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Final Presentation on Procter and Gamble

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Final Presentation on Procter and Gamble

  1. 1. Final Presentation on Procter and Gamble November 26 2014 Name : RISHIRAJ DAS Roll No. : DM14B33 Sec : PGDM 2 Touching Lives, Improving lives
  2. 2. Acknowledgement I have taken efforts in this project. However, it would not have been possible without the kind support and help of many individuals. I would like to extend my sincere thanks to all of them. I am highly indebted to my mentor/sir Mr. Ashis Bhagrav for his guidance and constant supervision as well as for providing necessary information regarding the project & also for his support in completing the project. I would like to express my gratitude towards my parents for their kind co-operation and encouragement which helped me in completion of this project
  3. 3. Contents Topic 1 SECTORAL INFORMATION 1. Worldwide sectoral Contribution to the World Economy (GWP) 2. GDP % Contribution to the Indian Economy 3. Historical Growth/Degrowth Pattern observed in the last 5 years 4. The reasons for the Growth/Degrowth pattern observed in the sector. 5. Porter’s Five Forces Model Topic 2 COMPANY INFORMATION 1. Promoters of the Company and company snapshot 2. Market Share of the company 3. Product/Services offered by the company 4. Competitor Analysis 5. News (Last 6/12 month) incl. corporate announcement Topic 3 MARKETING STRATEGY 1. SWOT analysis of company 2. Conduct STP and market planning of company 3. Map the products/services of the company in BCG matrix and their PLC 4. Comparison of sales of company for past 3 years 5. The marketing and promotional strategy of the company and link it with current company performance Topic 4 BUSINESS FINANCE 1. Gross Profit and Net Profit Margin of the company 2. Direct and indirect costs of the company Fixed assets added during the year 3. Working Capital requirement for the year 4. Debt/Equity ratio of the company and its implications Topic 5 HUMAN RESOURCE MANAGEMENT 1. Organization Structure 2. Analysis of JDs and Job Specifications Training needs of the company 3. Organization culture (as per employee reviews or research findings) Topic 6 BIBLIOGRAPHY Topic 7 CONCLUSION
  5. 5. Worldwide sectoral Contribution to the World Economy (GWP) Sectoral Contribution in World Economy 23.20% 16.80% 13.90% 13.50% 1999-00 2007-08 2012-13 2013-14 GDP % Contribution to the Indian Economy 54% 29% 17% Manufacturing Service Agriculture Sectoral Contribution towards Indian GDP
  6. 6. Historical Growth/Degrowth Pattern observed in the last 5 years 44.9 41.1 34.8 30.2 24.2 2014 2013 2012 2011 2010 2070 2060 2050 2040 2030 2020 2010 2000 1990 1980 1 2 3 4 5 CAGR Rate Years  The industry has tripled its size over the past 10 years growing much faster than in recent decades.  The FMCG sector is the fourth largest in the Indian economy, with a total market size of USD44.9 bin in 2014.  The sectors growth has been driven by increasing consumption, resulting from rise in incomes , changing lifestyles and favorable demographics.  Though the fmcg sector continues to grow in double digits, there has been some moderation (9.4%) in growth rates during 2014 due to declaration of GDP growth and high inflation. Source: Spark Capital December 2014 report, The Hindu Business Line, Aranca analysis
  7. 7. Porter’s Five Forces Model Threat of Competition: HIGH P&G’s market environment is highly competitive, with global, regional, and local competitors. In many of the markets and industry segments in which P&G sells its products, P&G competes against other branded products as well as retailers’ private-label brands. Threat of New Entrants: LOW-MODERATE The threat of new entrants seems to be low overall but it depends on which business segment of Procter & Gamble the threat is coming from. It is a low probability for a new entrant to become as big and as well capitalized as P&G. The biggest barriers to entry are derived from research and development Bargaining Power of Suppliers: LOW Procter & Gamble does not seem to have any reliance on specific suppliers and P&G forms joint ventures and partnerships for new products.
  8. 8. Threat of Substitutes: LOW-MODERATE The threat of substitutes is moderate and not high because most of the products that P&G sells are necessities. There is no substitute for laundry detergent besides different types of laundry detergent. Bargaining Power of Buyers: MODERATE The power of buyers is moderate because as mentioned, 15% of P&G’s sales are to Wal-Mart who is a very demanding buyer. There are two tiers of buyers, the retailers and the end consumer
  10. 10. Overview of the Company Procter & Gamble  William Procter, a candle maker, and James Gamble, a soap maker, immigrants from England and Ireland respectively who had settled earlier in Cincinnati, who met as they both married sisters, Olivia and Elizabeth Norris, formed the company initially.  Alexander Norris, their father-in law called a meeting in which he convinced his new sons-in-law to become business partners. On October 31, 1837, as a result of the suggestion, Procter & Gamble was born.  In 1859, sales reached one million dollars. By this point, approximately eighty employees worked for Procter & Gamble.  During the American Civil War, the company won contracts to supply the Union Army with soap and candles. In addition to the increased profits experienced during the war, the military contracts introduced soldiers from all over the country to Procter & Gamble's products.  In the 1880s, Procter & Gamble began to market a new product, an inexpensive soap that floats in water. The company called the soap Ivory. William Arnett Procter, William Procter's grandson, began a profit-sharing program for the company's workforce in 1887.  As radio became more popular in the 1920s and 1930s, the company sponsored a number of radio programs .As a result, these shows often became commonly known as “soap operas”.  Numerous new products and brand names were introduced over time, and Procter & Gamble began branching out into new areas.  The company introduced "Tide" laundry detergent in 1946 and "Prell" shampoo in 1950. In 1955, Procter & Gamble began selling the first toothpaste to contain fluoride, known as "Crest".
  11. 11.  In 1994, the company made headlines for big losses resulting from leveraged positions in interest rate derivatives, and subsequently sued Bankers Trust for fraud; this placed their management in the unusual position of testifying in court that they had entered into transactions they were not capable of understanding.  In 1996, Procter & Gamble again made headlines when the Food and Drug Administration approved a new product developed by the company, Olestra .Also known by its brand name Olean, Olestra is a substitute for fat in cooking potato chips and other snacks that during its development stages is known to have caused anal leakage and gastro-intestinal difficulties in humans.  In January 2005 P&G announced an acquisition of Gillette, forming the largest consumer goods company and placing Unilever into second place .This added brands such as Gillette razors, Duracell, Braun, and Oral-B to their stable.  P&G's dominance in many categories of consumer products makes its brand management decisions worthy of study.
  12. 12. Snapshot of Procter and Gamble Company Details Industry Household & Personal Products House Procter & Gamble - MNC Registered Office Registered Office Address P & G Plaza,Cardinal Gracias Road,Chakala Andheri (East) Mumbai , 400099 , Maharashtra BSE Code [500459] NSE Symbol PGHH Bloomberg PG IN ISIN Code INE179A01014 Chairman R A Shah Managing Director Shantanu Khosla Secretary Preeti Bishnoi Source : www.aceanalyzer.com
  13. 13. Promoters of the company Top 5 Promoters as on Sep 2014 Name % of Holdings No. of Shares Inc/Dec Procter & Gamble Asia Holding BV 21221953 65.38 0 HDFC Trustee Company Ltd HDFC Prudence Fund 1897544 5.85 -0.52 Rosemount LLC 1088137 3.35 0 Temple Trees Impex & Investment Pvt Ltd 619683 1.91 0 SBI Blue Chip Fund 561993 1.73 5 Source : www.aceanalyzer.com
  14. 14. Market Share of Procter and Gamble 4649.9 Market Share Price The market share price of Procter and Gamble for last Six months. Source : www.aceanalyzer.com 5701.45 5401.35 5381 5299.6 4259.1 Nov-14 Oct-14 Sep-14 Aug-14 Jul-14 Jun-14
  15. 15. Product/Services offered by Procter & Gamble FABRIC AND HOME CARE Fabric Care Categories: Fabric Enhancers , Laundry Additives,Laundry Detergents Home Care Categories: Air Care, Dish Care, Surface Care, P&G Professional Personal Power Categories: Batteries Source: Annual reports of P&G BEAUTY Beauty Care Categories: Antiperspirant and Deodorant, Cosmetic, Skin Care, Personal Cleansing PRESTIGE Categories: Prestige Hair Care Categories : Hair Care, Hair Color Salon Professional Categories : Salon Professional BABY, FEMININE AND FAMILY CARE Baby Care Categories: Diapers & Pants, Baby Wipes Feminine Care Categories: Adult Incontinence, feminine care Family Care Categories : Paper Towels, Tissues , Toilet Papers HEALTH AND GROOMING Personal Health Care Categories: Gastrointestinal, Rapid Diagnostics, Respiratory, Vitamins/Minerals/Supplements Shave Care Categories : Electronic Hair Removal, Female Blades & Razors Male Blades & Razors, Other Shave Care
  16. 16. Competitors Analysis Competitor’s analysis according to the Net profit 23.35550238 Competitor’s analysis according to the Total Assets Return 24.23713085 42.13984889 Source : www.aceanalyzer.com 13.80303386 13.80059465 13.84466057 15.08518195 15.67417698 HUL DABUR India Godrej Consumer Colgate Marico Emami 118.0174242 34.52633526 18.67091537 89.99933318 HUL DABUR India Godrej Consumer Colgate Marico Emami
  17. 17. Corporate Announcements  Nov 24, 2014 - Old Spice Debuts “Dadsong” Holiday Ad as Sequel to Much-Hyped”MOM Song” TV spot.  Oct 28, 2014 – Wella Professionals Launches Partnership with Match.  Sept 20 , 2014 – P&G Delivers First quarter Core EPS of $1.07.  Aug 19, 2014 - New Survey Finds Holiday Toy Shoppers Still Forgetting To buy Batteries.  July 15 , 2014 - P&G’s to webcast presentation from 2014 analyst meeting.  June 5, 2014 – Tide Dry Cleaners opens second location in southwest india
  18. 18. Topic 3 :MARKETING STRATEGY
  19. 19. SWOT Analysis of Procter And Gamble STRENGHT  The company is valued at$191.47 billion on the market.  Many of P&G’s products are considered non cyclical.  P&G has over 300 brands globally which are available in over 180 countries.  It has around 25 brands have annual sales over a billion dollars.  Over 125,000 people are employed in P&G globally.  Many of P&G’s products are considered non cyclical. WEAKNESS  P&G are losing their market share rapidly. In online media leadership and presence P&G is lagging behind.  The beauty and health products by P&G are mostly for women.  P&G does not make and offer any private label products for the retail customers.  Offers multiple products in each category along with more than on brand.  P&G invests every year $2 billion for research and development. OPPURTUNITIES  Tap rural markets and increase penetration in urban areas.  The expontial growth of the middle class in emerging markets such as China and India.  An opportunity for P&G is health and beauty products for men.  Fake products sold under the name of P&G brands.  Its product have stiff competition from big domestic players and international brands. THREATS  There is a cut throat competition in the fast moving consumer’s good markets today.  The private level growth is a serious threat to the P&G’s market share.  In the market many substitutes for the P&G products at a cheaper price.
  20. 20. Segmenting, Targeting and Positioning S •Demographic - Family size •Higher Middle Class People and Upper class society •Urban and Semi urban area •Many products segmented to both men and women T •General Customers •Products targeted to babies of 4to 5 months ages, 10- 16 yrs age children and the adults persons •Targeted to Upper, Middle and Lower class people P •Premium brands against its competitors •Superior Technology • Importance to Quality •Enviornmental Friendly
  21. 21. Marketing Mix The marketing mix is a business tool used in marketing and by marketing professionals. The marketing mix is often crucial when determining a product or brand's offering, and is often synonymous with the four Ps: price, product, promotion, and place; in service marketing, however, the four Ps have been expanded to the Seven Ps or eight Ps to address the different nature of services. Product  Product classification – service consumer good  Product differentiation- form , features , performance , reliability  Superior technology  Attractive packaging  Catchy taglines  Established as a brand itself Pricing  Optional – feature pricing  Product- line pricing  Cost- plus pricing  Competitive pricing  Distribution pricing Place  In store placement strategy  Already existing strong links in urban area  Rural penetration  Develop marketing channels as strong and penetrated so that it would gain access to remote areas
  22. 22. Promotion  Media  Radio  Hoardings  Consumer promotion  Fragrance oriented and eco friendly  Newspaper  Various promotional offers  P & G is spending 30-35 % of its sales in Advertisement and Promotion which is highest in the industry, HUL expends only 15% of sales on Advertisement and Promotion.
  23. 23. BCG Matrix of Procter & Gamble Stars  Gillette  Pantene Relative Market Share  Head & Shoulders  Pamper  Whisper Question Mark  Olay Cash Cows  Ariel  Vicks  Tide  Oral - B Dogs  Ambi pur H i g h M a r k e t G r o w t h H i g h L o w High Low
  24. 24. PRODUCT LIFE CYCLE OF P&G INTRODUCTION 1947, PANTENE HAIR TONIC GROWTH 2003, VICKS & since 2005,PANTENE MATURITY In most of its brands DECLINE In the era of financial crunch & downtrend PRODUCT LIFECYCLE: EXAMPLE VICKS Vicks has reached the maturity stage (i.e.) most profit is earned by the market as a whole. At this stage Research and Development is likely to be restricted to product modification and improvement and perhaps to improve production efficiency and quality.
  25. 25. Comparison of sales of company for past 3 years Year Amount of sales % Change 2014 2050.94 21.58% 2013 1686.78 30.01% Implications: Amount of sales 2050.94 1297.41 1686.78 In the year 2014 Procter and Gamble made a sale of Rs. 2050.94, where as in 2013 the sale was Rs. 1686.78 and also in the year 2012 the sale was Rs. 1297.41. The sale gradually increasing year to year. Source : Annual reports of P&G 2014 2013 2012 2012 1297.41
  26. 26. Promotional Strategy “Thank You, Mom” Campaign  P&G's corporate campaign kicked off in April with its first ``Thank You, Mom'' TV spot.  It also has a dedicated ``Thank, You Mom'' Facebook page and app that allows people to send ``Thank you'' messages to their mothers.  P&G is sponsoring more than 150 global athletes.  P&G is sponsoring a few athletes like boxer Mary Kom and runner Kavita Raut, giving their mothers a chance to see them perform and hopefully win at London this year.  P&G expects the campaign to drive $500 million in sales.
  28. 28. Gross Profit and Net Profit Margin of the company Particulars Findings of Gross Profit Ratio G.p./Net sales*100 Particulars 2014 % 2013 % 2012 % Gross Profit Ratio 45.67% 42.80% 45.25% Findings of Net Profit Ratio PAT/Net sales*100 Particulars 2014 % 2013 % 2012 % Net Profit Ratio 14.72% 12.04% 13.97% Source : Annual reports of P&G 2014 Amt. in Rs. 2013 Amt. in Rs. 2012 Amt. in Rs. Net Sales 2050.94 1686.78 1297.41 Less : Increase/decrease in stock 3.47 -34.34 -16.39 Raw Materials Consumed 808.34 737.79 540.53 Power/fuel Cost 15.10 13.89 9.84 Employee Cost 89.44 93.78 60.33 Other Manufacturing Expenses 197.77 153.60 115.90 Gross Profit 936.82 722.06 587.20 Profit After Tax(PAT) 14.72 12.04 13.97
  29. 29. Direct and Indirect costs of the company Calculation of Direct Cost 2014 Amt. in Rs. 2013 Amt. in Rs. Calculation of Indirect Cost Particulars Cost Change in Comparison to previous years Source : Annual reports of P&G 2012 Amt. in Rs. Raw Materials Consumed 808.34 737.79 540.53 Power/fuel Cost 15.10 13.89 9.84 Other Manufacturing Expenses 197.77 153.60 115.90 DIRECT COST 1021.21 905.28 666.27 Particulars 2014 Amt. in Rs. 2013 Amt. in Rs. 2012 Amt. in Rs. General and Administration Expenses 42.18 31.53 48.78 Selling and Distribution Expenses 439.46 394.22 325.72 Miscellaneous Expenses 34.63 46.21 12.99 Depreciation 35.18 31.31 28.08 INDIRECT COST 551.45 503.27 415.57 Particulars 2014 % 2013 % 2012 % DIRECT COST 12.80598 35.87284 -------- INDIRECT COST 9.57339 21.10354 ------
  30. 30. Fixed Assets during the year Particulars 2014 Amt. in Rs. 2013 Amt. in Rs. Fixed Assets 22,304 21,666 Fixed Assets added 638 In the year 2013 value of fixed assets was 21,666 and in the year 2014 it increases to 22,304. New fixed assets value added 638 Source: Annual report of P&G
  31. 31. Working Capital requirement Particulars 2014 Amt. in Rs. 2013 Amt. in Rs. 2012 Amt. in Rs. Inventories 118.52 118.90 92.27 Sundry Debtors 86.05 80.87 48.15 Cash and Bank 269.08 166.03 182.37 Other Current Assets 47.95 37.79 22.35 Loans & advances 490.83 437.11 424.15 Total Current assets 1012.43 840.70 769.29 Less: Current Liabilities 293.11 289.12 309.37 Provisions 208.99 152.08 89.57 Total Current Liabilities 502.10 441.20 398.94 Particulars 2014 Amt. in Rs. 2013 Amt. in Rs. 2012 Amt. in Rs. Working Capital 510.33 399.50 370.35 Calculation of Working Capital requirement Current assets – Current Liabilities Source : Annual reports of P&G
  32. 32. Debt/Equity ratio of the company and its implications Particulars 2014 Amt. in Rs. Particulars 2014 2013 2012 Debt Equity Ratio 1.00% 1.00% 1.53% Calculation of Debt Equity Ratio Total Shareholders Fund/Shareholders Equity Implications : Here the Debt equity ratio is 1 which means that the company has a good capital structure. Which is a good sign for the company Source : Annual reports of P&G 2013 Amt. in Rs. 2012 Amt. in Rs. Total Shareholders Fund 1005.84 808.11 1067.37 Shareholders Equity 1002.90 805.32 697.04
  34. 34. Organization Structure of P&G
  35. 35. Analysis of JDs and Job Specifications posted by the company on online-job portals Designation Territory Manager - Parlour (east) - 1 Opening(s) Job Description Responsible for Parlour Sales for East zone Handling and leading team of front line Sales Promotion officers and Sales Promoters. Analysis and forecasting of sales data. Sales and distribution management. Desired Profile - Minimum of 6- 8 years of work experience plus team handling exposure is must for this role. - Candidates from the Cosmetic channel/ industry or candidate with a fair amount of FMCG cosmetics products experience are encouraged to apply. - Candidates presently leading in managerial roles are only encouraged to apply for this post. - Minimum of 6- 10 years of work experience plus team handling exposure is mandatory for this role. - Candidates from the Cosmetic channel/ industry or candidate with a fair amount of FMCG cosmetics products experience are encouraged to apply. - Candidates presently leading in managerial roles are only encouraged to apply for this post.
  36. 36. - 75% tour is applicable in this managerial position. Experience 6 - 10 Years Industry Type FMCG Role Area / Territory Manager Functional Area Sales, Retail, Business Development Education UG - Any Graduate - Any Specialization PG - Any Postgraduate Doctorate - Doctorate Not Required Compensation: 5,50,000 - 11,00,000 P.A. Salary not constraint for right talent. Location Kolkata Keywords Regional Territory Manager - Parlour Contact HRManager Procter and Gamble Job Posted 2014-11-02 19:18:54.0 Source: www.naukri.com
  37. 37. Training needs of the company  Sales Training  Training for the new products  Analytical thinking for launching an ad for that product
  38. 38. Organisational Culture Procter & Gamble is 5 in The 2014 DiversityInc Top 50 Companies for Diversity, which it achieved by combining corporate diversity with a passion to change lives (Visconti). Organizational culture consists of shared values and beliefs that allow employees to understand their roles and the values of the company (Luthans, 158). Bob McDonald, CEO of P&G, said that the difficulty of moving into another culture and expanding globally is bringing your values with you. Diversity, then, is a strategy for P&G: “if I’m trying to improve someone’s life, would I be better off having somebody in the organization who is of that representation so they can help the company be empathetic to the consumer?” (Visconti). By having a diverse workforce, P&G sets itself up for success because these employees bring in different backgrounds and knowledge about different cultures, allowing them to connect with consumers all across the globe. Other advantages to diversity include enhanced creativity, better decision making, and more effective and productive performance (Luthans, 175). McDonald strives to capitalize on using diversity to stem innovation. The generation of better ideas is more likely when individuals come from a variety of different cultures. This allows for the opportunity of more unique solutions and recommendations.
  39. 39. Conclusion As we know this market is known as FMCG market so there are many competitor in this time in the market so P&G company were focused in this time and target the middle class segment for increasing the sales as well as market shares . Some products like Gillette is made by the company to target the higher segment of the market. In India HUL is biggest competitor in FMCG market.
  40. 40. Bibliography  http://www.corporatewatch.org/?lid=247  http://www.cisco.com/warp/public/779/ibs/solutions/supply/pgc asestudy1.pdf  http://www.emory.edu/BUSINESS/dra/PGsmartersupplychain.p df  http://www.business-standard.com/india/news/with-pringles-buy- kelloggs-haslarger-canvas-in-india/464942/  http://www.pg-india.com/  www.aceanalyzer.com  www.ibef.org  www.google.co.in