Company Backgroundc

1837 - P&G FOUNDER

Founded-1837*(American MNC)

Headquarters-Cincinnati,Ohio,Usa

Key People-A.G Lafley,(Chairman,President &Chief executive)

Industry-Consumer goods

Revenue-US$ 84.7 billion(2013)

Employees-121,000(2013)

Website-www.pg.com

Products are available in 140 countries

P&G Vision & Mission

Vision To be recognized as,the best consumer products and Services Company in the world.

• Mission

We will provide branded products and services of superior quality and value that improves the lives of the World’s consumers.

• Values Integrity Leadership Ownership Passion for winning Trust

Products

Brands

Expanded new lines of business through brand acquisitions.

Company Timeline

Started International expansion---- 1930 First T.V commercial for Ivory soap---- 1930 First R&D Lab---- 1887 Began to enter markets in Latin America, Western Europe, & Japan---- 1945 Crest Toothpaste---- 1955 Charmin Paper Mill---- 1957 Pampers,Downy,Bounce---- 1961 Folger’s Coffee---- 1963 Crush International---- 1980 Citrus Foods(Frostproof), Norwich Eaton Pharmaceutical, Richardson-Vicks---- 1981 MetaMucil---- 1985 Noxell(Covergirl & Noxzen)---- 1990 Maxfactor ---- 1991 Sales dropped by 2.6%Cutoff 15000 staff,7 GBU to 4GBU---- A.G Laffley, C.E.O;Jim Stengel,CMO---- 2000 Sampling Program---- Pet Food---- Gillete---- 2005 McDonald as C.E.O---- 2010 Digital & Mobile Marketing,sponsorships to Olympics,NFL etc.,----

Case Facts

Global leader in Branded Consumer Goods

Has 2 dozen $1 billion brands worldwide

First company to advertise directly to consumers

2010,net sales=$78.94 billion

Net income=$12 billion

Market Capitalization=$186.63 billion

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Year Net Sales in Billions of Dollars

2006 $64.4

2007 $72.4

2008 $79.3

2009 $76.7

2010 $78.9

75

75.5

76

76.5

77

77.5

78

78.5

79

79.5

2010 2009 2008

NET SALES(Bn Dollars)

NETSALES(BnDollars)

Recession

31

31.5

32

32.5

33

33.5

34

34.5

2010 20092008

DEVELOPING MARKETS(% of net

sales)

DEVELOPINGMARKETS(% of netsales)

Financial Highlights

Amounts in millions,except for share amounts

2010 2009 2008 2007

Net Sales $78,938 $76,694 $79,257 $72,441

Operating Income($) 16,021 15,374 15,979 14,485

Net Earnings($) 12,736 13,436 12,075 10,340

Net Earning Margin from Continuing Operations*

13.9% 13.9% 14.2% 13.3%

Diluted Net Earnings per Common Share from Continuing Operations*

$3.53 $3.39 $3.40 $2.84

Diluted Net Earnings Per Common Share*($)

4.11 4.26 3.64 3.04

Dividends Per Common Share*

1.80 1.64 1.45 1.28

Strategies by Durk Jager

Year 1999.

Situation - Net sales slowed to 2.6% growth from previous year i.e.,1998.

What he did?

Cut 15000 staffs-promised to deliver more innovations.

4 Geographic business units replaced by 7 global business units based on product category.

50% innovations-inside P&G Labs

• 50% through the labs i.e., partnerships and connections with non-P&G scientists and engineers.

• Expanded it’s digital content offering with the launch of Pampers.com-an early online community for mothers and family parents.

Who Supported?

• A business development team

• A venture team created by the business development team

• Market Development Organizations

Aim in mind

• Bigger innovation

• Faster speed to market

• Greater growth

Durk Jager

Insider‟s estimation

• For every P&G researcher(7500) inside,200 scientists and engineers elsewhere in the world i.e.,1.5 million researchers beyond.

This new structure and approach to innovation—called „ Connect & Develop‟

Results:

Success

• Led to successful product introductions such as Swiffer Dusters, Olay

Regenerist, Crest Whitestrips, And

Crest Spinbrush. • Swiffer Dusters grew up to be half-

billion dollar brand • Olay and crest grew up to be billion

dollar brands.

Glitches

• Firm struggled to control costs • Stock slid from $118 to $52 over 18

months.

Strategies by A.G Lafley

Year 2000

Goal set by Lafley To make P&G the top product-design company in the

world. What he did?

• Named Jim Stengel as CMO(chief marketing officer) • Created a new design unit,separate from other business

units • Named Claudia Kotchka as vice president for design

innovation and strategy

• Acquisition of Gillette in 2005 for $57 billion.

Result Acquisition of Gillette made P&G the top consumer good’s company.

What Claudia Kotchka did? • Hosted a “design tasting”,featuring design case studies for P&G’s top 200

executives. • Created a P&G design board similar to Mattel and Nike. • Created Clay Steel Project which brought cross-sectional teams from their jobs to

create new brands based on design.

Results • Design informed the innovation process and even changed the function of some

products such as Tampax Pearl’s more comfortable applicator. • P&G’s brand faced two moments of truth-first on store shelf and second

when consumers used the product and decided whether it delivered on it’s promise.

What CMO Stengel did?

• Started a more consumer centric marketing.

• (ex.,Website reflect.com which let customers customize P&G products,

• Sampling programs)

• Brought a sharper focus to return on marketing investment(ROMI)

• (ex.,Project Apollo)

• Developed metrics that measured brand loyalty and customer

relationships.

2008-early 2009

Recession Company activities: • P&G wooed recession-wary consumers with more focussed attention to in-store

promotions.

• P&G introduced store-back approach , intended to shift P&G’s mindset to the shopper marketing experience( Pamper’s 2008 campaign donated funds for one

tetanus vaccine in developing markets for each pack of specially marked diapers sold.)

• Multibranding or leveraging the P&G brand to drive sales to it’s sub-brands.

• P&G took a stake in Ocado-a U.K based online grocer for mainly understanding

how consumers used the internet and engaged in e-retailing. • Maintained it’s marketing budget, with more fraction of it being shifted to

coupons and in-store promotional activities.

Strategies by Bob McDonald

Year 2010 & onwards

Aim/focus

• Grow P&G’s core brands and categories with an unrelenting focus on innovation.

• To build P&G’s business with unserved and undeserved consumers.

Reach

“More consumers, in more parts of the world, more completely”.

Bob McDonald

Initiatives taken

A successful advertising campaign for the 2010 Winter Olympics, which combined 18 P&G brands under a common message and featured a commercial that thanked moms around the globe for their efforts.

P&G announced a partnership with Tobii; a leader in

eye tracking for their research.

• Sponsored 2012 winter games to be held in Russia.

• Sponsored 2016 summer games to be held in Brazil.

emotional

factor

innovation

• More Celebrity Endorsements Sofia Vergara, Roger Federer, Alex Ovechkin, Sebestian Vettel, Eva Mendes, Naomi Watts • Increased Ad spending by $1 billion with 20% increase in media

impressions. More part of marketing budget shifted to digital advertising & other new media.

• Began using Facebook as a marketing tool.

Results

• The collection sales grew 20% in the first half of 2010,74 and second-quarter dollar share increases for Pantene were up 14%, 4% for CoverGirl, and 3% for Olay.

• P&G’s Old Spice television commercial and YouTube sensation, “The Man Your Man Could Smell Like,” gave P&G its greatest exposure in the online community in 2010, and bridged the power of digital and social media.

• TV series & web series on the line of “My Black is Beautiful” products, targeting African American women attracted more online consumers.

A Brief Overall Analysis

Market Segmentation

Each brand must be positioned for it’s target segment

and a single Proctor and Gamble brand cannot have one

positioning for all P&G ‘s segments.

SWOT Analysis

Strengths

1.Diversified brand portfolio

2.Research and development

3.Global Operation

4.Strong Distribution Network

Weaknesses

1.Online media & Leadership

2.Dependency

3. Brand cannibilazation

Opportunity

1.Diversification

2.Capitalizing on online media

3.Growth in Indian FMCG market

4.Environment concern

Threats

1.Competition

2.No new product innovation

Commercial ads through broadcast media.

Customized ads by region to enter company’s global market

P&G TV ads focused on functionality and emotional

connection.

P&G also pursued sponsorship and celebrity endorsements

In 2010,P&G shifted marketing budget to digital advertising and other online medias.

• According to the mission statement, delivering products that satisfy consumer needs.

The culture at P&G is also influenced by the brand management system. • P&G wants to satisfy the consumer in a superior way to win the competition and

achieve leading positions in the market. • Successful companies are better educated about consumers , competitors and

distibutors than their rivals. • To acquire knowledge about consumers and competitors,P&G conduct monthly

analysis of nielsen data,regularly check stores to ‘feel the market’ and to pick up any changes in consumer attitudes or the competitive context,organise qualitative consumer testing,and running monthly evaluations of new product launch.

Advertising Early innovations included sponsorship of daytime radio dramas (1932) and television commercials (first aired in 1939). Soap operas owed their existence to P&G: the daytime drama As the World Turns was launched in 1956 to specifically target women in their homes. Another World, The Young and the Restless, and Guiding Light were other longtime P&G-sponsored daytime dramas.

Sponsorships P&G, a U.S. Olympic team sponsor for the 2010 Games, became a worldwide sponsor, specifically to raise its visibility in emerging markets, for the 2012 winter games to be held in Russia and the 2016 summer games in Brazil. A National Football League (NFL) sponsorship gave consumers opportunities to engage with the NFL, “just for choosing P&G brands,”

CoverGirl spokespersons Christie Brinkley, Drew Barrymore, Ellen DeGeneres, and Queen Latifah. P&G also developed numerous celebrity endorsements. Most recently, television show Modern Family actress Sofia Vergara was named spokesmodel for CoverGirl cosmetics in May 2011 for an ad campaign launching in January 2012. Taylor Swift also joined the company for the CoverGirl brand.

Celebrity Endorsements

Sofia Vergara & Ellen Degeneres

Christie Brinkley

Queen Latifah

NHL player Alex Ovechkin was named a Gillette Brand Ambassador.

Tennis star Roger Federer was featured in Gillette Fusion Products ads in the U.K. in 2010.

BeingGirl.com, launched in 2000, provided information and expert advice on “issues that teenage girls might be too embarrassed to ask a parent or doctor about, such as menstruation, eating disorders, acne and dating

P&G developed a “response”

campaign, with 180 videos

featuring “The

Old Spice Guy” responding to

questions posed by fans, bloggers,

and celebrities.

These generated over 2 billion

media

impressions.

Digital marketing

Lessons learnt from long years of marketing Five strategic lessons:

Never give your consumer a product-based reason to switch away from your brand.

Think of every brand that we have, and treat every brand that we have, as though it were our only brand.

Always determine whether a product innovation is brand-specific or generic.

Competition will always follow your technology, not your brand. After you have defined your options, always test your worst-case

scenario in the market. If you don’t, and if you have made the wrong move, the market will be the worst-case scenario

Moving forward

Building on its strengths in R&D, consumer research, and product performance, P&G continued to evolve and innovate as the world’s largest marketer.