Procter & Gamble`s ‘Double Down’ Strategy during COVID-19 Pandemic
| Case Code: BSTR631
Case Length: 18 Pages
Pub Date: 2022
Teaching Note: Available
Organization : Procter & Gamble
Industry : -
Countries : United States
Themes: Branding Strategy, Consumer Behavior, Advertising & Promotion,Brand Strategy
Abstract Case Intro 1 Case Intro 2 Excerpts
Coronavirus Outbreak, Panic Buying and Stockpiling
Like many other businesses, P&G had to grapple with the COVID-19 pandemic in 2020. In December 2019, a novel strain of corona virus was first detected in Wuhan city in China. While 80 percent% of the people infected with COVID-19 showed mild symptoms such as cold and flu, around 14% displayed symptoms of pneumonia and shortness of breath. Around 5 percent of the patients suffered from septic shock, respiratory failure, and multiple organ failure, according to data released by the Chinese authorities. The virus soon spread to other provinces of China and throughout the world. On March 11, 2020, the World Health Organization declared it a pandemic...
Covid Induced Consumer Behavioural Changes
As fears over worsening of the outbreak were rising, stockpiling in anticipation of an unspecified period of lockdown among shoppers continued. Moreover, fear of stock out also induced panic buying among people in US. Pete Guarraia, Head global supply-chain practice, Bain & Company said, “There is one fear we can alleviate: the idea that America is running out of toilet paper. When everybody forward-buys, then you do create a shortage. Perception becomes reality.”..
Manufacturers’ Response to The Rising Demand
Many shoppers attributed scarcity to the panic buying of products particularly toilet paper. By end of March 2020, more than 70 percent of U.S. grocery stores ran out of toilet paper stock. The shortage likely stemmed from supply chain disruptions. Consequently, leading toilet paper manufacturers such as Kimberly-Clark, Georgia-Pacific, and P&G ramped up production to meet the increased demand..
P&G’s Double Down Strategy
Amid all race for production, P&G’s witnessed a massive surge in its third-quarter financial results, the best US sales in decades. In April 2020, the company reported that its organic sales in US surged 10 percent and global net sales rose about 5 percent to US$17.21 billion. The adjusted earnings per share wasUS$1.17 per share. Analysts, however, predicted sales of US$17.46..
Besides scaling upto meet the consumer demands and the double down bid, another major challenge for the company was to keep the workers safe during the pandemic. P&G released a series of safety protocols to keep workers healthy (Refer Exhibit VI for more details). In addition to requiring them to wear face masks, wash hands and keep 6-feet apart, the company also eliminated in-person meetings and other large gatherings places like the cafeteria, break rooms and locker rooms to prevent close contact with other employees..
Exhibit I: Purpose and Values
Exhibit II: P&G Advertising Expenditure (2015-2020)
Exhibit III: Items in Demand during COVID-19 (As of March 2020)
Exhibit IV: Stockpiling Leading to Rise in P&G’s Organic Sales
Exhibit V: P&G’s Organic Sales January - March Quarter 2020
Exhibit VI: P&G’s Bulletin On COVID-19 Safety Protocols
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