P&G Crafts New Internet Strategy

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Procter & Gamble Co. has crafted a new Internet strategy that envisions its flagship pg.com site as a portal for its 300-odd brands and as a focal point for interaction and trade between manufacturer and consumer.


A key role of the newly relaunched site at www.pg.com is to encourage P&G consumers, shareholders, vendors, and employees and their friends and kin to test and buy new products before they hit store shelves.


"This is not going to be a channel which competes with our traditional channels," said Tom Millikin, spokesman for P&G, Cincinnati. "It helps introduce products so that when it gets to traditional channels, some people are more familiar with the new products, with the new brands, and are more likely to try it."


The sampling feature on the site lists products that are not available yet in retail stores or are just hitting the market. Consumers click on a "Try & Buy New Products" tab on pg.com's home page. Once clicked, they are exposed to an array of offerings.


Currently, the site sells and offers free samples of Crisco Cooksmart, Olay Complete Radiance, Pert Plus, Crest Whitestrips and Folgers Latte. It also offers More Than a Card, a feature that allows consumers to buy an assorted hamper of P&G products for less than $25.


Another feature is the "Help Create New Products" section, which encourages consumers to share ideas with P&G to improve brands or create new products.


"We want to wrap bytes around the atoms of our products -- that's what pg.com is all about," said Greg Icenhower, associate director of corporate digital branding at P&G.


While P&G is clearly on a mission to gather as much online consumer data as possible, pg.com may not be the best place to do it.


"Do consumers go to pg.com to find information about Cover Girl or Pampers, or Tide?" said Barrett Ladd, retail analyst at Gomez Advisors, Lincoln, MA. "Consumers identify with the brand rather than the company." Indeed, many of P&G's brands already have Web sites.


Meanwhile, pg.com has sections devoted to family care, household care and personal care, plus corporate information. But the focus on direct interaction with consumers for a consumer goods marketer of such magnitude is unprecedented.


"I think it's just become more consumer focused to provide more consumer-type value to our stakeholder audiences where, in the past, we traditionally focused on corporate-centric information and services," said Todd Borgerson, marketer manager at pg.com.


Support for this new Internet strategy comes straight from the top. A.G. Lafley, P&G's president/CEO, told an annual meeting Oct. 10 that online product tests can be conducted for one-tenth of the cost and in a quarter of the time of traditional methods.


"We think of our new pg.com as the one place where all our brands hang out together," Lafley told shareholders, adding that "this transformation of our company, as we harness the Internet's capability, is one of the major drivers of my confidence in P&G's future."


To wit, P&G is using the Internet to generate product trials for its new Physique hair care line. More than 5 million women have visited the Physique site, and 1 million sampled the product and recommended it to friends through the Club Physique viral marketing e-mail feature.


The new online strategy also recognizes economies of scale for P&G's business-to-business transactions. The company aims to take 50 percent of retail orders on the Internet in the next 12 months. This will result in no-touch orders, which go directly from customers to P&G plants, Lafley said.


P&G has little fear that retailers will resent its direct-to-consumer e-commerce efforts. New products will be sold on pg.com until they achieve mass distribution in the retail market.


"We're not doing some mass selling of Tide here," Millikin said. "We're trying to use this as a tool, say, to introduce Crest Whitestrips, so that when Crest Whitestrips comes off the Internet, then it becomes available through mass means."


Borgerson, Millikin's colleague at P&G, agreed and pointed out that P&G was not selling online products that are in wide distribution in the marketplace. Selling on pg.com basically will create awareness, he said.


"[Retailers] actually like it because we're prepping the markets for when the products get into their traditional channels," Borgerson said.
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