Recently the world's biggest FMGC company announced plans to adopt a tiered approach and launch cheaper products, the first of which in the UK was Pampers Simply Dry which rolled out last month.
However a report by Bernstein Research, the research arm of Wall Street investment bank Sanford C. Bernstein, claims that while the company has been successful in trading consumers up to high-priced products, making the switch the opposite direction could be difficult.
The report said: ‘P&G has been quite successful in trading consumers up to higher-priced products, with its price points relative to category averages climbing over the years.
‘However, we believe P&G may have exercised its trade-up capabilities at the expense of developing capabilities needed to produce and sell lower-priced products to less affluent consumers (capabilities such as cost engineering, efficient advertising, in-store displays, lower overhead, values messaging, sampling, etc),' it added.
But the report supports the expansion of P&G brands into lower price points and noted that it would help the company to target consumers in emerging markets.
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