Beverage Titan, Electronics Giant Aim to Double Sales by 2020; House of Ivory Reaches for 1 Billion More Consumers in 5 Years
BATAVIA, Ohio (AdAge.com) -- Forget the prospects of a weak recovery, double-dip recession and all the talk of a "New Normal" where consumers are scared to spend. Marketers' projections are bigger than ever. Rather than an era of reduced expectations, this might be better termed the Era of Big Projections.
Consider: At the Association of National Advertisers' annual confab earlier this month, Coca-Cola Co. Chief Marketing and Commercial Officer Joe Tripodi talked of doubling its sales -- now at $31 billion -- within 10 years. Ralph Santana, once a top North American soft drink executive at Mr. Tripodi's nemesis PepsiCo and now CMO of Samsung, did him one better by promising to nearly triple sales to $400 billion.
Some of the growing list of big projections sound huge, but appear doable. Procter & Gamble Co. Chairman-CEO Bob McDonald last year set out to reach a billion more among the world's 6.7 billion consumers within five years, bringing P&G's total from 4 to 5 billion. Tough, but by P&G's accounting, achievable. Even in a year when the company struggled to reinvigorate growth, P&G added 200 million consumers, right on plan.
The North American leg of P&G's plan to "touch and improve more lives more completely" focuses on the "more completely" part. In North America, P&G already reaches 99% of consumers with at least one product. The goal over the next five years is to get each one to buy at least one more. That would add $1 billion to $3 billion annually to the company's sales, which have been largely flat in North America the past couple of years.
To that end, P&G last week launched a "Have You Tried This Yet?" campaign aimed at getting people to try just one among several products launched within the past 18 months. Among its tactics is a pop-up store in New York to encourage sampling its products.
The "Just One More" idea is no small task, but not unattainable either. If each of the 133 million households in North America bought just one more P&G product annually, they'd only have to spend about $7.50 each to add $1 billion to P&G sales. A bigger-ticket item or repeat purchases that would drive the household sum up by $23 would add $3 billion in sales for the company.
Other big projections sound amazingly hard to meet but could turn out to be easier than they seem, even if the path from here to there isn't entirely clear yet.
Take Coca-Cola Co.'s goal of doubling sales in 10 years. That comes out to a compound annual growth rate of 7% -- difficult, but not impossible for a company whose motto is "Live Positively." It's even more possible without ruling out acquisitions or currency movements to hit the target. It's reasonable to assume Coke will buy some companies over the next decade, and given the size of the U.S. trade deficit, dollar devaluation seems a given.
Coca-Cola, in setting its doubling goal last year, said it expected 60% of growth to come from such markets as China and India, vs. only 15% from developed markets. (Mr. Tripodi said it wants to achieve 3 billion servings a day by 2020.) With sales up 5% last quarter, though, it will need to pick up the pace.
P&G under Chairman-CEO A.G. Lafley nearly doubled sales in just seven years last decade, helped by liberal doses of both acquisitions (led by Clairol, Wella and Gillette) and currency devaluation. For the past three years of recession, however, sales have stuck around $80 billion.
Unilever CEO Paul Polman, a veteran of P&G whose work in Western Europe helped P&G attain that doubling under Mr. Lafley, has set a similar goal of doubling Unilever's sales since he took over early last year. But he's done two things that make attaining that goal a little easier: He didn't set a timeline and he didn't specify that it had to be organic sales growth.
Such things as the recent acquisitions of Alberto-Culver can help, as has the devaluation of the euro this year. On the other hand, he added a caveat that made it tougher -- reducing total negative environmental impact while doubling sales.
Samsung, which already holds leading shares across a dizzying array of consumer electronics and home appliance categories, has perhaps a tougher task even in a market with stronger growth prospects.
Mr. Santana held one of the means to his end in his hand at the ANA meeting in Orlando -- a yet-to-be-launched tablet PC that he noted was considerably smaller than the iPad ANA CEO Bob Liodice was using to organize his
presentation. Mr. Santana's fit in his jacket pocket.
The bigger solution for Samsung lies in going from a big brand with a largely functional image to what Mr. Santana called "a curator brand," which he likened to ESPN -- one that defines the notion of cool within its space.
That's not unlike, though he didn't say this, Apple. And it's a tall order, one that Mr. Santana, who started at Samsung only three months ago, acknowledged will take some time -- though, presumably, less than 10 years.
Turning Samples Into Sales
No "free" sign waved in front of P&G's New York pop-up store Friday, but people got the message all the same. Hundreds filed in and out of the corner location in midtown over the course of its first day of business, queuing for free hair-color treatments, skin evaluations and take-home samples of some of the consumer giant's most recognizable brands. It's all part of its Have You Tried This Yet? initiative, which aims to introduce new P&G products to its already-loyal consumers.
A visitor to the New York City pop-up store gets a free Siascope reading, which measures the health of one's skin.
And try it I did. Along with dozens of others, I enjoyed a shampoo and conditioning treatment with Head & Shoulders products and a styling with Pantene classic gel and hairspray. (I declined a Clairol Nice N' Easy color treatment and a CoverGirl color-match consultation, though I could've had those, too.) I watched my smile digitally rendered to show how it might look after a Crest Whitestrips Advanced Seal regimen, and even submitted to a Siascope reading, which bore distressing news about the state of my "dull, uneven" skin after a summer in the sun.
The samples may be free for now (the shop will shutter for the year after Oct. 31, and the products will be featured in the company's BrandSaver book), but P&G is one marketer that knows that if you bring a horse to water, it may just stay thirsty for a lifetime. -- THOMAS PARDEE
