One Sunday in 1879 Harley Proctor, one of the founder of the candle and soap firm P&G, heard a sermon based on the Forty-fifth Psalm, "All thy garments smell of myrrh, and aloes, and cassia, out of ivory palaces." The word "ivory" stuck in his mind - and became the name of the firm's white soap.
Proctor had great ambition for his product. But it was a commodity. He was an inquisitive young man who decided he was going to figure out a way to differentiate his product. How does one go about doing that? By simply going to the store where soaps were sold and observing what went on over there. Proctor came to know the housewife bought the soap to clean herself, her family and her home.
He had a cousin who was a chemist. He requested his cousin to analyze his soap to see how pure it was. Cousin reported it is "99 and 44/100 percent pure". All the soaps were the same but Proctor decided to capitalize on this knowledge.
In December, 1881, P&G ran their first Ivory ad stating that the soap "floated" and that was "99 and 44/100 % pure," a dual claim which has become one of the most famous ad slogans ever.
Ivory was a remarkable product in a time in which most soaps were yellow or brown, irritated skin, and damaged clothes. The fact that it floated had practical value to those used to being frustrated by trying to find their soap in the bath. Ivory's brand name and its distinctive wrapping, gave customers confidence that they were getting the mild, gentle soap they had always desired.
In 1882, Proctor spent $11,000 in a national ad campaign that resulted in high level of brand awareness, and customer confidence that the manufacturer was backing the product and would stand by it.
Then in 1885, a yellow soap named Sunlight, when introduced to dreary, sun starved England, became the start of Unilever, now one of the largest firms in the world. Unlike Ivory, however, Sunlight gave way to other brands, such as Lifebuoy, Lux, and Rinso.
P&G demonstrated its commitment to Ivory's brand equity during the depression. In the face of tremendous economic hardships, P&G resisted pressures to reduce advertising. In fact, in part by sponsoring "The O'Neills," a radio "soap opera," Ivory doubled its sales between 1933 and 1939.
The loyalty and market presence that Ivory had built was challenged in 1941 by an Ivory clone called Swan from lever Brothers. It was billed as "The first really new floating soap since the Gay Nineties." P&G reacted with aggressive advertising to protect Ivory.
Without any clear product difference, Lever could not dislodge Ivory, and ultimately withdrew from the market.
In few other companies is the power of branding so apparent. Without question the key to the success of P&G is its commitment to the development of brand equity, the brand management system that supports it, and the ongoing investment in marketing that sustains it.
There are a few publicly available numbers that allow a crude estimate of the profits that the Ivory brand name has provided to P&G over the past century or so. Just over $300 million was spent on U.S. measured media during the ten-year period from 1977 to 1987. It is estimated that during this period measured media was about 75% of the total advertising at P&G. If similar ratios hold for Ivory products, the total Ivory advertising expenditure would be around $400 million.
Assuming an ad-to-sales ration of 7% (the ratio for P&G as a firm ranged from 6% to 8% during this period), worldwide sales of Ivory products would have been $5.7 billion. Assuming an exponential sales-growth curve since 1887, the total sales of Ivory products since Ivory was first introduced would be around $25 billion. Assuming an average profitability of 10% (the average profitability for laundry and cleaning products from 1987 to 1989 was 10%), a reasonable estimate of total Ivory profits would be $2 to $3 billion.
[N. B.: Much of this text has been taken from a news paper article published around 1994. I do not have the article to accord the credit due to the author. If any reader is able to recall, please communicate so that due credit may be accorded.]
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