence in the feminine hygiene products category. In 1997, the Tampax brand was owned by P&G.
In 1999, P&G expanded its portfolio into pet food products by acquiring Iams, a world leader in premium pet food.
In 2001, P&G acquired the Clairol business from Bristol Myers Squibb Co. The Clairol brand is one of the leaders in the global market in the category of hair coloring products.
In 2002, P&G celebrates its 165th anniversary. The company has achieved sales of US$40 billion and has 12 brands in its portfolio with sales of over US$1 billion each. These brands account for more than half of the company's sales and revenue. These include Pampers, Tide, Ariel, Always, Pantene Pro-V, Charmin, Bounty, Iams, Crest, Folgers, Pringles and Downy.
In 2003, P&G acquired a controlling stake in the world leader in the hair care market, Wella AG, which provides P&G with wide representation in the fast-growing segment professional means hair care.
In 2005, Procter & Gamble and Gillette merged. The following have been added to the P&G family of brands: famous brands like Gillette, Braun, Duracell and Oral-B.
History in logos:
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Illustrations courtesy of P&G
Currently, the company's portfolio includes more than 300 brands. Of these, 22 brands have a turnover of more than US$1 billion each (Pampers, Tide, Ariel, Always, Pantene Pro-V, Charmin, Bounty, Iams, Crest, Folgers, Pringles, Downy, Gillette Mach 3, Dawn, Oral-B, Olay, Wella, Actonel, Duracell, Gillette series, Head&Shoulders, Braun). P&G launched Gillette Fusion ProGlide and acquired air freshener brand Ambi Pur. The Ace brand became P&G's twenty-third billionaire brand. Procter & Gamble products are presented in 38 categories of consumer goods. More than 135,000 employees work in 80 countries where P&G has offices.
P&G in Russia
Since its opening, the Russian division of P&G has become one of the most dynamically developing in the global P&G system. Today the company sells more than 70 brands in Russia and has leading market shares in 3/4 of product categories.
P&G became one of the first companies to enter the Russian market after the fall Iron Curtain. In his new book “Procter & Gamble. The path to success in Russia" John Pepper, ex-president of Procter & Gamble, described the development of P&G business in Russia in the difficult 1990s. The author was directly involved in the planning and implementation of the company's entry into the Russian market, he visited Russia several times and, as he repeatedly emphasizes in the book, fell in love with the country, its people and culture.
The official representative office of the Procter & Gamble Company was registered in Moscow in 1991, and a few months later the joint venture Procter & Gamble USSR appeared, in which the St. Petersburg State University and Procter & Gamble EE Inc.
Vidal Sassoon Wash&Go is the company's first product to enter the Russian market. One of the primary tasks at that time was the organization of our own production in Russia, as a result of which the first contacts were established with the Novomoskovskbytkhim plant in Novomoskovsk, Tula region.
Vidal Sassoon Wash&Go
When entering the Russian market, Procter & Gamble decided to rapidly implement a regional rather than country strategy, in contrast to its previous international initiatives. Pursuing a regional penetration strategy, P&G categorized Eastern European regions based on their commercial attractiveness. Moscow and St. Petersburg were included in the most attractive group for the company, along with Czechoslovakia, Hungary and Poland.
In early 1992, just a few weeks after the breakup Soviet Union, P&G opened an office in Moscow. Since the opening of its first representative office, the Russian division of P&G has become one of the most dynamically developing in the global corporation system.
One of the problems that the company faced at the very beginning of its work in Russia was the lack of retail stores and a standard P&G distribution system for goods. To market its products, P&G used open-air markets, where aspiring entrepreneurs sold goods directly on trays, tents or stalls.
Soon sales of P&G products began in Moscow. According to an agreement with P&G, in December 1992, the Novomoskovskbytkhim plant began contract production of detergents. In 1993, sales expanded beyond Moscow and St. Petersburg. P&G wins the investment tender and acquires the first stake in Novomoskovskbytkhim JSC. The production of Wella brand shampoos and balms has begun in Dzerzhinsk.
In 1994, the company's office moved from St. Petersburg to Moscow. By the mid-90s, P&G introduced Russian market 15 brands. In 1997, a new distribution center was built on the territory of the Novomoskovskbytkhim plant. A regional sales office is opened in Yekaterinburg.
In 1998, the investment program in Novomoskovsk was completed. Novomoskovskbytkhim begins production of Ace liquid bleach. A regional sales office is opened in Rostov-on-Don and Novosibirsk. However, P&G was forced to cut production and staff during the 1998 crisis. Despite all the difficulties, the company returned to profitability ten months after the onset of the economic crisis and was able to fully recover by 2000.
Tide or boil
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By the end of the 90s, P&G already owned a controlling stake in the Novomoskovskbytkhim plant. In 2003, an agreement was signed with OJSC Svoboda (Moscow) for the contract production of Camay toilet soap and Safeguard antibacterial soap. By the mid-00s, more than 30 brands were already represented in Russia. The volume of investments in the Russian economy exceeded $150 million, and in 2005 the volume of investments already exceeded $200 million. In 2006, after the merger with Gillette, the Gillette, Duracell, Braun, and Oral-B brands joined the P&G family. The merger of P&G Prestige Beaute with Cosmopolitan Cosmetics in Russia forms a new representative office of P&G Prestige Products Russia.
Last year the company celebrated 20 years of presence on the Russian market.
One of the judges, creative director at BBDO New York, noted: “Looking at this list, you will see that all of these campaigns had a strong voice, position and a client who was willing to go beyond the familiar and tried-and-true. There are a million logical reasons why each of them shouldn't have worked. Fortunately, the right people ignored all these reasons.”
Procter & Gamble's "Thank You Mom" campaign is rooted less in strategy or creativity than in opportunity.
Until the end of P&G CEO Alan G. Lafley's first term in 2009, the company expected to sign a sponsorship deal with the US Olympic Committee for the 2010 Winter Olympics. In previous years, their main competitor, Johnson & Johnson, received most of the sponsorship opportunities. According to Kirk Perry, then in charge of marketing for North American P&G, they had to act quickly and essentially make a decision over the weekend.
Perry and Ed Shirley ex-president groups in North America, eventually convinced Lafley to sign on to the idea. The usually slow and clumsy company made the decision in one weekend, and less than a year later the program was being implemented.
What was the common denominator among a range of brands that ranged from Pampers diapers to Bounty paper towels to Olay skin care products? Moms were their main target consumer. And, in truth, J&J based its Johnson's Baby campaign around a similar concept during Olympic Games 2008 in Beijing - to show appreciation to the mothers of American athletes.
Pressed for time to create a global campaign, Procter & Gamble's head of global marketing and brand development, Mark Pritchard, launched a simultaneous tender for all agencies working for P&G, which was won by Wieden & Kennedy.
What followed was a series of award-winning tear-jerkers in an ever-growing program that went far beyond what P&G - and perhaps anyone else - had ever done for the Olympics, starting with Procter & Gamble bringing together 18 brands for one short message in 2010.
“We've found a lot of times that people feel better about a brand if they know it's P&G,” Pritchard says of the strategy behind the campaign. “And if they know that P&G is responsible for all these brands, they feel better about P&G.”
The 2010 cobbled-together program was followed by an even bigger effort to promote the "Thank Moms" campaign during the 2012 London Olympics, which added $500 million to P&G's sales. In addition to creative awards, the campaign earned Effie Gold and a top spot on the 2013 Ogilvy Advertising Research Foundation Award for research work, based on reactions to Wieden commercials to measure the impact of television advertising. P&G research has shown a consistent increase in brand awareness over the course of a campaign.
By the time of the 2014 Winter Olympics in Sochi, P&G clearly dominated its competitors both in the creative field and in the public consciousness.
P&G and Weiden had four of the most effective commercials during the 2014 games, according to study consumer behavior Ace Metrix. With 25 million views on YouTube between February 7 and 10, 2014, P&G had four times the combined views of the other six Olympic sponsors combined, including Visa and Samsung.
In terms of impact on sales, the results were more mixed. Deutsche Bank data showed P&G's U.S. retail sales fell 1.7% year over year in the four weeks ending August 12, 2012. That's worse than any competitor except Kimberly-Clark Corp.'s performance before and during the 2012 Olympics.
The 2014 Sochi Games' US sales results were better for P&G. During the four weeks ending February 15 (including the first week of the Olympics), sales were down 0.2% with general decline by 2.7% in the household products and personal care products segment. The next four weeks after the end of the Olympics showed P&G sales growth of 0.1%, compared with growth of 0.2% for the entire segment.
Credits
- Agency: Wieden+Kennedy, Portland
- Client: P&G / Olympics
- Director: Alejandro Gonzalez
- Production: Anonymous content
- Creative Director: Karl Lieberman
- Copywriter: Kevin Jones
- Art director: Ollie Watson
- Senior Agency Producer: Erica Madison
- ECD: Mark Fitzloff, Susan Hoffman
- Head of Broadcast: Ben Grielevitz
- EP: Dave Morison, Eric Stern, Jeff Baron
- Head of Production: SueEllen Clare
- Line Producer: Jon Benet
- Cinematographer: Rodrigo Prieto
- First Deputy Director: Javier Soto
If you're going to start advertising disposable diapers, laundry detergents, toothpaste, bleach, soaps, and cleaning products, you'll inevitably have to compete with Procter & Gamble. Their market share for all of these products is at least forty percent, not counting strong positions in the categories of shampoos, coffee, homemade cake mixes, antiperspirants and household hygiene products. They spend $700 million a year on advertising, more than any other company, and their total sales are close to $12 billion a year.
Your chances of winning the competition against such a colossus will increase significantly if you can understand the reasons for their amazing success. So I want to tell you everything that my partner Kenneth Roman was able to find out about their activities.
First of all, Procter & Gamble is incredibly disciplined. Their life credo is careful planning, minimizing risks and firmly adhering to proven principles.
In order to immediately capture the market in a certain region, they first begin to massively distribute free samples of their products to the population. In 1977, their Chairman of the Board of Directors stated: “The largest portion of our initial investments usually represents the cost of widespread product distribution. Only after the consumer has had an initial understanding of the product and is satisfied can the remaining elements of marketing, such as advertising and retail sales, be successfully implemented.”
They never release small quantities of products onto the market until they are confident that the product will be in high demand, and then they try to establish themselves in first place in each of the categories of goods that are in demand among the population. Due to their enormous scale, they always manage to reduce production costs to a minimum, compared to their competitors, which allows them to either receive high profits again, or gives them the opportunity to sell their products at the lowest price.
They often enter the market with more than one product in a given category and quietly allow their two brands to compete with each other - without interfering in the process.
They constantly research the market to accurately gauge consumer sentiment. Here's what Ed Harness, their former Chairman of the Board of Directors, says: “We never stop wondering what's new in the world of consumer products. We study demand and try to be the first to identify new tastes, needs, atmosphere and changes in people’s living habits.”
Most importantly, they always try to create products that are obviously superior to those of their competitors. By constantly communicating with people, conducting tests and surveys, offering more and more free samples, they ensure that their superiority becomes familiar to the consumer. As Harness says, “The key element of successful marketing is the undeniable superiority of the product. If the buyer does not receive clear benefit or benefit from your product, then even the most ingenious advertising or trade policy will not save his fate.”
When Procter & Gamble launches a new brand, they advertise it with what is called a massive attack, and they always support their successful brands with a huge advertising budget - $29 million for Crest, $24 million for High Point,” 19 million for Pampers, 17 million for Tide, and so on.
They research the market extremely consistently and tenaciously - and yet never lose their composure. For six years, they analyzed the success of Folgers coffee in the provinces before starting to distribute it on the East Coast. “Patience,” says their president, “is one of our company’s core values.” They always strive to be right rather than first. Only three products in Procter & Gamble's history have been distributed nationally without first being tested in limited local markets. Two of them subsequently failed to withstand the competition.
My admiration for their advertising principles knows no bounds, in no small part because their principles are very similar to mine. By using scientific research they determine the most effective strategy, which they then never change if it has already proven successful. Their marketing strategy in relation to Tide, Crest, Zest and Ivory Bar has not changed over the past thirty years.
They always promise the consumer one big benefit from each product. If they conclude that they can increase sales by promising people more than one benefit, they sometimes launch two simultaneous advertising campaigns—sometimes even through the same media.
They believe that advertising should primarily inform effectively, rather than sparkle with originality or entertain, and therefore they measure the level of this effectiveness at three stages: before the advertising script is written, after the commercial is finished, and during its appearance in limited testing. market sectors. However, unlike me, they do not believe that testing can change the level of consumer “persuasion.”
All of their TV commercials have an element of “proof.” A housewife appears on the screen, WATCHING HERSELF as “Era” removes greasy stains.
They use demonstrations in 60 percent of all their TV commercials, visually showing viewers how Top Job cleans plumbing fixtures better than bleach, and how Zest leaves no residue on the surface.
Their videos are addressed directly to the consumer, the language and stories are absolutely accessible to common man. If the product is intended for use in the bathroom, they show it in the bathroom, not in the laboratory.
They make incredible efforts to mention their brand name as often as possible, both vocally and visually. Basically, all their brands have short and simple names. They sound from the screen in the first ten seconds, as soon as the commercial begins, and then are repeated at least three more times.
In Procter & Gamble commercials, the promise of benefits to the consumer is spoken out loud and supplemented by on-screen captions. In addition, the video almost always ends with a repetition of the promise. They typically use a lot of words, sometimes over a hundred in a 30-second video.
If Procter & Gamble uses the same recurring character in its commercials to advertise the brand, it is always a little-known actor or actress—in no case a movie star.
Significantly less than half of their videos include an explanation of the “reason why...”. They believe that it is enough for the consumer to show what exactly the product guarantees to them, without having to explain why exactly this happens.
In addition, they often show how the consumer using their products experiences a feeling of emotional satisfaction. For example: “You will really enjoy using Dash.”
They use television techniques that have proven to work - no matter how much advertising agencies try to convince them that they are all yesterday. Characteristic scenes from life, testimonies of satisfied customers and “talking heads” - this is their style.
Up until 1976, Procter & Gamble neglected to use music, but now they use it, although in no more than 10 percent of their commercials. Besides, in Lately they injected a little humor into their advertising.
Despite the fact that all their videos are extremely “intrusive”, they never take risks and do not mention the names of competing brands out loud. They prefer to deal with “other ordinary washing powders.”
Once they create a sample ad campaign that is proven to be effective, they continue to make the most of it. for a long time, often for ten years in a row or even more. However, at the same time they do not stop testing new approaches and tactics for using the already chosen advertising strategy.
Only 30 percent of their primary advertising is broadcast on television during prime time, that is, in the early evening hours. Everything else is distributed equally between daytime hours and the end of broadcasts. Instead of continuing to exclusively use 30-second spots, they are increasingly increasing their length to 45 seconds, based on the idea that an additional 15 seconds allows for better “storytelling” and additional “viewer engagement.”
Almost all Procter & Gamble brands are advertised regularly throughout the year. They found that this method was more effective than so-called “raids” - that is, when a video is shown on TV for six weeks, absent for six weeks, and so on. In addition, in this way they are able to significantly reduce advertising costs.
After competing with Procter & Gamble in various product categories for 30 years, my respect for their advertising strategies is absolute. However, they are not at all as invincible as they seem. They can be beaten, despite all their research and all their experience. Some of their products have flopped in the past, including Teal Cleaning Liquid, Dren Shampoo, Big Top Nut Butter, and Network Wipes.
Their Achilles heel is immutability. They are always extremely predictable. Knowing the enemy's strategy always helps you win the battle.
Of course, the most The best way beat Procter & Gamble to market the BEST PRODUCT. Bell potato chips put Procter & Gamble's Pringles to shame because they simply tasted better. And “Rave” managed to surpass their “Lilt” in less than a year, because this is truly the most best product, also free of bleach.
Finally, I can’t resist adding to all of the above - who do you think, in both cases, was advertising these other products that managed to defeat the generally recognized favorite? Guess it once.
