After years of expansion into areas like pet food and beauty products, Procter & Gamble announced in 2014 that it would cut as many as 100 brands from its arsenal to focus on others, like Tide, that made the company a powerhouse over the decades. The move is part of a strategy to improve the company’s financial performance by doubling down on about 80 brands that generate 95 percent of the profits and 90 percent of sales (P&G to Sell up to 100 Brands to Revive Sales, Cut Costs | Reuters, n.d.). Out of the 180 or so names P&G owns, it counts on only 50 for more than 90 percent of its sales and profits. Those are what it calls its Leadership Brands, the ones that stores want and the ones that resound with consumers. The rest failed to take hold or just have niche followings. They’re taking up too much space on the books with little to no payoff. Meanwhile, P&G’s sales and profit have been sluggish, and its stock price has given investors little to cheer about. That’s why the company is taking the unprecedented step of dumping more than half of its stable of brands. It wants to slim down, become nimbler and focus on the names that make serious money.

P&G to Sell Up to 100 Brands

FILE – This July 9, 2015, file photo, shows signage outside Procter & Gamble corporate headquarters in downtown Cincinnati. Procter & Gamble Co., the maker of such household products like Crest toothpaste, Tide detergent and Charmin toilet paper, reported better-than-expected fiscal fourth-quarter results, Friday, July 28, 2023, that showed consumers’ appetite for its items even as it continued to push up prices. (AP Photo/John Minchillo, File)

Consumers continued to keep spending less five years after the financial crisis, and Procter & Gamble, like other manufacturers, have been under pressure to improve sales and cut costs. There are also fundamental issues that make it harder for P&G to grow in the current environment, including the company’s lack of local manufacturing presence, which has saved competitors like Unilever money on labor and production costs and has pressured P&G’s margins. Some products sold in Brazil, for instance, are made in Europe. As well, the corporate structure where decisions are made, and business is reported, is done so by category, beauty or grooming, instead of geographically focused by region, which is how Colgate operates. P&G’s structure may result in a misunderstanding of local consumer markets and tastes and an inability to be nimble regarding changes and decisions on brands and execution, particularly important for the localized beauty market.

Reference:

P&G to sell up to 100 brands to revive sales, cut costs | Reuters. (n.d.). Retrieved October 20, 2022, from https://www.reuters.com/article/us-procter-gamble-results/pg-to-sell-up-to-100-brands-to-revive-sales-cut-costs-idUSKBN0G13WX20140804

Assessment Description

Find a journal article online about a company that recently added or dropped a product or service, or a company that decided to outsource. In the subject line of your post, include the name of the article that you read. Then, in your initial post, provide a link to the article and a summary followed by your reaction to the article. The summary should be approximately 250 words and the reaction should be approximately 150 words. The summary should describe the major points of the article, and the reaction should demonstrate your interpretation of the article and how you can apply that knowledge. Do not choose an article that one of your classmates has already posted. To participate in follow-up discussion, choose one of the articles that a classmate has posted and provide your own reaction to it.

Please include proper citations in your discussion post. Points will be deducted if proper citations are not used.

Assessment Description

Review Case 8.32 in your textbook. Using the questions provided as a guide, discuss your recommendation(s) regarding what the company should do about the conference. Support your recommendation(s) with calculations based on the data provided.

To participate in follow-up discussion, ask questions and post comments regarding classmates’ posts, or respond to follow-up questions posted by the instructor.

Please include proper citations in your discussion post. Points will be deducted if proper citations are not used.