8 billion dollar woman... marketing idiocy in the modern age

Dear reader,

It might surprise some of you to know I studied Marketing at university a long time ago. As a funny aside to today's tale of utter corporate stupidity I was the only guy who got a cheer from the auditorium when I went up to get my honours degree (there is a long story about potato sacks, vikings and rubber chickens behind this but that is for another time).

I read with interest the recent strong earnings by the market behemoth Proctor and Gamble. It has a market cap of 292 billion dollars operates on a P/E ratio of 27.84 and compared to its peers looks cheap and gives a better yield of 2.53%.  Obviously being a tight Jock I have a habit of looking for stocks with much lower P/E ratios with similar or better yields  (take Ford with a p/e ratio of 7 and a dividend yield of 6%).

What was more interesting for me as an marketing student was the writedown of 8 billion dollars by P and G on their Gillette division meaning they posted an overall company loss of 5.24 billion for the quarter ending June 30th.

According to Forbes Gillette is the world's 37th most valuable brand worth 16.6 billion on may 22nd this year. I imagine after the write down it might not be so high up next year's list.  Imagine if you had spent 57 billion greenbacks back in 2005 to then have to write down 8 billion 14 years later.

Does anyone remember the new advert that came out in January called 'The best a Man can be'. It was universally panned by Men which is a bit odd given Gillette's target market is ostensibly men's shaving products.  I suggest you check it out on youtube in case you haven't seen it. The net result was GIllette's sales were down 8% while P and G's other divisions were all up.

https://www.youtube.com/watch?v=koPmuEyP3a0

The woman Kim Gerhig they hired to shoot the advert for male grooming products is also known for such hits in the advertising world as 'Viva la vulva', 'I Jiggle therefore I am' and ;This girl can'.  I wonder if the marketing director at Gillette is looking forward to his/her christmas bonus this year. Not since Gerald Ratner have |I ever seen such a shocking tactical marketing blunder.

Might be worth not overweighting in funds that have larger than normal holdings in P and G at least in the short term.  Just a thursday thought.

We had an expression we were taught when I was in class 'Keep it simple stupid'. Am I the only one that sometimes watches modern adverts and wonders what the hell they are actually trying to sell?

Don