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Growth Strategies Of Procter and Gamble
- 1. PROCTER AND GAMBLE GROWTH STRATEGY Manasi Koli-1311 Chanchal Jadhav-1309
- 2. INTRODUCTION • Founded in 1837 by William Procter and James Gamble • An American multinational consumer based company headquartered in downtown Cincinnati, Ohio • P&G is one of the largest and amongst the fastest growing consumer goods companies in India • Operates as 11 brands in India and 300 all over the globe • Has a revenue of 6506 cores USD
- 3. HISTORY • Procter’s candle making was merged with Gamble’s soap making business in 1837 • Later the development of electric bulb ceased the production of candles • P&G started to supply soaps to the soldiers in mass quantities
- 4. GENERIC STRATEGY- Cost Leadership • Purpose is to achieve competitive advantage in consumers good industry • The emphasis is given on product quality and value • These are significant in supporting P&G’s efforts to achieve and maintain a leadership position in the consumer goods industry • Eg. Tide Naturals at 30% lower costs than existing ones
- 5. GENERIC STRATEGY-Focus • Focuses on marketing in developing countries • Strategy is to have minimal price and better quality product • Eg. MACH3 razor with triple blades
- 6. GENERIC STRATEGY- Differentiation • Close to 300 brands across the globe • Very first company to bring baby diapers in market • During the year 2008, out of the 25 products that were launched newly, 10 were from P&G in comparison with J&J, L’Oreal, Colgate etc.
- 7. INTENSIVE STRATEGIES- Market Penetration • Main aim is to increase the company’s market share • Does so through marketing campaigns to increase consumer awareness about the company’s consumer goods • This strategy is especially significant for low- performing products in the market • Eg. National Rural Health Mission in Rajasthan which was involved in sampling of sanitary napkins, Vicks, SHIKSHA
- 8. INTENSIVE STRATEGIES- Product Development • Involves design and production processes for products that attract target customers • Procter & Gamble applies product development to support continuous business growth, while addressing competition • Eg. Fusion& Mach3 sensitive, OLAY fresh products, Illumina colors from Wella professionals, Tide naturals
- 9. INTENSIVE STRATEGIES- Market Development • Uses market development as a supporting intensive growth strategy • Procter & Gamble could enter new market segments when it creates an entirely new product line or when it changes its market focus • Eg. P&G has well established markets in the category of Dental care, food and household care, personal care
- 10. INTENSIVE STRATEGIES- Diversification • Supporting intensive growth strategies • Involves establishing new business operations • This intensive growth strategy is considerably difficult to implement because of its large- scale effects on P&G’s business organization • Eg. P&G’s acquisition of Gillette helped it diversify its products from household to lifestyle products.
- 11. THANK YOU!
Editor's Notes
- Brands like Ambi Pure Ariel Gillette Head & Shoulders Olay Oral-B Pampers Pantene Tide Vicks Whisper
- First company in US to offer a profit sharing program for its employees First to create a Market Research department The invention of electric bulbs, ceased the production of candles P&G started supplying soaps to the soldiers in mass quantities Gave an opportunity to return to the market again
- Generic strategies are used in order to accomplish the competitive advantages. Generic Strategies are divided into three categories and are as follows-Cost leadership, Differentiation, Focus, Now, talking about p&g’s application of this strategy goes as follows- P&G could become the leader in the markets because of its low prices and quality products. Even during the global recessions all the companies have lost their sales but P&G stood by its mark due to the efficiency in its strategy to market the products with minimal resources and get maximum response. They have reduces the prices of the products existing and those which have good demand. To gain more advantages in its sales P&G introduced ” Tide Natural” at 30% lower cost than the existing ones which is intended to target the mid-class markets and those who were neglected by other companies. Anothr example is that, Pantene hair care products are priced relatively lower compared to competitors like Unilever’s Dove hair care products
- P&G focused on marketing in the developing countries where approximately 50% population fall under the scale of low income rates. They have managed to get a strategy with minimal cost and better quality so that people get attracted and buy them It has also come up with MACH3 razor with triple blades with latest technology and marketed in the low class parts of Latin America and Asia.
- Every organization would like to be a leader in the market and they have it as their main motto P&G is way ahead of most of the companies and they have approximately close to 300 different brands across the globe where they have made their presence felt with their innovation. It's an approach that a business takes to develop a unique product or service that customers will find better than or in another way distinctive from products or services offered by competitors They are the very first company to bring the baby diapers into the market and with the new technology called “dry max” they have increased their sales in the baby care segments due to its tremendous demand. During the year 2008, out of the 25 products that were launched newly, 10 were from P&G in comparison with J&J, L’Oreal Colgate etc.
- So, Intensive growth is when a firm grows by expanding its product line or its market reach. Thus, if a firm introduces a new product, enters a new market, or further develops its own competency, than the firm is undergoing intensive growth. Intensive growth strategies are likely to help the firm grow in the market faster and make the company stronger. The Procter & Gamble Company’s primary intensive growth strategy is market penetration. In this intensive strategy, the main aim is to increase the company’s market share. Procter & Gamble does so through marketing campaigns to increase consumer awareness about the company’s consumer goods. This strategy is especially significant for low-performing products in the market Eg. P&G has made rural penetration better through NGOs and local Organisations like National Rural Health Mission in Rajasthan which was involved in sampling of sanitary napkins. This sampling technique helped them convert their sampling into sales by increasing the number of touch points by connecting with the rural consumers Next examples is that P&G has started laying stress on targeting the rural masses due to the huge potential there in. As a result the reach of Vicks has already reached a penetration of 40% with it being available in 8 lakh outlets. P&G has been running the project SHIKSHA since 2005 in which it is dedicated to provide education to underprivileged children in rural area
- Product development is used as a secondary intensive growth strategy in Procter & Gamble’s business. This intensive strategy involves design and production processes for products that attract target customers. Procter & Gamble applies product development to support continuous business growth, while addressing competition. P&G develops new products to increase its share of the global consumers goods market. In addition, Procter & Gamble increases its competitiveness by continually enhancing current products Eg. Fusion& Mach3 sensitive, OLAY fresh products, Illumina colors from Wella professionals, etc. In order to look into this strategy we can take up the example of Tide naturals. Tide is a detergent which was launched by targeting women who washed clothes with their hands & experienced irritation due to rough nature of hand-use detergent powder. Thus they launched a product which was low in price and was also soft on the hands of women and thus grew in terms of market share through innovative strategy
- The Procter & Gamble Company uses market development as a supporting intensive growth strategy. Market development contributes to the company’s growth through entry into new markets or market segments. For example, Procter & Gamble could enter new market segments when it creates an entirely new product line or when it changes its market focus. In this way, Procter & Gamble can expect a new revenue stream P&G has well established brands in the category of Dental care,food and household care and personal care and constantly innovating and introducing new product brands in the emerging markets like India
- Diversification is one of Procter & Gamble’s supporting intensive growth strategies. This intensive strategy involves establishing new business operations. For example, every acquisition and corresponding business diversification in Procter & Gamble’s history has led to considerable growth. However, this intensive growth strategy is considerably difficult to implement because of its large-scale effects on P&G’s business organization For instance, each acquisition leads to adjustments in Procter & Gamble’s organizational structure. Eg. P&G's acquisition of Gillette helped acquire a host of products from their portfolio comprising shaving products, Duracell batteries & Oral-B toothbrushes which has given P&G the opportunity to upgrade from household products like cleaners, soaps and detergents to a company that is into "lifestyle" products in the personal care and grooming segments. P&G has leveraged Gillette's basket of hi-tech shaving systems for men, powered tooth-brushes and male grooming products have complemented P&G set of brands in the feminine hygiene, beauty segments and personal care.