Magazine article Marketing

Editor's Comment: P&G Puts Premium on Value

Magazine article Marketing

Editor's Comment: P&G Puts Premium on Value

Article excerpt

Procter & Gamble's launch of a cheaper product under its existing Pampers brand marks the beginning of a new phase in the company's history in the UK. It is, however, the result of a strategy put in place five years ago. It is also likely to be the first of several big-brand 'value' variants to emerge from FMCG companies.

The brand extension, which would have been unthinkable for many companies a few years ago, is an acknowledgement of an ongoing dual threat: that of supermarket own-label ranges and the rise of hard discounters in Western Europe. It is also a chance to generate fresh revenue streams in growing markets for years to come.

P&G could have continued to ignore own-label, but discounters such as Aldi and Lidl - the fastest-growing retail channel across Europe - have proved too much of a threat to overlook. Hard discounters are 100% own-label and there is a good chance that if their rise continues, branded-goods firms such as P&G will be ringfenced as high-margin and high-priced.

Pampers is not the first brand with which P&G has experimented by adding a value range, but it is the most significant, and the first launch of its kind in the UK. …

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