AP Interview: P&G's US leader on growth strategies

AP News
Posted: Sep 30, 2011 11:16 AM
AP Interview: P&G's US leader on growth strategies

While many of Procter & Gamble Co.'s top executives are looking overseas for expansion, Melanie Healey's focus is on growing what already is the consumer products maker's biggest market.

As P&G's North America Group president, part of Healey's job is to build sales for products like Tide detergent, Pampers diapers and Charmin toilet paper in the U.S. That's a challenging task because U.S. customers who face job losses, low wages and higher prices in the down economy have tightened their household budgets.

"I think you can only focus on the things you can control. We grew despite the economic conditions," said Healy, who's been in her role since October 2009. "In the last two years, we've added $1 billion in growth in North America. I think that's good in this environment; I want to do even better going forward."

The U.S., which accounts for about 40 percent of P&G's annual revenue, is not an obvious growth area for the company. For one, P&G estimates that up to 99 percent of U.S. households already use at least one P&G brand.

As a result, there's much more room for growth overseas. Emerging markets such as China, India and Brazil fueled global sales growth that last year climbed 5 percent to $82.6 billion. Meanwhile, sales were nearly flat in the United States, Canada and other developed countries

But Healy said the U.S. is such a big market, it's critical for the company.

"It's still such a big part of the business that it has got to continue growing to fuel the growth for the rest of the world," Healey said. "We have some of our highest market shares in the world here in the U.S., and there's a lot more growth to be had."

Here are excerpts from an interview in which the Brazilian-born Healey, 50, talked about the strategies P&G is using to get that growth:

_ Increase the number of products customers use

Our mantra in North America is `just one more and a healthy core.' If I take the 8 to 9 percent of households in North America that have 10 or 11 P&G brands, what if I got the 8 to 9 percent to 10 to 11 percent or I got that 10 or 11 brands to grow to 12 to 13 brands in those households? That `just one more' is equivalent to about $7 billon in growth.

_ Offer more price tiers

Charmin is a great example of a brand where we've worked very hard to understand the different consumer needs and segments out there, and really understanding how to advertise to each one of them _ Soft, Strong, Basic. We've really nailed down our targets on each one of those products. P&G has come a long way in the last three or four years in terms of ensuring that we have a portfolio that meets the needs of a full spectrum of consumers.

_ Reach the growing Hispanic population

For us, the important thing is we want to play where the growth is. The biggest area we are focusing on is making sure we are designing products that win with Hispanic consumers. The design target for Gain dish (soap) was Hispanics as well as the new Febreze scents (such as "Brazilian Carnaval"and "Hawaiian Aloha"). There are Brandsaver (coupons) that target Hispanics. P&G on Sept. 15 launched a bilingual online site for Hispanic women, called "Orgullosa," offering beauty and household tips, inspirational stories, and product information.

_Put coupons for P&G products inside Tide and Pampers boxes

We have tried to leverage the coupons in a way that builds trial on our innovation and brings in new uses and grows household penetration. What we're doing is using these coupons in a very strategic way and giving consumers who are seeking that value ways to buy into our brands.

_ Emphasize value in marketing

Our focus has to be all about communicating our value, the strength of performance, the value of our innovation. Men want the very best shave, they don't want to stumble out looking bad. Women want the very best possible cream to keep their skin looking great. If it means one less trip to the dentist to whiten my teeth, that's value. In an economy like this, they're going to be tempted by the cheaper stuff if you're not communicating the value of the innovation.


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