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• P&G needed grocery channel confidence of CRP, via use of a CRP IT tool, called electronic data interchange (EDI), in order to effectively increase market share and decrease channel costs.
• Rewriting from the old Ordering, Shipping, and Billing Systems to the new, integrated OSB system (OSB Project) involved a major culture change.
• Top management support was needed to implement new pricing and promotion strategies to create buy in from the employees. .
• Should P&G keep the CRP system within the P&G framework, or sell it to another company?.
Analysis.
Pricing and promotion strategy changes:.
P&G's reliance on the political and economic environments to set the tone for its inventory levels and cost structures were not allowing P&G to maximize its business potential. The pricing and promotions environment of the 1970's and 1980's motivated the chains to purchase products ahead of the time before they really needed them. Low cost loans, mandated government price controls, and high inflation were the root cause of this8. This environment forced the retail chains to carry higher inventories. .
In addition, store promotions were more and more frequent, causing a greater fluctuation in consumer demand. All these items spelled major trouble when it came to forecasting. How could P&G expect to keep their costs in line without knowing an accurate forecast of product? .
P&G sought to solve these pricing and promotions issues. P&G sought to collaborate with their retail chains to reduce the number of pricing promotions, thus mitigating the unpredictability of pricing, and therefore demand. This would stabilize the cost structure of P&G and allow the retail chains the chance to reduce their inventories from 3 months to a bare minimum. .
Branding to Category Management.
In addition, to improve coordination and efficiency, top management markedly needed to change its brand management structure.
