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TOUCHING LIVES, IMPROVING LIFE. PROCTER & GAMBLE

BY:- MUNESHWARPRASAD

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FACTFILEFACTFILE

FoundedFounded 1837 *(American multinational 1837 *(American multinationalcorporation)corporation)

HeadquartersHeadq

uarters - Cincinnati, Ohio, USA- Cincinnati, Ohio, USA Key peopleKey

people - A. G. Lafley, Chairman, President,- A. G. Lafley, Chairman, President,

and Chief Executive.and Chief Executive. IndustryIndustry

- Consumer goods- Consumer goods RevenueRevenue - US$ 83.503 billion (2008)- US$ 83.503 billion (2008) Net incomeNet income - US$12.075 billion (2008)- US$12.075 billion (2008)

EmployeesEmp

loyees - 138,000- 138,000 WebsiteWebsite -- www.pg.comwww.pg.com Products are available in 140 countriesProducts are available in 140 countries

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RANKS ACHIEVEDRANKS ACHIEVED

8th largest corporation in the world by market8th largest corporation in the world by marketcapitalization. (2008)capitalization. (2008)

14th largest US company by profit.14th largest US company by profit. 10th in10th in Fortune'sFortune's Most Admired Companies list (as ofMost Admired Companies list (as of

2007).2007). P&G was named 2008 Advertiser of the Year byP&G was named 2008 Advertiser of the Year by

Cannes International Advertising Festival spendingCannes International Advertising Festival spending$2.62 billion$2.62 billion

Awarded inaugural social innovation award by theAwarded inaugural social innovation award by thefinancial times.financial times.

Ranked 2nd in the chief executive magazines bestRanked 2nd in the chief executive magazines bestcompanies for leaders.companies for leaders. In October 2008, P&G was named one of "In October 2008, P&G was named one of "

Canada's Top 100 EmployersCanada's Top 100 Employers" by Mediacorp Canada" by Mediacorp CanadaInc.,Inc.,

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PASTPAST

William ProcterWilliam Procter, a candlemaker, and, a candlemaker, andJames GambleJames Gamble,,a soapmaker, immigrants from England and Ireland,a soapmaker, immigrants from England and Ireland,respectively, who had settled earlier in Cincinnati,respectively, who had settled earlier in Cincinnati,who met as they both married sisters, Olivia andwho met as they both married sisters, Olivia andElizabeth Norris formed the company initially.Elizabeth Norris formed the company initially.

Alexander Norris, their father-in law called a meetingAlexander Norris, their father-in law called a meetingin which he convinced his new sons-in-law to becomein which he convinced his new sons-in-law to becomebusinessbusiness

partners.partners.

On October 31, 1837, asOn October 31, 1837, asa result of the suggestion,a result of the suggestion,

Procter & Gamble was born.Procter & Gamble was born.

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OPERATIONSOPERATIONSEffective July 1, 2007, the company's operations areEffective July 1, 2007, the company's operations are

categorized into threecategorized into three "Global Business Units""Global Business Units" with eachwith eachGlobal Business Unit divided into "Business Segments,"Global Business Unit divided into "Business Segments,"according to the company's June 2007 earnings release.according to the company's June 2007 earnings release.

Beauty CareBeauty Care Beauty segmentBeauty segment

Grooming segmentGrooming segment

Household CareHousehold Care Baby Care and Family Care segmentBaby Care and Family Care segment

Fabric Care and Home Care segmentFabric Care and Home Care segment

Health & Well-BeingHealth & Well-Being Health CareHealth Care

Snacks, Coffee and Pet CareSnacks, Coffee and Pet Care

Twenty-four of P&G'sTwenty-four of P&G's brandsbrandshave more than a billion dollarshave more than a billion dollars

in net annual sales and anotherin net annual sales and another

18 have sales between $500 million18 have sales between $500 million

and $1 billion.and $1 billion.

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MANUFACTURINGMANUFACTURING

Procter & Gamble manufactures its products acrossProcter & Gamble manufactures its products acrossthe globe. Manufacturing operations are based inthe globe. Manufacturing operations are based inthe following regions:the following regions:

United StatesUnited States CanadaCanada Latin AmericaLatin America EuropeEurope China (31 wholly-ownedChina (31 wholly-owned

factories) and other partsfactories) and other parts

of Asiaof Asia AfricaAfrica AustraliaAustralia

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PRODUCTIONSPRODUCTIONS

Procter & Gamble produced and sponsored the first radioProcter & Gamble produced and sponsored the first radio soap operassoap operasin the 1930s.in the 1930s.

Past serials produced by Procter & Gamble include:Past serials produced by Procter & Gamble include: Another WorldAnother World Lovers and FriendsLovers and Friends The Brighter DayThe Brighter Day The CatliThe Catli Our Private WorldOur Private World The Edge of NightThe Edge of Night The First Hundred YearsThe First Hundred Years For Richer, for PoorerFor Richer, for Poorer From These RootsFrom These Roots

Search for TomorrowSearch for Tomorrow SomersetSomerset TexasTexas Young Doctor MaloneYoung Doctor Malone

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EXPANSIONEXPANSION

During theDuring the American Civil WarAmerican Civil War, the company won contracts to supply the, the company won contracts to supply theUnion ArmyUnion Army withwith soapsoap andand candlescandles. In addition to the increased profits. In addition to the increased profitsexperienced during the war, the military contracts introduced soldiersexperienced during the war, the military contracts introduced soldiersfrom all over the country to Procter & Gamble's products.from all over the country to Procter & Gamble's products.

In the 1880s, Procter & Gamble began to market a new product, anIn the 1880s, Procter & Gamble began to market a new product, aninexpensive soap that floats in water. The company called the soapinexpensive soap that floats in water. The company called the soap IvoryIvory..

The company began to build factories in other locations in the UnitedThe company began to build factories in other locations in the UnitedStatesStates

The company introduced "The company introduced "TideTide" laundry" laundry detergentdetergent in 1946 and "in 1946 and "PrellPrell""shampoo in 1950.shampoo in 1950.

In 1955, Procter & Gamble began selling the first toothpaste to containIn 1955, Procter & Gamble began selling the first toothpaste to containfluoridefluoride, known as ", known as "CrestCrest".".

Branching out once again in 1957, the company purchasedBranching out once again in 1957, the company purchased CharminCharmin

Paper Mills and began manufacturing toilet paper and other paperPaper Mills and began manufacturing toilet paper and other paperproducts.products.

One of the most revolutionary products to come out on the market wasOne of the most revolutionary products to come out on the market wasthe company's "the company's "PampersPampers", first test-marketed in 1961.", first test-marketed in 1961.

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DIVERSIFICATIONDIVERSIFICATION

In 1996, Procter & Gamble again made headlinesIn 1996, Procter & Gamble again made headlineswhen thewhen the Food and Drug AdministrationFood and Drug Administration approvedapproveda new product developed by the company,a new product developed by the company,OlestraOlestra. (a substitute for fat in cooking. (a substitute for fat in cookingpotato chipspotato chips ))

In 2008, P&G branched into the record businessIn 2008, P&G branched into the record businesswith its sponsorship ofwith its sponsorship ofTag RecordsTag Records, as an, as anendorsement forendorsement forTAG Body SprayTAG Body Spray..

In 1911, began producingIn 1911, began producing CriscoCrisco, a, a shorteningshorteningmade ofmade ofvegetable oilsvegetable oils rather thanrather than animal fatsanimal fats..

As radio became more popular in the 1920s andAs radio became more popular in the 1920s and1930s, the company sponsored a number of radio1930s, the company sponsored a number of radioprograms. As a result, these shows often becameprograms. As a result, these shows often becamecommonly known as "commonly known as "soap operassoap operas".".

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ACQUISITIONSACQUISITIONS

In 1930 acquisition of theIn 1930 acquisition of the Newcastle upon TyneNewcastle upon Tyne--basedbasedThomas Hedley Co.Thomas Hedley Co. terms of manufacturingterms of manufacturingand production.and production.

Folgers CoffeeFolgers Coffee, Norwich Eaton Pharmaceuticals,, Norwich Eaton Pharmaceuticals,

Richardson-Vicks, Noxell, Shulton'sRichardson-Vicks, Noxell, Shulton's Old SpiceOld Spice,,Max FactorMax Factor, and the, and the IamsIams Company, among othersCompany, among otherswere also acquired.were also acquired.

In January 2005 P&G announced an acquisition ofIn January 2005 P&G announced an acquisition ofGilletteGillette, forming the largest consumer goods, forming the largest consumer goods

company and placingcompany and placing UnileverUnilever into second place.into second place.

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CONTROVERSY NO. 1CONTROVERSY NO. 1

Logo controversyLogo controversy The company received unwanted media publicity in the 1980sThe company received unwanted media publicity in the 1980s

when rumors were spread that their previous corporate logowhen rumors were spread that their previous corporate logowas awas a SatanicSatanic symbol. The company has sued and attempted tosymbol. The company has sued and attempted tosue a number of companies likesue a number of companies like AmwayAmway and individuals whoand individuals whohave spread rumors of this type, in some instances becausehave spread rumors of this type, in some instances because

they sell competitive products and have spread such rumors forthey sell competitive products and have spread such rumors forthe purpose of tarnishing P&G's image to increase sales of theirthe purpose of tarnishing P&G's image to increase sales of theirown brands.own brands.

However, the continuous media coverage prompted P&G toHowever, the continuous media coverage prompted P&G toadopt an entirely new logo consisting of justadopt an entirely new logo consisting of just

the letters P&G. In television commercialsthe letters P&G. In television commercials

in China, the former P&G logo still appearsin China, the former P&G logo still appearsat the end of each commercial, and up untilat the end of each commercial, and up until

2004, it appeared at the end of each2004, it appeared at the end of each

commercial in Japan.commercial in Japan.

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CONTROVERSY NO. 2CONTROVERSY NO. 2

Crest Pro-Health Teeth Staining and Loss of TasteCrest Pro-Health Teeth Staining and Loss of Taste

In October 2007, a class action lawsuit wasIn October 2007, a class action lawsuit wasfiled in the State of Georgia alleging thatfiled in the State of Georgia alleging thatmany users of Crest Pro-Health mouthwashmany users of Crest Pro-Health mouthwash

suffered stained teeth and loss of theirsuffered stained teeth and loss of theirsense of taste.sense of taste. Procter & Gamble contends that these sideProcter & Gamble contends that these side

effects occur in only 3% of users.effects occur in only 3% of users.

The suit seeks to includeThe suit seeks to include

disclosure warning users ofdisclosure warning users of

these side effects on productthese side effects on product

packaging.packaging.

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CONTROVERSY NO.3CONTROVERSY NO.3

Environmental recordEnvironmental record Researchers at the University of Massachusetts haveResearchers at the University of Massachusetts have

identified Procter & Gamble as the 52nd-largest corporateidentified Procter & Gamble as the 52nd-largest corporateproducer ofproducer ofair pollutionair pollution in the United States, with roughlyin the United States, with roughly350,000 pounds of toxic chemicals released annually into350,000 pounds of toxic chemicals released annually intothe air.the air.

In 2007 Procter & Gamble pledged to reduce their carbonIn 2007 Procter & Gamble pledged to reduce their carbonemissions, mainly through reduction in packaging. Theemissions, mainly through reduction in packaging. Thestated emission reduction goal was 10% by 2012.stated emission reduction goal was 10% by 2012.

Procter & Gamble is one of the founding members ofProcter & Gamble is one of the founding members ofCarbon Disclosure ProjectCarbon Disclosure Project's Supply Chain Leadership's Supply Chain LeadershipCouncil.Council.

Procter & Gamble has for several years funded a recyclingProcter & Gamble has for several years funded a recyclingschool in the slums of Cairo, Egypt.school in the slums of Cairo, Egypt.

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CONTROVERSY NO.4CONTROVERSY NO.4

Animal testingAnimal testing P&G conductsP&G conducts research using animalsresearch using animals to demonstrateto demonstrate

safety or efficiency of their raw materials andsafety or efficiency of their raw materials andproducts.This has led to a worldwide campaign to raiseproducts.This has led to a worldwide campaign to raisepublic awareness and to stop P&G being involved inpublic awareness and to stop P&G being involved inanimal testing.animal testing.

The campaign is led byThe campaign is led by Uncaged CampaignsUncaged Campaigns in the UKin the UKand Stop Animal Exploitation Now in the USA.and Stop Animal Exploitation Now in the USA.

In 2002 P&G was recognized by theIn 2002 P&G was recognized by the

Humane SocietyHumane Society of the United Statesof the United Statesfor "advancing alternatives tofor "advancing alternatives to

animal testing".animal testing".

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MARKET RESEARCHMARKET RESEARCH

P&G employed market researchers for everyP&G employed market researchers for everyproduct division. The company also had twoproduct division. The company also had two

independent in-house research groups whichindependent in-house research groups which

were responsible for advertising research andwere responsible for advertising research and

market testing...market testing...

Qualitative Research ToolsQualitative Research Tools

Quantitative Research ToolsQuantitative Research Tools

Conducting Marketing Research OnlineConducting Marketing Research Online

The BenefitsThe Benefits

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Qualitative Research ToolsQualitative Research Tools

Generate new ideas for product andGenerate new ideas for product andmarket development.market development.The researchers engaged the customers inThe researchers engaged the customers in

detailed discussions over differentdetailed discussions over differentfeatures of the company's products. As afeatures of the company's products. As aresult, the personal interaction betweenresult, the personal interaction betweenthe researchers and the consumers wasthe researchers and the consumers washigh.high.

The major qualitative research tools usedThe major qualitative research tools used

by P&G included focus-group discussions,by P&G included focus-group discussions,in- home visits, in-context visits and in-in- home visits, in-context visits and in-store interviews...store interviews...

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Quantitative Research ToolsQuantitative Research Tools

P&G also employed quantitative researchP&G also employed quantitative researchtools extensively. These tools helped intools extensively. These tools helped ingenerating new product ideas for P&G.generating new product ideas for P&G.

While the sample sizes for quantitativeWhile the sample sizes for quantitativeresearch was usually larger, the personalresearch was usually larger, the personalinteraction between the researchers andinteraction between the researchers andthe respondents was minimal...the respondents was minimal...

Tools like surveys throughTools like surveys throughweb or practical approachweb or practical approach

in the market.in the market.

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Conducting Marketing ResearchConducting Marketing Research

OnlineOnline

P&G conducted online concept tests to getP&G conducted online concept tests to getfeedback from consumers. This feedback helpedfeedback from consumers. This feedback helpedit in new product introduction and launchingit in new product introduction and launchingimproved versions of existing products...improved versions of existing products...

The BenefitsThe Benefits: P&G's online surveys saved: P&G's online surveys saved

considerable time and costs for the company.considerable time and costs for the company.Using traditional methods,Using traditional methods,

a consumer survey costa consumer survey cost

the company aroundthe company around

$50,000 and took at least$50,000 and took at leastthree to four weeks...three to four weeks...

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P&G s SCOPE BRAND OFMOUTHWASH

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INTRODUCTION OF SCOPEINTRODUCTION OF SCOPE

This mouthwash product has been around for wellThis mouthwash product has been around for wellover hundred years. It has good reputation asover hundred years. It has good reputation asnotable brand that kills the germs that cause thenotable brand that kills the germs that cause thebad breath. It also can be successful although itbad breath. It also can be successful although it

not as old as Listerine product in mouthwashnot as old as Listerine product in mouthwashmarket.market. It has been proven to kill more germs. OtherwiseIt has been proven to kill more germs. Otherwise

its also well knows as bad breath remedy.its also well knows as bad breath remedy. Scope products are just not available in originalScope products are just not available in original

mint flavor (green), but also in a citrus (orange),mint flavor (green), but also in a citrus (orange),peppermint (blue), cinnamon (red) flavors & newpeppermint (blue), cinnamon (red) flavors & newScope White. Its major competitor in mouthwashScope White. Its major competitor in mouthwashmarket is a Listerine brand.market is a Listerine brand.

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Defining ProblemsDefining Problems

First is to develop a strategy that would ensure theFirst is to develop a strategy that would ensure thecontinued profitability of scope in the face of thesecontinued profitability of scope in the face of thesecompetitive threats. This means that their oldcompetitive threats. This means that their oldstrategies are not suitable with the customerstrategies are not suitable with the customerneeds. The innovations from other brandneeds. The innovations from other brand

competitors make their brand decreasing incompetitors make their brand decreasing incustomers satisfaction.customers satisfaction. The second is a how to maintain their profit andThe second is a how to maintain their profit and

make sure the Scope brand is always be the 1st inmake sure the Scope brand is always be the 1st inmouthwash product ranking. This means thatmouthwash product ranking. This means that

the Scope ranking is decreasing fromthe Scope ranking is decreasing fromthe first choice to second choice ofthe first choice to second choice of

customer. Listerine be the popularcustomer. Listerine be the popular

and the first choice of customers.and the first choice of customers.

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SWOT analysisSWOT analysis

STRENGTHSSTRENGTHS

Scope was long experience in the oral hygiene industry since 1967.Scope was long experience in the oral hygiene industry since 1967.

The taste or flavor of Scope better than other mouthwashes.The taste or flavor of Scope better than other mouthwashes.

High-quality product, quality processes and procedures.High-quality product, quality processes and procedures.

Have a first rating in mouthwash market share.Have a first rating in mouthwash market share. WEAKNESSESWEAKNESSES

Not enough make a distribution channel.Not enough make a distribution channel.Lack of canning or packaging.Lack of canning or packaging.

Undifferentiated products or services with other competitor.Undifferentiated products or services with other competitor. OPPORTUNITIESOPPORTUNITIES

Brand which it concentrate for a healthy oral.Brand which it concentrate for a healthy oral.

Move into new market segment that offer improves profit.Move into new market segment that offer improves profit.

A developing market such as in the Internet.A developing market such as in the Internet.

Place more distribution channel such as more drugstore and food storePlace more distribution channel such as more drugstore and food store THREATTHREAT

Too many competitor in this industry.Too many competitor in this industry.

Price wars with other competitor.Price wars with other competitor.

Not patentable , competitor can attempt to duplicate a productNot patentable , competitor can attempt to duplicate a product

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ENUMERATE THE DECISIONENUMERATE THE DECISION

FACTORSFACTORSTwo sets of decision factors must beTwo sets of decision factors must be

enumerated in the decision-making processenumerated in the decision-making processis alternative courses of action andis alternative courses of action anduncertainties. Alternative courses of actionuncertainties. Alternative courses of action

are controllable decision factors becauseare controllable decision factors becausethe decision maker has complete commandthe decision maker has complete commandof them.of them.

Uncertainties areUncertainties are

uncontrollable factorsuncontrollable factors

that the Protect &that the Protect &

Gamble, Inc. cannotGamble, Inc. cannot

influence.influence.

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IDENTIFY THE BEST ALTERNATIVEIDENTIFY THE BEST ALTERNATIVE

Create a product extension and innovation: ForCreate a product extension and innovation: Forexamples; produce a product that closelyexamples; produce a product that closelyfunctioning like a mouthwash products such asfunctioning like a mouthwash products such asdental gums. Dental gums are promoted todental gums. Dental gums are promoted to

reduced plaque, whiten teeth, and reduce the riskreduced plaque, whiten teeth, and reduce the riskof tooth decay.of tooth decay. Increase the variety of an offering. For examplesIncrease the variety of an offering. For examples

in November 2004, P&G come out with their newin November 2004, P&G come out with their newmouthwash product called Crest Pro-Health whichmouthwash product called Crest Pro-Health which

present as their product extension. This productpresent as their product extension. This productis in the same product category of theis in the same product category of themouthwash products. The effort is intended tomouthwash products. The effort is intended todraw Listerine users who've resisted P&G's Scope.draw Listerine users who've resisted P&G's Scope.

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Develop a plan for implementing theDevelop a plan for implementing the

chosen alternativechosen alternative

Establish a R& D (research andEstablish a R& D (research and

development) group which able to makedevelopment) group which able to make

a new innovation of Scope productsa new innovation of Scope products

Improving production by upgradingImproving production by upgradingTechnologyTechnology

Brand building andBrand building and

better marketingbetter marketingstrategiesstrategies

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Was the decisionWas the decision

appropriate?appropriate? Yes, the decision was appropriate. As uYes, the decision was appropriate. As u

know that the Listerine has done this andknow that the Listerine has done this and

grown up by doing this in the last few years.grown up by doing this in the last few years.

Examples can be cited from cross functionalExamples can be cited from cross functionalindustries where investment in marketingindustries where investment in marketing

the productthe product

has proven successfulhas proven successful

like Pepsi, Sony, Nokia,like Pepsi, Sony, Nokia,

etcetc

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The Future Opportunities &

Challenges Supply Chain Service Providers Innovation Service Providers Need software as much as hardware.

Opportunity:

Lead defining the use of Contract Manufacturerswithin the Consumer Products industry.requirescapability.

Challenges:

Capital / investment needed to create thiscapability. Requires business strategies and focus on core

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MUNES

HWAR

P

RASAD