Question

1. Advertising is important for most companies, especially companies such as P&G that sell mostly to end customers. But, most people already know about P&G products such as Charmin bathroom tissue and moist towelettes, Crest toothpaste, and so on. Does P&G really need to constantly put money into advertising when its products already have a strong hold in the global marketplace? 2. P&G cut its marketing and advertising agency roster by 50 percent over the past three years from around 6,000 to 3,000 companies in a bid to increase its marketing productivity, efficiency, and effectiveness. With a $9 billion worldwide spend on advertising, should P&G have more or fewer marketing and advertising agencies handling its advertising? 3. By consolidating and cutting 100 brands from its consumer portfolio of brands, does P&G run the risk of ultimately losing out on global market opportunities?

          1. Advertising is important for most companies, especially companies such as P&G that sell mostly to end customers. But, most people already know about P&G products such as Charmin bathroom tissue and moist towelettes, Crest toothpaste, and so on. Does P&G really need to constantly put money into advertising when its products already have a strong hold in the global marketplace?
    2. P&G cut its marketing and advertising agency roster by 50 percent over the past three years from around 6,000 to 3,000 companies in a bid to increase its marketing productivity, efficiency, and effectiveness. With a $9 billion worldwide spend on advertising, should P&G have more or fewer marketing and advertising agencies handling its advertising?
    3. By consolidating and cutting 100 brands from its consumer portfolio of brands, does P&G run the risk of ultimately losing out on global market opportunities?

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Added by Marcos R.

Principles of Economics

Gregory Mankiw 8th Edition

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Solved by Expert Jonathan Tapiwa

04/20/2022

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While it is true that P&G products are well-known and have a strong presence in the global marketplace, advertising is still important for several reasons. Firstly, advertising helps to maintain brand awareness and visibility among consumers. Even if people are Show more…

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1. Advertising is important for most companies, especially companies such as P&G that sell mostly to end customers. But, most people already know about P&G products such as Charmin bathroom tissue and moist towelettes, Crest toothpaste, and so on. Does P&G really need to constantly put money into advertising when its products already have a strong hold in the global marketplace? 2. P&G cut its marketing and advertising agency roster by 50 percent over the past three years from around 6,000 to 3,000 companies in a bid to increase its marketing productivity, efficiency, and effectiveness. With a $9 billion worldwide spend on advertising, should P&G have more or fewer marketing and advertising agencies handling its advertising? 3. By consolidating and cutting 100 brands from its consumer portfolio of brands, does P&G run the risk of ultimately losing out on global market opportunities?

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Transcript

00:01 We have here quite an interesting analysis of a firm that has a stronghold in the market and deals with so many brands.

00:10 And the firm is png.

00:13 So we want to look at png.

00:16 And it pulls in a lot of amounts in advertising.

00:23 So basically, we want to quickly look at whether it's important that this business, continues to pour in huge amounts in advertising.

00:34 Okay, i suddenly think it needs to, for the simple reason, firstly, adverts are a constant reminder in the eyes of the customer.

00:45 Constant reminder, it simply shows that the products are still their competitive, they're active, and the disadvantage of stopping or cutting on your advert.

01:00 Advertisement budget is simply the perception, the perception the customers might have of the products.

01:10 The perception might be that the products are in decline in terms of their competitiveness, in terms of equality.

01:18 You know, it can just come as a perception.

01:21 So this can actually be counted by continuous advertising.

01:26 And obviously, advertisement will always.

01:31 Always ensure that the product has presence, has presence.

01:38 So it allows for the product to be well known.

01:42 It also has its domineering presence in the market.

01:47 So there is many other reasons we can talk about why this business needs to continue to advertise.

01:54 And secondly, the second part of the question looks at the business cutting, marketing and the advertising roster by as much as 50%.

02:04 So we're looking at the marketing roster by as much as 50%.

02:11 Cutting that by as much as a 50%.

02:14 So this is a big disadvantage.

02:18 Why is this? because there is no analysis of the impact.

02:28 Analysis of impact...

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