To be head & shoulders above

Procter & Gamble India looks to CEO Laey to make innovation work for it again.

Procter & Gambles CEO A. G. Laey (above) is expected to spur innovation at the Indian arm to retrieve its competitive edge. Seen in the pictures above (centre) are packs of
various P&G brands in a store in rural Uttar Pradesh and (right) Gillettes razors displayed for sale at a Bharti Walmart store in Zirakpur. Gillettes global models did not quite succeed
in India so the company developed Gillette Guard using consumer insights. _ BLOOMBERG, REUTERS
AMRITA NAIR-GHASWALLA

ast moving consumer goods major

Procter & Gamble has raised innovation to a key corporate priority. With
the return of Alan George Laey as
CEO, innovation has got an added
thrust, especially in its Indian offices.
Widely credited for making Procter & Gamble
(P&G) a more consumer-driven company, Laey
has been responsible for creating a diverse and
connected culture at the consumer goods giant.
At P&G, listening to the voice of the consumer has
been paramount, especially with Laey in his
earlier stint at the company in 2009 encouraging
his team to bring the outside in, and emphasising the co-creation process of working with consumers to build new brands.
Laey joined P&G in 1977 and served as Chief
Executive Officer from 2000 to 2009. Incidentally, he was responsible for pulling off the blockbuster $57-million acquisition of Gillette in 2005,
expanding P&Gs reach into male-oriented products with Gillettes shavers and razors. Analysts
say the company is looking for Laey to work his
magic once again as the company struggles to
grow under increased competition and local
challenges.
The company has been facing tough competition from already entrenched rivals such as
Dutch consumer product maker Unilever and
Colgate-Palmolive in India.
MACH FORCE

Shaving off market share from the competition is

a strategy that P&G learned early. As a P&G
spokesperson told BrandLine, P&G is constantly
innovating to reach more consumers, in more
parts of India, more completely. In India, a specic example of research and development innovation has been Gillette Guard, Indias rst
affordable system razor.
Gillette originally focussed on selling its midtier American razors in India, such as the Mach 3,
in new packaging. However, with the vast majority of men shaving with double edge razors, Gillette's global product failed to cut the mustard in
India.
So, how did Gillette manage to corner over 50
per cent market share in no time in India, which,
incidentally is the worlds largest shaving blade
market by volume? It sent a team to conduct

research and visited customers at their homes.

Earlier, Gillette had tested a low-end razor
among Indian students at the Massachusetts Institute of Technology (MIT), according to the
Harvard Business Review. The students reported
loving the razor. With hot water and comfortable
bathrooms to aid the process, the shaving experience was markedly different from those of people
in rural India, who shaved using little or no water,
while balancing a mirror in one hand.
Though it was a no-go with the MIT Indian
students, the researchers visiting Indian homes
brought back several insights which P&G used.
The result was the Gillette Guard, perhaps the
most signicant departure from traditional product development in Gillette's history.
The Guard uses 80 per cent fewer parts, plastic
housing, and a single blade to minimise cost. It
also has a large safety comb to reduce nicks and
cuts, which were the norm with the traditional
razor. The easy rinse cartridges, for better cleaning without running water, and several other key
features were designed specically for the Indian
shaver. Within six months of its release in October 2010, Gillette Guard was able to claim 50 per
cent of the market share for razors.
The company did not stop at an India-tailored
product, but built an India-tailored business
model. All manufacturing is done locally to further control production and supply chain costs.
P&Gs go-to-market and branding capabilities
are well respected. The aim was to leverage competencies in new markets.
As Harish Morarka, business head at consulting rm, Avalon Green notes, When companies
work with consumers, they are well positioned to
lead the charge in developing and executing cocreation processes within their companies. Nailing a new market often requires this kind of
holistic, ground up innovation.
HIGHER SPENDS

Though the global major has declined to report

advertising spends for the just concluded scal
year, with no announcement at the company's
earnings conference call, the group spent $9.3
billion globally last year.
In India, Procter & Gamble Hygiene and
Health Care Ltd had raised its advertising expenditure by 35.77 per cent for the second quarter
ended December 31, 2012. The company spent Rs
94.58 crore in the second quarter, as compared

with Rs 69.66 crore a year ago.

The ad spends exceeded the companys net
prot in the second quarter by a wide margin
compared with a year ago. The company's advertising spend to total income ratio was also up
marginally in Q2 FY13 to 20.09 per cent from
19.61 per cent a year ago. P&G has a strong tradition of not only introducing blockbuster brands,
but also of creating new categories. In 2012, P&G
invested around $2 billion in innovation. This
year, the company intends to expand its innovation and marketing strategies to more categories
and geographies, boosting both top and bottom
line growth.
For example, Head & Shoulders has transformed itself from being merely a North American brand to the largest shampoo brand in the
world. Similarly, Tide Naturals in India was designed specically for the consumer who still
washes by hand, and needs a product which takes
care of the hands as it cleans, said the
spokesperson.
Tide Naturals was meant to target lower-income Indian consumers whose hands were affected as a result of using cheaper, lower-quality
detergent powders.
For rural consumers, the key barrier to upgrading their detergent is a limited laundry budget. Consumers in this segment were clearly
looking for an affordable product that provided
superior whiteness, was mild on hands and had a
good fragrance, which other products did not
offer,.
The company decided to innovate on the
chemicals, since other Indian value detergent
brands contain calcium carbonate and other insoluble llers that could be abrasive on the fabric
and hands during the clothes washing process.
Tide Naturals uses water-soluble sodium sulphate, which doubles up to keep hands soft,
claims the company.
The detergent contains a surfactant derived
from natural palm and coconut oil, as well as
several natural oils, such as Cedarwood Oil and
Patchouli Oil.
Branding expert Kedar Pandit Mohan at Train
of Thought, a branding rm, cites an example to
bring home the point. Customers do not experience a product or service in an isolated fashion.
When it concerns brand preference, they assess
their total experience with that brand, from beginning to end. Say, if you book a ight very easily

and receive excellent assistance at the check-in

counter, but once on board, experience a horribly
cramped seat and stale food, the total experience
will be a negative one. Similarly, it is important
for organisations to get a grip on the entire customer journey in order to ensure an unforgettable
total experience.''
By letting the customer know that her health is
paramount, and has led the company to innovate
for her safety and well-being (in this case soft
hands despite washing clothes by hand), the company is counting on journey mapping to provide a
quick x to a specic problem. It is a framework
that allows one to get a grip on many different
aspects of customer experience design. It is always about the customers experience, but it is up
to the company how to map that experience and
what to map exactly,'' said Mohan.
PRIME TARGETS

It is not just rural consumers who hold sway in

the company. P&G brought out Gillette Fusion
and Olay Regenerist to cater to the top tier consumer in India.
The company's breakthrough 5-blade battery
operated shaving system, the Gillette Fusion
Power, was launched recently by Bollywood diva
Chitrangada Singh, actor-director Arbaaz Khan
and ace cricketer Rahul Dravid. The team highlighted the intricate, technological advancement
of Fusion Power through a 2D projection.
Fusion Power is not just about more blades, its
R&D has spaced the blades 30 per cent closer
than before. The blades have a smoother coating
and an enhanced Lubrastrip infused with vitamin E and aloe, creating, what the company
claims, is a signicantly superior shaving experience. Here too, innovation was at the forefront.
Incidentally, when Laey became the CEO of
P&G over a decade ago, he realised that P&G had
become almost completely dependent on inorganic growth. Looking at the huge cost of acquisitions, he was convinced that P&G needed to
embrace an innovation-driven approach to
growth, said an official in the know. Laey advocated collaboration with others as a way of
accelerating the innovation process. To enable it,
he created the foundation for Connect & Develop
(C&D), an open innovation platform.
In the case of Olay Regenerist, the C&D came
into play in its most effective way.
Sederma, a small French company that runs a

skin and wound institute, had identied an amino

peptide that helped wounds heal faster, without
leaving a visible trace on the skin. P&G collaborated with Sederma to use this compound to
remove skin wrinkles, resulting in Olay Regenerist, a wrinkle treatment product.
At the launch of Olay Regenerist in India, Sonali Dhawan, Head, P&G Beauty, said the amino
peptide complex has been historically used for
cell regeneration. The company said 11,400 women were on the waiting list for the launch of Olay
Regenerist in India, and termed it the most awaited product.
Regenerist is P&Gs top selling product line in
its crucial $2 billion-a-year Olay skin care brand.
In the last decade, P&G has aimed to get 50 per
cent of its innovation ideas through Connect &
Develop. The company has an elaborate network
to drive the C&D process, with 70 C&D leaders
worldwide, 11 regional C&D hubs, and thousands
of networks.
With more than 2,000 global partnerships who
have delivered dozens of products to consumers,
the company has accelerated innovation development and increased productivity, both for P&G
and its partners.
In its Web site that has served as P&Gs open
front door to the world, it allows any innovator
anywhere to share their innovations with P&G.
The site reportedly receives about 20 submissions every week, from all over the world. The
company is looking to deliver more discontinuous, breakthrough innovations. The new Web
site links external innovators directly to P&Gs
top company needs, accelerating innovation
cycles.
Connect & Develop has radically retooled how
P&G fostered innovation and implemented its
fruits through launching new products. C&D is
about nding good ideas in universities, startups, independent labs and suppliers, vetting
them against business requirements and consumer needs, and then leveraging them back through
marketing and R&D.
Though the global company is in the middle of
a belt-tightening plan aimed at saving $10 billion
by 2016, innovation will not take a backseat. As
the P&G India spokesperson said, Innovations
across tiers, on Pampers and Whisper among
others, have resulted in consumers rewarding the
rm with marketing leadership year on year.
After all, it pays to invest in innovation.