Which concept or concepts related to marketing this company is following, justify your answer
The close analysis of how Procter & Gamble addresses the task of ensuring a high commercial appeal of its line of products in the Arabian FMCG market, allows us to define the Company subdivision’s (Procter & Gamble Gulf FZE) approach to marketing, as such that draws on the ‘societal marketing’ concept of what this activity it ought to be about. According to this concept, the realities of contemporary living presuppose that nowadays, the best way for just about any corporate vendor of goods and services to go about solidifying/expanding its share of the targeted market is adjusting the offered goods/services to be thoroughly consistent with this market’s continually fluctuating demands. The concept’s another crucial provision is that, while trying to remain thoroughly competitive, companies must pay close attention to the ethics-related societal effects of their functioning.
As Laczniak and Murphy noted: “Firms have an unwavering ethical obligation to attend to the claims of affected parties (e.g., employees, customers, suppliers, the host community), insofar as the company negatively influenced or benefited from actions affecting those stakeholders” (287). The ideal state of affairs, in this respect, would be when a company can ensure both: that the chosen marketing strategy does help it to ‘saturate’ the targeted segment of the market, and that the process of this company becoming ever more commercially efficient does have a positive long-term effect on the affiliated society. In light of the above-stated, Procter & Gamble Gulf can be referred to as the actual example that it indeed proves beneficial for a transnational corporation to invest in paying genuine interest to what accounts for the targeted consumers’ lifestyles, on one hand, and in embracing the spirit of corporate social responsibility (CSR), on the other.
The suggestion that Procter & Gamble Gulf is indeed affiliated with the specifically the societal paradigm of marketing can be illustrated, in regards to the following:
- While operating in the Gulf Region, Procter & Gamble never ceased being observant of the cultural and religious specifics of the area’s business environment, which in turn helped the Company to strengthen the integrity of its reputation, as a socially responsible commercial enterprise. To illustrate the validity of this statement, we can refer to the fact that Procter & Gamble Gulf has always been known for its willingness to adjust the advertisement campaigns of the marketed FMCGs to be consistent with the ethical conventions of Islam. For example, according to Bankhar: “Procter and Gamble a multinational company wanted to promote one of their well-known brands, Buitoni Pasta. After its (company’s) acknowledgement of the Saudi conservative culture, it decided to advertise the product using an image of the pasta and catchy slogan, instead of using a woman model” (11). Thus, the Company’s managers do recognize the importance of marketing FMCGs in the manner that is being the least capable of triggering any ethics-related tensions within society – even if this results in reducing sales.
- Procter & Gamble Gulf proved itself thoroughly flexible and creative when it comes to conceiving a particular advertisement-campaign. The validity of this suggestion can be shown, in regards to the instances of this company has been able to fuse Islam with the actual advertisement-message, conveyed by TV commercials: “When Procter & Gamble launched Tide liquid in Arab markets in the 1990s, it decided to use a series of ads showing how easily women could use the product to wash their veils. The company was careful to present the act as an everyday chore without religious overtones” (Mahajan par. 11). Essentially the same can be said about the significance of the fact that it is namely during the time of Hajj to Mecca, that Procter & Gamble Gulf can significantly increase its profits: “P&G promotes just about all its products during the hajj, but those that people can take home as gifts sell best. Perfume sales peak, and small appliances, such as electric razors…” (Mahajan par. 35). The Company’s ability, in this respect, implies the ‘holistic’ essence of its business philosophy – Procter & Gamble strives to take advantage of even the seemingly unfavorable circumstances for marketing, which once again substantiates the rationale for defining its marketing approaches as being clearly ‘societal’.
- While operating in the Arabian Peninsula, Procter & Gamble Gulf made a point in positioning itself fully committed to the provisions of CSR, within the context of how the Company used to go about addressing competitive challenges. The fact that this is indeed being the case can be confirmed, about the Company’s tendency to pay much attention to what account for the societal effects of its presence in the area: “P&G played a pioneering role in developing local industry and national economies across the Peninsula, growing steadily to become one of the region’s biggest investors, exporters and employers… In addition to direct employment, we estimate that our AP operations contribute to creating around 9000 indirect job opportunities in associated services” (“P&G in the Arabian Peninsula” par. 4). The Company’s top-officials are well aware of the fact that nowadays, the extent of a particular organization’s commercial efficiency cannot be discussed outside of what this organization does to contribute to the community’s overall well-being. The same can be said about the significance of the Company’s commitment to ensuring that it conducts its manufacturing operations in agreement with the applicable environmental rules and regulations.
- Procter & Gamble Gulf proceed with investing the ever-larger sums of money into the continual improvement of its line of brand-products: “P&G delivers a consistent stream of innovative products with a balanced combination of disruptive, sustaining and commercial innovations. Some of the examples of its innovative products include Tide PODS, Swiffer, and Crest Whitestrips” (“Procter & Gamble” 8.2.3). By doing it, the Company exposes its marketing strategy as such that is being defined by the ‘sense and respond’ marketing principle. In its turn, this suggests that while trying to increase profits, Procter & Gamble Gulf takes into consideration the challenges of having to ensure the commercial appeal of its products in the ‘post-industrial’ market of FMCG, the dynamics of which are being largely defined by the consumers’ strive to attain self-actualization. This, of course, naturally prompts the Company to apply an additional effort into making sure that in the eyes of the targeted consumers, the ‘perceived value’ of its products appears to be especially high.
Describe the variable used to segment three consumer markets (Look and Beauty, Home, and Health). What type of market segmentation strategy are Procter and Gamble following? For each, relate some specific examples of products tailored to various target markets.
It can be safely suggested that the main qualitative specific about how P&G operates in the Gulf, is that it mainly relies on the demographic and psychographic variables of segmenting the Arabian market of FMCGs – something that can be illustrated, in regards to the marketing approaches of the Company’s ‘Look & Beauty’ and ‘Home & Health’ sub-divisions. For example, due to being concerned with the promotion of cosmetics/personal hygiene products, the former naturally targets middle-class women (in the Gulf countries, the representatives of the middle-class account for 65%-70% of the population). This explains why the market positioning of many of P&G’s feminine products, such as Cover Girl, Herbal Essenes, Vidal Sassoon, Wella, etc., manufactured by the Company’s production-plants in Jeddah and Dammam (Saudi Arabia), cannot be discussed outside of how women tend to perceive the surrounding social reality and their place in it.
That is, the advertisement-campaigns for these products aim to: a) persuade women that, as a result of using the mentioned brand-products, they will appear attractive in the eyes of men – something that in the Gulf countries often remains the only predictor of a woman’s ability to achieve social prominence, b) convince the targeted consumers that the quality of P&G’s ‘look & beauty’ products is indeed higher than that of the Company’s competitors. It is understood, of course, that the outlined marketing-approach, on the part of Procter & Gamble Gulf, correlates perfectly well with the highly emotional workings of a woman’s psyche. There is, however, is even more to it. How these P&G’s products are being promoted also takes into account the psychographic factor of what has always been known about the personality of Arabic women – namely, their acute sense of shyness. This is the reason why the Company’s strategy for marketing its women-oriented products can be defined as being fully compatible with the so-called ‘feminine values’, on one hand, and with the fact that in the Gulf countries it is considered inappropriate exploiting sexually suggestive images for any marketing-related purposes, on the other.
Essentially the same line of logic applies when it comes to discussing the specifics of how the ‘Home & Health’ sub-division goes about defining the segmentation-variables in its market. For example, unlike what is the case with most the P&G-owned brands of laundry detergents, the one branded ‘Bonux’ is being mostly sold in packages with Arabic inscriptions on them.
Given the fact that the overwhelming majority of Saudi women are housewives, entrusted with the duty of household-keeping (doing laundry is the essential part of it), we can speculate that this product is concerned with targeting specifically those female-consumers that are not well-versed in English, which automatically presupposes these women’s association with the lower social classes. This conclusion is consistent with the fact that the ‘Bonux’ line of laundry detergents, sold by P&G in the Gulf countries, has traditionally featured the cheapest prices in the affiliated market-segment. Thus, here we again see that the marketing positioning of ‘Bonux’ products is being simultaneously predetermined by the ‘demographic’ and ‘psychographic’ variables. After all, it is not only that these laundry detergents are women-oriented, but also that the specifics of how the concerned products are being marketed reveal the fact that the designers of the marketing-strategy in question were well aware of how one’s class-status affects his or her existential attitudes and consequently – purchasing choices.
Is the P&G portfolio of brands an advantage or a disadvantage? Assess the pros and cons of operating in so many segments of the market.
There can be only a few doubts that, given the specifics of the Arabian market of FMCGs, the Company’s ownership of the extensive portfolio of 26 brands comes in extremely advantageous, within the context of how Procter & Gamble Gulf goes about striving to ensure its competitiveness. The reason for this has to do with the earlier mentioned fact that the majority of consumers, targeted by the Company, consists of the well-off representatives of the middle class. Consequently, this implies that these consumers are far from being price-sensitive and that they expect FMCGs to be tailored to their exact specifications (often purely subjective). Being able to provide consumers with the opportunity to choose between differently branded but quintessentially the same lines of FMCG products, without having to turn to the products of other companies, helps P&G to address the factor of competition, on the part of its smaller rivals in the market (Neff 34).
Thus, there is indeed a good rationale in referring to P&G’s brand-portfolio in terms of competitive strength: “Comprehensive product portfolio helps the company (P&G) to serve diverse customer needs and preferences and increase its overall sales… Diverse products portfolio coupled with well-known brands help to achieve balanced revenue platform” (“Procter & Gamble” 8.2.1). Moreover, the fact that Procter & Gamble Gulf continues with the policy of acquiring more and more of the world-famous FMCG brands and introducing them to the Peninsula’s residents, benefits the Company in the sense of strengthening its ‘holistic’ integrity. After all, it represents a well-known fact that the measure of just about any company’s functional resilience positively relates to the actual size of its market-share – especially if the factor of demand-volatility in such a market appears to be neglectful.
At the same time, however, there can be no guarantee that the Company’s currently deployed portfolio-policy will prove beneficial in the long run. The reason for this is that there are no objective preconditions to expect that the socio-economic prosperity of the GCC countries (something that makes possible the proliferation of the middle-class in the area) will continue to persist into the indefinite future – quite to the contrary. After all, it does not represent much of a secret that this prosperity came about as a result of the Gulf states being rich in oil, just as we are well aware that this natural resource is not self-renewable. The above-mentioned helps to identify the main con of operating in many segments of the market.
The adoption of this specific policy only proves feasible in the situations when there is a good reason to expect the continued growth of the economy, which in turn makes possible for people to be willing to spend money on purchasing FMCGs that are believed to account for a high ‘perceived value’. However, in the situations when the economy takes a steep dive, the continual deployment of the aggressive brand-diversification policy ceases to make much sense, because the increased price-sensitiveness of consumers leads them to associate the notion of ‘high value’ with the notion of ‘low price’. Given the fact that the political tensions in the area continue to escalate, and the fact that the GCC countries do not enjoy any de facto sovereignty (otherwise, they would not be now deliberately dropping prices for oil – the policy that hurts the economy), it can be predicted with a high degree of certainty that it is only the matter of time before the economy of these countries experiences a dramatic setback. When this happens, P&G in the Gulf will sustain financial losses. However, given the Company’s sheer size, there can be only a few doubts that this will not result in P&G being driven out of the Arabian market of FMCGs altogether.
What kind of positioning strategy should the company adopt for the Caring about home Segment?
When it comes to adopting one or another positioning strategy in the market of FMCGs, it is important to assess the qualitative dynamics within this market and to define the main forces behind them. As it was mentioned earlier, the most important factor to be considered, in this respect, is the overall state of the economy. The second equally important factor is whatever happened to be the objectively predetermined essence of consumerist attitudes, on the part of the targeted buyers. Thirdly, the marketed products’ actual nature should be taken into consideration, as well. In light of this suggestion, the main recommendation as to what should account for the positioning strategy, on the part of the Company in the ‘Caring about home’ segment of the market, can be formulated as follows:
P&G should proceed with the policy of expanding its share of the household-item market in the Arabian Peninsula, which in turn is best accomplished by the mean of purchasing smaller rivals that operate in the same field – something that the Company has been doing up until now. The rationale behind this suggestion has to do with the fact that, as of today, the economies of the GCC states continue to grow, which in turn presupposes the continual increase of the number of consumers that can be potentially targeted, on one hand, and the amplification of their buying power, on the other. The trend in question will inevitably lead towards more and more people associating FMCGs with not only the utilitarian value but with the ‘perceived’ one, as well. Yet, as marketers are being well aware of, it is namely people’s realization that by buying a particular household-item they make a ‘conscious’ choice, which allows them to experience the sensation of emotional satisfaction in the aftermath of having purchased it.
This explains the Company’s practice of shelving differently branded household-products (such as ‘Tide’ and ‘Bonux’ laundry detergents) together – only a few consumers realize the illusionary nature of the ‘choice’ they are being faced with, in this respect. After all, both brands are owned by the same company, which means that essentially the same components have been used for manufacturing these laundry detergents. Because the market of FMCGs in the Gulf leaves only a few chances for the ‘new entrants’ to be able to succeed in gaining a share of it, the proposed strategy indeed makes much sense. Rather than seeking to saturate even further the ‘Caring about home’ market-segment, P&G should strive to solidify and expand its share of it. At the same time, however, the Company may never cease remaining closely observant of the macro-economic situation in the area, to be able to apply adjustments to the proposed strategy, in case the circumstances call for it – just as it was suggested in the paper’s previous sub-chapters.
Critically evaluate the Corporate social initiatives the company pursuing as part of their Sustainability initiatives from Procter and Gamble in the market in the Gulf.
Procter & Gamble Gulf does function in close conjunction with the provisions of CSR, the main of which has to do with the assumption is that by choosing in favor of conducting their operations in the socially responsible (ethical/environmentally friendly) way, companies can contribute towards increasing the rate of these operations’ long-term commercial sustainability. The Company’s range of CSR-activities is indeed rather extensive. For example, ever since it entered the Arabian FMCG market in 1956, P&G continued to position itself as a ‘communally conscious’ commercial enterprise – something that can be illustrated, in regards to the Company’s commitment to participating in different charities.
According to Mahajan: “In 2009… P&G announced that for every pack of Tide White Musk customers purchased during Ramadan, it would donate one garment to a needy family… By the end of Ramadan, P&G and its customers had combined to provide 640,000 garments to needy children” (par. 29). P&G is also known for its commitment towards the cause of protecting the environment: “The Procter & Gamble Company has launched (in 20100 the Supplier Environmental Sustainability Scorecard and rating process, to measure and improve the environmental performance of its key suppliers” (“Procter & Gamble” 10.1). Many of the Company’s TV commercials in the GCC countries do emphasize the fact that P&G conducts its manufacturing activities in an environmentally friendly manner.
Nevertheless, it would be naïve to believe that by presenting itself as a socially responsible company, Procter & Gamble Gulf truly does seek to ensure the long-term sustainability of its operations – just as the concept of CSR presupposes. Rather, the Company acts socially responsible to strengthen its ‘ethically sound’ reputation, which in turn should prove helpful within the context of P&G trying to achieve high sales. That is, the Company’s corporate social initiatives are essentially nothing but part of its PR-strategy – pure and simple. This simply could not be otherwise, because the concept of CSR stands in opposition to the main methodological principles, behind the functioning of a free-market economy. Given the fact that the main purpose of just about any commercial organization is to generate profits, and that it is specifically the short-term commercial objectives that are now being considered the only legitimate ones by most businesses (due to the on-going economic recession), the concept in question appears to be just another neo-liberal myth.
The objective realities of today’s ‘globalized’ living leave only a few doubts that this is indeed being the case: “Social investments are unlikely to pay off in the two to four-year time horizon that public companies, through demands of the stock market, often seem to require… investments in things like the environment or social causes become a luxury” (Doane 25). As of today, the concept of CSR serves mainly the purpose of allowing large businesses to divert people’s attention from the actual issues of substance, within the context of how these businesses operate. In this respect, Procter & Gamble Gulf is no different. At the same time, however, it would be rather inappropriate to refuse to recognize the benefits of the Company’s active stance on social issues in the area – it does contribute to society’s well-being. In the future, Procter & Gamble Gulf is most likely to pursue the same policy of social responsibleness, as yet additional means of increasing the commercial appeal of its products among the consumers that are endowed with much ‘buying power’. This, however, will cease to be the case, as soon as the economies of the Gulf countries enter the phase of recession – a rather likely scenario, given the current geopolitical situation in the world.
Works Cited
Bankhar, Selwa. “Saudi Women in Advertising Agencies in Saudi Arabia and the Gender Roles in the Workplace.” Order No. 1591220 Bowie State University, 2015. Ann Arbor: ProQuest. Web.
Doane, Deborah, and Naomi Abasta-Vilaplana. “The Myth of CSR.” Stanford Social Innovation Review Fall (2005): 22-29. Print.
Laczniak, Gene, and Patrick Murphy. “Stakeholder Theory and Marketing: Moving From a Firm-Centric To a Societal Perspective.” Journal of Public Policy & Marketing 31.2 (2012): 284-292. Print.
Mahajan, Vijay.Understanding the Arab Consumer. 2013. Web.
Neff, Jack. “Change At Procter & Gamble.” Advertising Age 80.15 (2009): 34. Print.
Procter & Gamble Hygiene & Health Care Limited: Consumer Packaged Goods – Company Profile, SWOT & Financial Report. Basingstoke: Progressive Digital Media, 2014. ProQuest. Web.
P&G in the Arabian Peninsula at a Glance. 2015. Web.