The Old Spice brand was brought in to this world by the handsome founders of Shulton Inc. way back in
1937, right around the time your grandfather met your grandmother. They’re married now. Coincidence?
We think not. Old Spice was initially only a women’s deodorant; the men’s deodorant, after tedious
performance training and table etiquette lessons, wasn’t released until 1938. It wasn’t until 1990, that
Old Spice was brought under the care of the equally handsome owners of Proctor & Gamble. P&G owns
over 50 brands including some of the world’s most recognizable brands such as Gillette, Duracell, and
Tide.
Proctor and Gamble
Chieftains of Smellf
Headquarter Locale: Cincinnati, Ohio
Founded: 1837
Hub Locations: U.S., Mexico, Brazil, England,
Switzerland, Brussels, China, Singapore, South
Africa
Purpose: “To touch consumers’ lives with brands
that make life a little better every day.”
A.G. Lafley – P&G Chairman of the Board/ President
Werner Geissler – P&G Vice Chairman
Deborah Henretta – Global Beauty Department
President
Below is the financial summary the “Finance Wizards” of Proctor and Gamble have brought
down to us from their Castles of Commerce. You can see that in the last five years, P&G has
increased their earnings by %15.
mounts in millions, except per share amounts
2012
2011
2010
2009
2008
2007
Net Sales
$ 81,104
$ 77,567
$ 75,295
$ 77,714
$ 71,095
$ 83,680
Gross Profit
41,245
40,525
37,644
39,534
36,607
41,289
Operating Income
15,495
15,732
15,188
15,743
14,236
13,292
Net Earnings from Continuing Operations
11,698
10,851
10,645
11,224
9,562
9,317
Net Earnings from Discontinued Operations
229
1,995
2,877
930
847
1,587
Net Earnings attributable to Procter & Gamble
11,797
12,736
13,436
12,075
10,340
10,756
Net Earnings Margin from Continuing Operations
14.4%
14.0%
14.1%
14.4%
13.4%
11.1%
Basic Net Earnings per Common Share (1):
Earnings from continuing operations
Earnings from discontinued operations
$
3.24
0.58
$
4.04
0.08
$
3.63
0.69
$
3.51
0.98
$
3.56
0.30
$
2.95
0.27
Basic Net Earnings per Common Share
Diluted Net Earnings per Common Share (1):
Earnings from continuing operations
Earnings from discontinued operations
3.82
4.12
4.32
4.49
3.86
3.22
3.12
0.54
3.85
0.08
3.47
0.64
3.35
0.91
3.36
0.28
2.79
0.25
Diluted Net Earnings per Common Share
3.66
3.93
4.11
4.26
3.64
3.04
Dividends per Common Share
2.14
1.97
1.80
1.64
1.45
1.28
$ 2,029
9,345
132,244
3,964
21,080
64,035
$ 1,982
9,210
138,354
3,306
22,033
68,001
$ 1,931
8,475
128,172
3,067
21,360
61,439
$ 1,844
7,453
134,833
3,238
20,652
63,382
$ 1,927
8,426
143,992
3,046
23,581
69,784
$ 1,809
7,714
138,014
2,945
23,375
67,012
Research and Development Expense
Advertising Expense
Total Assets
Capital Expenditures
Long-Term Debt
Shareholders' Equity
Source: http://www.sec.gov/Archives/edgar/data/80424/000008042412000063/fy2012financialstatementsf.htm
Below here is a chart depicting the percentage of sales from each segment,
with almost a quarter due to Beauty.
Reportable Segment
% of
% of Net
Net Sales* Earnings*
Beauty
24%
22%
Grooming
10%
16%
Health Care
15%
17%
Fabric Care and
Home Care
Baby Care and
Family Care
32%
26%
19%
19%
Categories
Antiperspirant and Deodorant, Cosmetics, Hair Care, Hair Color, Personal
Cleansing, Prestige Products, Salon Professional, Skin Care
Blades and Razors, Electronic Hair Removal Devices, Hair Care
Appliances, Pre and Post Shave Products
Feminine Care, Gastrointestinal, Incontinence, Rapid Diagnostics,
Respiratory, Toothbrush, Toothpaste, Other Oral Care, Other Personal
Health Care, Vitamins/Minerals/Supplements
Bleach and Laundry Additives, Air Care, Batteries, Dish Care, Fabric
Enhancers, Laundry Detergents, Pet Care, Professional, Surface Care
Baby Wipes, Diapers and Pants, Paper Towels, Tissues, Toilet Paper
There is a constant world-wide struggle; a war raged on every front, in every continent, in every
country, in every college dormitory bathroom. This is of course the War on Smell. Only a select
few have the bravery and the self-confidence to fight the Smell. Only the warriors of Men’s
Beauty and Hygiene products stand between us and total social quarantine. In almost every
retail store, department store, and pharmacy, these warriors stand ready to fight.
Brand Category: Men’s Beauty and Scented Hygiene products
Methods of Distribution: Hygiene and Beauty products (Old Spice included) are sold in
almost every retail and department store around the world.
Major Players: AXE and Right Guard (Unilever)
Seasonal Factors: N/A at present
Regional Factors: Scent may change vary from region to region
Legal Factors: FDA, Drug and Medicine safety testing
Major Trade Organizations: N/A at present
Beauty and Personal Care: Top Global Companies
Proctor and
Gamble
1
1
1
1
1
1
11%
L’Oreal
2
2
2
2
2
2
9.7
Unilever
3
3
3
3
3
3
7.8
ColgatePalmolive Co
4
4
4
4
4
4
3.8
Avon Products
6
7
7
5
5
5
3.2
Newly Added Warriors of Smell:
NEW PRODUCT INTRODUCTIONS: Recently,
Old Spice has launched a new line of “Pure
Sport” products which are targeted toward
heavily active men and male athletes.
NEW PACKAGES: The products feature a
slicker, more simple packaging design.
APPEALS OF NEW PRODUCT: Puts your odor
on 24 hour lockdown. Features a controlled
scent release throughout night and day. Like
one of those scent things you plug into the
wall. Only this “plugs” into your armpits.
2011
2010
2009
huge fireplaces, unpublished manuscripts and
gold-plated hot tubs. Old Spice Classic
envelops you in a clean, manly scent that has
served mankind for decades. And it fights odor
all day, turning your armpit house into an
armpit home.
Decimates odor-causing bacteria without
remorse.”
2008
“Welcome to a home filled with deer heads,
2007
What does Swagger look like?
(Product-form description)
Company
2006
This graph depicts the market share held by the top 5
companies in the Beauty and Personal Care segments.
P&G (Old Spice) has held the top market share for the
past 7 years. Unilever (AXE), Old Spices arch-nemesis,
has consistently held the 3rd spot. The furthest column
to the rights lists each companies market share in
2011.
%
Compa
ny
Share
2011
Store/Point of Sale
Price of Old
Spice Classic
Body Spray
Price of
AXE Anarchy for
Him Bodyspray
Walmart
$3.77
$3.97
CVS
$5.29
$5.99
Walgreens
$4.89
$5.29
Category Share by Region: N/A at present
Fresh News of Freshness
Old Spice: “Old Spice, the "Official Deodorant and Body Wash of the NFL," today
debuted its "Unnecessary Freshness" advertising campaign, which humorously
chronicles the stories of Denver Broncos wide receiver Wes Welker and New England
Patriots linebacker Jerod Mayo being swept away...”
AXE: “Eight students were hospitalized, and two others were taken to their own
doctors, after someone released the especially pungent body spray in a sixth grade
classroom at 1 p.m. Emergency crews rushed to Medgar Evers College Preparatory
School in Brooklyn…”
Demographics:
- Men, age 16-26
- Men looking for relationships,
men with active social lives
- Recently, male athletes
Frequency of Purchase:
- Depending on activity level, men
typically purchase a new
deodorant stick or body wash once
every 1-3 months
Place of Purchase:
-Major retails or
pharmacies.
(Walmart, CVS,
Walgreens, etc)
Purchase Cycle:
- 1-3 months
Loyalty:
- Old Spice users tend to have
high loyalty due to the image
and off-beat culture marketing.
Heavy User Profile:
- Men, age 18 - 26
- Loyal customers who
enjoy the scent and
appreciate the humor
in the marketing and
packaging.
Awareness and Attitude:
- Through an extensive and successful
marketing campaign, the Old Spice
brand is a household name, although
its ads and marketing style alienate it
from an older audience and
individuals who do not appreciate the
humor depicted.
Decision-Makers vs Purchasers:
- On average, the target market are the
decision makers, except in the case of the
younger users, in which case the parents
make the purchase.
Old Spice creative marketing strategies appeal only to those with the most refined of humors and those with the seed of
greatness in them only waiting for Old Spice products to fertilize it. Old Spice uses an off-beat and absurd sense of humor to leave
lasting impressions and appeals to the more masculine side of champions, the side that excels at taming sharks and making harps from
scratch, rather than pandering to more prepubescent lusts and physical urges.
AXE strategies employ more of a direct sex appeal. Its ads and marketing provide more of a message of how AXE
will make women attracted to you.
Right Guard’s creative marketing are more down to earth and feature more celebrity endorsements. Its ads are
targeted primarily toward physically active, older, “serious” men.
Specific Promises: N/A at Present
Appeals Claims: N/A at Present
Old Spice’s Movie Sorceries (Special Effects):
“The Man your Man Could Smell Like” campaign ads
were universally acclaimed and praised at the time
of their release due to their use of practical effect,
complex sets, and utilization of the dark arts; its
“behind the scenes” video garnering almost as much
attention as the commercials themselves.
Evolution of a Champion (Past Executions):
1937
Old Spice
originally
marketed as
women’s beauty
product.
1938
1 year after its
introduction, Old
Spice products
targeted at
older/elder males
1990
Old Spice brand
acquired by
Proctor & Gamble
and aimed at
profitable, young
male segment
Father Smell’s Allowance (Company Ad Spending): 26 million on Old Spice ads in 2012
-By Region: N/A at Present
-By Season: N/A at Present
Media Employed by Top Brands:
-Television
-Radio
-Internet
-Billboards
-Social Media
-Product Placement
Market Share: P&G to cut back on advertising spending Share price currently at 82.37,
the #1 spot in the category.
Promotions Used in Category: N/A at present
Major Brand Promotions:
-Official NFL sponsor promo
-P&G BrandSaver Coupons
Success Rate of Promotions: N/A at Present
Web-Castle: www.oldspice.com
Ecommerce Activities:
- Supply Chain
Mission: To list and make available to all the world our
entire arsenal of smell fighting warriors. Whether they
be used to end world suffering or to return your fatherin-laws ladder he keeps asking you about, we offer
descriptions and details on any product you need.
Internet Civilizations Diplomacy:
-Online order processing
-Internet Marketing
-Online Video Production
(Social Media Activities)
Created: September 29, 2009
Likes: 2.5 Million
Activity: Keeps up brand awareness
through consistent statuses and
promotes events and specials
Created: N/A at Present
Followers: 218,229
Activity: Promotes products and builds
equity through Twitter specific events
entertaining followers.
Created: January 1, 2006
Subscribers: 380,994
Views: 247 million
Activity: Plays ads and
promotions
Personal Interviews: N/A at Present
Additional information can be found at:
http://www.pg.com/en_US/company/global_structure_operations/index.shtml
http://www.sec.gov/Archives/edgar/data/80424/000119312510188769/dex21
.htm
http://www.pginvestor.com/GenPage.aspx?IID=4004124&GKP=209707
In 2012, P&G’s sales from deodorant fell 2%. But, since
acquiring Old Spice in 1990, P&G’s market share price has
increased 90% and does not appear to be verging on a
downward trend. Old Spice’s successful revival was due to a
highly effective repositioning, rebranding, and marketing
campaign. We are still in a time period of introduction to this
new, re-positioned Old Spice, and its rise in brand value is in
large part due to new interest and attention from consumers
due to its off-beat ad campaigns. During 2013, I think this
trend will continue as Old Spice continues to appeal to it
target audience using this marketing technique. But, not too
long after this year, I believe there will be a fading of interest
and jaded feelings toward the brand as a whole unless a new
marketing technique is employed.
Brand
Evaluation
Swag
12 participants aged 20 – 41 were asked to
give 5 deodorant brand a rating on two
different scales. The first scale was on a basis
of “Basic” to “Swag” and the other scale was
on a basis of “Uneffective” to “Fresh.” The
terms of scale were defined in the following
way:
Ineffective
Fresh
Swag – the brand features an appealing
look an style, both in packaging and
marketing.
Fresh – the brand is highly effective at
what it promises to do (i.e. prevent
body odor) and meets expectations.
Ineffective – the brand does not
accomplish what it promises
adequately (i.e. prevent body odor)
and fails to meet expectations.
Basic – the brand’s look and image are
simple and/or unappealing and does
not encompass a certain style
Basic
Conclusion: Old Spice definitely creates an appealing culture
and style with which consumers like to associate themselves.
But, Old Spice was generally rated lower on terms of making
effective products or meeting promises. Brands such as Degree
and Right Guard, with their “clinical strength” products were
rated much higher on the “Fresh” scale.
Q1: What brand deodorant do you Q1: What brand deodorant do you
use?
use?
Q1: What brand deodorant do
you prefer?
A1: Degree for Men
A1: Old Spice
A1: Old Spice
Q2: Why do you use it?
Q2: Why do you use it?
Q2: Why do you use it?
A2: Its cheap. At least, the cheapest A2: I like their commercials. Terry
where I buy deodorant.
Crews is a boss. Plus, it smells good.
Q3: What would cause you to
switch brands?
Q3: What would cause you to switch
brands?
A2: The youtube videos.
Q3: What would cause you to
switch brands?
A3: I would never switch.
A3: A raise in price, or if they
started doing AXE-like ads.
A3: If it became really expensive, or if
their ads started being boring.
Q1: What brand deodorant do you
use?
Q1: What brand deodorant do you
use?
A1: Right Guard
A1: Right Guard
Q2: Why do you use it?
Q2: Why do you use it?
A2: I have really sweaty pits. It’s the
only one that I’ve found works for
me
A2: I like the gel kind. I don’t think
any other brand has a gel deodorant.
Q3: What would cause you to switch
brands?
A3: I suppose if like Axe or Old Spice
made a really strong antiperspirant, I
would buy that.
Q3: What would cause you to switch
brands?
A3: Another brand came out with a
gel stick.
Old Spice’s strength lies in its advertising campaign and culture it has created. It holds high brand
equity and brand awareness and appeals to a very profitable market segment. It offers a variety of
different scents and styles of their deodorant/antiperspirant and body wash products all of which can
be bought within five miles of everyone’s house.
But, Old Spice products do not have a very low appeal to those outside the demographic at which
they are aiming for. Old Spice appeals mostly to young adults who appreciate the “entertainment
value” provided by the brand. People buy Old Spice because the commercials or ads made them laugh
and/or they buy into the image Old Spice sells. Although they have successfully captured the “Axe”
market, Old Spice does not as of now does not capture the audience looking for a strong, more
effective body odor/sweat prevention.
If Old Spice wanted to increase market share, it would have to maintain some of its current image
while releasing products along with marketing designed to appeal to older, “serious” consumers. The
release of a “clinical strength” line of products would be beneficial. Old Spice also holds the
opportunity to embark on a campaign which draws upon its brand history. They could act on an “Old
Spice Classic” campaign, focusing on drawing the interest of older consumers by designing marketing
more reminiscent of its earlier image as a “father’s hygiene” product.
It will be interesting to see where Old Spice chooses to take its brand in the next couple of years as it
already has a reputation for adaptation.