Magazine article Marketing

P&G Retreat on Price Strategy

Magazine article Marketing

P&G Retreat on Price Strategy

Article excerpt

Static market share figures and squeezed profit margins have forced Procter & Gamble to ditch the much-trumpeted 'Every Day Low Pricing' strategy it launched a year ago.

In a dramatic U-turn, P&G has in the past ten days instigated a national price increase on Pampers and Lenor - the two brands which led EDLP.

Price hikes across other brands are expected over the next few months. A key candidate is likely to be Fairy Liquid, which saw its price cut by 10% to 72p.

Despite the reduction in price, in the 12 months to December 1996 the brand's volume share was static at 37.3%, according to IRI Infoscan, while its value share was cut by nearly 7%.

Competitors such as Kimberly-Clark and Lever Brothers, which were forced to follow P&G's cuts, have been equally quick to copy the recent price hikes.

In the nappy market, where P&G caused a price war by dropping the price of a standard Pampers pack from [pounds]6. …

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