Consumer giant changes tack to maintain market leadership

Kenya: For the past twenty years in Kenya, Procter & Gamble’s (P&G) growth strategy has been to innovate and provide consumers with new products that are a class above their competitors.

However with increasing competition and changing consumer consumption habits, P&G is changing its tactics in a bid to significantly improve on its performance in the 2014 fiscal year.

The new strategy will see the company, which produces Pampers diapers, Always Sanitary pads, and Ariel detergent among others, focus on value creation, productivity, operation discipline and strategic investments will be the company’s focus areas as it builds on its fourth quarter results.

Locally, P&G will be up scaling its point of market entry activities through which they first introduce their products to Kenyan consumers. The company will also seek to strengthen and accelerate its productivity and costs savings efforts as a means of value creation to the end consumer.

“Our new tactics will ensure that we win when the consumer chooses our product at the shelf – and the second moment of truth – when the consumer uses the product at home and decides whether to buy it again.  Winning with consumers is a foundation of value creation,” said Ms. Irene Mwathi, Communications Manager.

According to a recent survey by Nielsen data conducted in Kenya, P&G is a market leader in most of the categories its products play in with its leadership brands Pampers and Always. In the diaper category, Pampers holds a 79 per cent market share ahead of its competitors Kimberly Clarks’ and InterConsumer brands.t. In the detergent category, Ariel holds a 23.8 per cent market share a few points behind Unilever’s Omo which has a 30.6 percent share while Always sanitary pads fights off competition from locally produced pads with a 59 per cent market lead.

The change in tactics were introduced with the coming of the ‘new’ P&G’s Chairman and CEO AG Lafley who is accredited for doubling sales and growing P&G’s portfolio of billion-dollar brands from 10 to 23 with a focus on consumer-driven innovation and consistent, reliable, sustainable growth during his tenure from 2000 to 2009.

Ms. Mwathi adds that the company will try and focus more on low and middle class Kenyans consumers with intentions of reallocating some of its savings to make strategic, focused investments in innovation and go-to-market capabilities which are two important sources of P&G’s competitive advantage.  

Last month, P&G announced its fourth quarter results which saw the company reported fiscal year 2013 diluted net earnings per share from continuing operations of $3.86, up 24 percent versus the prior year. Net sales were $84.2 billion, with the Central Eastern Europe Middle East & Africa contributing 15 per cent of the sales. The main sales came from the Fabric and Home care with 32 percent followed by Baby and Family care at 20 per cent of the global sales.