How P&G Develop Its Brand Equity?

Procter & Gamble Co., also known as P&G, is an American multinational consumer goods company headquartered in Ohio, United States. Over its 175-year history, the firm has consistently created new categories of consumer goods — from the first disposable diaper (Pampers) to the first toothpaste with fluoride (Crest) to the first synthetic laundry detergent (Tide). P&G, as being a really successful company, it pays a great attention to build its brand equity and build products’ loyalty in order to attract customers. So we will discuss some steps that P&G develop its brand equity.


The Importance of Brand Equity

As we know, brand equity is the added value endowed on products and services. It may reflect consumers thinking, feeling, and acting with respect to the brand, as well as in the prices, market share and profitability the brand commands (Kotler, Philip & Keller, 2012). Some market researchers believe that brand equity is one of the factors which can increase the financial value of a brand to the brand owner.

“Price is an element of value, but the real driver of value perception is relative pricing, not absolute pricing, combined with product performance and brand equity,” the Chairman of the Board and Chief Executive Officer, A.G. Lafley, says. Therefore, developing the brand equity plays an important role in marketing for P&G.


The Identified Brand Elements

First P&G choose some brand elements which can be trademarked, identified and differentiate itself from other brands. The brand elements include brand names and slogans. For P&G, it has innovated and launched scores of revolutionary products of superior quality and value, including Ivory soap, Tide laundry detergent, and Crest toothpaste, Pampers, Olay, Pantene and Vicks. These products all have great names. Their names are easily to remember and adapt, including the company name, P&G which is also easily to recall and recognize.


Meanwhile, every brand must have a clear focus. It cannot be applied across multiple products with differing benefits. For instance, the Tide brand, which is about strength, cannot be applied to products which are mild and gentle, such as typical Ivory branded products. Then this is the first step for P&G to build its brand equity and it gives a strong impression to their customers.


The Holistic Marketing Activities

Moreover, P&G designs some holistic marketing activities. P&G creates brand contact with consumers not only through ads but also through some new avenues such as event marketing, sponsorship, public relations and so on. The company uses integrated marketing strategy to expand its brand equity and influence. According to the material, it indicates that P&G has shifted more of its advertising budget to online marketing efforts and social media such as Facebook, Twitter, and blogs (Lehmann & Neslin, 2002). And these holistic marketing activities help P&G infuse stronger and emotional appeals into its communications and create deeper consumer connections.


Leverage the Secondary Associations

Finally, P&G leverage its secondary associations. P&G produces its brands in several sizes and forms. It uses its strong brand names to launch new products with instant recognition and much less advertising outlay. For example, Mr. Clean brand has been extended from house hold cleaner to bathroom cleaner, and even to a carwash system. The main claimed benefit must be consistent with the product, it means that the product must deliver. Tide products must be strong, and Ivory products must be gentle.


In conclusion, it is obviously important for a company to develop its brand equity. The behaviors and activities of P&G are excellent examples for other band to follow. By developing its brand equity, P&G gains thousands of customers and successfully build its loyalty.


Reference List

Chang, P, & Chieng, M. 2006. “Building Consumer-Brand Relationship: A Cross-Cultural Experiential”, Psychology and Marketing, p. 927.

Daniel, Y, & David, M. 2006. “Rediscovering Market Segmentation”, Harvard Business Review, p. 141.

Kotler, Philip, and Kevin L. Keller. 2012, “Marketing Management (14th edition)”, Frenchs Forest, p.108.

Lehmann, D, and Neslin, S. 2002, “A Product-Market-Based Measure of Brand Equity”, Marketing Science Institute, p. 15.



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