P&G chief: We need new model-now

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Marketing powerhouse Procter & Gamble Co. is set to unleash a torrent of experimental initiatives to replace the mass-marketing techniques it has long relied on. P&G also declared a new company "holiday" to mark the rise of consumer control.

"We need to reinvent the way we market to consumers," said P&G Chairman-CEO A.G. Lafley. "We need a new model. It does not exist. No one else has one yet. But we need to get going now."

His remarks came at Flashpoint, a P&G innovation extravaganza last week that drew 2,000 of its executives from around the world to Covington, Ky.

P&G declared April 23 "Consumer Is Boss Day." The date marks the 20th anniversary of the introduction of New Coke and was chosen in honor of the consumer revolt that undermined that product launch.

At the Flashpoint gathering, Mr. Lafley and Global Marketing Officer Jim Stengel called for 30 to 40 experiments companywide to replace mass marketing-which, ironically, has proved very effective for P&G of late.

Having drubbed many of its rivals, in part through record spending on TV, magazines, coupons and other mass media, P&G is out to change a game it's winning by exploring alternate marketing models.

"Mass marketing isn't dead by any means," Mr. Lafley said. Indeed, if it is, its death rattles have had a mighty kick. Backed by a $5.5 billion global advertising outlay that ranks as P&G's biggest ever and highest as a proportion of sales in at least a decade, the company increased sales 19% in the fiscal year ended June 30, up 8.3% excluding acquisitions or currency impact.

start testing now

"[Mass marketing] still has an important role-and a central role in some developing parts of the world," Mr. Lafley said. "But in markets like the U.S., Western Europe and Japan, we need new models that initially co-exist with mass marketing and eventually succeed it. ... My request-indeed, my expectation-is for all P&G businesses to begin testing alternatives now."

The call for experiments is part of Mr. Lafley's broader jawboning efforts to deter complacency amid recent successes. The greatest threat P&G faces is from executives and agency partners that "continue to do the same things tomorrow that we are doing today," Mr. Stengel said. "This is not just a P&G issue. We see it throughout our industry. But we must lead the way."

Mr. Stengel asked all of P&G's senior business leaders to put aside money in their budgets to fund the experiments. But unlike six years ago, when P&G formed an "Incent" fund to match outlays from brands to develop new interactive marketing models, the brands won't be required to contribute money to a corporate innovation fund. Their efforts and outlays are voluntary-albeit spurred by Mr. Lafley's call to action.

already in the works

"Consumer Is Boss Day" will be used to recognize brand teams that make the most progress toward developing the new marketing models, Mr. Stengel said. It will only take one or two marketing experiments from each of P&G's far-flung business units globally to reach the goal of 30 to 40, he added. And some of the projects are already in the works.

Ted Woehrle, VP-marketing North America, said P&G's "Apollo" project is one the corporate marketing group would likely put forward as a response to the call. The project is a venture with Arbitron and VNU to develop a single-source media measurement system with 30,000 people using portable people meters and tracking their purchases using home scanners (AA, Oct. 4).

Another possibility is a viral marketing program for mothers modeled on P&G's Tremor online community for teens, which will start testing early next year.

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