The recent PR moves of consumer products giant Procter & Gamble Company over the Pampers Dry Max problem says a lot about P & G’s balance sheet in reality. Not many financial experts or even consumer advocates consider this. But, the company’s latest price cutting, accelerating product launches and advertising campaigns are at risk. Worse still, some of these strategies may put customers at risk.
We will not get into the Pampers Dry Max issues so much here, but that campaign does possibly shed light on some larger issues where consumer safety, satisfaction, and current PR strategies are concerned. Hardly anyone considers the internal production impact of such campaigns – the way these pressures affect the whole B2C relationship. Price being of major concern to consumers and companies, in the case of P & G, what we may be seeing are the effects of a gamble on their part – in more ways than one.
Putting the Brakes on Profits
According to a brief report by The Wall Street Journal three weeks ago, P & G initiated a massive marketing campaign to regain ground lost in market share, and probably to recoup losses from 2009. Ellen Byron of the WSJ called it; “one of the most aggressive market-share wars in years.” Aptly so.
Low cost competitors are the target obviously, along with consumer buying trends and etc. So, how does that affect P & G, and their Pampers line? Put is this way, a recall of Pampers Dry Max would put a serious halt to any such campaign – applying the brakes to any profit gleaned by the company. This is the real story. P & G gains are already being affected by normal market fluctuations, along with media negativity over P & G’s handling of the whole “tainted diapers” affair. P & G is desperately trying to turn a lose situation into a win, or at worst a no-loss one. This is not rocket science.
Apparently the primary conduit for P & G’s Pampers line is a large PR firm, Paine PR, which has recently carried out “Mommy Blogger” campaigns aimed at utilizing social media, blogs, and word of mouth to promote the brand. Not the least of these brands is the Pampers Dry Max product. If we look at some of the rhetoric and specifics of this “outreach” it is easy to unravel their current strategies.
Three Pronged Marketing Attack Backfires
Paine plainly reveals their initiatives for the Pampers brand in a case study surrounding what was termed “Pampers Mommy Blogger Day.” The report talks about a Pampers engagement of key Moms at their headquarters in Cincinnati focused on what Paine termed “Building relationships rather than product promotions.” A smart move, if fairly transparent and Machiavellian. They essentially wanted key Moms to “buy into” the proposition that Pampers and P & G are decidedly altruistic towards children basically. One key outcome, and I quote from Paine’s report:
“….Perception shift – from big corporation that creates diapers to a brand that is passionate about babies and invests time and energy to make the best products.”
They convinced these mommies that P & G is passionate about babies, then turned right around and literally cursed parents, minimized and marginalized babies, and began to take what Ad Age’s Jack Neff called “a tougher tone” in his detailed summary of the P & G line. This “tone” is not uncommon for big business these days, as we have seen from BP, the IOC, Toyota, Tylenol, and many others. The PR reasonings behind this tough talk are anyone’s guess.
These are two fold in my opinion. First, the economic situation negates a more relaxed posture (discussed below). Secondly, big business’ view that consumers are growing ever more stupid and unable to show solidarity. Brilliant views on the one hand, inherently short lived on the other. Paine’s and P & G’s recent efforts at engaging hapless moms stand ready now to backfire in their faces. This is why you have not seen the Moms they summoned to headquarters post on their “newfound” confidence in Pampers – they are awaiting the go from Pampers. A syrupy Mommy Blogger post or twenty fawning over Dry Max right now, is just not a good idea.
P & G As a Diaper Factory
The Wall Street news of P & G’s “ramp up” for market share has another arm (or tentacle). Cost cutting. When a manufacturer offers reduced prices, what do you imagine takes place in their production line? Do they just lose some money and give the consumer a great deal? Reduce the margins and give great deals? Reduced production costs and give great deals? Or, all of the above?
P & G are not idiots (expect maybe where the long term is concerned). Everywhere in their production chain, three important things began to happen when this plan went into effect. First, production was increased across the price reduction board. Second, new product launches were accelerated across the board, even where time frames has not been reached (probably). Finally, it is very likely that QC and other departments were not ramped up to meet any of these situations. And, not just QC. For the sake of argument, imagine a line of Dry Max product. Have you ever wondered what happens to what are called “seconds” in the industry? Or, can you envision a line going say, twice as fast, as during development? I can, I used to engineer such production.
For the sake of argument (and we have no way of knowing this yet) what if the Dry Max diapers released with “sprayed or brushed” on chemicals represented product that could be used for the overall production ramp? How many were shipped? What revenue did those represent? Were these boxes and pallets intended for secondary markets like China? We will know all this sooner or later, but for now these are just possible explanations for P & G’s track on this.
Kill the Head and the Snake Dies
Jack Neff’s article at Ad Age is quite brilliant actually. The authors there, if they know anything, they know advertising and marketing. You cannot expect them to jump head long into the consumer end of things. P & G has a huge problem here, and much of the advice is coming from “supposedly” seasoned professionals on brand loyalty, crisis management, and etc. Of course P & G gave Ad Age “a rare, behind the scenes look at the crucial hours of the crisis management campaign.” Ad Age is one of the most respected online expert sites in the world. Prone quite honestly, to be focused on the methods and means, rather than the end of the tape – babies in peril and pissed off moms. But, this is where P & G has made a huge error.
Now P & G’s grand scheme to take over even more market share is in peril because of some apparently crappy diapers. Instead of employing (err I mean approaching) several “friendly” Mommy Bloggers, the company should have flown the loudest of their detractors to headquarters to show them their efforts (if in fact there are any above tougher QC). When you sum all this up, boil it all down, and serve the plate of P & G to the public – you end up with a massive PR game to save money, rescue a campaign, minimize losses, and forget about 2 years from now.
Procter & Gamble is using the same old strategies it always has. They hired some people who “think” they know social media and the “conversation,” set in motion digital campaigns that “should work” – but cannot, and decided to show you, the public, the true face behind the corporate brand – and that face is the same Big Bad Wolf who brought people toxic shock syndrome. Money, the winning or loss thereof, make no mistake about it. No PR campaign operated like this one can negate this actuality.