---
title: "Can P&G's Brand Reduction Strategy Succeed?"
description: "P&G, known for its multi-brand strategy with over 200 brands, has been cutting brands in recent years. In China, its sales growth has slowed and market share has declined, raising the question of whether this brand reduction can succeed. The article argues that P&G faces challenges such as brand aging, missing the consumption upgrade, and lack of innovation, making the reduction strategy insufficient to solve its problems."
author: "江品醇"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2017-07-10"
language: "en"
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# Can P&G's Brand Reduction Strategy Succeed?

> P&G, known for its multi-brand strategy with over 200 brands, has been cutting brands in recent years. In China, its sales growth has slowed and market share has declined, raising the question of whether this brand reduction can succeed. The article argues that P&G faces challenges such as brand aging, missing the consumption upgrade, and lack of innovation, making the reduction strategy insufficient to solve its problems.

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As we all know, P&G has always been proud of its multi-brand strategy, with over 200 brands under its umbrella. In recent years, P&G's multi-brand strategy has significantly shrunk. Can P&G's brand reduction succeed?
In China, the daily chemical consumer industry is one of the most competitive markets. P&G and Unilever have almost monopolized the Chinese daily chemical market, leaving local brands unable to compete and forced to focus on niche segments. Recently, with changes in the market and consumers, as well as the impact of e-commerce, P&G's brands have begun to retreat. Since 2011, P&G has not launched any innovative new categories, providing unprecedented strategic opportunities for local brands.
In 2016, P&G's brand predicament began to show. In the Chinese market, sales only grew by 1%, reaching $15.8 billion. In terms of market share by segment, P&G's home care products fell from 7.3% in 2010 to 6.6%; beauty, hair care, and personal care products fell from 15.2% in 2009 to 12.7%. From the above data, P&G's brand sales have been declining year by year. No wonder P&G changed its CEO three times in four years. It is clear that P&G's brand problems are serious.
Of course, P&G is still a brand master. CEO David Taylor finally realized the brand decline issue; if there is no brand innovation and upgrade, it will be defeated by competitors. Therefore, P&G implemented a brand reduction strategy, abandoning more than 100 brands through sales, discontinuation, and elimination. For example, P&G sold off non-core brands such as Pringles, Jif peanut butter, Crisco shortening, and Folgers coffee.
So, can P&G's brand reduction succeed? In the past two years, P&G's transformation has never stopped, from the "pyramid" multi-brand model to focusing on core brand development, from "heavy advertising" to digital marketing, and from "big and comprehensive" promotion to precise investment in segmented markets. However, P&G's performance recovery is not obvious. Why?
In my opinion, P&G's brand reduction is destined to be difficult. From the perspectives of P&G's own brands, changes in consumer demand, and marketing methods, P&G faces internal and external difficulties. The brand reduction alone cannot solve its brand problems. The crux is mainly manifested in the following aspects:
First, P&G faces the problem of brand aging.
In the 1980s, P&G entered China, from shampoo to skincare, from diapers to feminine care, P&G has always been a leader in various industry segments.
In daily life, we are familiar with P&G brands, and we often use their products, such as Head & Shoulders, Pantene, Rejoice, Vidal Sassoon, Olay, Safeguard, Pampers, Whisper, Gillette, Tide, and more than twenty other brands, which are deeply loved by Chinese consumers.
For thirty years, P&G has achieved brilliant results by leveraging its brand advantages. Today, P&G also faces the problem of brand aging. According to the latest sales data, P&G's various segment brands have been declining, facing strong competitors, and the brand aging problem is prominent.
For example, P&G's Head & Shoulders, which sells on the "anti-dandruff" point, faces fierce competition from Unilever's Clear and local brand Lafang. For over twenty years, Head & Shoulders has been on a winning streak, initially with a high-profit, low-cost development model, gradually evolving into a mass consumer brand. Now, Head & Shoulders no longer has a competitive advantage. Whether in terms of price, product efficacy, or consumer loyalty, the target consumers of Head & Shoulders are continuously losing, showing brand fatigue, and there is a "gap" in the subsequent target consumers. Therefore, P&G must rejuvenate its aging brands; otherwise, the brands will dry up.
Second, P&G has derailed from brand consumption upgrade.
With the rise of China's middle class, the demand for mid-to-high-end products is increasing, and consumption upgrade is the general trend. Unfortunately, the high-end market in China has become a blank for P&G.
According to authoritative statistics, in 2016, the number of middle-class people in China will reach 300 million, with total purchasing power reaching 5 trillion yuan. P&G's washing and care products priced at tens of yuan obviously cannot meet the needs of these consumers. P&G has derailed from the brand consumption upgrade.
As P&G's former CEO A.G. Lafley said: "P&G misunderstood China's middle class and got stuck in the middle of the market. Chinese consumers are going more and more upmarket, and we are going down." I think this is indeed the case. During the continuous upgrade and personalization of Chinese consumers, P&G has persisted in the "affordable mass" strategy, causing mid-to-high-end brands to sink and failing to meet consumers' higher demands.
For example, P&G tried to use Head & Shoulders and Pantene to create more high-end series, with the concept of "hair mask," priced at twice the original products. Since the launch of these new products, sales have been minimal. Although P&G wants to rely on the "premiumization" of mid-range brands to win back target consumers, it is difficult to change customer minds, so sales will not improve.
Third, P&G lacks brand innovation drive.
As we all know, P&G has always been known for product innovation, even diversifying brands within the same category, such as hair care brands Pantene, Head & Shoulders, Rejoice, and Vidal Sassoon, which are successful examples of P&G's diversified brand competition.
In the Internet era, with changes in the market and consumers, the drawbacks of P&G's multi-brand strategy have emerged. In the context of brand aging, product innovation will be an important magic weapon for P&G to win the market. Unfortunately, in the past six years, P&G has not launched any entirely new brand, clearly lacking brand innovation drive.
Currently, P&G is using brand reduction to concentrate resources and reduce costs, aiming to achieve profits. This "treating the symptoms, not the root cause" approach means P&G's brand reduction is just a "fashion show." It has not grasped the real crux of brand decline and applied the right remedy; instead, it gives competitors more opportunities.
For example, P&G's laundry detergent line, represented by Tide and Ariel, is collapsing under the impact of local brands like Blue Moon, Liby, and Nice. P&G's hygiene products fortress, represented by Pampers and Whisper, is shaking under the fierce attacks of new brands like Hengan, Kao, and Unicharm. P&G's beauty position, represented by Olay and SK-II, is also retreating under the siege of competitors like L'Oréal and Amorepacific.
As the saying goes, "not advancing is retreating." Over the years, P&G's lack of brand innovation drive has given competitors room to grow. Coupled with frequent CEO changes, resulting in poor execution of brand strategy, P&G has finally reaped what it sowed.
In conclusion, P&G's brand reduction is only the first step in changing itself, let alone whether the brand transformation is successful. P&G's courage to cut off its arm to survive is what makes it a respected brand master, and it is worth studying and learning from.
Introduction: Jiang Pinchun, practical brand expert, researcher at China Brand Research Institute, and final judge for "China 2015 Second Annual Marketing Case Award." He specializes in brand strategic planning, precise positioning, personalized marketing, cultural differentiation, human management, corporate training, project investment, etc., involving dozens of industries such as high-tech, food, electronics, finance, home furnishing, automotive, elderly care, real estate, and the Internet. He has provided professional services to hundreds of enterprises. Welcome cooperation and discussion. Email: 368137964@qq.com.
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