The story.
Procter & Gamble is the world’s biggest consumer products company with more than $80bn in sales. Yet P&G distributes one of its most innovative products – Pur water purifier – through a non-profit model because executives are convinced it generates more value for the company than a traditional for-profit model ever could. This benefit comes from increased brand presence in emerging markets, opportunities to open new markets and tuning in to the philanthropic sympathies of its employees and consumers.
The challenge.
While P&G has a strong history of philanthropy, the decision to adopt a non-profit model for Pur was difficult and required generating internal support.
Evolution of a strategy.
Pur is a water purification powder that can decontaminate water by stirring it in and straining the water through a cloth. Studies show Pur’s effectiveness in cutting the incidence of diarrhoeal fatalities in the developing world.
In spite of P&G’s success in marketing consumer products, disappointing sales in initial market tests led P&G to consider cancelling the Pur product in 2004. The time required to persuade consumers they needed Pur, and for them to learn how to use it, was too long.
Pur, however, had a tenacious advocate in Greg Allgood, a senior P&G executive. Also, in the aftermath of the devastating tsunami that hit south-east Asia in December 2004, the company donated $3.1m in products and cash, including 13m packets of Pur to Sri Lanka, Indonesia and the Maldives. According to Mr Allgood, this was a turning point because employees understood at “a gut level” that the company was contributing to society and that it could turn a commercial failure into a humanitarian success.
The model of donations along with steady sales at cost-recovery prices to international aid organisations meant Pur could stay viable in the