Why Selling Luxury Paper Towels Is Working for Proctor & Gamble
Proctor & Gamble (NYSE:PG) reported earnings on Friday that beat expectations despite being hurt by currency exchange rates, and a report from Bloomberg Businessweek reveals the strategy behind the company’s success at selling cleaning products and other consumer goods.
In a move that may strike some as strange, Proctor & Gamble has seen great success with its high-end offerings that include paper towels, tampons, and dish soap. Businessweek pointed out that a three-tier approach — offering products at entry-level, mid-tier, and luxury options and prices — works for other types of companies, and Proctor & Gamble has managed to replicate that success.
While Proctor & Gamble brands like Bounty, Cascade, and Tampax used to offer just one or two options, the company is now spending money and time on promoting high-end versions of the products. These choices offer huge earnings potential, as certain customers are apparently willing to pay double the price for a premium paper towel instead of the entry-level option.