Proctor & Gamble Case Study

15 Pages 3795 Words

e to P&G, not to mention the complete industry. Pricing and promotions of P&G products was influenced by the Nixon political administration’s price controls during the 1970’s. This was an attempt to keep inflation down during this time period6. Chains were highly motivated to forward purchase goods, especially with the price controls, high inflation, and low interests costs. Basically chains were buying, instead of ultimately selling for profit.
Because of these pricing and promotions issues, P&G wanted to transform the channel partner relationship in the 1990’s to a more mutually productive and collaborative effort with their channel partners. By steering towards relationships as opposed to negotiations, P&G hoped to increase market share and reduce channel costs to the ultimate consumer, allowing P&G and the channel partners to reap the benefits.
In the late 1980’s P&G realized their automated information system innovations were dependent on certain systems that did not deliver any value to P&G brand loyal consumers. P&G wanted to eliminate these systems with a redesigned way of how it went to market with the P&G branded consumer goods.
This purchasing strategy for chains did not bode well for P&G. Forward buying varied chain demand. Frequent store promotions varied consumer demand. All this uncertainty in demand obviously created the need for higher P&G inventories, thus increasing manufacturing costs and devaluing P&G brands7.

Key Issues
• P&G needed to make changes in their business process regarding pricing and promotions strategy, via buy-in from the channel retailers to change from the old way of doing business (negotiations) to partnering with P&G to better serve the consumer.
• Conversion from brand management to category managers was a challenge for P&G culture, especially since branding was such an integral role for the past few decades at P&G.
• The success of P&G relied upon improving...