Why is that? It's among the most profitable personal-care products, up there with makeup and other beauty items with high gross margins. Moreover, consumers are very loyal to their deodorant brands, meaning companies don't have to spend as much on marketing to retain customers.
Given that backdrop, it's not surprising that Procter & Gamble (PG
) bought Old Spice from American Cyanamid in 1990 for $300 million. While it was largely an aftershave with a graying customer base, Old Spice had a small deodorant business. P&G bought the brand specifically to get that male deodorant so it could develop it with the advantage of an established brand name.
P&G already had the dominant female brand with Secret. But in the last 18 months, Old Spice has become the top male brand as well. In a recent interview, Esi Eggleston Bracey, P&G's general manager of deodorants and antiperspirants, discussed the business and repositioning of Old Spice with BusinessWeek Correspondent Robert Berner. Following are edited excerpts of their conversation:
Q: How does P&G view deodorants strategically?
A: We think of deodorants as fundamental beauty for consumers. It's hygiene. The entry point in beauty. When you think about the journey deodorants has been on: It started with family brands. You saw the Sures and Bans of the world, and how the category has blossomed.
Now there are choices for men and women. You saw Secret born out of that. You really saw brands like Old Spice grow out of that. So having Old Spice was a nice way for us to round out our portfolio.
Q: What's the advantage of buying an existing brand like Old Spice?
A: One thing you have to invest in for a brand is awareness. It takes a lot to build awareness.... It's great when you get a brand that has awareness. Then your challenge is to grow the image. And as an acquisition strategy, that to us makes a lot of sense. Old Spice had broad brand recognition.
Q: Didn't the brand come with some negative connotations of being your father's aftershave?
A: It came with some baggage because the brand had been around so long.... Old Spice started as a catalog business. It was a broad range of products. During the war is when Old Spice really got popular. So if you think about our trial strategy, most of our user base was over 50, when we got the brand -- older than consumers we typically target with our brand.
Even with that older user base there was still a lot of positives for the brand. Strong, masculine, classic. Even sexy, rugged. With most things it's not all good and all bad. When you look at the brand equities that become outdated, there's usually a lot of strength there. They were strong at a point in time for a reason. And what typically happens is that you don't do a lot with it and the consumer base ages.
So what we saw was there were some real positives with Old Spice. And we had the opportunity to take what was positive and make it relevant to a younger consumer. That was the challenge for Old Spice.
In terms of the positioning, we wanted to celebrate everything that was good about it without reinforcing some of this negative baggage. And in that, we really learned what was good about it was that it was genuine, honest, and sincere. Authentic and masculine.... That's the core. If you say who our brand is as a person, it's an everyday, real masculine, easygoing, little bit tough but you can count on him fella. No B.S. Not all the frills. That's the Old Spice guy.
Q: So you ditched those famous Old Spice TV ads with the whistling sailor with a girl in every port?
A: It didn't work. As you look at taking the core of what's positive and separating it from what's negative, the whistle that was it's equity before acquisition evoked the negative response. So we launched the challenge campaign.
We took that no B.S., straightforward guy who doesn't want to worry about their deodorant. We give you Old Spice. It works. If not, we give you your money back. That's the challenge: Prove it, [with a] money-back guarantee.
Q: So from the beginning, your plan was to take the brand to a younger crowd?
A: To make it successful we absolutely had to take the brand younger. Because as a marketer, you look and say most of my user base is aging. It was a no brainer.
Q: What age group did you target?
A: We targeted young men. Why we targeted young men is we had to go after the entry point. We know that when consumers start to use deodorant, they stick to it. Some brands they look back and say, "That was my teen brand."
But what we learned from Secret was that young girls would enter the category, they would make their choice and stick with it. So our hypothesis was for men, we wanted to get them in young and that we would retain them, and they would become more loyal. So we thought about it as both a short-term and long-term strategy to go younger.
Q: But you went even younger in 1999? Down to kids in their early teens?
A: When we first got the brand, we knew we had to go younger than 55. So young men. What we learned over the years was we can get teen and young adults by targeting what we call "the sweet spot." We know teens aspire a little older, and we know adults aspire a little younger. That tends to be the 20 something.
Q: Are younger guys showing more interest in grooming?
A: As the years go by, you see the teens becoming more and more sophisticated consumers themselves. So as society advances we find a need to go younger and younger. If you just look 10 years ago and you look now, the amount of reception a young audience has to products is much greater, [as is] the influence they have on products and purchases. So as time goes on and young guys are using deodorant, we obviously want them start it with Old Spice.
Q: You believe you can turn Old Spice into a mega brand with a far greater variety of male grooming products?
A: At the core, it's a male grooming brand. So what we have done is try and make sure we're meeting needs within fragrance and deodorant. We have also entered what we call the personal-cleansing category, which is the body-care soap category. We have been very pleased with the results there.