Purpose of this post: To provide an analysis of the Product portion of P&Gs Marketing Mix with respect to its line of Health & Wellness Products, in particular, Crest Toothpaste.
Product: Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need (Philip Kotler & Gary Armstrong, Principles of Marketing, 10th Ed. 2004, Pearson Education Inc., Upper Saddle River, NJ, page 276).
Company: Procter & Gamble a Cincinnati, OH based multinational corporation with products in categories as diverse as food for human and animal consumption, household & personal cleaning products, health care and prescription drugs and water purification.
Analysis of P&G with respect to "Product" with the example of Crest (brand) toothpaste.
P&G has been around since 1837 and manufactured candles and soap (2 product lines and thus, a limited marketing mix). By the civil war, P&g was awarded contracts to provide soap & candles to the Union army. This helped to establish the P&G brand name. During the late half of the 19th century and early 20th century P&G began to change its marketing mix by discontinuing candle production due to the invention of the electric light bulb and increasing its emphasis on soap production. By 1890 P&G manufactured 30 different product lines of soap. In so doing, they launched new brands (laundry soap, personal soap, household cleaning soap, shaving soap etc.), engaged in brand and line extensions and developed multibrand strategies to gain fuller market penetration for each product line in their mix.
Crest toothpaste was introduced in 1955. Brand equity is critical to the marketing of convenience products. Since these products are "routine" purchases with low customer involvement, brand equity is what will make or break a purchase opportunity for the manufacturer. In the case of Crest toothpaste, P&G already had strong brand equity among consumers by 1955 but the fact that Crest was the first toothpaste to contain flouride earned it the endorsement of the American Dental Association as an "effective decay-preventive dentifrice that can be of significant value." This distinguishing factor set Crest up as a product leader.
Not overconfident in its market position, P&G devoted substantial resources to continued development of the Crest product line and 25 years later, when other toothpaste manufacturers were all coming into line with the addition of flouride to their products, Crest upped the ante by
the development of a "new cavity fighting system" supported by two clinical trials which renewed Crest's advantage in this market.
From its early development as a simple detrifice, Crest's brand has been extended from just Toothpastes (16 different brands/varieties) to Toothbrushes (14 different brands/varieties), Whitestrips, Night Effects and Pro-Health Rinse (one product each). Through line extensions,(ie., multiple flavors & sizes of toothpaste), multibranding (Spiderman2 Super Action Liquid Gel) and brand extensions (ie., use of Crest toothpaste brand to launch a Crest toothbrush) P&G has virtually "filled every cavity" in the oral healthcare market. P&G has even co-branded (Crest Whitening Plus Scope) with its own products in a different product category to further strengthen Crest brand equity.
Toothpaste is a convenience product which is low priced, widely distributed and demands low customer involvement. In this market, a manufacturer's greatest chance of having a profitable product is to develop such high brand equity that customers purchase their products almost by reflex. With a Corporate Brand value of $107.4 Billion it is difficult to argue against the success of P&G's strategic approach.
P&G has developed the product concept fully in their entire marketing mix. They began by building a solid reputation with two product lines. They lengthened and widened these product lines to the extent which the market would allow through internal development efforts toward continuous product improvement and research and development to create new products . As the company grew, they also added products through acquisitions (Clairol, Wella and Gillette).
While P&G has placed strong emphasis on the Product Concept, they have not suffered undully from Marketing Myopia. This is demonstrated by the fact that they do not hesitate to continually reevaluate their marketing mix and discontinue products that are no longer profitable. This was the case in 1920 when they could not profitably sell candles due to the growth of the market for electric lightbulbs (an industry that was well outside the realm of P&G at the time) and the fact that the soaps P&G produces today are not the same as those produced in the 1800s. This still holds true for today in that this week P&G opted to discontinue its line of online customized cosmetics (Reflect.com)
