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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
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
% of net…01020304050
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% of net earnings
% of netearnings
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
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.
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”.
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.
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
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.