At the same clock time, the FMCG giant has continued to up its market investment to communicate the “ transcendence ” of its brands, which has enabled it to raise its prices in the US over the last quarter without any “ noteworthy changes ” in consumer behavior .
In the business ’ fiscal results for the irregular draw of its fiscal class, P & G revealed it had increased market spend by 50 basis points compared to the like menstruation in 2020.
however, overall commercialize expense as a share of sales decreased by 80 basis points, signalling that the occupation ’ marketing spend is working harder and driving a greater volume of sales .
Speaking to investors today ( 19 January ), foreman fiscal officeholder Andre Schulten said the improvement was driven by sales leverage and savings in “ non-working selling costs ” .
build on the intensity of our brands, we are thoughtfully executing tailored price increases .
Andre Schulten, P&G
While he did not break down in which channels marketing investment had been spent, Schulten said during P & G ’ s end fiscal update in October that the company was hoping to “ optimize ” its market strategy by ramping up digital media spend across all markets .
“ We estimate there ’ sulfur still significant opportunity to optimise our ability to reach consumers more broadly and more effectively at importantly lower cost, ” Schulten said at the time .
“ [ We will ] increase the percentage of digital media around the earth, as we continue to optimise our own algorithm to target messaging to consumers. ”
P & G reported net sales of $ 21bn ( £15.4bn ) for its latest quarter between October and December, an increase of 6 %, or $ 1.3bn ( £954m ) versus the second quarter of the 2020/2021 fiscal year. final profit rose 9 % from $ 3.9bn ( £2.9bn ) to $ 4.2bn ( £3.1bn ) .
Nine out of 10 product categories grew parcel over the past three, six and 12 month periods in the US tied as inflation takes its toll on family budgets, which Schulten attributes to consumers preferring P & G brands and “ the superior performance they provide ” .
Price rises fail to put off consumers
however, P & G ’ s CEO Jon Moeller admitted the business has never faced more “ excitability ” than it is presently experiencing across geopolitics, regulations, health, add and british labour party.
The impact of the new Covid-19 form Omicron, combined with inflationary pressures and supply chain difficulties, are all driving up operational costs. The business is looking to offset a assign of these monetary value pressures with price increases, Schulten said .
“ Building on the intensity of our brands, we are thoughtfully executing tailored monetary value increases. We ’ ve [ combined ] price increases with invention to improve consumer measure along the way, ” he said .
The caller announced price increases in each of its 10 product categories in the US, with rises in baby caution, feminine care, pornographic dissoluteness, family worry, home care, hair’s-breadth care, grooming, oral concern, skin care and detergents now effective in grocery store .
Increases in detergent prices have besides taken seat over the last few months, Schulten said. Price increases on sealed healthcare brands in the US were besides announced to retailers yesterday, effective from mid-april .
P & G vows to increase digital selling spend amid growing cost pressures
“ We expect pricing to be a large subscriber to sales growth in the back half of the fiscal year as more of our price increases become effective in the market, ” Schulten said .
“ As this price reaches store shelves we will be close monitor pulmonary tuberculosis trends. sol far, we haven ’ thymine seen detectable changes in consumer behavior. ”
P & G said price elasticity has been lower than would have been seen historically, with price elasticity on brands that undergo increases in September and October in the range of 20-30 % lower than the occupation would have expected based on historic data.
demand for the occupation ’ best perform, premium-priced brands remains “ very impregnable ” as their commercialize share trends upwards, Schulten added, crediting the “ potent superiority ” of P & G ’ s brands .
“ For the price increases where we have a sufficient read period at this item in clock, we have seen a more benign chemical reaction of the consumer. The consumer is healthy broadly and is preferring our brands, ” he said .
“ So we take comfort in the strength of our brands, the broad based growth of the portfolio globally, the broad base growth of the portfolio across categories and the short-run reaction of the consumers. ”