Last week, Procter & Gamble North America finally admitted that,
after only two years, it had ditched one of the most controversial
elements of its Marketing Breakthrough 2000 programme.
Despite troubles in the Far East, P&G is so upbeat about the feelgood
factor in the US that it has abandoned its declared aim of slashing its
marketing spend to 20 per cent from its average 25 per cent. This was a
key tenet of Marketing 2000 and has provoked a great deal of angst among
advertising agencies since its inception in December 1995.
Last week P&G’s headquarters in Cincinnati admitted it had ’disengaged’
from the practice. ’We are still looking for efficiencies but we are not
measuring them in the same strict way,’ one source said.
The reason for this change is clear. Put simply, it is because P&G is
about to bring out some of its most exciting new products in decades -
and it cannot afford to get it wrong.
These include a revolutionary edible fat, for example, that can pass
through the body without contributing calories and a formulation that
will allow people to dry-clean at home using their washing machines.
There is also a reformulated Tide in the pipeline and a new fabric
deodoriser. In fact, some analysts predict that the company will
introduce up to 100 new products over the next few years.
’It’s a happy coincidence, from P&G’s point of view, that it has a lot
of genuinely new products coming through at a time when consumers are
feeling quite receptive to trying out new things,’ John Elston, an
analyst at Panmure Gordon, explains.
This optimism is also backed by P&G. A company spokesman says: ’We’ve
got such a good flow of new brands coming down the pipeline that we want
to support them with as much advertising as possible.’
And that support will be forthcoming, even though sales might not
strictly justify expenditure under the old rules of Marketing 2000. As
P&G puts it: ’With new products, advertising support just has to be