The full story

Innovative development secures the future


The consumer is and always has been at the heart of P&G - logical for a consumer goods business – but the world is changing rapidly. It’s meant doing things differently: there have been many new products of course, but more importantly they have developed new business models and systems to adapt to the new world reality. Most significantly, it’s the novel way P&G have been driving new product development and innovation that is one of the core reasons for their continued success.

It’s not R&D anymore but C&D: Connect and Develop

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Until 10 years ago we, like many bricks and mortar companies, did our own research and development. Today all that has changed. Today, it’s all about making connections with those companies and universities who have the know-how to help us in what we call an open innovation model. It’s totally transformed the way we innovate and now we no longer do everything all by ourselves. We call it “Connect & Develop.”

“In Belgium for example, we have a world-wide innovation centre for household detergents – almost all the new products in this category come through here. The new Tide stain eraser, currently one of our hot products in the USA, is a good example of this and an excellent illustration of just how much we’ve changed over the years.”

“The product, essentially a pen that removes grease stains when you’re out and about, has been developed in Belgium. A local university here is behind the chemical, while a company in Ieper has supplied the pen technology. That’s what we mean by Connect and Develop.”

Vlerick – a key partner

While Procter & Gamble have considerable experience with these types of relationships, they are inevitably challenging and that’s where Vlerick’s role has been vital. From the outset, the involvement of the school in the negotiations sends a strong signal of intent to all the parties concerned, and demonstrates that P&G too, see these external relationships as important, and want to make them work. The reputation of the school, as well as its expertise in creating collaboration models mean that they can advise each party in a neutral manner at each of the different stages in the innovation and development process, for example on matters such as exchange of confidential information, the IP-split or licensing in the event of success or discontinuation.

“Very often people think that change is difficult, but for us change offers an opportunity. At P&G, this is the new reality.”

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Suykens confirms just how much of a difference Vlerick makes in these discussions. “Meeting everyone’s expectations and the company’s financial imperatives as well, means that more than ever we need good partners. And that’s where Vlerick has really helped us deliver. The school advises us how to set up open innovation projects in which everyone feels they win. Of course, there are issues and that’s normal with so many people involved: legal, scientists, engineers and consumer insights – but it’s the only way we can go forward and leverage our network of contacts, and so be more productive.”

Consumer insights lead us forward

Consumers are at the heart of every strategic move the company makes, and while in the past there may have been a one size fits all mentality, all that has changed. The maxim ‘Think Global, Act Local’ has long been integrated into how P&G works, but they have the added advantage of being able to use their considerable scale and resources to take advantage of any nuances and changes their local marketing teams may signal.

Suykens, at the heart of many of successful marketing campaigns over the years, gives us his take on the subject. “We are extremely focussed on consumer insights. Not just the kind of information you hear in a focus group, but genuine life strong innovations. It’s these changes that inspire break through innovations. Swiffer – the cleaning system that actively removes dust and dirt from the home – is based on an insight that there are more and more allergy sufferers, and that they really want a solution that works.”

New and different business models

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“We are quite simply a global company of brands,” says Suykens. It’s clear that P&G has not only been rediscovering the essence of its brands, but evolving the way it interacts with customers. “Did you know that in North America 15% of Pampers’ sales are now made via e-commerce, and that Amazon has become P&G’s second biggest customer? Families are encouraged to take a subscription to Pampers for their baby – this means that they get the right size delivered to their door, as the baby grows up, on an as needed basis.”

“In traditional markets consumers are getting older, and there are many more smaller families. Many are also now online, and that has meant thinking about new and different business models. As a company, we’re concentrating on our top categories and brands, and quite naturally too, we’re looking for opportunities in the emerging markets, especially as the middle classes in these regions establish themselves as an important buying force.”

How Pampers rediscovered its mojo!

P&G Enjoys Change P&G enjoys Change P&G Enjoys Change

If we look at our Pampers brand – now an 8 billion $ a year business, the change has been exceptional as it’s grown from being ‘only’ a 2 billion $ brand a few years ago. How did we grow the business? Well, by realising that we had to change. Our technology was certainly always improving, but we found – without realising it at first – that it had overtaken the consumer as the focus of our efforts. It was in fact a brand issue and we had to redefine the direction the brand was taking – and this we did successfully by making the consumer boss again. Dryness wasn’t the essence – but baby’s development was – and once you define it in those terms, the relevance of the brand and the service becomes totally different.

Pampers now provides a service for mothers and babies all around the globe, including information about health, breast-feeding, and so on. The lesson is that when you are able to define the essence of a brand in consumer terms, can take things broader and grow in a whole new way. Now for example, the Pampers brand works with Unicef, mainly at Christmas time, offering a vaccine for a child in need for every packet of Pampers sold. At first this was done only in Belgium, the Netherlands and the UK – but now it’s happening all over the world. It’s not just a good example of scale though; it’s also a demonstration of how innovation can come from the markets and not just via the innovation centres.

In truth, the consumer doesn’t always see or appreciate the changes we make – but if they compared the proposition from 10 years ago, they’d certainly see the difference.

A word from Vlerick

Professor Steve Muylle: Throughout our collaborative research partnership it has become clear that P&G not only sells better products but also sells its products better. By connecting to a vast pool of creative resources and developing joint innovations, P&G is able to introduce game changers in the fastidious consumer markets in which it competes. Likewise, P&G is a pioneer when it comes to selling FMCG better, as demonstrated by the success of its e-commerce model for Pampers at

While not obvious at first sight, Apple and P&G have a lot in common… when it comes to market research.

Indeed, The late Steve Jobs said, according to Walter Isaacson's official Jobs biography, “’Give customers what they want.' But that's not my approach. Our job is to figure out what they're going to want before they do.
That's why I never rely on market research. Our task is to read things that are not yet on the page." At the early stage of innovation P&G works in a quite similar way. Consumers are observed, rather than interviewed or surveyed, in their natural habitat, rather than in a focus group room or through an online questionnaire. The idea is to get into the shoes of the consumer and understand how she engages with the category. Then you can go ahead and “show and tell” your ideas to consumers, and continue to feed the innovation pipeline!

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