P&G’s ‘New Normal’ offer leads to record US sales week

Pur1.pngProcter & Gamble (P&G) is the world’s largest consumer products company, with sales of $80bn.

Its Pur water purification product highlights how Prof Michael Porter’s ‘Shared Value’ concept, highlighted in the blog in January, has the potential to unleash the next wave of global growth.

Pur helps to reduce deaths from diarrhoea in developing countries. And P&G have discovered that giving it away, or supplying it at cost to aid agencies, makes excellent commercial sense.

This ties in with the New Normal mood amongst Western consumers.. They are less focussed on ‘things’ (such as new autos and kitchens), and more interested in values and people issues.

And P&G found they responded very strongly to its initiative to reduce deaths from drinking polluted water. A case study in the Financial Times describes the scale of the change in attitude that is underway:

• A year ago, P&G had the highest US sales week in its 173 year history.
• The reason was that 30 million coupons were redeemed in response to P&G’s offer to donate “a day of safe drinking water” for every coupon.

P&G’s CEO Bob McDonald is no soft touch when it comes to profits. But unsurprisingly, given this boost to sales and revenue, he believes that its Pur activity is “good business, as well as good philanthropy“.

This week, Kellogg’s, the breakfast cereal company, have followed the same path. They are offering to donate 1 million breakfasts to needy US children. Cleverly, they have realised that BabyBoomers (those born between 1946-70), represent an ideal audience for them. As SVP Doug VandenVelde notes, “it’s a generation that grew up eating a lot of cereal.

Incidentally, any blog reader who is on Facebook can also now donate 10 litres of safe drinking water to P&G’s Children’s Safe Drinking Water programme. Simply click through here, and then click the logo on the new Pur Facebook page. P&G say 550k litres have so far been donated.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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