Procter & Gamble was founded in 1837 by William Procter and James Gamble. It originally produced candles and soap but pivoted to soap production for the Union army during the Civil War. Today, P&G operates across 180 countries and is organized into two global business units: Health and Well-Being and Beauty. Its largest segments are Fabric and Home Care, Beauty, and Baby Care and Family Care. P&G aims to acquire 1 billion new consumers by 2015 through expansion in developing markets and increasing productivity across operations.
3. History
Founded in 1837
William Procter and James
Gamble
Incorporated in Ohio on May 5,
1905
4. In the beginning…
Proctor and Gamble came to be by manufacturing
soap and candles.
After the invention of the electric light bulb, the
demand for candles fell significantly, thus causing
the newly formed P&G to cease their production.
During the Civil War, the government began to
order mass quantities of soap from P&G for the
Soldiers’ use—this significantly led to P&G’s return
to the market and their second chance at rising in
the business world.
6. Acquisition Summary
Between 1905 (Incorporated) – 2010, P&G
invested in 34 acquisitions
Periods of frequent acquisitions occur in the
1930’s, 50’s, 80’s and 90’s.
Some of the larger acquisitions include:
– Charmin, Clorox, Crush, Revlon, and Gillette
7. P&G Today
Products sold in > 180 Countries
On the ground operations in 80 countries
Organized into 2 Global Business Units (GBU’s)
Health Care Fabric and
& Home Care
Beauty & Household Baby and
Grooming
Grooming Care Family Care
Beauty Snacks and
Pet Care
8. P&G: Who we are.
http://www.youtube.com/watch?v=tAT-cFFGNQg
9. Health Care
Segment includes products in oral care, feminine
care, respiratory, toothpaste, OTC drugs and other
personal care categories
10. Health Care - Overview
14% of Net Sales in 2011
Products sold in drug stores
supermarkets, and mass
merchandisers
Mature market
Name Brand & Private Label competitors
11. Health Care – Core Competencies
Strong, Dependable, High Quality Products
– Strict internal standards and guidelines to comply
with FDA
– Most recent recall was early 2010 - Vicks
– Vicks 4-Hour Nasal Spray (wrong expiration date)
Health Care Research Center
– Promote innovation and bring new products to the
market quicker
13. Threats
Intense competition
– Private labels are much cheaper
Top Cough Syrup Makers - Market Share
Company % - 2010 % - 2011 % Change
Wyeth Labs, Inc. (Pfizer) 25.17 25.87 0.7
Reckitt Benckiser 26.82 24.23 -2.59
Private label 24.78 22.17 -2.61
Procter and Gamble Co. 13.59 19 5.41
Other 3 3.31 0.31
Novartis Consumer Health 2.61 3.02 0.41
Blacksmith Brands 0.65 1.12 0.47
Health Care Products 1.36 0.73 -0.63
Boiron-Borneman 1.13 0.55 -0.58
Qualitest Products 0.9 0 -0.9
14. Baby Care and Family Care
• Segment includes diapers, baby wipes, paper
towels, and toilet paper
15. Baby Care & Family Care Key Info.
• 19 % Of Net Sales
• Products sold in supermarkets, convenience
stores, hotels,motels,and other industries
• Baby Care and Family Care competitors
16. Beauty Segment
This segment includes cosmetics, fragrances,
hair care, and skin care products
17. Beauty Segment
Beauty accounts for approximately 34% of
P&G’s product portfolio.
24% of Net Sales & Net Earnings
– Head & Shoulders, Olay, and Pantene are some of
the biggest brands within this segment.
18. P&G Beauty in The Marketplace
P&G’s beauty products are highly
recognizable; brand differentiation is a
strength.
Product availably is great; products are sold at
practically all domestic retailer chain and drug
stores.
Proctor & Gamble is associated with tried and
true, trusted products.
19. Beauty Segment
Competition and Growth
Competitors
– Unilever
– L’Oreal
– Private Labels
3% Net sales growth from 2010
– 24% of P&G’s Net Sales are from the Beauty
segment
20. Threats to Beauty Segment
Greatest threat to P&G’s Beauty Segment is the
Threat of Rivalry
– Unilever, L’Oreal, Private Labels
Mature Market
Threat of Buyers and/or Suppliers?
– Relatively low, due to the working relationship between
both categories and the trust created in order to
maximize that relationship.
Suppliers are even involved in P&G’s creative process in
developing new products.
21. Fabric and Homecare
Segment contains products including laundry
cleaning products and fabric conditioners;
home care products, including dishwashing
liquids and detergents, surface cleaners and
air fresheners; and batteries
Fabric care dominates the market with over
30% of the global market share
Global home care market share is over 15%
across the categories in which we compete
22. Fabric and Homecare (Cont.)
Proctor and Gambles largest, and most
profitable division - 30% of net sales
Has been increasing steadily - 6% in 2011
Mature Market
Market made up of Brand name and Generic
brands
23. Snack and Pet Care
This segment includes food products and pet
food products
Smallest segment
24. Snack and Pet Care Overview
Least profitable P&G business segment
4% of P&G’s net sales in 2011
Pringles was the only existing snack brand*
Pringles owned 3% of US Snack Food
Production Industy’s market share
Utilizes Eukanoba and Iams to appeal to all
types of pet owners
25. Threats
Lack of presence in the industries
Mature market
Fierce competition
Extension would require major investment into
creating new products and brands
Competition has more industry-focused
product lines
27. Disinvest/Sell off Snack & Pet Care
Business Segment
Least profitable business segment (4% net
sales ’11)
Pringles sold for $2.7 Billion
Iams and Eukanoba (value?)
Increased focus on profitable business
segments
Increased opportunity to innovate in successful
segments
28. Growth in Developing Markets
Company-wide initiative: Acquire 1 billion additional
consumers by 2014/2015
P&G Sales Growth: 2000 to 2012
90%
80%
80% 77% Developed
% of Total Company Sales
70% 63% Developing
60%
50%
40% 37%
30% 23%
20%
20%
10%
0%
FY '00 FY '05 FY '12
29. Demographic/Socioeconomic
Trends
Population is forecasted to grow 700 million
people by 2020 (Think of all those diapers?)
95% of this growth will come from developing
markets
Wealth and Per Capita income increasing
Plan of attack?
– Expand geographically and fill in the ―White Space‖
30.
31.
32. Improve Productivity in All Areas
Cost of Goods
– Reduce RM costs
Long-term contracts
Increase # of Suppliers?
– Reduce excess inventory
– Develop partnerships (PGT Healthcare)
Research & Development ~ $2 billion annually
– Continuous improvement
– Product Innovation
33. Open Innovate Connect + Develop
Continue to nurture the Open Innovate:
Connect + Develop method of research and
development.
What is OIC+D?
34. Connect + Develop
“Today, open innovation at P&G works both ways — inbound and outbound — and
encompasses everything from trademarks to packaging, marketing models to
engineering, and business services to design. It's so much more than technology.”
-Bruce Brown, CTO
35. Why is OIC+D Important?
Collaboration
Ultra-fast
product-to-market delivery
36. Marketing Opportunities
Proctor and Gamble wants to cut $10 Billion in
expenses
In 2010 P&G spent $2.2 million on Television
advertising
While many of its advertising campaigns boost
sales is it too much?
Focus on digital marketing & social media and
spend more efficiently
http://www.youtube.com/watch?v=PvYP_d2S1Pg
P&G’s structure has removed many of the traditional overlaps and inefficiencies that exist in many large companies.Global Business Units (GBUs) focus solely on consumers, brands and competitors around the world. They are responsible for the innovation pipeline, profitability and shareholder returns from their businesses.Market Development Organizations (MDOs) are charged with knowing consumers and retailers in each market where P&G competes and integrating the innovations flowing from the GBUs into business plans that work in each country.Global Business Services (GBS) utilizes P&G talent and expert partners to provide best-in-class business support services at the lowest possible costs to leverage P&G’s scale for a winning advantage.Lean Corporate Functions ensure ongoing functional innovation and capability improvement.
Glad: Competition turned Joint venture.PG provided information from plastic research done via diaper testing.Olay: Partnership with french brand to develop anti-aging creams to fight wrinkles.Pulsonic:Febreeze: PG exited candle industry and febreeze invited PG to enter the market with them to collaborate on the febreeze candle line.P&G brought their air care expertise to the table, while febreeze brought the candle-making and scent expertise.Swiffer:
Social Media + Digital AdvertisingReduce Advertising and Marketing costs from 15% of sales to 10% of sales