The Consumer Advocate

Procter & Gamble is “putting the consumer first in everything we do,” says Jim Stengel, global marketing officer for the world’s largest packaged goods company.

Stengel immediately adds that this phrase has become an empty cliché in marketing. But he claims sincerity: “All of our big wins have come when we got that right, and all of our big failures have come when we got that wrong.”

This “customer first” credo is one of three principles that have been guiding the 46-year-old since he ascended to P&G’s top marketing post last August — a spot that puts him, literally, at the top of the marketing world.

As someone who has logged time in four countries during his 18 years at P&G, he’s comfortable with a world view: Marketing innovation can be found around the globe, and “a huge piece of my job is to connect those dots,” he says.

Stengel’s other guiding principles are to “continually hone the craft of marketing” and to “develop the best marketing talent,” goals he considers to be P&G’s legacy.

“We were the first to experiment in radio and print, with branding, and on TV,” he says. “It’s very important for us to be finding different ways to market. We’re big enough that we can experiment.”

With more than 250 brands covering the full spectrum of packaged goods, P&G has endless opportunities to experiment — and no corporate-wide mandates on what to do or how. “We think about the business brand by brand,” he says. “We’re not going to do the same things with [osteoporosis medication] Actonel that we will with Pringles.”

But that doesn’t mean brands are pigeonholed into rigid marketing formulas. In the FSI-heavy toothpaste category, for instance, Crest has been strong primarily because of “a $40 product called Whitestrips, which we’ve found is relatively price-insensitive. It’s very important for us to get the value of our brands in the right place.”

To develop the best marketing talent, “you have to be training, challenging, and always have your eyes outside the company,” says Stengel.

To that end, P&G Marketing University brings in teachers from in and outside the company to educate its 3,000-odd marketers in best practices and innovations; an annual brand-building symposium brings everyone together to present awards for outstanding work.

It’s not a problem if P&G does such a good job that it winds up as training ground for the rest of the industry — a downside to its legacy. “We’re a meritocracy. Some people make it up the pyramid, and some won’t,” Stengel explains. “There are some very talented people who don’t.”

Maintaining a first-class atmosphere means demanding excellence from agencies as well, he says. Although P&G retains four “core” global ad agencies, “we’ve always had many, many partners and a large number of suppliers. We recently scaled back our Internet roster by 90 percent, but that’s because we’ve doing a lot of experimenting.”

At a time when many large corporations are striking deals with global agency networks, P&G isn’t looking for a corporate-wide solution. “We expect and demand a lot. And we like longer-term relationships,” Stengel says. “Where there is a network [that can provide quality work in numerous areas], we’ll use it. But we want the talent.”

There are no top-down directives for selection. “I want the business to own the relationship and believe in the supplier,” he says. Most choices are made collaboratively with corporate, but “we’re almost never in a different place.”

Just Ask Mom

The lobby of P&G’s Cincinnati headquarters features a faux home and a store, so that employees can view “the two moments of truth” when they arrive each day, Stengel says. “We build the consumer into our decisions and put her — and it is ‘her’ most of the time — into everything we do.”

Recent success stories are both high-profile and under the radar. As an example of Internet innovation, Stengel points to two-year-old spin-off Reflect.com, which lets women customize P&G cosmetics and fragrances to match their own tastes. As a case study in understanding consumer needs (and when best to connect with them), he mentions a sampling program run last summer by Charmin (and other “bathroom brands”) that outfitted restrooms at 15 state fairs with samples and cleaning people.

“The common theme [in such disparate strategies] is a deep understanding of the consumers who offer the potential for growth,” he says.

Stengel is also proud of the recent revitalization of two stagnant brands: Olay, which is “a good example of the new P&G” because of the way it has addressed consumer needs with extensions such as Olay Daily Facials and holiday gift packs (and reached consumers with sampling in health clubs, sponsorship of online communities, and “beauty consultations” at retail); and Old Spice, for decades fodder for old-fogey jokes but now the deodorant of choice for 25 percent of male teens — thanks to NASCAR and baseball sponsorships and an overall focus on active consumers. “It was moribund, and now it’s the No. 2 brand — and maybe even a challenge for No. 1,” he boasts.

If he has a particular soft spot right now, it’s for the work at Pampers, a brand under his direct oversight in his most-recent post as vp-planning, marketing, and business development for global baby care.

Obviously, Stengel isn’t talking about Pampers Perks, the recently concluded continuity program that drew consumer and media flack for running short of rewards. (For the record: P&G views Perks as “very successful. It provided customer loyalty as well as new trial. We had hundreds of thousands of satisfied customers,” says a spokesperson.)

What gets Stengel beaming is Pampers.com, an initiative more about educating parents than selling diapers. The Web site gets 1.5 million unique visitors per month; an accompanying Parentpages newsletter e-mails customized content to registered visitors. “We wanted to help parents in developing their children. It’s the highest ground we can take,” he explains. The actual marketing messages are “not terribly overt, and sometimes that’s better. Technology can be a very personal medium, and you have to respect that. “We get testimonials like, ‘We don’t think of Pampers as just a diaper brand anymore,’ and that’s beautiful,” even if it doesn’t lead directly to sales. Still, visitors “tend to be more aware of, and loyal to, the brand. So it does pay off,” he concludes.

More in Store

Of course, addressing the needs of customers isn’t just about satisfying consumers, but making retailers happy as well. Along with the Internet, Stengel points to co-marketing as one of the “frontiers” he wants P&G to tame. The company is currently working with such leading chains as Wal-Mart, Target, and Ahold to develop mutually beneficial activity that makes the shopping experience “easy, direct, and pleasant.”

“A perfect example” is grl>lab, a merchandising unit in CVS drugstores designed as a “hot zone” for teen girls. The displays are designed not just to boost P&G sales (featured products are competitor-free but not company-exclusive) but to increase teen traffic to stores. “It has to be a collaboration between the retailer and us,” he says.

And the common ground for both, first and foremost, is the consumer.