Innovation at P&G: AG Lafley’s New Challenge

In early 2014, when consumer goods major Procter and Gamble Co. (P&G) announced its soon-to-be-launched new line of Crest toothpaste aimed at “experiential” customers in unusual flavors such as chocolate, lime and vanilla, some industry observers questioned whether the company was being innovative or whether it was acting out of desperation. This was a far cry from the early 2000s when P&G was considered a poster boy for innovation.

Right from the time of its inception, P&G had given top priority to innovation to gain an edge over its competitors in introducing new-to-the-world product categories. These new-to-the-world categories made it possible for P&G to command a price premium for its products compared to the products sold by its competitors and to reap higher profit margins. Some of its products like ‘Liquid Tide Detergent’ were sold for a 20 percent premium when compared with the private label alternatives sold by retailing companies.