Tags: P&G | Marketing | Middle | Class

WSJ: P&G Caters Less to a Shrinking Middle Class

Tuesday, 13 Sep 2011 11:34 AM

Consumer products giant Procter & Gamble is adjusting its marketing campaign for the middle class by marketing less to it.

The maker of household names such as Crest toothpaste or Tide detergent says a shrinking middle class is forcing marketing campaigns to focus on higher-end and lower-end consumer groups, but less in the middle, The Wall Street Journal reports.

"It's required us to think differently about our product portfolio and how to please the high-end and lower-end markets," says Melanie Healey, group president of P&G's North America business, the Journal reports

"That's frankly where a lot of the growth is happening."

(Getty Images photo)
The American middle class — households with annual incomes between $50,000 and $140,000 a year — was suffering even before the Great Recession as family revenues did not grow in pace with inflation and increasing housing, healthcare, education and other costs.

As a result, many middle-class shoppers are trading down to lower-priced consumer products.

Consumer spending accounts for 70 percent of the U.S. economy, yet confidence in the economy remains low due in part to stubbornly high unemployment rates.

President Barack Obama recently unveiled a $447 billion jobs plan, although some experts say that until the housing market recovers, the package — a series of tax incentives and investments in projects such as infrastructure — won't make a dent in unemployment.

"Until we fix the housing program, it is hard to see how consumers are going to have confidence, net worth and the willingness to spend," says Harvard University economics professor Martin Feldstein, according to Bloomberg.

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