Multi-Brand Strategy : A Case Study of P&g

The Key To The Success of

 Multi-brand Strategy:

A Case Study of Procter & Gamble

[pic 1]

Guo Zichen

Course    ：   Academic English for Business[pic 2]

Code     ：   ENGL110048.01     [pic 3]

 Instructor  ：   Prof. Ji Peiying                 [pic 4]

 Date      :    5th January, 2018[pic 5]

Outline

Research question

What is the key to the success of multi-brand strategy?

Thesis statements

Precise brands positioning and the ability of multiple brands operation are the two keys to the success of multi-brand strategy.

• Precise brands positioning requires an enterprise to design its brands portfolio with both differentiation and consistency. These two characteristics can largely ensure the corporate to account for maximal market share by satisfying the needs of different market segments while making full use of its core resources.

• The ability of multi-brand operation generally refers to a company’s ability to encourage resources sharing and healthy competition among its multiple brands. By this means it allows an enterprise to make the utmost of the brands under its name to maximize its profit.

The Key To The Success of

 Multi-brand Strategy:

A Case Study of Procter & Gamble

Rejoice, Head & Shoulders, Pantene and Sassoon, Safeguard, Tide, Pampers and Whisper…All these famous brands of commodities are from Procter & Gamble, the world’s largest consumer products giant. Founded in Cincinnati (a city in United States) in 1837, Procter & Gamble has grown up from a soap workshop to a top-of-fortune 500 company, depending on its constantly updated production technology and its pioneering brand strategies (Dyer, 2006).

Multi-brand strategy refers to the decision of using different brands in order to satisfy the interest of each market segment (Lv & Sun, 2011). In fact, a number of companies, for instance, Sanjiu Group, LI-NING, Younger have chosen multi-brand strategies similarly in an ambition to acquire a higher market share, but frequently hit some headwinds, and ended up with unsatisfied effect (Li, 2014), which leaves people in confusion: What makes Procter & Gamble outstanding in their brand strategy? Or to be more precise, what is the key to a successful multi-brand strategy? It is claimed that the key to the success of multi-brand strategy lies in precise brand positioning and the ability of multi-brand operation.

Precise brands positioning

Precise brand positioning should satisfy at least two essential conditions: brand differentiation and consistency.

Sirgy (1982) and Belk (1988) claimed that consumers tend to use brands which share commonality with their own expected personality and express themselves in a brand personality. These studies imply that even in homogenous product market, the existing or potential needs vary drastically from one consumer to another. It would be difficult for one brand to position itself to match this variation and still maintain a strong brand identity as the saying goes by “you can’t be all things to all people” (David & Anne, 2009). Therefore, by diversifying its brands, a company can fill multiple market positions to maximize relevance to the consumer.

This can be exemplified by Procter & Gamble’s shampoo brands. It is explored that there are diversiform demands for additional functions besides the very traditional single “cleaning”. Hence from 1988 to 1992, Procter & Gamble launched three main different brands Rejoice, Head & Shoulder and Pantene which highlighted different efficacy. Specifically, Rejoice emphasized softness and lustrousness” and Head & Shoulders featured “Anti-dandruff”, while Pantene laid stress on “intensive treatment”. It additionally launched Sassoon which tried to prove “professional salon experience” a few years later after drawing benefit from its multiple brands. It is estimated that those four brands accounted for more than 65% market share in the year of 2006 (Hao, 2010).