‘Product Experience’ Drives Performance

NEW YORK this September, Procter & Gamble announced that its Gain detergent had joined the sales ranks of the company’s billion-dollar brands. Playing an integral part in that growth: the February 2006 launch of Gain Joyful Expressions, a line extension that has distinctly curvy shapes and an assortment of bright colors (in addition to long-lingering scents like Apple Mango Tango, Mandarin Lime Fusion and Gardenia Delight).

“Historically at P&G we looked at product performance. We didn’t pay as much attention to product experience,” says Claudia Kotchka, vp, design innovation and strategy at P&G. “Obviously the product cleans fabulously, but this is all about joy. When consumers open the bottle, they like the smell. The bottle itself is much more whimsical. It’s about taking the elements people wouldn’t think are important and having them add up to the overall brand experience.”

More than ever, P&G’s efforts to reinforce consumer perception of quality in its brands will be a key to the company’s success. Its plans to increase product costs, as revealed in last week’s fiscal first-quarter earnings call with investors, will challenge the loyalty of the packaged-goods company’s consumers at the same time P&G predicted weak growth amid signs of a slowdown in the U.S. marketplace. With rising commodity prices, the company said it had little choice but to react accordingly to offset those costs.

In this environment, P&G CEO A.G. Lafley’s investment in design as a differentiator in product experience will be put to the test. Lafley has placed much emphasis on retail considerations—what he likes to describe as the “first moment of truth” with consumers. And for national marketers like P&G, point-of-sale consideration is taking on new urgency as they compete in a proliferating retail universe of SKUs (stock-keeping units) and the increasing credibility of store brands. And the company doesn’t stop at packaging. Lafley has set out to make P&G as much about design as technology or price point.

Last year, P&G established workshops to teach design thinking to the company’s executives. P&G’s presidents of business units sponsor the events and invite staffers across operating functions and management levels to participate.

“Design at P&G is not a centralized function,” says Kotchka. “All of the designers are in the business units. We have them sitting with our R&D working on innovation from the beginning, sitting with our marketing folks, working on branding from the beginning. That’s a big change from the historical approach of handing it over the wall at the end. … Looking at design as part of the total consumer experience is critical.”

Jerry Kathman, CEO of LPK, a Cincinnati branding agency that works with P&G, adds: “A lot of companies see design as something to consider at a tactical development stage, a decision that is made as the box is almost out the door. At P&G, it’s embedded in the company’s DNA. It’s part of that fuzzy front end of development.”

P&G now has around 250 staff designers, up from 30 a decade ago, and also works with outside firms. Underscoring their mission as change agents, they have been recruited from outside P&G, an atypical practice at a company that traditionally grows its own talent, and from backgrounds that include fashion and retail design. The Cincinnati-based company has also instituted the new practice of hiring designers in foreign markets to lend a cultural perspective. Also, Kotchka has created a global design board from outside the consumer packaged-goods industry. It meets three times a year and has members from companies like General Motors and the Disney Store.

Kotchka points to last year’s relaunch of Herbal Essences—repositioned as a brand for Gen Y females—as an example of P&G’s emphasis on design as a critical element in guiding a holistic solution.

“The team was very multifunctional,” she says. “The R&D folks, the marketing folks, the design folks developed the concept together. The attitude [of the brand], the way it’s named, the version names are very much in tune with the user [and] reflects who she is. This shows up in the package … shows up in the point of sale, it shows up in the advertising. This is where the whole team has to work together to get it right.”

In a hair-care aisle awash in vivid color, P&G used curvy bottles to stand out. The bottles of shampoo and conditioner have complementary shapes that nest together, encouraging consumers to buy the conditioner, which has driven sales. Additionally, the floral logo was updated to a hologram-like, circular label, and P&G used unexpected details, like making the translucent bottles a different color from the contents. To reach the Gen Y demographic, the brand features product names like “totally twisted” (for curly hair). Research also showed consumers like a reason to spend time in the shower, so P&G created a quiz: Shampoo bottles have questions printed on them, with answers found on Herbal Essences conditioner containers.

Sales of the shampoo, which was part of P&G’s 2001 purchase of Clairol, peaked in the ’70s and had a brief period of visibility with Kaplan Thaler Group’s “Totally organic experience” campaign. P&G spent 18 months relaunching Herbal Essences in spring 2006. (As recently as five years ago, the company would have spent twice as long on such a project.) Consumer research revealed that Gen Y females associated “organic”—which once brought up associations of granola and Birkenstocks—with things like fruit and live flowers.

Herbal Essences “is joyful,” says LPK’s Kathman. “We reflected changes that weren’t just aesthetic. It’s about the nomenclature of the product. [For instance], we don’t call it ‘dandruff’—we say ‘no flaking way.'”

Kotchka won’t comment on sales performance other than to say that sales have “exceeded expectations.” Herbal Essences is now the No. 3 hair-care brand in the country.

“P&G has made a commitment to design; it’s not just a case of hiring designers. It’s a case of investing in packaging innovation and using research to measure the impact of packaging decisions on sales. They think of packaging as a marketing vehicle, not just a cost center,” says Scott Young, president, Perception Research Services, a company that works with P&G and employs practices like eye tracking at retail. “As marketers realize how important point of sale is, they’re moving away from thinking of packaging purely in terms of aesthetics and instead they’re thinking of it in terms of shelf visibility and competitive differentiation.”

In launching Febreze Air Effects in late 2004, P&G wanted to establish the fabric freshener’s presence in a category dominated by SC Johnson, which offers Glade in different scents and forms (e.g., spray and solid). Febreze’s “technology was not typical of air fresheners,” explains Kotchka, who says its purpose is not to cover up odors, but to neutralize them. “It has a very clean scent and is very distinct in how it works. So we had to tell consumers it was a very different product experience [by] both the product shape and how it feels in your hand.” The product is sold in one form—spray only—and in a limited number of scents. “We [also] used a light fragrance and a mist, rather than a heavy spray to signal its difference as a ‘breath of fresh air.'”

Although Gillette’s Venus razor was designed by the brand before its acquisition by P&G in 2005, Kotchka holds it up as an example of the design standards at P&G. The razor, which has a different blade angle to navigate curves, now contains a shave gel bar. And because P&G found that women like to change blades in the shower, it designed a waterproof, multiple-blade box.

With Pampers diapers, P&G discovered parents didn’t like the thought of plastic against their babies’ skin, so the company made the products stretchier and more cotton-like. What’s more, the company now treats diapers more like underwear and has a fashion designer working on the brand.

P&G has kept its lead in product success story Swiffer, where cheaper lookalike products have subsequently launched, by recently redesigning the mop itself. To prevent the handle from sliding if propped against a wall—scratching both the wall and floor—it now has a point to keep it anchored when leaning. The mop also now has a bigger head and a longer handle.

“We use a lot of ethnography, watching how people use a product and why they don’t use it,” observes Kotchka.

In September, P&G—along with other companies—also began reformulating its liquid laundry detergents and putting them in bottles half the current size, making them easier for consumers to carry, store and pour. In a six-month test market in Cedar Rapids, Iowa, concluded in April, increasingly environmentally concerned consumers responded to the smaller bottle. In the first 12 weeks, awareness reached 65 percent, according to P&G

The smaller bottles follow P&G’s earlier success with the launch of energy-saving Coldwater Tide two years ago.

Lafley’s interest in design began when he was based in Japan, running P&G’s Asia operations in the mid-’90s. There, according to a company rep, he gained an appreciation of the country’s sophisticated design aesthetic and the power of those details as an impetus in purchase decisions. After becoming P&G’s chief executive in 2000, he promoted company veteran Kotchka into her design, innovation and strategy position, a new top-level role. Kotchka, who previously ran Tremor, P&G’s word-of-mouth marketing business, is charged with incorporating the design function throughout P&G’s business practices.

While P&G’s new design priorities have played an increasing role in Lafley’s turnaround of the company, Kotchka emphasizes it’s still one piece of the overall product development and marketing challenge—albeit an important one.

“If you look at design as part of the entire consumer experience, it’s critical,” notes Kotchka. “But we don’t try to quantify design as something different from something else; we measure what is the total consumer experience with this brand and this product. It’s very holistic.”