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TOUCHING LIVES, IMPROVING LIFE.
PROCTER & GAMBLE
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A .G. Lafley (Chairman)Headquarters - Cincinnati, Ohio, USA
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MISSION OF P & G
yTo provide branded products and
services of superior quality and value
that improve the lives of the world'sconsumers, now and for generations to
come.
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FACTFILEy Founded 1837 *(American multinational corporation)y Headquarters - Cincinnati, Ohio, USA
y Key people - A. G. Lafley, Chairman, President, and ChiefExecutive.
y Industry - Consumer goods
y Revenue - US$ 83.503 billion (2008)y $ 79 billion (2009)y Net income - US$12.075 billion (2008),
y $ 13.436 billion (2009)
y Employees - 138,000y Website - www.pg.com
y Products are available in 140 countries
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INTRODUCTIONy Procter & Gamble is the world's largest producer of
household and personal products by revenue
y Its products reaching 4 billion people worldwide
y P&G's product line includes 23 brands across
beauty, healthcare, and food includingTidedetergent, Pampers diapers, and Gillette razors,that generate over $1 billion in revenue annually
y
In 2005, P&G expanded its po
rtfo
lio
to
includerazors and blades as well as batteries with itsacquisition of the Gillette Company
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HISTORYy
William Procter, a candlemaker, andJames Gamble, asoapmaker, immigrants from England and Ireland, respectively,
who had settled earlier in Cincinnati, who met as they bothmarried sisters, Olivia and Elizabeth Norris formed thecompany initially.
y Alexander Norris, their father-in law called a meeting in whichhe convinced his new sons-in-law to become business
partners.
y
On Octo
ber 31, 1837, asa result of the suggestion,
Procter & Gamble was born.
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OPERATIONSEffective July 1, 2007, the company's operations are categorized into three
"Global Business Units" with each Gl
obal Business Unit di
vided int
o"Business Segments," according to the company's June 2007 earnings
release.y Beauty Care
y Beauty segmenty Grooming segment
y Household Carey Baby Care and Family Care segmenty Fabric Care and Home Care segment
y Health & Well-Beingy Health Carey Snacks, Coffee and Pet Care
y Twenty-four of P&G'sbrandshave more than a billion dollarsin net annual sales and another18 have sales between $500 millionand $1 billion.
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MANUFACTURINGProcter & Gamble manufactures its products across the
globe. Manufacturing operations are based in thefollowing regions:
y United Statesy
Canaday Latin Americay Europey China (31 wholly-owned
factories) and other parts
of Asiay Africay Australia
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CONTRIBUTIONS OF GLOBAL BUSINESS
UNITS(GBU)
y Beauty (33% of 2009 sales, 36% of 2009 net
income)
y Health and Well-Being (21% of 2009 sales, 24%
of 2009 net income)
y Household Care (46.8% of 2009 sales, 43% of
2009 net income)
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ACQUISITIONS
y In 1930 acquisition of the Newcastle uponTyne-basedThomas Hedley Co. terms of manufacturingand production.
y Folgers Coffee, Norwich Eaton Pharmaceuticals,Richardson-Vicks, Noxell, Shulton's Old Spice, MaxFactor, and the Iams Company, among others werealso acquired.
y
In January 2005 P&G anno
unced an acquisitio
no
fGillette, forming the largest consumer goodscompany and placing Unilever into second place.
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BUSINESS GROWTH AND DIVESTITURESy Folgers Sale
On June 4, 2008, P&G sold its Folgers coffee unit toJ.M. Smucker Co for$2.95 billion. As part of the deal, P&G shareholders will receive a 53.5percent stake in Smuckers and the company will assume $350 million ofFolger's debt.
y Gillette Acquisition
Pro
cter & Gamble acquired Gillette in 2005 fo
rov
er $50 billio
n in its largestacquisition
y Sale of Pharmaceutical Unit
In 2009 P&G sold its pharmaceutical unit toWarner Chilcott Plc for $3.1billion in cash.The company expects to book a 43 cent per share earningsboost in Q2 of fiscal 2010 as a result of the sale.
y Online SalesIn January 2010, the company announced it would pursue its own onlineretail store to sell its consumer products to US end-users, putting it in directcompetition with major retailers in reaching consumers.
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y Nice 'n Easy is a hair coloring product.
y Olay is a brand of women's skin care products.
y Oral-B is a brand of toothbrush, and oral care products.
y Pampers is a brand of disposable diaper and other baby care products.
y Pantene is a brand ofhair care products (conditioners/styling aids).
y Prilosec OTC is a brand of heartburn medicine co-marketed by AstraZeneca.
y Pringles is a brand of potato chips.
y Puffs is a brand offacial tissue.y Secret is a brand of antiperspirant and deodorant.
y TAG is a deodorant andbody spray.
y Tide is a brand of laundry detergent.
y Vicks is a brand name ofover-the-counter medicines (Formula 44, Sinex,
NyQuil/DayQuil)y Wella is a brand name of hair care products (shampoo, conditioner, styling, and
hair color).
y Whisper is a brand of pantyliners sold primarily in Asian markets.
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MARKETING STRATEGY OF P & G
y
to
maintain its competiti
ve edge by f
ocusing
on pr
oduct
innovation
y To spend almost twice as much on research and development
spending ($2.0 billion in 2009) as its closest competitor
y Adopt "Connect + Develop" initiative, to bring new productideas from outside the company. Connect + Develop has led to
the development of 42% of new P&G products in recent years
y To focus on emerging markets worldwide BRIC and many more
y Establish a R& D (research and development) group which able
to make a new innovation of Scope products
y Improving production by upgradingTechnology
y Brand building and better marketing strategies
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SWOT ANALYSISy STRENGTH
y New Management
y Gross Margin 15Times the Industry Average
y One of the best marketers in the world
y
Div
ersified brand po
rtfo
lio
: mo
re than 300 brands with mo
re than 79billion in Revenue
y Tightly integrated with the largest retailers in the US and around theworld
y Product innovation
y Talented management
y Distribute to 80 Countries
y Distribution channels all over the world
y New Billion Dollar brands
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WEAKNESS
y Top Brands Losing Market Share
y Health and Beauty Women Only
y Lagging behind in online media presence & leadership
y Missing opportunity: Refuses to manufacture private labelproducts for its retail customers
y Slow Process Heavy Culture
y Weak brands (Duracell, Iam, Braun, Pringles)
y Views Product Performance only
y Expansion for brands is limited
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OPPORTUNITIESy Health and Beauty for Men
y Doubling Environmental Goals for 2012
y Adding Value for the Conspiracy
y Utilizing online social networks
y Going Green/EcoFriendlyy Capitalizing on online media
y Continue to divest brands that don't align with the company'slong-term goals (i.e., Folgers)
y Emerging markets
y New acquisition opportunitiesy Selling directly to consumers
y Design for better product experience
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THREATS
y Substitute brands that have a cheaper price
y Private label growth
y Slowdown in consumer spending in the US & globally
y Key competitors expanding their product portfolios throughacquisitions
y Increase in raw material price
y Commodity cost and currency exchange rate placed
tremendous pressure on the business
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CORPORATE SOCIAL RESPONSIBILITYThey are:
y PROJECT SHIKSHA SECURE YOUR CHILDS FUTURE (2003)
y REBUILDING LIVES IN EARTHQUAKE HIT BHUJ (2001/2002)
y PROJECT POSHAN FIGHTING MALNUTRITION IN
INDIA(2000)y PROJECT OPEN MINDS EDUCATING INDIAS WORKING
YOUTH
y (1999)
y PROJECT DRISHTI THE FIRST EVER SIGHT RESTORATION
y PROGRM IN INDIA(1999)
y PROJECT FUTURE FOCUS -THE FIRST EVER ROUND WRITE IN
y CAREER GUIDANCE SERVICE (1998)
y PROJECT PEACE - ENVIRONMENTAL EDUCATIONPROGRAMME(1996)
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