Jump Starting Innovation – P&G Updates a Tired Brand

When P&G’s new CEO took the helm, his observation was that the company was innovating, but not successfully executing to develop compitetive advantage. Below is a video from Businessweek.com with information on CEO A.G. Lafley’s approach and his new book.

When Procter & Gamble acquired hair-care company Clairol in 2001, it inherited a floundering shampoo brand. By 2004, Herbal Essences, at the time nearly 35 years old and a mass-market hair-care brand for women, was in a “long-term decline,” reports Chairman and CEO A.G. Lafley. Marketed to all women (or at least those who wash their hair), the line had gone stale, with little distinction from the many competitors it shared on the drugstore shelf.

Jump-Starting Innovation

To find the right new, smaller target market for the brand, P&G turned to an immersion program for P&G managers to jump-start innovation. There, the team came up with a new target audience for the brand—Generation Y. “In the case of Gen Y, there really wasn’t another hair-care brand that was really meeting their needs,” says Lafley. “The question was: ‘Can Herbal do it?'”

P&G bet yes. They redesigned the packaging of the product to “fit” this more tailored market: The shampoo and conditioner bottles are curved so that they literally fit together on the shelf. The nesting shape not only helped Herbal Essences stand out from others on the shelf but also encouraged more young women to buy both products, driving up conditioner sales.

To appeal to Millennials, the team also updated the language on the packaging. The ho-hum “dandruff” reference gave way to “no flaking away.” Names for different hair styles were changed to more youthful phrases such as “totally twisted” or “drama clean.” “We totally reframed the proposition,” says Lafley. While P&G doesn’t break out sales figures on specific products, the company reported in a conference call soon after the shampoo was relaunched that the brand was growing again, with sales growth rates in the high single digits.

Michael Arrigo

Michael is Managing Partner & CEO of No World Borders, a leading healthcare management and IT consulting firm. He serves as an expert witness in Federal and State Court and was recently ruled as an expert by a 9th Circuit Federal Judge. He serves as a patent expert witness on intellectual property disputes, both as a Technical Expert and a Damages expert. He leads a team that provides Cybersecurity best practices for healthcare clients, ICD-10 Consulting, Meaningful Use of Electronic Health Records. He advises legal teams as an expert witness in HIPAA Privacy and Security, medical coding and billing and usual and customary cost of care, the Affordable Care Act and benefits enrollment, white collar crime, False Claims Act, Anti-Kickback, Stark Law, Insurance Fraud, payor-provider disputes, and consults to venture capital and private equity firms on mHealth, Cloud Computing in Healthcare, and Software as a Service. He advises self-insured employers on cost of care and regulations. Arrigo was recently retained by the U.S. Department of Justice (DOJ) regarding a significant false claims act investigation. He has provided opinions on over $1 billion in health care claims and due diligence on over $8 billion in healthcare mergers and acquisitions. Education: UC Irvine - Economics and Computer Science, University of Southern California - Business, studies at Stanford Medical School - Biomedical Informatics, stutdies at Harvard Law School - Bioethics. Trained in over 10 medical specialties in medical billing and coding. Trained by U.S. Patent and Trademark Office (USPTO) and PTAB Judges on patent statutes, rules and case law (as a non-attorney to better advise clients on Technical and Damages aspects of patent construction and claims).

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