P&G focuses on the long term

Really insightful article about P&G in Ad Age a few days back. Focused on investments they are making now in long-term growth *over the next decade*. A far cry from the recent fascination with instant gratification marketing that seems to have taken hold (at least in much of the press) during “this economy”.

One of the data points cited in the article was a Consumer Edge survey of 1,000 consumers, which found 19% of Tide’s core users have traded down, at least at times, to value brands during the recession. Of them, 81% said they’ll probably stick with value brands after the recession. An example of the significant, permanent share loss possible when branding investments slip – a topic we have discussed on this page previously.

Even Wall Street likes the long-term focus – a rare occurrence at that address. The article notes that “expectations that P&G will pull back on earnings and sales guidance for next year has been sending its stock *up* in recent weeks, because they signal a more aggressive posture for the long term. Were Mr. Lafley next week to reaffirm a commitment to double-digit earnings growth he’s delivered for nearly a decade, some analysts believe the short-term focus could actually disappoint investors and hurt the stock…Deutsche Bank analyst Bill Schmitz says, ‘Share losses are a slippery slope, and we believe management understands nipping it in the bud now is a lot less expensive than trying to take it back later.’”

We couldn’t agree more and while the short-term results of effective Branding are measurable, the full effect will play out over the long term. This is strategic marketing at its best and sets an example others would be wise to follow.

Author: Andy Atherton

I am currently COO at Regher Solar. Complete background on LinkedIn...

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