In its 183rd year, Procter & Gamble is one of the oldest running businesses in the market now. However, the road to success, needless to say, is never smooth. One of P&G’s revered skin care brands, ‘Oil of Olay’ was facing fierce competition from new entries in the 1990s and had to reclaim its position in the market. When you are in the market for as long as P& G has been, you tend to get picked up for all the wrong reasons – like in this case, the product “Oil of Olay” was seen as an old and irrelevant product. With many new brands and products in the market, the struggle was real for P&G.
It was former CEO, A.G. Lafley who understood the need for change and innovation. Under his leadership, P&G started incorporating Design Thinking at the core of its products. With Design Thinking principles at the helm, P&G’s reinvented its brand and emerged ever-ready for the market changes. Let’s look at how Design Thinking guided P&G’s road to success.
Understanding Which Questions to Answer
While Planning a comeback, P&G management team had three options to choose from as their next strategy- launching a new skin care brand/buying out a leading skin-care brand/ reinventing their existing skin care brand.
To answer these questions, P&G devised a design thinking approach to understand the requirement. Design thinking focuses on delivering an optimised solution for the end-user. The obsession with a user-centric experience helped P&G connect with its target group again and deliver accordingly. User-focused thinking encourages product designers to understand the user better, so P&G invested heavily in researching the customer. The user perspective – the approach, behaviour and actions helped the brand in filling in the blanks and come up with a solution that addressed the user needs in every way. And instead of onboarding another brand under the P&G banner or introducing a new skin care brand, the management decided to rework what they already had and meet the customer requirement.
Design Thinking’s Human-Centric Approach
The first step towards delivering a user-centric solution is understanding the user. The P&G team ran thorough research on their target group and came up with a few valuable insights which had the potential of transforming the brand.
The research revealed that consumers were already familiar with the brand name “oil of Olay” and it had the potential to capture the market with the right strategic moves. The research further revealed that Olay’s existing customer demographic mostly included women over fifty who were not ready to pay a hefty price on skin care products. Instead, they were looking for a product that was minimally priced but had the essential ingredients that could benefit their skin. In a nutshell, they were looking for a premium range product experience at affordable prices. This seemed like a sweet spot that was difficult to hit and had the competitor’s attention as well. The only way out for P&G was innovation and this is where Design Thinking came into play.
The Design Thinking Tool of Innovation
Skincare is not just about taking care of wrinkles, fine lines and protecting your skin against damages due to age or more. Skincare is essentially a part of self care, a reassurance that investing in it early will lead to long term benefits. P&G understood and put this concept to their use and changed their target group to be more inclusive. Instead of focusing only on existing customers and tailoring their product further, they shifted their attention to include non-customers as well. The diversification of the market proved to be a game changer for them. While women in their fifties were looking for a skin treatment that would reduce wrinkles, women in the mid thirties were looking for a solution that could prevent and keep these signs of ageing at bay for longer. The non-customers (younger women) were even willing to pay more as they were firm believers in investing in good skincare. Women in their thirties have younger looking skin and at this stage, they are still new to the signs of ageing and they would do anything to keep it looking like that for as long as possible. Women in their 30s were P&G’s new target market.
P&G not only delved into their skincare but also their psychology and this proved to be a game changer. Women in their thirties are vulnerable and more anxious than women in their fifties when it came to dealing with signs of ageing. They are more committed to skincare and are looking to invest in quality. Their skincare regime is much more than applying lotions – it made them feel good about themselves and took away their anxiety about ageing.
Reframing the Problem
In their attempt to be more inclusive, P&G started addressing various skin concerns like dry skin, uneven complexion, sunspots and more. The focus was no longer only on wrinkles. They relaunched the brand as a skincare company that produced skin wellness products and not just anti-ageing products.
P&G changed its strategy to focus on value innovation where they increased their value offerings to users. This meant tapping into a new uncontested market. P&G scientists started working on and developing better skin-care formulations to meet the new value propositions. In 1999, P&G launched its “Olay Total Effects” and claimed its position as a leader in anti-ageing products at once. It has since then redefined what anti-ageing products could do. “Olay Total Effects” was soon followed by “Olay Regenerist”, “Olay Definity” and “Olay ProX”.
Their innovation paid off and Olay had double digits sales growth in record time leading to high profit margins and a growing consumer base.
With Design Thinking to guide their rebranding, Olay not only reclaimed their own position in the market but also created an example or even a benchmark for all beauty brands to follow. To learn more about Design Thinking and how it can help you succeed as a business leader, visit Great Learning’s Stanford Design Thinking Course, where you will learn to use the frameworks in a wide variety of scenarios so you are ready for any challenge.2