P&G Gussies Up Its Line Extensions

by Christine Bittar, Feb 26, 2007, 5:00 AM

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Procter & Gamble has been indicating for a while that acquisitions will drive future growth, but that doesn't mean the packaged goods marketer isn't interested in expanding its own brands with nifty line extensions for the very same reason.

That was one of the main messages from P&G CFO Clayton Daley, Jr., who spoke last week at the CAGNY conference in Scottsdale, Ariz.

Expanding on some of its biggest names, Daley said P&G's new products rolling out in this first half of the year include Crest Pro-Health toothbrushes; a variant of its women's Venus razor, Venus Breeze; and an Olay Regenerist Eye Derma-Pod--all products that will be priced higher than comparable ones and will follow a trading-up strategy to get consumers to spend more on everyday items.

Those new products and others, Daley said, will help spur sales growth 6% in 2007.

Judging by its razor strategy, P&G didn't pay $57 billion for Gillette just for its blade business, but for Gillette's marketing expertise as well.

Part of its plan: to continue using Gillette's past launch strategy of introducing a high-priced, publicity-worthy razor and gussying it up with different-color handles and other non-essentials for a few years before rolling out the next razor innovation--which has essentially consisted of an extra blade or two, or a vibrating handle.

As for upcoming items in the category, P&G said last week it plans to wait several years before launching an entirely new brand, but will add enhancements to the Fusion razor over the next few years. And at the moment, P&G is doing just that with its launch of a black-handled version of the Fusion men's power razor called Phantom, which is an extension of the five-bladed Fusion with separate trimming blade--and its original silver and orange handle--launched in January 2006.

Also in the works before June, Daley said, is a full restage of P&G's top-selling hair care brand, Pantene; a citrus Head & Shoulders--its dandruff shampoo brand, which has seen sales turn around with newer products; a new Cover Girl mascara; Cascade with bleach, and in paper, Charmin Trial Packs--a category which can be more profitable to P&G than to its competitors because of its sheer size and negotiating power with paper suppliers.

Nonetheless, P&G is still looking to high-end beauty products and health to drive growth as well, which had not been a focus. Just last month, P&G acquired the prestige skin care line, Doctor's Dermatologic Formula, from a private equity firm--and also entered into its first celebrity fragrance licensing deal with singer Christina Aguilera under its Prestige Products unit.

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