The Fall of Procter and Gamble Company

Procter and Gamble (P&G) company is considered the world's leading company in the provision of consumer products such as Ivory soap, Tide detergent, Crest toothpaste and pamper diapers. P&G Company has done very well in the recent past as compared to other competitors such as Unilever, Colgate-Palmore, and Kimberly-Clark because of its differentiation strategy (Cravens et al., 2003). However, for the past few years, P&G Company has undergone a great loss because its marketing strategy seems not to work efficiently anymore thereby the company has been surpassed by its competitors who seem to be making more profits. There are various reasons why the P&G Company experienced such downfall. However, some recommendations exist to take the company back to its glory.

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In the recent past, the P&G Company strategic position weakened greatly and therefore; the profit margins decreased considerably (Jai et al., 2009). The company lost the market share for key product-country combinations such as beauty in the U.S and oral in China. The company's market strategy no longer worked effectively because of tough economic times and therefore the customers shifted to low-value products offered by other companies such Unilever, Colgate-Palmore or Kimberly-Clarke at a lower price as compared to P&G Company (Jain et al., 2009).

The fall of P&G Company is partly attributed to its internal weaknesses and partly due to external challenges (Cravens et al., 2003). P&G marketing strategy focused on the domestic markets instead of focusing on the growing economies and therefore they were only bound to specific countries which they considered best performing without realizing that most economies especially in Europe were rising and were potential markets for their products. Its competitors considered the market of the growing economies and were able to make more profits. The company also focused on adding minor features to the products instead of inventing new products. During the deep recession of 2009-2009, most US customers, resorted to low-priced products and thus P&G companies lost a lot because of their high pricing (Jain et al., 2009).

To go back to their lost glory, P&G Company can firstly refocus its portfolio and concentrate on the company's 70 to 80 most lucrative product-market combinations contributing over 90% of the company's profit and revenues and expand their its market to the emerging economies. Secondly, the company should implement stringent measures to cut on costs by eliminating all spending that is not directly related to selling.

The strategic position to be pursued by P&G Company is to increase the perceived value of P&G's brands to the customers and at the same time lowering the production costs. To increase P&G strategic profile, the focus should be expanding the market to emerging economies and cut on costs not related to selling. This can be achieved by setting new offices and stores in the various emerging economies and proper planning on capital expenditure. When these are done, profits would greatly increase because of the increased market for the product and reduced expenditure.

References

Cravens, D. W., & Piercy, N. (2003). Strategic marketing (Vol. 8). Boston, MA: McGraw-Hill Irwin.

Jain, S. C., & Haley, G. T. (2009). Marketing planning and strategy. South-Western Publishing Company.