9) P&G Buzz Case Study

P&G’s ‘Buzz Marketing’
Case Study Reference No. COS0049P
This case was written by Shruti Khatri under the direction of Mridu Verma, IBSCDC. It is
intended to be used as the basis for class discussion rather than to illustrate either
effective or ineffective handling of a management situation. This case was compiled from
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P&G’s ‘Buzz Marketing’
"We know that the most powerful form of marketing is an advocacy message from a trusted
friend."
Steve Knox, Vocalpoint's CEO1
Introduction
In 2005, the $57 billion - Procter & Gamble (P&G) was the world's No.12 maker of household
products. The company engaged in the manufacture and marketing of various consumer products
worldwide. In 2005, it marketed nearly 300 branded products in more than 160 countries3. It was
a global leader in 7 of the 12 different product categories in which it competed and had more than
20 ‘billion dollar’ global brands4 in its product portfolio.
P&G had always been a frontrunner in marketing. It had invented the concepts of brand, brand
management and the ‘Soap Opera5’. Over the years, it had consistently remained on the cutting
edge of marketing, always finding new, exciting and ever changing ways of reaching the
consumers. The company had recently resorted to ‘Buzz/ Word-of-mouth marketing’ (refer to
Annexure I for word-of-mouth marketing) in a big way and its latest experiment was a challenge
for the competitors.
Background Note
P&G was established in 1837 by William Procter and James Gamble in Ohio, USA (refer to
Annexure II for P&G’s company history). The company had started off as manufacturers of soaps
and candles. Over the years, P&G diversified into various segments and was the innovator of
many products. It invented the first Fluoride-based toothpaste -Crest, the revolutionary synthetic
detergent Tide, and the first disposable nappy, Pampers. It also innovated in existing products by
introducing new technology like – Always (high protection feminine pads) by inventing the ‘Dri-
Weave topsheet technology6’, Pert (introduced two-in-one shampoo and conditioner), Olay (anti-
ageing cream), Bounty (structured tissues and towels7), Eukanuba (dental care for pets), and
Lams (nutritional supplements for pets).
P&G defined many marketing strategies and that was an important key to its success. It was the
first company to advertise nationally direct to consumers in 1882. The company advertised its
white soap ‘Ivory’ in a weekly newspaper. In the late 1890s, P&G set up its own product research
laboratories, where scientists worked to create new products. The company leadership also
pioneered in the area of market research, by investigating consumer needs and product appeal.
The company initiated several innovative data collection techniques to collect information for the
company’s use. One of P&G’s innovative tools was ‘door-to-door’ interviews wherein young
women were groomed and sent to neighbourhoods all over the country. These women visited the
1
www.businessweek.com/magazine/content/06_22/b3986060.htm
2
http://hoovers.com/procter-&-gamble/--ID__11211--/free-co-factsheet.xhtml
3
www.pg.com/jobs/corpinfo/consboss
4
www.pg.com
5
A soap opera is an ongoing, episodic work of fiction, usually broadcast on television or radio.
6
A superior-performing polyethylene topsheet called "Dri-Weave"—helps keep the product cleaner and drier while being worn.
7
The absorbent capacity, strength, flexibility, softness, and thickness of structured tissues, and towels make usage more convenient,
faster, and comfortable.
houses and questioned the housewives about every activity for which P&G’s products were used.
The data was then forwarded to the concerned departments.
As radio became more popular in the 1920s and 1930s, the company initially sponsored a number
of cookery shows on radio. Later on, P&G’s soaps range sponsored many radio shows and one of
them was - ‘Ma Perkins8’ which became very popular nationwide. As a result, these shows
became commonly known as ‘soap operas’ and thus P&G literally created the concept of soap
opera by sponsoring radio and television dramas targeting women.
In 1931, P&G introduced the concept of brand and brand management. The technique was
actually introduced by one of the department heads who realized that the company’s products not
only competed with rival brands but also with other brands within the company. He then felt that
individual teams should manage each brand of the company as an individual business. The teams
should just concentrate on developing and improving their own brands and target consumers. The
concept was thus implemented in the organization and later on became popular globally.
In 1935, shortly after the introduction of television in the United States, P&G aired its first
advertisement during the first major league baseball game shown on television. P&G kept
expanding its product and brand categories over the years and increased the scale of its global
operations. By the early 1970s, cheap long-distance telephone rates had made it possible to
conduct mass surveys more cost efficiently. P&G thus stopped using the door-to-door interview
method of market research and instead made use of telephone-surveys and mail-in interviews for
getting customer feedback and their expectations. Soon after, the market research department at
P&G was doing about a million and a half telephone or mail-in interviews each year.
By the late 1970s, P&G had become a heavy television advertiser. To measure the impact and
memorability of its television advertisements, it instituted ‘DAR’ (Day after Recall9) method.
P&G also used focus groups and many other kinds of opinion-sampling techniques (through
many advertising agencies) to adapt its products to the changing needs and tastes of the
consumers. P&G continuously developed several innovative market research techniques over the
decades. It trained its researchers to get the required information from the customers. It also made
use of advanced technology to analyse the feedback it received and arrive at the right conclusions.
It used qualitative research tools such as focus groups, in-house visits, in-context visits and in-
store interviews and quantitative research tools like blind tests, and concept tests. P&G also took
help of professional agencies to conduct market research for them.
Besides the external market researches, P&G’s management also adopted the approach of
innovation from within the organisation. It encouraged its employees to exchange ideas with each
other and the ideas were then evaluated at the company’s annual review meetings. P&G even
went one step further with the consumer market research. It asked its employees to think of
themselves as the consumers while viewing the company’s brands. With its innovative concepts
and techniques, P&G established itself as the number one maker of household products globally.
"Within a paternalistic corporate culture, P&G pioneered in brand management, in consumer

surveys for marketing research, and in new product research and development. One reason for
8
Ma Perkins was a radio serial which was heard in America on NBC from 1933 to 1949 and on CBS from 1942 to 1960. Between
1942 and 1949, the show was heard simultaneously on both networks.
9
A method of testing the performance of an ad or a commercial whereby members of the audience are surveyed one day after their
exposure to an ad or commercial in an advertising vehicle to discover how many of the audience members remember encountering
that specific ad or commercial in the advertising vehicle.
P&G's domestic success has been their reliance on a combination of consumer research,
advertising, and distribution techniques."
An industry expert10
In 2006, P&G was the No. 1 advertiser in the US11 with an advertising spend of $4.61 billion12
and also one of the biggest advertisers in the world. It operated in five segments: P&G Beauty,
Health Care, Baby Care and Family Care, Fabric Care and Home Care, and Snacks and Coffee.
Some of P&G's billion-dollar selling brands were - Actonel, Always/Whisper, Bounty, Charmin,
Crest, Downy/Lenor, Folgers, Iams, Olay, Pampers, Pantene, Pringles, Tide, and Wella (refer to
Annexures III, IV and V for P&G’s brands, revenue distribution and sales).
Buzz/ Word-of-Mouth Marketing

“The traditional mass media methodologies are providing increasingly less effective, marketers
are increasingly interested in finding unique ways to reach the teen consumer13.”
Steve Knox, CEO of Tremor, Procter & Gamble's teen marketing unit.
“Of course, traditional advertising is still extremely important. But its impact is slipping in a
nosy marketplace. There are too many requirements on people’s attention14.”
An industry observer
With the market getting increasingly competitive, traditional media strategies were proving
inefficient to grab the attention of teenagers and the youth. Audiences were fragmented, and more
and more television viewers were using devices like TiVo15 to skip commercials. P&G needed to
try out something new again. Keeping in line with its history of experimentations and
innovations, P&G adopted a new marketing tool. P&G turned to viral marketing16 by using word-
of-mouth marketing.
Tremor
“The mass-marketing model is dead, this is the future17.”
James Stengel, P&G's Global Marketing Officer.
In 2001, P&G started ‘Tremor’, a word-of-mouth marketing programme that recruited teens to
‘pitch’ products from P&G and other companies to their friends. Tremor’s business model was
based on a research that showed how trends developed. It was seen that there were two
10
http://www.corporatewatch.org/?lid=247
11
http://www.adpunch.org/entry/pg-largest-advertiser-in-us-for-2005/
12
ibid
13
http://www.clickz.com/news/article.php/3360711
14
David DeVore, sales and marketing director of FanMail. http://www.cantonrep.com/index.php?ID=280390
15
TiVo is a popular brand of digital video recorder (DVR). It is a consumer video device which allows users to capture television
programming to internal hard disk storage for later viewing.
16
Viral marketing and viral advertising refer to marketing techniques that seek to exploit pre-existing social networks to produce
exponential increases in brand awareness, through viral processes similar to the spread of an epidemic. It is word-of-mouth delivered
and enhanced online; it harnesses the network effect of the Internet and can be very useful in reaching a large number of people
rapidly.
17
http://www.commercialalert.org/news/Archive/2004/01/kid-nabbing
categories/ types of people: ‘The trend setters’ and ‘The trend spreaders’. The trend setters were
the once who set themselves apart from others by starting a new trend and once the trend was
copied, moved away from it. Such people usually did not help in spreading a trend. The trend
spreaders on the other hand were people who the moment they spotted a trend, wanted to share it
with others. These people were really valuable to a company as they spread word about the
product/ service and unknowingly advertised it (refer to Annexure VI for the Tremor process).
Tremor recruited teenagers (age group 13-19) whom it called ‘Connectors’, to help develop
exciting and relevant product ideas and marketing programmes that teens wanted to talk about.
According to Steve Knox (Knox), CEO of Tremor, connectors were people who even if they were
the last people to find out about something always tapped the nearest shoulder to point out a new
purchase or a cool song or TV show or movie. They were people with “really broad and deep
social networks and a deep propensity to want to talk about ideas18 .”
Another basic fundamental on which Tremor was based was ‘The advocacy and amplification
model’ (refer to Annexure VII for the model). This model was constructed from a mix of
academic theory, psychological insights, existing P&G data and Tremor's proprietary research. In
Tremor’s language, advocacy was what happened when a connector naturally experienced a
product and liked it enough to talk about it with his or her peers. Knox explained, “When
connectors are exposed to a new idea, the first question they ask themselves is, ‘Is this idea worth
my advocacy?' It's their social currency on the line, so it has to be a product that they at least
believe in19.”
The Tremor model thus worked on three basic things: First, people always loved to break news so
the idea was to give them information first hand. Second, not only pass information but also such
information which was hard to come by, thus giving them the inside scoop. Finally, let consumers
influence the company’s decisions openly. One way of doing that was by giving out samples of a
product which was not yet released and ask people to vote on the product’s logo, packaging,
punch line. This way, the participant feels that they had a say in the decision and were also
curious to spread the word about the new product/ service and their contribution in it. P&G
officials believed that their network of youngsters could create genuine excitement and
conversation in lunch rooms and elsewhere and possibly create impact more than an expensive
television ad campaign.
As the success of a Tremor campaign ultimately depended upon the ‘lips’ (talks) of the minions,
P&G spent a lot of time developing ways to identify them. The first step was to draw teens to
Tremor.com (the website). Once on the site, visitors were prompted with questions like, “How
many people do you talk to on a daily basis?” and “How do you feel about buying new
products?” The participants were screened for eight character traits and three primary
characteristics-- inquisitiveness, connectedness and persuasiveness were focussed upon. A typical
connector would have around 150 to 200 names on their instant messaging buddy list.
After the initial questioning, roughly 15 % of the applicants were invited to join the site as new
Tremor members20. The rest who did not get through were given a polite message saying –
“Thank you for your interest in Tremor. Unfortunately, we have enough applicants at this time21.”
The chosen ones were then put through a “boot camp.” In this, Tremor lured the connector
candidates with a series of ideas and opportunities by sending them emails. In one of its mails,
18
www.cmomagazine.com/read/070105/making_waves.html
19
ibid
20
21
ibid
Tremor had a subject line: “Think like a Hollywood Heavyweight22,” and in the email it asked for
teen input on a new idea for a movie. While the teens went about with their responses, the Tremor
staff kept a watchful eye on them anonymously through the Internet. This was done to see
whether the teens' actual behaviour matched with their claimed behaviour. Around 8-10 % of the
original applicants attained the connector status after the evaluation.
The recruited teens were then sent an information kit by mail that included a notification to the
parents. The company also at times called up the parents and explained the initiative to them,
asking them if their child would be interested in it. The mission of the members/ connectors was
to help companies’ plant information about their brands in living rooms, schools and other
crevices that were difficult for corporate America to infiltrate. These kids delivered endorsements
in school cafeterias, at sleepovers, by cell phone and by e-mail. Tremor did not coach the teens,
rather just encouraged them to talk up just about everything, from movies to milk and motor oil.
It contacted the connectors two to three times a month through email and passed down
information to them about a new product or an idea. To retain their attention, Tremor also sent
them exclusive music mixes and gift packs which contained sample package of the product,
coupons or even inexpensive watches, DVD23 players and minidiscs24.
Tremor had started off with campaigns for its parent company's products as well as external
brands. It worked with companies in industries like entertainment, fashion, music, food and
beauty to reach out to the teen market and develop successful word-of-mouth advocacy among
teenagers. Tremor helped P&G in marketing its shampoo - ‘Head & Shoulders25’. The point that
the dandruff shampoo helped kill the fungus that caused dandruff, could not have been broached
in mainstream advertisements but it was spread through Tremor. A Tremor executive26
commented “That's a message that won't survive in the mass market, but it's perfectly
appropriate to give it to 1% of teen boys and let them talk about it27.” P&G tested a new line of
its Cover Girl28 Outlast Lipcolor lipstick in Providence, R.I., using product information and
sample cards. That particular campaign resulted in a 14 % boost in sales in that market in eight
weeks. Tremor also used its marketing technique to hype new flavors or other offerings by
Pringles29 potato chips, Herbal Essences30 shampoo and Noxzema31 skin care for P&G.
Soon, Tremor became popular and gained external clients. Valvoline32, the motor products unit of
Ashland33, was using Tremor as part of its marketing push for SynPower34 premium oil. Coca-
Cola35 Company employed Tremor for marketing its soda. Tremor also ran word-of-mouth
programmes for DreamWorks36 movie studios which released the movie “Eurotrip37” with
22
www.cmomagazine.com/read/070105/making_waves.html?action=print
23
DVD (also known as "Digital Versatile Disc" or "Digital Video Disc") is an optical disc storage media format that can be used for
data storage, including movies with high video and sound quality.
24
A MiniDisc (MD) is a disc-based data storage device intended for storage of digitized audio.
25
Head & Shoulders is a famous brand of anti-dandruff shampoo produced by Procter & Gamble.
26
Ted W. Woehrle, Tremor's chief executive.
27
www.motivequest.com/main.taf?p=2,1,11
28
Cover Girl is the cosmetics division of Procter & Gamble
29
Pringles is a brand of potato chip or crisps snack produced by Procter & Gamble.
30
Herbal Essences is a range of shampoos and conditioners with natural, organic herbs and botanicals by P&G.
31
Noxzema is a skin care product marketed by Proctor and Gamble.
32
Valvoline is a leading marketer, distributor and producer of quality automotive products and services.
33
Ashland, Inc. operates as a chemical and transportation construction company. It operates in four segments: Ashland Distribution,
Ashland Specialty Chemical, Valvoline, and Ashland Paving and Construction (APAC) segment.
34
SynPower is an advanced, fully synthetic motor oil formulated for extreme protection and superior performance. It helps extend
engine life by reducing wear and oil breakdown.
35
The Coca-Cola Company is the largest manufacturer, distributor and marketer of nonalcoholic beverage concentrates and syrups in
the world.
36
DreamWorks, L.L.C., doing business as DreamWorks SKG, is a Big Ten studio based in the United States which develops,
produces, and distributes films, video games, and television programming.
Tremor’s help. The studio asked the Tremor teens for title suggestions, and settled on a name
from over 60,000 suggestions submitted by 20 teenagers. Toyota38 was also one of P&G’s clients.
"The early years at Tremor were spent trying really hard to understand how word of mouth
actually works in the marketplace, the work is not over, Word of mouth is not a static science; it's
a dynamic science39.”
Steve Knox, CEO of Tremor and Vocalpoint
In 2005, Tremor incurred revenues of more than $12 million40. In 2006, Tremor had over
280,00041 teenagers registered on its website (roughly 1% of the U.S. teen population) a strong
sales force to push products on friends and family. Tremor’s success in fact was so high that in
2006, 80 %42 of the group's campaigns were for non-P&G brands.
Vocalpoint
“The program is a state-of-the-art method for reaching the most influential group of shoppers in
America: moms. At a time when companies need to find creative ways to get their message across
to consumers, it's likely to be widely studied.”
About Vocalpoint43
The success of its teen-based efforts led Tremor to begin exploring another target audience for its
budding word-of-mouth business. P&G wanted to construct a similar network of ‘mothers’ to
pitch more products. This network was supposed to be linked more closely to P&G's own product
lines as P&G expected that half of Vocalpoint's business would involve its own brands. In 2005,
P&G launched “Vocalpoint,” another word-of-mouth marketing programme. Through Vocalpoint
P&G was aiming at making its word-of-mouth marketing more predictable based on its
experience with Tremor. It was seen that usually buzz was created with not much control over
influencing product sales. The solution to this problem was finding a strong reason why a
connector would want to share product information with a friend. Knox commented saying “We
do tremendous research behind it to find the reason to care44.”
P&G started developing Vocalpoint in 2004, to market products directly to mothers, which it
defined as women with children aged 19 or less. P&G first conducted preliminary tests in three
cities - Columbus, Tulsa, and Buffalo. After that, it went national (in US) with its programme in
March 2005. For Vocalpoint, P&G concentrated on finding women who had large social
networks. The Vocalpoint moms, ranged between the age group 28 to 45, and generally spoke to
about 25 to 30 other women during the day, as compared to an average mom who usually spoke
to just five.
Though the age group and aim differed for Tremor and Vocalpoint, the basic definition of a
connector remained the same. For Vocalpoint, P&G contacted many of the connectors on the
Internet with banner advertisements on sites such as iVilllage.com. Those moms were then linked
to www.vocalpoint.com, a site that provided them with more information about Vocalpoint. The
37
EuroTrip is a 2004 American comedy film about a group of young Americans and their adventures traveling around Europe.
38
Toyota Motor Corporation or TMC is a Japanese multinational corporation that manufactures automobiles, trucks and buses.
39
40
www.commercialalert.org/issues-article.php?article_id=289
41
ibid
42
43
http://www.businessweek.com/magazine/content/06_22/b3986060.htm?campaign_id=search
44
visitors were requested to fill out a short survey form. The answers were then screened and
tabulated and those who were accepted into the programme received a sample of the latest
products in beauty care. The screening questions for moms though were a little different than
those for teens. For Vocalpoint, a fact like the number of organizations a mother belonged to was
more relevant than the number of buddies on her Instant Messenger list. Besides the internet,
alternative recruiting methods were also explored to capture the less tech-savvy segment.
P&G created product messages which they felt that mothers would like to share and encouraged
them to share the advertising pitches through their social network/ friends in return for free
product samples, coupons and a chance to share their own opinions directly with P&G.
Vocalpoint also sent a weekly e-mail newsletter to its connectors called ‘The Inside Track’. The
newsletter asked for their opinions on everything from the design of the newsletter itself to
express mail options. Through this, the women got a chance to voice their opinions. In Knox’s
words- “They also get a voice that is going to be heard by other companies45.”
The Vocalpoint moms also received an interactive bi-weekly newsletter that provided them with
insider information about the latest and greatest new products and services. It also discussed the
latest topics on current events and trends in the marketplace. Members were asked to give their
insights and opinions on an assortment of products and concepts from some of the largest
companies in the world. They were kept updated on the latest ideas and products in the areas of
home care, personal finance, pharmaceuticals and entertainment including, movies, television and
music. With Vocalpoint, moms were never obliged to do or say anything. There was no cost
involved in registering or being a member of the programme and the company ensured the
member’s privacy.
"Over the years, Procter & Gamble has offered products that help moms run their households
efficiently and economically, and we've often heard back from our customers about what they
liked, or perhaps didn't like, about a particular product, at P&G, we find this consumer feedback
absolutely invaluable in helping us continuously offer products that best serve the needs of our
customers. By developing Vocalpoint, P&G has set up a way for other companies to gain access
to these very vocal and influential moms to gain access to their thoughts and feedback as well46."
Amy Donges, Vocalpoint marketing manager.
Vocalpoint started off by marketing its own brand – ‘Dawn Direct Foam’ in the market. In
traditional advertisements for the product, P&G stressed its grease-cutting power. Vocalpoint
moms though were mailed packets showing the detergent and a smiling girl on the outside with
words in big letters saying: ‘Mom, can I help?’ A pamphlet inside the packet explained that the
soap was so much fun to use that, kids would want to help out with the dishes. To reinforce the
point, the packet included a little sponge in the shape of a child's foot, plus a dozen $1.50
coupons. Knox commented – “We have to enable a conversation to take place, kids not doing
enough chores is a conversation taking place among moms47.” Thus by creating such a message
Vocalpoint ensured that moms would want to talk about it. The results of the effort were clear.
Early special test market results found that the sales for the product with Vocalpoint were double
than that of markets without Vocalpoint.
45
46
www.pginvestor.com/phoenix.zhtml?c=104574&p=irol-newsArticleMain&ID=793251&highlight=
47
By mid 2006, sales of other products marketed through Vocalpoint were also higher by 20-25%
and more than 10 P&G brands were working on national Vocalpoint campaigns. Also, Vocalpoint
had managed to enroll as many as 6, 00, 000 mothers in its word-of-mouth marketing programme.
P&G's services extended past its own house of brands. Its early clients included WD-4048, Animal
Planet49, People's Choice Awards50 and ABC, Inc.51. WD-40 for instance, launched its first line
extension52 ever, through Vocalpoint instead of first turning to advertising. ABC got input for its
new show “What About Brian” (refer to Annexure VIII for Vocalpoint’s marketing of the show)
through Vocalpoint's web site. Vocalpoint also marketed P&G's Crest Whitestrips and an
upcoming nature show for Discovery53 Networks.
"As proud as we are of our Tremor work, we're seeing the efficacy and advocacy from moms
dramatically even higher, it's natural human behavior ... People like talking to people about
things they think help them54."
Looking Ahead
Tremor proved to be a success and initial results of Vocalpoint were positive as well (refer to
Annexure IX for Brands/ Companies that used P&G for marketing through WOMM units-
Tremor and Vocalpoint). Management at Vocalpoint though had other fears at hand. Knox was
aware that connectors might grow weary as the novelty withered and routine and predictability set
in. The management was already looking for ways of warding off connector fatigue.
“What keeps me awake at night is overdoing the [connector] panel, I need to maintain a
relationship with these connectors [to encourage them] to stay involved, to keep them from
tiring55.”
Another problem that P&G faced was the opposition from Word of Mouth Marketing Association
(WOMMA56) and Commercial Alert57. Both the organizations were not at all pleased with
48
WD-40 Company is a global consumer products company.
49
Animal Planet, launched in 1996, is a cable and satellite television network co-owned 80% by Discovery Communications, Inc.
(parent company of Discovery Channel, TLC, Discovery Health Channel, and The Travel Channel) and 20% by the BBC Worldwide.
The channel is dedicated to programming that highlights the relationship between humans and animals.
50
The People's Choice Awards is an awards show recognizing the people and the work of popular culture. The show has been held
annually since 1975 and is one of the few to be based on the opinions of the general public.
51
ABC Inc. stands for American Broadcasting Company. It is the No. 2 broadcast television network in US (behind CBS). In addition
to the primary network, ABC owns 10 television stations (the network has 225 affiliates) and some 70 radio stations (which it is
selling), and holds stakes in several cable channels through Disney ABC Cable. The firm produces many of its own shows through
Touchstone Television and distributes Disney content to television through Buena Vista Television.
52
WD-40’s first line extension ever was its –‘WD-40 No-Mess Pen’ which is an innovation from WD-40. It’s the same product as
WD-40 but with the convenience of precise application through a handy pen-shaped applicator. WD-40 product protects metal from
rust and corrosion, penetrates stuck parts, displaces moisture, and lubricates just about anything. It is also useful for cleaning grease,
grime, and other marks from most surfaces.
53
Discovery is a leading global real-world media and entertainment company. It has news and features about science, nature,
technology and adventure.
54
adage.com/news.cms?newsId=48353 - 25k
55
56
WOMMA is the official trade association for the word of mouth marketing industry. WOMMA’s mission is to promote and improve
WOMM by protecting consumers and the industry with strong ethical guidelines, promoting WOM as an effective marketing tool and
setting standards to encourage its use.
57
Commercial Alert's mission is to keep the commercial culture within its proper sphere, and to prevent it from exploiting children and
subverting the higher values of family, community, environmental integrity and democracy.
Vocalpoint's army of 600,000 moms spreading buzz about P&G products and others. The reason
being that Vocalpoint did not require its connectors to disclose who they worked for, which was
one of the basic principles in the WOMMA’s Code of Ethics. Critics felt that non-disclosure of
the fact could cause “danger of the basic commercialization of human relations where friends
treat one another as advertising pawns, undercutting social trust.”
P&G’s stand on the issue however, was that it was up to the connectors to make that decision on
their own. Knox commented - “We have a deeply held belief you don't tell the consumer what to
say.” P&G also pointed out that all the coupons that connectors handed out clearly mentioned that
they were from Vocalpoint.
The market did not have much faith in the power of word-of-mouth and some sceptics felt that
word of mouth could not be a science at all. Few others believed that bringing word of mouth
under a microscope and trying to reproduce spontaneous puffs of brand advocacy would
eventually lead to a public that would be even more mistrusting and cynical than the one currently
challenging marketers. P&G’s success with Tremor and positive initial results of Vocalpoint
though were quite the opposite (refer to Annexure X for the power of word-of-mouth). P&G’s
success was attracting attention of other companies and some had even started taking a keen
interest in the growing trend. Would P&G then set an example for the others and change the face
of marketing? Was word-of-mouth a revolution or just a passing fancy?
10
Annexure I
Word of Mouth Marketing
Definitions:
1. Word of mouth (WOM): The act of consumers providing information to

other consumers.
2. Word of mouth marketing: Giving people a reason to talk about your
products and services, and making it easier for that conversation to take
place.
The basic elements of WOM:
 Educating people about your products and services

 Identifying people most likely to share their opinions
 Providing tools that make it easier to share information
 Studying how, where, and when opinions are being shared
 Listening and responding to supporters, detractors, and neutrals
Types of Word of Mouth Marketing
 Buzz Marketing: Using high-profile entertainment or news to get people

to talk about your brand.
 Viral Marketing: Creating entertaining or informative messages that are
designed to be passed along in an exponential fashion, often electronically
or by email.
 Community Marketing: Forming or supporting niche communities that
are likely to share interests about the brand (such as user groups, fan clubs,
and discussion forums); providing tools, content, and information to
support those communities.
 Grassroots Marketing: Organizing and motivating volunteers to engage
in personal or local outreach.
 Evangelist Marketing: Cultivating evangelists, advocates, or volunteers
who are encouraged to take a leadership role in actively spreading the
word on your behalf.
 Product Seeding: Placing the right product into the right hands at the right
time, providing information or samples to influential individuals.
 Influencer Marketing: Identifying key communities and opinion leaders
who are likely to talk about products and have the ability to influence the
opinions of others.
 Cause Marketing: Supporting social causes to earn respect and support
from people who feel strongly about the cause.
 Conversation Creation: Interesting or fun advertising, emails, catch
phrases, entertainment, or promotions designed to start word of mouth
activity.
 Brand Blogging: Creating blogs and participating in the blogosphere, in
11
the spirit of open, transparent communications; sharing information of
value that the blog community may talk about.
 Referral Programs: Creating tools that enable satisfied customers to refer
their friends.
Source: http://www.womma.org/wom101.htm
Annexure II
P&G’s Company History
1837- P&G was founded by William Procter and James Gamble in Cincinnati. The
two were brother-in-laws and were convinced by their father-in-law to become
business partners. They started the business by manufacturing and selling candles
and soaps. The business was doing well, moon and stars were the company’s
unofficial trademark and appeared on all company products and correspondence.
1859- P&G sales had reached $1 million and the company was employing 80
people.
1862- During the Civil War in 1862, P&G was awarded several contracts to supply
soap and candles to the Union armies thus building the company's reputation as
soldiers returned home with their P&G products.
1879- P&G manufactured an inexpensive white soap equal to high-quality, imported
castile and named it ‘Ivory’. The soap was then advertised nationally.
1890- P&G was selling more than 30 different types of soap, including Ivory.
1904- In order to meet the demands of growing national markets, P&G began
building outside of Cincinnati for the first time in 1904.
1911- P&G introduced Crisco, the first all-vegetable shortening. Crisco provided a
healthier alternative to cooking with animal fats and was more economical than
butter.
1917-1918- P&G established its chemicals division to formalize research procedures
and develop new products.
1919- Seasonal purchases of P&G products by wholesalers led to uneven production
needs and layoffs at Ivorydale. In response to the same, P&G announced a plan to
sell directly to retailers and hired 450 salesmen.
1920-With the invention of the electric light bulb, candles, once, the staple of the
company's product line declined in popularity. The company discontinued candle
manufacturing.
1945- P&G had become a nearly $350 million company. Its products were popular
throughout the United States and Canada and the Company took its first step toward
developing an overseas business, with the acquisition of Thomas Hedley & Co.,
Ltd., in England.
1946- P&G introduced Tide, its most important new product since Ivory.
1948- P&G established an overseas division to manage the company's growing
international business.
1955- Crest, the first toothpaste with fluoride clinically proven to fight cavities, was
introduced.
1957- P&G entered the consumer paper products business with the acquisition of
12
Charmin Paper Mills, a regional manufacturer of toilet tissue, towels and napkins.
1960- The Company introduced liquid Downy, its first fabric softener.
1963- P&G entered the coffee business with the acquisition of Folgers Coffee.
1978- Didronel was introduced. A treatment for Paget's disease, it was one of the
Company's first pharmaceutical products.
1980- Company’s sales reached $10 billion.
1982- P&G increased its prescription and over-the-counter health care business with
the acquisition of Norwich Eaton Pharmaceuticals.
1983- The Company introduced a superior feminine protection product, Always/
Whisper that became the leading world brand in its category.
1984- Liquid Tide was introduced.
1985- The company acquired Richardson-Vicks, owners of Vicks respiratory care
and Oil of Olay product lines.
1986- The Company developed a new technology that enabled consumers to wash
and condition their hair using only one product - Pert Plus/Rejoice shampoo.
1987- P&G acquired Blendax line of products, including Blend-a-Med and Blendax
toothpastes.
1988- The Company announced a joint venture to manufacture products in China.
1989- The Company entered the cosmetics and fragrances category with the
acquisition of Noxell and its CoverGirl, Noxzema, and Clarion products.
1990- The Company expanded its presence in the male personal care market with the
acquisition of Shulton's Old Spice product line.
1991- It acquired Max Factor and Betrix brands, increasing its worldwide presence
in the cosmetics and fragrances category.
1993- Company sales exceeded $30 billion.
1994- P&G entered the European tissue and towel market with the acquisition of the
Germany-based company, VP Schickedanz. Also, P&G added Giorgio Beverly Hills
to its fine fragrance business.
1996- The U.S. Food and Drug Administration granted approval of Olestra for use in
salty snacks and crackers. Olestra, marketed under the brand name Olean, was a
calorie-free fat replacer that provided the full taste of fat without the added fat or
calories.
1997- P&G expanded its feminine protection expertise into a new global market
with the acquisition of Tambrands. Tampax, its tampon brand, was the market leader
worldwide. Also, P&G gained a solid entry in the Mexican tissue business with the
purchase of Loreto y Pena. This marked P&G's first tissue entry into Latin America.
P&G formed a global pharmaceutical alliance with Hoechst Marion Roussel to
market Actonel, P&G's new prescription bone health drug.
1999- The Company entered the global pet health and nutrition business by
acquiring the Iams Company, a leader in premium pet foods.
2000- P&G launched Reflect.com, its initial Internet brand. The site was the first to
offer truly customized beauty care products online.
2001- P&G acquired the Clairol business from Bristol-Myers Squibb Co. Clairol
was a world leader in hair color and hair care products. Same year, P&G and
Viacom Plus announced a major multimedia marketing partnership.
2003- P&G acquired a controlling interest in Wella AG, a leading hair care
13
company, giving P&G a major presence in the fast growing professional hair care
segment.
2005- P&G and Gillette merge into one company.
Source: Compiled by IRC from http://pg.com/company/who_we_are/ourhistory.jhtml
Annexure III
P&G’s Product Category-wise Net Sales in 2005
Source: http://ccbn.mobular.net/ccbn/7/1142/1201/print/print.pdf
Annexure IV
P&G’s Brands and Revenue Distribution
14
Annexure V
P&G’s Product Category-wise Change in Net Sales (2004-05)
15
Annexure VI
The Tremor Process
Source: http://www.tremor.com/info/process/process_index.aspx
16
Annexure VII
The Advocacy and Amplification Model
Source: http://www.tremor.com/info/wordofmouth/difference.aspx
17
Annexure VIII
Vocalpoint’s marketing of the show – “What about Brian”
Source: http://www.vocalpoint.com/brian/index.aspx
18
Annexure IX
Brands/ Companies that used P&G for marketing through WOMM units-
Tremor and Vocalpoint
Sr. No. Brands/ Companies P&G’s WOM Units

1. Head & Shoulders Tremor
2. Pringles Tremor
3. Cover Girl Tremor
4. Herbal Essences Tremor
5. Noxzema Tremor
6. Valvoline Tremor
7. Toyota Tremor
8. Coca Cola Company Tremor
9. Dream Works Studios Tremor
10. The movie- “My big fat Greek wedding” Tremor
11. Pantene Tremor
12. MilkPEP Tremor
13. AOL Tremor
14. WB Network Tremor
15. Dawn Direct Foam dish detergent Vocalpoint
16. Febreze Air Effects air freshener Vocalpoint
17. Millstone coffee Vocalpoint
18. ABC Inc. Vocalpoint
19. WD_40 Company Vocalpoint
20. Animal Planet Vocalpoint
21. People's Choice Awards Vocalpoint
22. Gillette Fusion Vocalpoint
23. Kashi Company Vocalpoint
Source: Compiled by IRC Pune
19
Annexure X
The Power of Word of Mouth
The "Top Ten" most influential marketing mediums, regardless of

demographic age group in 2005:
1. Word-of-Mouth
2. TV
3. Coupons
4. Newspaper Inserts
5. Read Article
6. Direct Mail
7. Magazines
8. In-store Promotion
9. Cable TV
10. Online Advertising
Power of Word-of-Mouth as per demographic break-up in 2005:
20
Source: BIGResearch, LLC findings as printed in Advertising Age (January 2, 2006)
21
Readings and References:
1. Thomas K. McCraw, “American Business, 1920-2000: How It Worked - P&G:

Changing the Face of Consumer Marketing”, www. harvardbusiness.com, 2nd
May, 2000
2. George Silverman, “How to Harness the Awesome Power of Word of Mouth”,
Direct Marketing Magazine, www.mnav.com, 2001
3. “Smells like teen (marketing) spirit”, www.forbes.com, 27th January, 2004
4. Alexander Coolidge, “Michael Stalbaum addresses viral marketing techniques for
teens — teens virtually perfect for P&G”, www.cincinnati.com, 8th March, 2004
5. “The rise of word of mouth marketing”, www.aktuleno.com, 17th May, 2004
6. Samar Farah, “WORD-OF-MOUTH MARKETING Making Waves”,
www.cmo.com, July, 2005
7. Rob O'Regan and Constantine von Hoffman, “Jim Stengel: Up Close and
Personal”, www.cmo.com, September, 2005
8. Todd Wasserman, “What's the Buzz? One Organization Says “Fraud””,
www.brandweek.com, 18th October, 2005
9. Bruce Horovitz, “P&G Buzz Marketing Unit Hit With Complaint”,
www.usatoday.com, 19th December, 2005
10. John Moore, “The Influential Power of Word-of-Mouth”, Word of mouth
marketing, 17th January, 2006
11. Justin Kirby, “How to Manage and Measure the Word of Mouth Revolution”,
www.connectedmarketing.org, 28th February, 2006
12. Jack Trout, “Is word of mouth all it’s cracked up to be?”, www.forbes.com, 7th
March, 2006
13. Neff, Jack, “P&G provides product launchpad, a buzz network of moms”,
Advertising Age, Vol. 77 Issue 12, p1-40, 2p, 2c, www.ebsco.com, 20th March,
2006
14. Stephanie Hoo, “’Guerrilla marketing’ takes over”, www.cantonrep.com, 14th
April, 2006
15. Kevin Dugan, “P&G Expands Word Of Mouth Efforts”,
www.marketingnewz.com, 18th April, 2006
22
16. “Word of Mouth Marketing: To Tell Or Not To Tell”, www.adrants.com, 19th
May, 2006
17. Jack Neff, “Package-Goods Giant Lures WD-40, Discovery to 'Vocalpoint'
Marketing Service”, www.advertisingage.com, 20th May, 2006
18. “Commercializing relationships?”, www.emergencemarketing.com, 21st May,
2006
19. Stan, “The Power of Word of Mouth as Practiced by P&G”, www.buyblue.org,
23rd May, 2006
20. Robert Berner, “I Sold It Through The Grapevine”, www.businessweek.com, 29th
May, 2006
21. “P&G: Largest Advertiser in U.S. for 2005”, www.adpunch.org, 28th June, 2006
22. “Savvy Moms Share Maternal Instincts; Vocalpoint Offers Online Moms the
Opportunity to be a Valuable Resource to their Communities”, www.pg.com, 21st
July, 2006
23. James Stengel, “The future of marketing”, www.aaaa.org
24. www.pg.com
25. www.vocalpoint.com
26. www.sourcewatch.org
27. www.ebsco.com
28. www.hoovers.com
29. www.morningstar.com
30. www.tremor.com
23

9) P&G Buzz Case Study

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P&G’s ‘Buzz Marketing’

Case Study Reference No. COS0049P

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Teaching Note COS0049P-1

Distributed and Printed by Phone : 91(40) 23435310 - 11

Steve Knox, Vocalpoint's CEO1

"Within a paternalistic corporate culture, P&G pioneered in brand management, in consumer

Buzz/ Word-of-Mouth Marketing

“The mass-marketing model is dead, this is the future17.”

James Stengel, P&G's Global Marketing Officer.

Amy Donges, Vocalpoint marketing manager.

Steve Knox, CEO of Tremor and Vocalpoint

Steve Knox, CEO of Tremor and Vocalpoint

1. Word of mouth (WOM): The act of consumers providing information to

The basic elements of WOM:

 Educating people about your products and services

Types of Word of Mouth Marketing

 Buzz Marketing: Using high-profile entertainment or news to get people

Source: Compiled by IRC from http://pg.com/company/who_we_are/ourhistory.jhtml

Sr. No. Brands/ Companies P&G’s WOM Units

Source: Compiled by IRC Pune

The "Top Ten" most influential marketing mediums, regardless of

Power of Word-of-Mouth as per demographic break-up in 2005:

1. Thomas K. McCraw, “American Business, 1920-2000: How It Worked - P&G:

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