P&G's Dina Howell on how to integrate shoppers and retailers into the marketing mix
Posted by Unknown at 9:07 PM
Via About.com, I stumbled across an interview with Dina Howell from Proctor & Gamble, on their marketing strategy. P & G, for those that don't know, develops and markets a wide range of consumer-products from hair care to pet nutrition.
Being a producer is very interesting and obviously a very complex position to be in. For instance, you do not have complete control over the product experience, which can be frustrating, if not handled properly. Nevertheless, both producers, retailers, and shoppers have shared interests to make the experience a positive one as possible. The obvious step is thus an increased co-operation between these parties. Ms. Howell outlined several ways in which this is happening at P&G.
I imagine that P&G's methods, as will be outlined in this article, are not the best, nor the only way to improve the shopper-experience. Nevertheless, some interesting core-principles came out of the article, namely the importance of collecting data; the effects of new strategies on the organisation; and how to work with partners in the value chain.
The importance of data
The importance of data
On Tech IT Easy, I wrote a post on the importance of statistics, and similarly everything at P&G is dependant on measuring data, which comes from a number of sources: retail-locations, shoppers, and consumers, in the context of the store (the first), and in the context of home-use (and the second moment of truth), and is instrumental in what Howell calls "commercial innovation"—basically innovation which happens on a marketing-level, as opposed to a product or packaging-level.
Commercial innovation comes from studying shopper-needs closely and adapting products in the sense that they become useful for them. An example mentioned is long-haired people and hair colour. Observation taught P&G that they these types of shoppers tend to buy two packs of hair-colour as one simply doesn't suffice. So a commercial innovation was to sell packs of two's, simple but effective.
The challenge of organisational change
The advantage of understanding the customer-perspective is of course obvious: it leads to leaner and more effective product-strategies. At the same time, it requires a massive organisational dedication, which does not come easy. For one, traditional mass-marketing tactics still work and there is not always the incentive to change. Much of marketing-literature is still focussed on that area of business as well. And, of course, change is costly, requiring resources, human, technological, or otherwise, to be relocated to this purpose only.
Developing co-ordinated strategies
Another challenge as a producer is to overcome the disconnect with consumers, particularly if you're not the one doing the selling, and certainly not the one using it. That requires finding channels that work, by co-operating closely with retailers, and giving them an incentive to co-operate with you. One method of effectively measuring in-store product-performance and designing effective sales-environments is to use a benchmarking system like PRISM, which ties all these parties in the retail value-chain together, and turns the retail store into a medium "compared to television advertising". That brings advantages to both the retailer and the producer, as both can co-design an environment that maximises revenue.
Final thoughts
Final thoughts
The question is of course whether these measures can be applied to other environments as well. It seems to me that new businesses will find it easier, if they design their organisation from the bottom up in a way that performance can be measured and improved on various levels, and which are also compatible with practices of business-partners. Since, so far, much of my thinking comes more from software-design, it is an obvious conclusion. But is it a workable one?
The graph is courtesy of Clickz. Dina Howell is leader of Procter & Gamble’s shopper-marketing strategy and the entirety of the interesting interview with her on these issues can be read at Hub Magazine (pdf).
The graph is courtesy of Clickz. Dina Howell is leader of Procter & Gamble’s shopper-marketing strategy and the entirety of the interesting interview with her on these issues can be read at Hub Magazine (pdf).
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