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P&G's Lafley: 'P.R.I.S.M. Will Transform'

By Peter Breen

Insights unlocked by the Pioneering Research for an In-Store Metric project will "transform" Procter & Gamble's understanding of in-store communication and help the company improve ROI on all marketing activity, according to ceo A.G. Lafley.

Speaking to the Consumer Analyst Group of New York on Feb. 21, Lafley identified P.R.I.S.M. as a key factor in P&G's efforts to improve corporate-wide productivity.

In a presentation that focused on P&G's plans to reduce and maintain operating costs through a variety of global measures, Lafley spent several minutes discussing P.R.I.S.M., a landmark research initiative undertaken by P&G, other leading product manufacturers and several national retailers under the guidance of the In-Store Marketing Institute.

Data from P.R.I.S.M. will not only let P&G "better understand what's really happening in the store," it will improve the company's marketing productivity overall by facilitating comparisons of in-store activity with other methods of consumer communication, he said.

The subject of in-store marketing also came up as Lafley described efforts to eliminate operational duplication by moving toward shared services. An early success in that endeavor has been a move toward centralized sourcing of P-O-P materials, he said.

Below is a transcript of Lafley's comments on P.R.I.S.M, followed by his remarks on P-O-P sourcing.

On P.R.I.S.M
"Marketing productivity is another important opportunity. P&G invests about $10 billion a year in consumer marketing. And as you know we've been working for some time now to increase the effectiveness and the efficiency of our consumer marketing spending -- and to increase the reach and the impact with consumers.

In addition, we spend $10 billion with retailers to drive demand creation in stores. And we're confident we can improve the productivity of this investment in shopper purchase and trial with our trade customers. Consumers claim 70% of their final purchase decisions are made at the store shelf, but we don't know as much as we would like about how these purchase decisions are really made. So we're in the process of closing this knowledge and understanding gap.

We've been impressed with how well Gillette understands the key business factors that move their brands in store -- what they call key business drivers -- and how those drivers direct their spending with retailers. By combining P&G's deep shopper understanding and Gillette's key business driver capabilities, we're becoming far more knowledgeable about how to leverage retail presence, in-store innovation and what we call shopper-based marketing.

P&G has been at the forefront of an industry initiative called P.R.I.S.M., an in-store metric that we believe will help us better understand what's really happening in the store. P.R.I.S.M. will transform how we think about in-store consumer communication and behavior.

Today, we know a lot. We know the size and the value of the shopping basket. We know total store traffic and shopper frequency. But P.R.I.S.M. will tell us a whole lot more:

  • what did shoppers really have the opportunity to see in their shopping trip;
  • which in-store programs specifically are working the best;
  • how much do we have the opportunity to sell on any given shopping trip.
In addition, we're equipping field sales staff with tools that enable them to calculate and compare the ROI for a range of in-store marketing and consumer promotion programs. This combination of high-quality data and new tools will help us make a meaningful productivity improvement in the ROI of shopper and trade spending over the next few years.

It will also allow us to improve returns on total marketing spending, because we can compare returns from in-store programs with returns from out-of-store consumer marketing."

On P-O-P Sourcing
"We're moving more work to shared services. A good example is point-of-sale material, all of our in-store display materials, shelf signage and tags. This has been managed on a brand-by-brand and country-by-country basis, but we're already seeing significant savings as we begin to centralize and standardize the sourcing of in-store materials."

Published: February 2008

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