Proctor and Gamble

Procter and Gamble Case Study An insight on why P&Gs logo change in the 1980s was the right move [pic] By: Anvesh Saxena-02 Sameer- 04 Rajat Aggarwal-06 Alex K-08 Arun Chopra-10 Section B-PGDM General 2011-13 The case in brief • Rumours of P&G involvement in Satanism emerge in the 1970s. • Came in two cycles. 1981-82 and 1984-85 • Rumours surfaced immediately after P&G introduced the tool free no. system to address customer complaints • First rumour claimed that the company was owned by the Church of Satan because the logo of P&G that was more than a 100 years old portrayed a half moon and 13 stars symbolising Satanism. By 1981 a second rumour circulated which claimed that John Smale, President & CEO had appeared on the Phil Donahue Show or a similar one and claimed that he was a member of the Church of Satan. • Toll free lines were flooded with retailers and customers and the sales were declining. • P&G sent fact sheets clarifying their stand to 48,000 churches in Southern USA and also sought the aid of clergy to support them • They also obtained statements form TV channels vouching for the company through a concentrated effort by the PR team The rumours reduced subsequently but then there was another sudden spurt by late 1984 and then tripled in October • These claims came from around the country and P&G sent out media information kits explaining the history of the logo • A security team was engaged to trace the rumours source and pattern, even threatening to sue those spreading the story. • By 1985 the problem had gotten out of control and P&G were forced into a position where they had to change to logo. • Experts believed that it was the right decision although hundreds of thousands of dollars were spent on squashing the rumour and convincing the customers and retailers Finally, although the company lost an 100 year old heritage but it has risen from the ashes FMCG market . Background of P & G the Union Army with soap and candles. The Logo of P&G [pic] P&G’s former logo originated in 1851 as crude cross that barge workers on the Ohio River painted on cases of P star candles to identify them. P later altered this symbol into a trademark that showed a man in the moon overlooking 13 stars, said to commemorate the original 13 colonies] The company received unwanted media publicity in the 1980s when rumours spread that the moon-and-stars logo was a satanic symbol.

The accusation was based on a particular passage in the Bible. The three curls were said to be a mirror image of the number 666, or the reflected number of the beast. At the top and bottom, the hair curls in on itself, and was said to be the two horns like those of a ram that represented the false prophet. P changed the logo in 1981 regarding the controversy it was facing at that time. What was quoted by the then spokesperson for P, Mr Loftus said “The moon and stars will continue to be the company’s officially registered trademark, Loftus said. But the company is eliminating curly hairs in the man’s beard that look like the number 6”.

But P decided to change the entire logo eventually to give itself a makeover and hence remain a competitive force in the market SWOT ANALYSIS A SWOT analysis was done to understand the position of P in the US market at that point of time and the environment that influenced it. Strengths of P & G • They have always strategized their products as per the consumer needs and the trends. • They believe in doing extensive market research before launching any product in the market. They set the standard of the new product so high that no competitor is able to come near their product in the near future. Their products are quality products and they focus on quality not quantity. • They have focused on customer feedback ad have made changes in their products accordingly. P & G was the first company in the world to have toll-free lines for their customers. They thoroughly believed in understanding what the customer wants and expects from the organization. • They advertise and market the product in such a manner that it seems that their products create a niche for itself in the market. Weaknesses of P & G • Their symbol has been their biggest problem.

Their symbol made a direct relationship with Satanism and devil worship in the eyes of the people during 1980 to 1985. Their symbol had a quarter moon and thirteen stars which made a link possible for it to be linked to church of Satan. • Another major problem they faced was they were not able to anticipate and judge the mood of the public regarding the outlook towards their logo. After the first cycle of rumours they never thought of being proactive and make some changes in their symbol. They firmly believed in eliminating the rumours in the first cycle and did not minimize the scope for future rumours. They were not able to clarify their logo and trademark to the public and their retailers. They were not able to maintain a good relation with the public and lost out on that front. • During the second cycle of rumours, they sent the same kits which they had used during the first cycle of rumours. They never realized that this time the rumours were nation-wide. Opportunities • After the first cycle of rumours got suppressed, they had a good opportunity to change their logo and minimize the scope of further rumours but they didn’t focus on it. At that time all they were concerned were with the suppression of the rumours Threats Their business was in threat as the rumours were concerned with the religious sentiments of the people. This one threat was capable of swiping them out of the business forever. The outrage by the people was beyond their control. They had already occurred huge losses which were prominent signs of the disaster ahead for them had they not changed their logo. Inferences • The cyclic rumours were the biggest problem they were facing. This problem lead to a series of other problems. It was like a chain reaction which triggered the mob against them and made them suffer huge losses in terms of money and goodwill of the brand. People had lost faith in a company which served them for so many decades with great products. This clearly indicates how serious the problem would have been for them and how severe it was. • Even retailers had started questioning the company about their linkages and were slowly losing faith in the company • Employees were being threatened and tyres were being slashed. This clearly indicates how serious the situation had become • Sales of their products were going down tremendously. They had already incurred huge losses. People were not choosing their products. As the number of calls was very high they had to keep extra telephone staff in order to handle the outrage which further added to their expenses • During the second cycle of rumours, the outrage was from across the nation. This time it was widespread and it was impossible to control the people. It has reached such a state that hysterical rumours could easily outlast reasoned explanations and even lawsuits. Questions 1. What category of communication is P concerned with this case? This is a classic case where P corporate communication dept. was put to test.

We understand that the rumors surfaced in the 1970s but P corp. comm. did not react instantly to the rumor. They lacked anticipation and after a decade it got out of control. The rumors would not have had a damaging effect if they had come out with a clear statement through corp. comm, explaining the logo and its association with it. 2. What change, if any, would you have recommended for the company’s initial strategy in 1982 to stop the rumor. Unfortunately the rumor had spread to most parts of the south and had stained the reputation of P by 1982.

An important thing to realize is that rumors cannot be stopped completely. We can only distance ourselves from the rumor. To minimize the damages already caused P could have adopted the following strategies. a. Make an appearance in the Phil Donahue Show with an episode on P history and business thereby explaining the tradition behind the logo and the competition present in the market and why such a rumor was propagated against P. b. Since there was an allegation that P donated money to the Church of Satan corp. comm. could have come out with a financial statement on how P was earning and spending its money. . Advertisements through radio broadcasting for P products could have been altered to end with a tag line like “God Bless America” ,(an American patriotic song written by Irving Berlin in 1918) endorsing the company’s belief in its people and God. d. Making public donations to religious bodies for social welfare activities would have been beneficial to its brand image and would also have cost far less than what was actually spent on their firefighting activities. 3. Were the toll-free telephone lines advantageous or disadvantageous to the company?

Do you agree with the decision of P to change their established logo? Justify your view. P introduced the system of the toll free nos. to provide better service to its customers. It was the first company in the US to do this. With the kind of brand image P had in America this additional feature would only add to its reputation. The introduction of such a service backfired when the rumors began spreading and the toll free lines became a medium through which customers and retailers enquired about the rumor. This could be looked at as an advantage because if the toll free nos. ere not available people would have approached the company directly and they would not have been able to gauge the extent to which the rumors had spread. The no. of calls and the locations from where the calls were arising could give a measure of the rumor’s distribution and magnitude. We believe that the change of logo was the best decision for the following reasons. economy was booming P had a lasting impression in the minds of the people through their products. It was best not to make an old logo become an obstacle to P growth. References: Wikipedia – Procter and Gamble, God Bless America

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