Project Report On
FMCG COMPANY-PROCTOR AND GAMBLE
Submitted in Partial Fulfillment for the Award Master in International Business (Session 2010-12)
Submitted to:
Submitted By:
Mr.ASHISH KR.JHA
Student Name: RAJEEV RANJAN
(Internal Guide)
Roll No: MIB11010 MIB SEMESTER-1st
DEPARTMENT OF MANAGEMENT MA NAGEMENT
INSTITUTE OF MANAGEMENT STUDIES, NOIDA
A-8B, Plot C, Sector-62, Noida
A UGC Recognized Institute
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INSTITUTE OF MANAGEMENT STUDIES, NOIDA
A UGC Recognized Institute A-8B, Plot C, Sector-62, Noida
DECLARATION
I RAJEEV RANJAN bearing Roll MIB10110 MIB10110
Class MIB of the Institute of Management Management
Studies, Noida hereby declare that the Project Report-108 entitled entitled PROCTOR AND GAMBLE is an original work and the same has not been submitted to any other Institute for the award of any other diploma. The suggestions as approved by the faculty were duly incorporated.
Signature of Student
Countersigned Signature of Faculty Guide
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ACKNOWLEDGEMENT
While
presenting this project we express our sincere gratitude to Almighty God. For his grace and blessing that helps us to complete this project synopsis successfully.
As with any project this one would not have been possible without the contribution of many people. First of all all I would would like to express our sincere gratitude gratitude to are Project Guide Guide Ms. KEENIKA SAINI who provides us all the necessary information for the successful completion of this synopsis. We would also like to thank our Class Coordinator Mr. AJAY PRATAP co-operat ive healthy environment. SINGH for their great support and providing co-operative We
shall be failing if we are not thanking Program coordinator Mrs. VANJA GOSWAMI and all concern faculties for their moral support and guidance time to time. We would like to thanks to our entire supporter for their encouragement and moral boost up.
DIGVIJAY SINGH PGDM-I YEAR
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TABLE OF CONTENTS:
SNO.
TOPIC NAME
PAGE NO.
1
INDUSTRY DETAILS
5
2
INTRODUCTION OF P&G
7
3
VISION AND MISSION OF P&G
13
4
VALUES AND PRINICIPLE
14
5
HISTORY AND MILESTONES
18
6 7 8 9 10 11 12 13
SUBSIDIARIES OF P&G PRODUCTS
21 24
MANAGEMENT TEAM MERGER AND ACQUISITION CORPORATE SOCIAL RESPONSIBILITY SWOT ANALYSIS
25 28 29 30
RECOMMEDATION/SUGGESTION BIBLIOGRAPHY
32 34
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INDUSTRY DETAILS: [FMCG-FAST MOVING CONSUMER GOODS] THE TERM FMCG REFERS TO THOSE RETAIL GOODS THAT ARE GENERALLY REPLACED OR FULLY USED UP OVER A SHORT PERIOD OF DAYS, WEEKS, OR MONTHS, AND WITHIN ONE YEAR. THIS CONTRASTS WITH DURABLE GOODS OR MAJOR APPLIANCES SUCH AS KITCHEN APPLIANCES, WHICH ARE GENERALLY REPLACED OVER A PERIOD OF SEVERAL YEARS. FAST MOVING CONSUMER GOODS (FMCG) OR CONSUMER PACKAGED GOODS (CPG) ARE PRODUCTS THAT ARE SOLD QUICKLY AT RELATIVELY LO W COST. EXAMPLES INCLUDE NON-DURABLE GOODS SUCH AS SOFT DRINKS, TOILETRIES, GROCERY ITEMS ETC. THOUGH THE ABSOLUTE PROFIT MADE ON FMCG PRODUCTS IS RELATIVELY SMALL, THEY GENERALLY SELL IN LARGE QUANTITIES, SO THE CUMULATIVE PROFIT ON SUCH PRODUCTS CAN BE LARGE. FMCGS HAVE A SHORT SHELF LIFE, EITHER AS A RESULT OF HIGH CONSUMER DEMAND OR BECAUSE THE PRODUCT DETERIORATES RAPIDLY. SOME FMCGS ± SUCH AS MEAT, FRUITS AND VEGETABLES, DAIRY PRODUCTS AND BAKED GOODS ± ARE HIGHLY PERISHABLE. OTHER GOODS SUCH AS ALCOHOL, TOILETRIES, PRE-PACKAGED FOODS, SOFT DRINKS AND CLEANING PRODUCTS HAVE HIGH TURNOVER RATES. THE FOLLOWING ARE THE TYPICAL CHARACTERISTICS OF FMCGS: FREQUENT PURCHASE LOW PRICE HIGH VOLUMES LOW MARGINS EXTENSIVE DISTRIBUTION NET WORKS HIGH STOCK TURNOV T URNOVER ER 5
FMCG SCOPE AND COMPANIES:
FMCG industry, alternatively called as CPG (Consumer packaged goods) industry primarily deals with the production, distribution and marketing of consumer packaged goods. The Fast Moving Consumer Goods (FMCG) are those consumables which are normally consumed by the consumers at a regular interval. Some of the prime activities of FMCG industry are selling, marketing, financing, purchasing, etc. The industry also engaged in operations, supply chain, production and general management. FMCG Companies Worldwide Procter & Gamble Unilever PLC Taj agro international (India) Dabur India Limited Godrej Consumer Products (GCPL) Other Leading FMCG companies Some of the well known FMCG companies are Sara Lee, Nestlé, Reckitt Benckiser, Unilever, Procter & Gamble, Coca-Cola, Carlsberg, Kleenex, General Mills, Pepsi and Mars etc.
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INTRODUCTION OF
Procter & Gamble Co. (P&G) is an American company based in Cincinnati, Ohio that manufactures a wide range of consumer goods. In India Proctor & Gamble have two subsidiaries: P&G Hygiene and Health Care Ltd. and P&G Home Products Ltd. P&G Hygiene and Health Care Limited is one of India's fastest growing Fast Moving Consumer Goods Companies with a turnover of more than t han Rs. 500 crores. It has in its portfolio famous brands like Vicks & Whisper. P&G Home Products Limited deals in Fabric Care segment and Hair Care segment. It has in its kitty global brands such as Ariel and Tide in the Fabric Care segment, and Head & Shoulders, Pantene, and Rejoice in the Hair Care segment.
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Business Growth and Divestitures Folgers Sale
On June 4, 2008, P&G sold its Folgers coffee unit to J.M. Smucker Co for $2.95 billion. As part of the deal, P&G shareholders will receive a 53.5 percent stake in Smuckers and the company will assume $350 million of Folger's debt. Gillette Acquisition
Procter & Gamble acquired Gillette in 2005 for over $50 billion in its largest acquisition to date. In 2004, the last full year before the acquisition, Gillette generated over $10 billion in sales, about $6 billion of which came from razors and Duracell and Braun products and the remainder sourced from the Oral-B brand, which was moved into the Health & Well-Being segment. A key piece of the acquisition beyond Gillette's product lines was its distribution network and supply chain. Gillette's distribution network and supply chain in emerging markets had been extremely successful for Gillette and, once acquired, has worked to complement P&G's own distribution network. Sale of Pharmaceutical Unit
In 2009 P&G sold its pharmaceutical unit to
Warner
Chilcott Plc for $3.1 billion in cash. The
company expects to book a 43 cent per share earnings boost in Q2 of fiscal 2010 as a result of the sale. The deal allows P&G to focus on its personal care, beauty, and household product divisions. In 2006, the company started winding down its discover-phase pharmaceutical products in favor of licensing late-stage compounds, and announced in 2008 it would exit the drug industry entirely. Online Sales
In January 2010, the company announced it would pursue its own online retail store to sell its consumer products to US end-users, putting it in direct competition with major retailers in reaching consumers. P&G CEO Bob McDonald said the company could increase its online sales "substantially" over the next few years. In fiscal 2009, P&G's existing online sales accounted for 8
$500 million, or 0.6% of total revenue. The company plans a full scale launch in spring 2010 after a pilot test with 5000 consumers co nsumers.. [25]
Different product price points provide some insulation against recession
Household staples are somewhat protected from the US recession and global economic downturn. However, in a recession consumers often turn to cheaper private label or store brands instead of "brand name" products from P&G. To combat private label encroachment, P&G offers at least two product forms in many product categories. For example, the company has seen increases sales in Luvs from Pampers diapers and an increase in Gain detergent sales from Tide. In addition, P&G offers "Basic" versions of its Charmin toilet paper and Bounty paper towels. The company's broad offerings, combined with the necessity of household items, provide a degree of insulation against recession. Retail Consolidation
The rise of a handful of powerful low-priced retailers has negatively impacted consumer products companies. A handful of big retailers have captured a large share of the market. For example, from 1999 to 2004, the top 10 food retailers in the US increased their share of food retail sales from 53.4% to 58.9%. These large retailers have shifted the balance of power within the supply chain. For example, the company's largest customer, Wal-Mart, accounted for 15% of net sales in 2006, 2007, and 2008.
Wal-Mart
has exerted its power over other suppliers to their
detriment in the past, such as forcing record companies to produce clean-label CDs and pulling adult magazines. A decision by Wal-Mart not to sell a particular P&G consumer product would prevent P&G from reaching its entire target market. In addition, many retailers have pushed their own higher margin private label brands in competition with P&G. Rise of Private Labels
In the past decade, P&G has faced stiff competition from private label brands or "store brands" of large retailers such as Wal-Mart, Target, and supermarket chains. Private label products often sell at lower price points and earn higher margins because the retailers can control the cost of their production. For example,
Wal-Mart
offers 5,500 products through its "Great Value" brand,
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which has increasingly sold as consumers feel the recession squeeze on their disposable income. From 2003 to 2008, sales of Target's private label products rose an average of 15% annually.
Large retailers are close to the consumers, have the point of sale data on consumer behavior and are in better position to understand consumer behavior. These strengths contribute to better private label product development, which directly compete with P&G products. Retailers also promote their own brands as they earn higher margins on them. P&G has addressed this issue by continuously investing in Research & Development and introducing new products as well as offering different versions of its own products at different price points. Developing Markets
P&G has a well-established market presence in developed countries such as the United States and
Western
Europe and is looking to its presence in emerging markets. In fiscal 2009, 32% of
total net sales came from developing nations, nat ions, a figure that has increased steadily from fro m 2002 when sales in developing nations accounted for only about 20% of total revenue (approximately $8 billion). ] CEO Bob McDonald said in 2010 that he wants P&G to grow sales in China and India to reach 1 billion more customers by 2014. In September 2010, PG announced it would bring its Wella
hair color products to India, leading an aggressive push for product expansion. Some
expect the company co mpany to bring its Crest or Oral-B toothpaste to the Indian market next. In China and Russia, P&G's market share has been consistently increasing in the past five years as Procter & Gamble has put an increased emphasis on establishing its products in those markets. In 2008, the company's distribution network reached 800 million people in China and 80% of the population in Russia. P&G has created products designed specifically to target developing nations. For example, in many countries consumers wash clothing by hand with limited amounts of water. In response, P&G has launched Downy Single Rinse in Mexico, China, Philippines, and 9 other countries.
While
the average Mexican spends about $20 a year on P&G products,
Chinese per-capita spending is only about $3 and India per-capita spending $1. Increasing sales in China and India to the levels in Mexico would add $40 billion in sales to the company's overall revenue. Research & Development focuses both inside and outside the company
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In 2009, P&G spent approximately $2.04 billion on Research & Development, nearly $1 billion more than its closest competitor, Unilever. The two most important factors in P&G's innovation process are its practice of consumer demand research and its "Connect and Develop" R&D structure. First, when entering new markets, P&G sets up in-home visits with consumers in order to fully understand the needs and desires consumers have for household and personal products. This way, P&G gets directly to its customers and is able to cater to their needs. P&G also incorporates consumers' input into the R&D process thro ugh its "Connect and Develop"
initiative. Through "Connect and Develop" P&G has an online interface set up where people can submit product ideas and provide input on topics that P&G places on the web-portal. P&G staff then sort through the ideas and work with the most promising ones. This process is not responsible for all of the R&D that P&G does, but approximately 42% of new products in the last several years were influenced by or o r originated from "Connect and Develop." Early returns on new products released in 2009 are encouraging. Tide Stain Release, a stainremoving detergent released in July 2009, has garnered 10% market share in the US as of November 2009. The Bounce Dryer Bar, an automatic laundry freshener released in August 2009, has captured 7% of the North American fabric sheet market as of November 2009. Commodity Prices
A diversified consumer products manufacturer, P&G depends heavily on a wide basket of global commodities for manufacturing its goods. Higher commodity costs subtracted 0.5% from gross margin growth.Nearly half of the company's cost of goods is directly related to commodity goods. The company co mpany has increased prices due to higher costs of oil and other raw materials. materials. P&G instituted broad price adjustments in Q1 2010 to close widening price gaps in several businesses, including North American laundry, tissue, and towel, and several Eastern European markets. Analysts believe pricing adjustments are largely behind P&G as of Q2 2010, with an impact on about 10% of P&G's products. Jefferies analyst report, 10 Nov 2009As the market leader, the company does benefit from pricing power and can moderate commodity inflation better than its competitors.
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P&G Home Products Limited was incorporated as 100% subsidiary of The Procter & Gamble Company, USA in 1993 and it launched launches Ariel Super Soaker. In the same year Procter & Gamble India divested the Detergents business to Procter & Gamble Home Products. In 1995, Procter & Gamble Home Products entered the Hair care Category with the launch of Pantene Pro-V shampoo. Procter & Gamble Home Products launches Head & Shoulders shampoo. In 2000, Procter & Gamble Home Products introduced Tide Detergent Powder - the largest selling detergent in the world. Procter & Gamble Home Products Limited launched Pampers - world's number one selling diaper brand. Today, Proctor & Gamble is the second largest FMCG Company in India after Hindustan Lever Limited.
PROCTOR PLAZA IN CINCINNATI [USA]. 12
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MISSION AND VISION OF Proctor & Gamble's (P&G) Mission and Vision Statement
VISION of P&G ³To be a leading consumer goods company and to improve improve the lives of world consumers by providing valuable and innovative products´. Ten years ago Procter and gamble started the journey to improve the lives of Pakistani consumers by providing them with world famous quality brands. P&G want to be an outstanding organization with a passion for winning that would felt by everyone everyday; in the office, in the field every where P&G vision is to lead business growth by proactively identifying opportunities and positively contributing to volume growth.
We
will provide branded products and services of superior quality and value that improve the lives of the world's consumers. As a result, consumers will reward us with leadership sales, profit, and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper.
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VALUES AND PRINICPLES OF
P&G is its people and the values by which we live. We attract and recruit the finest people in the world. We build our organization from within, promoting and rewarding people without regard to any difference unrelated to performance. We act on the conviction that the men and women of Procter & Gamble will always be our most important asset.
LEADERSHIP: y
y y y
We
are all leaders in our area of responsibility, with a deep commitment to deliver leadership results. We have a clear vision of where we are going. r esources to achieve leadership objectives and strategies. strat egies. We focus our resources We develop the capability to deliver our strategies and eliminate organizational barriers.
OWNERSHIP: y
y
We
accept personal accountability to meet our business needs, improve our systems, and help others ot hers improve their effectiveness. We all act like owners, treating the Company's assets as our own and behaving with the Company's long-term success in mind.
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INTEGRITY y y y y y
We
always try to do the right thing. We are honest and straightforward with each other. operat e within the letter and spirit of the law. We operate We uphold the values and principles of P&G in every action and decision. We are data-based and intellectually honest in advocating proposals, including recognizing risks.
PASSION FOR WINNING
y
are determined to be the best at doing what matters most. We have a healthy dissatisfaction with the status quo. We have a compelling desire to improve and to win in the marketplace.
y
We
y y
We
TRUST
y y
respect our P&G colleagues, customers, and consumers, and treat them as we want to be treated. We have confidence in each other's capabilities and intentions. We believe that people work best when there is a foundation of trust.
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We Show Respect for All Individuals y y y
y
We
believe that all individuals can and want to contribute to their fullest potential. potential. We value differences. We inspire and enable people to achieve high expectations, standards, and challenging goals. We are honest with people about their performance.
The Interests of the Company and the Individual Are Inseparable y
y
We
believe that doing what is right for the business with integrity will lead to mutual success for both the Company and the individual. Our quest for mutual success ties us together. We encourage stock ownership and ownership behavior.
We Are Strategically Focused in Our Work y y y
We
operate against clearly articulated and aligned objectives and strategies. We only do work and only ask for work that adds value to the business. We simplify, standardize, and streamline our o ur current work whenever possible.
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We Value Personal Mastery y
y
We
believe it is the responsibility of all individuals to continually develop themselves and others. We encourage and expect outstanding technical mastery and executional excellence.
We Seek to Be the Best y y
y
We
strive to be the best in all areas of strategic importance to the Company. We benchmark our performance rigorously versus the very best internally and externally. We learn from both our successes and our failures.
Innovation Is the Cornerstone of Our Success y y
We
place great value on big, new consumer innovations. We challenge convention and reinvent the way we do business to better win in the marketplace.
Mutual Interdependency Is a Way of Life y
y y
We
work together with confidence and trust across business units, functions, categories, and geographies. We take pride in results from reapplying others' ideas. We build superior relationships with all the parties who contribute to fulfilling our Corporate Purpose, including our customers, suppliers, universities, and governments.
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HISTORY OF
Procter & Gamble Co. (P&G) is an American company based in Cincinnati, Ohio that manufactures a wide range of consumer goods. In India Proctor & Gamble has two subsidiaries: P&G Hygiene and Health Care Ltd. and P&G Home Products Ltd. Procter & Gamble's relationship with India started in 1951 when Vicks Product Inc. India, a branch of Vicks Product Inc. USA entered Indian market. In 1964, a public limited company, Richardson Hindustan Limited (RHL) was formed which obtained an Industrial License to undertake manufacture of Menthol and de mentholated peppermint oil and VICKS range of products such as Vicks VapoRub, Vicks Cough Drops and Vicks Inhaler. In May 1967, RHL introduced Clearasil, then America's number one pimple cream in Indian market. In 1979, RHL launches Vicks Action 500 and in 1984 it set up an Ayurvedic Research Laboratory to address the common ailments of the people such as cough and cold.
In October 1985, RHL became an affiliate of The Procter & Gamble Company, USA and its name was changed to Procter & Gamble India. In 1989, Procter & Gamble India launched Whisper - the breakthrough technology sanitary napkin. In 1991, P&G India launched Ariel detergent. In 1992, The Procter & Gamble Company, US increased its stake in Procter & Gamble India to 51% and then to 65%. In 1993, Procter & Gamble India divested the Detergents business to Procter & Gamble Home Products and started marketing Old Spice Brand of products. In 1999 Procter & Gamble India Limited changed the name of the Company to Procter & Gamble Hygiene and Health Care Limi L imited. ted.
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In 1993, Procter & Gamble Home Products is incorporated as a 100% subsidiary of The Procter & Gamble Company, USA. Procter & Gamble Home Products launches Ariel Super Soaker.
In 1993, Procter & Gamble India divests the Detergents business to Products.
Procter & Gamble Home
In 1995, Procter & Gamble Home Products enters the Haircare Category with the launch of Pantene Pro-V.
In 1997 Procter & Gamble Home Products launches Head & Shoulders shampoo.
In 2000, Procter & Gamble Home Products introduced Tide Detergent Powder - the largest selling detergent in the world.
In November 2000, Procter & Gamble Home Products Limited presented India in the first International Hair Styling and Beauty Expert Contest- Hair Asia Pacific 2000 in collaboration with Sri Lankan Association of Hairdressers and Beautician.
During this period, Procter & Gamble Home Products also re-launched the international range of Head & Shoulders, best-ever Anti-dandruff shampoo with an improved formula, new packdesign and logo, in three variants - Clean & Balanced, Smooth & Silky and Refreshing Menthol, which offers the fine combination of o f anti-dandruff efficacy efficacy and hair ha ir conditioning.
In January 2001, Procter & Gamble Home Products Limited and Whirlpool India Ltd. launched a special 'Ariel - Whirlpool Superwash' offer, making washing machines more affordable to the people of Hyderabad.
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On purchase of either a 500gms, 1kg or 1.5kg economy pack of New Ariel Power Compact, consumers are automatically eligible to buy a Whirlpool Washing Machine for as low as Rs.238/- in Equal Monthly Installments for 24 months, by filling in the application form that comes with the Ariel pack and contacting any one of the Whirlpool dealers mentioned on the pack. In June 2001, Procter & Gamble in partnership with the Association of Beauty Therapy & Cosmetology (ABTC), India hosted the Pantene Artist 2001 a national stylist competition, which included categories such as Bridal Dressing, Hair Cutt ing and Body Painting. Present at the t he event was world-renowned hairdresser and stylist Jun L. Encarnecion, who demonstrated the hottest international haircuts and styles in vogue via an interesting hairhsow. Mr. Encarnecion has trained students in leading hairdressing schools like Robert Fielding School of Hair Dressing (U.K), Pierre Alexander International Academy (U.K), Vidal Sassoon Academy, (U.S.A) among others and also enjoys the reputation of being the official hairdresser for the 1993 Miss Universe pageant.
In April 2002, Procter & Gamble Home Products Limited announced the launch of a special Ariel Bar Refund Offer along with its new Advanced Ariel Compact. Under the Ariel Bar Refund Offer, consumers could exchange their detergent bar on purchase of Advanced Ariel Compacts 1kg and 500gms packs, and avail of a Rs.15 and Rs.7 discount respectively on MRP.
Additionally, Procter & Gamble Home Products announced the Beat The Summer Dandruff offer on which 200ml Head & Shoulders bottle was available for Rs.99/- only, thus giving a benefit of a Rs.23/- discount to consumers.
In June 2003, Procter & Gamble Home Products Limited launched Pampers - world¶s number one selling diaper brand with sales of US$ 6 billion annually. Pampers provides superior dryness for uninterrupted overnight sleep, with just one pampers diaper. In India, Pampers Fresh & Dry is available in a variety of o f three sizes ± 4s, 10s and 25s.
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In July 2003, Procter & Gamble Home Products Limited launched Pantene Long Black, the ultimate solution for achieving the Long and Black hair look, and Head & Shoulders Silky Black - the only shampoo in India to offer the dual benefits of 100% dandruff-free as well as silky black hair. In January 2004, Procter & Gamble Home Products Limited announced the launch of Rejoice ± Asia¶s No. 1 shampoo, in India. Rejoice¶s patented Micro-Silicone conditioning technology gives twice as smooth, and easy to comb hair versus ordinary shampoos, at affordable prices in 100 ml bottles and 7.5 ml sachets. In April 2006, Procter & Gamble Home Products Limited announced the launch of Pantene Hair Fall Control, which is designed to free women of their hair fall concerns by reducing hair fall due to breakage by up to 50% within just two months, thus giving them stronger, thicker looking and beautiful hair. The prices of Pantene 100ml and 200ml bottles were reduced by 16%, offering superior value to consumers. In August 2007, Procter & Gamble Home Products Limited signed Preity Zinta ± Bollywood's no.1 Actress, as Brand Ambassador for its Head & Shoulders anti-dandruff shampoo that gives 100% dandruff-free soft beautiful beaut iful hair.
In October 2008, Procter & Gamble Home Products Limited launched New Pantene Amino ProV Complex shampoos, which makes hair ten times stronger.
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SUBSIDIARIES
P&G India has three arms -- P&G Hygiene and Health Care, P&G HOME PRODUCTS and GILLETTE INDIA. P&G Hygiene and Health Care :
Procter & Gamble Hygiene and Health Care Limited is an India-based fast moving consumer goods company. The Company is engaged in the manufacturing and marketing of health and hygiene products. The Company's portfolio includes VICKS, a healthcare brand and WHISPER, a feminine hygiene brand. Its healthcare product portfolio includes Vicks VapoRub, Vicks Inhaler, Vicks Formula 44, Vicks Cough Drops and Vicks Action 500+. Vicks VapoRub is available in five pack sizes of 50 grams jar, 25 grams jar, 10 grams, five grams and two grams dibbi. Under feminine care, its brands include Whisper Maxi Regular, Whisper Maxi XL Wings, Whisper Ultra with Wings, Whisper Ultra XL Wings and Whisper Choice. The Procter and Gamble Company is its ultimate holding company and Procter and Gamble Asia Holding BV is its holding company. P&G HOME PRODUCTS:
Procter & Gamble Home Products Limited manufactures and distributes fabric care, hair care, and baby care products. The company was incorporated in 1989 and is based in Mumbai, India. P&G Home Products is a subsidiary of o f Procter & Gamble Co. P&G Home Products Limited is one of India's fastest growing Fast Moving Consumer Goods Companies that has in its portfolio P&G's global brands such as Ariel and Tide in the Fabric Care segment, and in the Hair Care segment: Head & Shoulders - world's largest selling antidandruff shampoo; Pantene - world's No. 1 beauty shampoo; and Rejoice - Asia's No. 1 shampoo. P&G Home Products Limited is a 100% subsidiary of The Procter & Gamble Company, USA, that in India, has carved a reputation for delivering superior quality, value-added products to meet the needs of consumer.
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GILLETTE INDIA:
Gillette India Limited (GIL) is one of India's well-known FMCG Companies that has in its portfolio GILLETTE MACH 3 TURBO, ORAL-B and DURACELL - world's leading brands and has carved a reputation for delivering high quality, value-added products to meet the needs of consumers. Incorporated in the year 1985 as Indian Shaving Products Limited, now Gillette India Limited, its products speak for themselves. The company is always been known for the strength of its brands, and always continues to penetrate deeper into the hearts of Indian Consumers. In the year 1990-91, the company launched two products, first was 7 0'Clock EJTEK PII Shaving System and second was shaving cream with three variants. This was the First time that a shaving cream was introduced in Indian markets with special features. Company successfully relaunched Gillette Foam in 4 Variants .Duracell also launched its Ultra M 3 AA batteries, which was well received by consumers. Oral Care launched Power Oral Care brushes, which were well received in the market. Towards the End of 2003, Company launched Gillette Vector Plus. The Company launched Storm Force, a revolutionary after shave splash and New Ultra Comfort Shaving Gel .In the fourth Quarter, Company launched two new Gillette Series Tube Shave Gel variants, namely for Sensitive skin and Moisturizing, to suit different skin types. Company launched ?New Improved Gillette Vector Plus featuring all new contemporary look. The Gillette Company, USA was acquired worldwide through merger in October, 2005 by Procter& Gamble Company, USA creating the largest Consumer products Company in the World. In the year 2006-2007, Company launched Gillette Presto Plus for more discerning consumers. Oral B brand launched Oral B Vision and Kid in Premium Market Segment. In the year 2007-2008, Company launched The Gillette Winners program that had sports legends Roger Federer, Thierry Henry and Tiger Woods and Rahul Dravid. An innovative program "Free Dental Check up" was organized to enable consumers to benefit from expertise of professional dentists at no cost. Oral-B brand launched a new variant "Shiny Clean" targeted at the value segment.
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PRODUCTS OF
Fabric Care:
Procter & Gamble has two of its world-leading detergents ± Tide and Ariel, in India to cater to the main concerns of the Indian households, namely, outstanding whiteness and stain-removal sta in-removal.. Ariel Front-O-Mat Ariel 2 Fragrances Tide Detergent Tide Bar Hair Care:
P&G¶s Beauty Business is over US$ 10 Billion in Global Sales, making it one of the world¶s largest beauty companies. The P&G beauty business sells more than 50 different beauty brands including Pantene®, Olay®, SK-II®, Max Factor®, Cover Girl®, Joy®, Hugo Boss®, Herbal Essences® and Clairol Nice ¶n¶ Easy®. In India, P&G¶s beauty care business comprises of Pantene, the world¶s largest selling shampoo, Head & Shoulders, the world¶s No. 1 Antidandruff shampoo and Rejoice ± Asia¶s No. 1 Shampoo. Procter & Gamble is committed to making every day in the lives of its consumers better bett er through the superior quality of its products and services. Pantene Pro V Head & Shoulders Rejoice Baby Care:
Pampers
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CORPORATE STRUCTURE OF P&G¶s corporate structure has contain four pillars which are as follows: Four pillars ² Global Business Units, Market Development Organizations, Global Business Services and Corporate Functions Funct ions ² form the heart of P&G's organizational structure. y y
y
y
Global Business Units (GBU) build major global brands with robust r obust business strategies. Market Development Organizations (MDO) build local understanding as a foundation for marketing campaigns. Global Business Services (GBS) provide business technology and services that drive business success. Corporate Functions (CF) work to maintain our place as a leader of our ou r industries.
P&G approaches business knowing that t hat we need to Think Globally (GBU) and Act Locally (MDO). This approach is supported by b y our commitment to operate efficiently (GBS) and our constant striving to be the best at what we do (CF). This streamlined structure allows us to get to market faster.
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Global Business Units (GBU) Philosophy: Think Globally General Role: Create strong brand equities, robust strategies and ongoing inno vation in products and marketing to build major global g lobal brands Our GBU: Baby & Family Care Beauty & Feminine Care Fabric & Home Care Snacks & Beverages Health Care
Market Development Organizations (MDO) Philosophy: Act Locally General Role: Interface with customers to ensure that marketing plans fully capitalize o n local understanding, to seek synergy across programs to leverage corporate scale, and to develop strong programs that change the game ga me in our favor at point-of-purchase Our MDO Regions: North America Asia/India/Australia Asia/India/Australia Northeast Asia Greater China Central-Eastern Europe/Middle East/Africa Western Europe Latin America
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Global Business Services (GBS) Philosophy: Enabling P&G to win with Customers and Consumers General Role: Provide services and solutions that enable the company to operate efficiently around the world, collaborate co llaborate effectively with with business partners, and help employees become more productive Our GBS Centers: GBS Americas located in Costa Rica GBS Asia located in Manila GBS Europe, Middle East and Africa/Newcastle, England
Corporate Functions (CF) Philosophy: Be the Smartest and the Best General Role: Ensure that the functional capability integrated into the rest of the company remains on the cutting edge of the industry. We want to be the thought leader within each CF. Our Corporate Functions: Customer Business Development External Relations Finance & Accounting Accou nting Human Resources Information Technology Legal Marketing Consumer & Market Knowledge Product Supply Research & Development Workplace Services
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ACQUISITION AND MERGERS Procter & Gamble (P&G), the number one US consumer goods company, and Gillette, the world's largest manufacturer of shaving products, announced the merger of their operations in January 2005. The $57 billion merger was the ninth largest in the US corporate history. Postmerger, the new company would dethrone Unilever as the world's largest producer of consumer goods and is expected to have bargaining power rivaling that of global retailers like Wal-Mart and Carrefour. The merger, scheduled to be completed in late 2005, is expected to reap cost synergies of up to $22 billion for the new company. But the problems encountered by DaimlerChrysler and Hewlett Packard-Compaq's mergers showed that size could be a potential hindrance to the success of a merger. In the 1940s and 1950s, P&G embarked on a series of acquisitions. It acquired Spic and Span (1945), Duncan Hines (1956), Chairman Paper Mills (1957), Clorox (1957; sold in 1968) and Folgers Coffee (1963)... The AcquisitionAs per the P&G and Gillette merger deal, P&G would exchange 0.975 shares of P&G common stock for each share of Gillette. It represented an 18% premium to Gillette shareholders based on the closing c losing share prices on January 27, 2005. Ho wever, the merger was subject to approval by the shareholders shareho lders of both Gillette and P&G. The merger was expected to get regulatory clearance by 2005. P&G planned to buy back $18-22 billion of its common stock immediately after the merger. The buy back process could take around 18 months to complete. This would make the deal structure a 60% stock and 40% cash deal, although on paper it was a pure stock-swap. According to marketing guru, Al Ries, "The extra 18% premium paid by P&G P &G for Gillette's stock is going to make it 18% more difficult for the deal to pay dividends d ividends to stock holders."P&G would have to borrow funds to finance the planned repurchase r epurchase of its stock. In light of this move, credit rating agencies put both companies co mpanies under a review for a possible downgrade. S&P placed all ratings for P&G on Credit Watch with negative implications based on t he likelihood that P&G's leverage would increase significantly due to the t he merger. As of September 30, 2004, P&G had debts of $21.4 billion and Gillette of $3.1 billion.
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CORPORATE SOCIAL RESPONSIBILITY
At P&G, Social Responsibility stems from our Corporate PVP (Purpose, Values and Principles). Social Projects are in keeping with P&G¶s credo of µBusiness with a Purpose¶. P&G has always demonstrated its commitment to the community not just through the quality of its products and services, but also through socially responsible initiatives for the community. We believe in building the community in which we live and operate by supporting its ongoing development. Project Shiksha II: Educating Underprivileged Children(2007) Project Shiksha: Secure Your Child¶s Future (2003) Rebuilding Lives In Earthquake Hit Bhuj (2001/2002) Project Poshan: Fighting Malnutrition in India (2000) Project Open Minds: Educating India¶s Working Youth (1999) Project Future Focus: The First-Ever Round Write-In Career Guidance Service (1998) Project Peace: Environment Education Programme (1996)
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SWOT ANALYSIS OF
STRENGTH: y y y y y y y y y y
New Management Gross Margin 15 Times the Industry Average One of the best marketers in the world Diversified brand portfolio: more than 300 brands with w ith more than 79 billion in Revenue Tightly integrated with the largest retailers in the US and around the world Product innovation Talented management Distribute to 80 Countries Distribution channels all over the world New Billion Dollar brands
WEAKNESS: y y y y
y y y
Top Brands Losing Market Share Health and Beauty Women Only Lagging behind in online media presence & leadership Missing opportunity: opportunity: Refuses to manufacture private label products for its retail customers Slow Process Heavy Culture V iews iews Product Performance only Expansion for brands is limited
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THREATS: y y y y y
Substitute brands that have a cheaper price Private label growth Slowdown in consumer spending in the US & globally K ey ey competitors expanding panding their product portfolios through acquisitions Increase in raw material price.
OPPORTUNITIES : y y y y y y y
y y y y
Health
and Beauty for Men Doubling Environmental nvironmental Goals for 2012 A dding dding V alue alue for the Conspiracy Utilizing online social networks Going Green/ Eco Friendl F riendly y Capitalizing Capitalizing on online media Continue to divest brands that don't align with the company's long-term goals (i.e., Folgers) Emerging markets New acquisition opportunities Selling directly to consumers Design for better product e xperience
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RECOMMENDATION & SUGGESTIONS
RECOMMENDED OR SUGGESTED STRATEGIES:
The practice of incomplete market coverage should not be followed because you cannot hijack other company¶s customers and new customers as well. All these scenarios require following strategies: MARKET DEVELOPMENT STRATEGY:
P&G is emphasizing on urban areas while it has neglected the suburban areas, which is also a big market for soaps like safeguard. For this purpose, they should efficiently utilize their Marketing Information System to collect information about the demand and attitudes of the people in these areas. By using this strategy, safeguard can fetch the customers of competitors and will be successful in building new customers. PRODUCT DEVELOPMENT STRATEGY:
It describes to develop new products or modify the existing products with respect to size, color, packaging, etc. Safeguard is a well-perceived product among the customers, and at this moment, it is available in two sizes; 75gm and 125gm, which cannot satisfy the demand of every segment. While the products of the competitors are available in multiple sizes which provide abundant choices for purchases to customers for example Lifebuoy Gold has 140gm and 95gm and Medicame has 80gm soap available in the market. This provides an opportunity to the customer to have multiple choices. It can be a threat for the market share of safeguard. On the other hand, in case of safeguard the choice to customer is very limited. This is what they have analyzed through market survey.
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Therefore, it is necessary that safeguard should be available in maximum possible sizes to meet the selection criteria of the customer. As far as launching of new product is concerned, it is not necessary for P&G at this moment, but in future, they will require taking this step as well because they have some other soap like ivory, and zest which are very famous in international market.
MARKET PENETRATION STRATEGY:
It describes that a company tries to sell more of its product by introducing new supplementary uses. Safeguard is that product, which contains such chemicals useful for beauty care as well. This characteristic, we have analyzed through its product formula. Therefore, it is more useful to supplement this idea with existing safeguard or introduce safeguard into different pack sizes especially for capturing the female customers.
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BIBLIOGRAPHY
y y y y y
www.p&g.com www.wikipedia.com www.mbaboast.com www.ebooks.com www.times.com
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