Abstract

Procter & Gamble (P&G) is one of the most well known consumer goods marketing companies in the world. When Alan Lafley became the CEO of P&G in the summer of 2000, things were not looking good. Under his predecessor, Dirk Jager, costs had gone up, volumes stagnated and profit margins had shrunk on P&G's biggest brands like Pampers, Tide, and Crest. The case explains how P&G manage product innovation and how it streamlines the idea generation, test marketing and new product development processes. In the process, P&G has improved its new-product hit rate (the percentage of new entries that deliver a return above the cost of capital) from 70% to 90%.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

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Keywords

Procter & Gamble (P&G), Product innovation, Alan Lafley, Dirk Jager, Pampers, Tide, Product hit rate, Brand management, Crest, Market research, Fabric and home care, Beauty care, Health care, Baby and family care