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· Posted on
August 2, 2024

Gillette's owner is feeling the cut as its sales growth slows and their products lose their shine

Procter & Gamble’s brands have been whacked in their fourth quarter sales.

What's the key learning?

  • When a company uses promotions and discounts to get the attention of consumers, it might help volumes but, an over-reliance on this can depreciate the value of the brand.
  • Consumers might start to associate the brand with constant sales, and for some consumers, lower prices may mean lower perceived value in the product.
  • This all means they may wait for the next promotion rather than purchasing at full price.

👉 Background: Procter & Gamble is the company behind Gillette, Oral-B, Vicks Vapor Drops, Pantene, Head and Shoulders… just to name a few. It also used to own Pringles and Kellogg’s as well.

👉 What happened: Procter & Gamble’s brands have been whacked in their fourth quarter sales. While they saw volumes grow by 1%, its net sales fell behind expectations by more than $200 million USD.

👉 What else: With many price conscious consumers, P&G has been forced to run many promotions to woo customers.

What's the key learning?

💡In times of need, retailers often turn to promotions and discounts to boost their sales volumes. While this can be effective in driving short-term sales, it comes at a price.

💡 P&G saw growth in the number of units sold yet their revenue was still down. And too any promotions can risk devaluing the brand too.

💡So P&G needs to balance the short-term benefits of promotions with the long-term health of the brand or otherwise it risks continually chasing the sugar hit of discounts.

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