Dangers of Being a Market Leader in Multiple Categories
Procter & Gamble, famous as P&G, is a multi-brand organization with an extensive product portfolio. The company boast of over 300 brands, which contributes to over one billion US dollars in annual sales. Despite such financial and brand might, the company may face some challenges owing to its multi-brand strategy and being the market leader in the industry. The use of a multi-brand strategy has drawbacks. With such an approach, an effect on one of the brands of the product could have potential hazards on other brands under the company. Furthermore, a scandal with one of its product brands relating to customer experience and ratings could also have negative impacts on the customers' relations on other products of the company. Rao (2019) states that the implication, in this case, is that the company may reduce sales and revenue collection in case there can be a problem with one of the brands under its portfolio.
Being a market leader is critical as it is one of the competitive factors a company needs for its success. However, doing it in so many categories is risky for a company. The success of a company like P&G that uses this particular strategy would depend on the degree to which it will remain relevant in the eyes of the public ( Schill & Lentz, 2017). Being a leader in many categories or market segment means the customers are paying close attention to the products ( Rao, 2019). In this sense, any mistake a company makes while discharging its role would result in negative publicity for the company. Further, the customers’relationship with the product from different categories is also at risk in a situation where the company is leading in many categories. Any mistake on a specific product from one segment could mean a reduction of the sale in other segments due to publicity.
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P&G and Its Brand Equity Growth
Brand equity is the value of the company’s product in the face of the consumer in comparison to the products from the competitors. Brand equity is one of the factors that push a customer to go for a specific brand and ignore others. Numerous paths are available for achieving brand equity ( Jain & Sharma, 2018). However, quality, innovation, differentiation, holistic market activities are strategies P&G uses to create brand equity for its products. The company believes in quality as its priority for most of its products. The nature of employees in the organization underscores the need for quality in the products. For instance, the company has 1000 Ph.D. employees whose purpose is to bring quality to the innovations. Besides, the products’ prices also speak of their quality( Schill& Lentz, 2017). For instance, the P&G pricing strategy is premium. Premium prices are specific for premium products. Other than quality, P&G prioritizes uniqueness or differentiation. Differentiation is unique strategy organizations use to create uniqueness or distinctiveness among their products, which makes them different from the competitors' products. For this company, differentiation comes alongside the product's uniqueness with taste, color, and sizes ( Rao, 2019). The unique marketing and promotion strategies such as Mr. Clean underscores the differentiation strategy the company prefers for its product to create brand equity for the products.
Further, the company uses its innovative might to create brand equity for the products. With quality workers, the company has a great history with innovation, applying for over 3000 patent rights for its quality products. In this sense, the company’s products in the face of the customers are of quality and innovative purposefully to serve them better than those of the competitors. Jain & Sharma ( 2018) argue that t he use of holistic market strategies to enhance brand equity is also a strategy the company uses to create a lasting impression on the customers’ minds about their products.
References
Jain, A., & Sharma, R. (2018). Flagship and Flanker Brands: Consumer Preference Study of Hindustan Unilever Limited and Procter & Gamble. IUP Journal of Brand Management , 15 (3), 7-22.
Rao, P. P. R. (2019). MARKETING STRATEGIES FOR PHYSICAL GOODS AND SERVICES: A COMPARATIVE STUDY. Global Journal For Research Analysis , 8 (5).
Schill, M. J., & Lentz, D. (2017). The Procter & Gamble Company: Investment in Crest Whitestrips Advanced Seal. Darden Business Publishing Cases .
