One of America’s leading household products’ companies recently announced it would be discontinuing at least 90 of its low performing brands. That might sound like a lot (and it is), but, as with so many things, it’s all in how you position it. Yes, on the one hand, 90 familiar Procter and Gamble Brands will no longer be available on store shelves, but the company will still offer up to 80 popular brands,which is no small number by any stretch of the imagination. P&G did not reveal which brands would no longer be available, and representatives said some of the discontinued brands would be sold to other market leaders.
Regardless of which brands will stay and which will go, one of the most important facets of this move will be how the company presents that shift as it rolls out, both to investors and to the consumer public. Initial responses have been positive and company stock shot up three points after the announcement, but that doesn’t mean consumers will respond positively to the decision without a workable explanation.
On one hand, P&G could say they cut back about half of their brands in order to focus on the most popular lines. This is a practical move that all but the most jaded consumers can understand, and even embrace.
Another option, a slightly more consumer-minded approach, would be for P&G to explain that the decision was made as part of an effort to give the public what they want, focusing their businesses around those brands that it’s consumers love best. This implies the decision was made more for the consumers and less for investors (which has its pros and its cons). In the end, the answer may lie somewhere between the two options. Not exactly in the middle, but including both and “sliding the dial” based on the audience.
No matter which direction they choose to go, P&G needs to prepare for competitors to use this as a chance to cut into its well-established consumer brand confidence. Even though the brands the company is planning to keep represent nearly 90% of total product sales, any time a company does any sort of belt tightening, that empty shelf space presents a prime opportunity for the competition. Who will fill the gaps in that shelf space, and how will they position their brands in the marketplace? That will be an interesting process to watch.