1) Procter & Gamble is an American multinational consumer goods corporation founded in 1837. 2) It has a diverse portfolio of products including health, grooming, home, fabric and family care products. 3) P&G employs market research extensively to understand consumers, develop new products and improve existing brands. It uses both qualitative and quantitative research tools globally.

2. Group members:
Umar Mustaq ,80 Zahid Iqbal, 84
Arshia Abbas,89 Sana Tariq,47
Rida Afzal 98
Presented To: Sir, Farhan Gillani
Class BBA
Section: B
Semester:4th
1/5/2014 2
ISP Infinite Possibilities

3. TOUCHING LIVES, IMPROVING LIFE…. PROCTER & GAMBLE

4.  Founded – 1837 *(American multinational corporation)
 Headquarters - Cincinnati, Ohio, USA
 Key people - A.G.Lafley ,( Chairman, President, and
Chief Executive).
 Industry - Consumer goods
 Revenue - US$ 84.7 billion (2013)
 Net income - US$11.31 billion (2013)
 Employees - 121,000(2013)
 Website - www.pg.com
 Products are available in 140 countries

6.  8th largest corporation in the world by market
capitalization. (2008)
 14th largest US company by profit.
 10th in Fortune's Most Admired Companies list (as of
2007).
 P&G was named 2008 Advertiser of the Year by
Cannes International Advertising Festival spending
$2.62 billion
 Awarded inaugural social innovation award by the
financial times.
 Ranked 2nd in the chief executive magazine’s “best
companies for leaders ” . In October 2008, P&G
was named one of "Canada's Top 100
Employers" by Mediacorp Canada Inc.,

7.  William Procter, a candlemaker, and James Gamble, a
soapmaker, 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.

9. Recommendation: Long-Term Buy
Recent Price (12/04/09): $62.60 Sector: Consumer Staples
Target Price: $65.53 Sub‐ Sector: Consumer Goods
52‐Week Range: $43.93‐ $64.00 Stock Classification: Classic Growth
Market Capt: $178 B Institutional Ownership: 58%
P/E Ratio: 17.4 Dividend Yield: 2.8%
Earnings per Share: $4.58 Beta: 0.6
Business Summary

10. Price Performance

11. Effective July 1, 2007, the company's operations are
categorized into three "Global Business Units" with
each Global Business Unit divided into "Business
Segments," according to the company's June 2007
earnings release.
Twenty-four of P&G's brands
have more than a billion dollars
in net annual sales and another
18 have sales between $500 million
and $1 billion.

12. Market segmentation is a market strategy that involves
dividing broad target market into subsets of consumers
who have common needs and then designing and
implementing strategies to target their need and
desires.
Each brand must be positioned for its target segment
and a single Procter and Gamble brand cannot have
one positioning for all of P&G’s segments.
As of July 1,2011, the company structure is categorized
into three “Global Business Unit” with each one further
divided into ”Business Segments ” according to the
company 2011 annual report. Dimitri
Panayotopoloulos is Vice Chairman of Global Business
Unit.

13. Three global business units are: Beauty, Health and Well‐Being,
and Household Care.
BEAUTY Includes two sub‐segments:
o Beauty (2009 Sales $18.79 B, 23.7% of sales revenue) —
cosmetics, deodorants, hair
care, personal cleansing, prestige, fragrances and skin care
products
Billion‐dollar brands include: Head & Shoulders, Olay,
Pantene and Wella
o Grooming (2009 Sales $7.54 B, 9.54% of sales revenue) —
blades and razors, electric
hair removal devices, facial products, shave products and home
appliances
Billion‐dollar brands include: Braun, Fusion, Gillette and Mach
3

14. HEALTH AND WELL‐BEING
Includes two sub‐segments:
o Health Care (2009 Sales $13.62 B, 17.23% of sales revenue) —
feminine care, oral care
and personal health care products
Billion‐dollar brands
include: Actonel,
Always, Crest and Oral-B
o Snacks and Pet Care (2009
Sales $3.11 B, 3.94% of sales
revenue)—pet food and snacks
Billon‐dollar brands
include: Iams and
Pringles

15. HOUSEHOLD CARE Includes
two sub-segments:
o Fabric Care and Home Care(2009 Sales $23.19 B,
29.33% of
sales revenue)—air care,
batteries, dish care, fabric care
and surface care
Billion‐dollar brands
include: Ariel, Dawn, Downy, Duracell, Gain and Tide
o Baby Care and Family Care (2009 Sales $14.10 B,
17.84% of sales revenue)—baby wipes,
bath tissues, diapers, facial tissues and paper towels
Billion‐dollar brands include: Bounty, Charmin and
Pampers

18. 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 often
synonymous with the four Ps: product, price, promotion and
place; in service marketing.
Product Strategy
Product classification-service consumer good
Product differentiation-form, features, performance, reliability
Superior technology
CSR initiatives
Attractive packaging
Catchy taglines
Established as a brand itself

19. Pricing Strategy
Optional-feature pricing
Product-line pricing
Cost-plus pricing
Competitive pricing
Distribution pricing
Promotion Strategy
Media
Radio
Hoardings
Consumer promotion
Newspaper
Various promotional offers
P&G is spending30-35% of its sale in advertisement and
promotion which is highest in the industry, HUL expends
only 15% of sales on advertisement and promotion

20. Place Strategy
In store placement strategy
Already existing strong links in urban areas
Rural penetration
Develop marketing channels as strong and penetrated so that it
would gain access to remote areas
Strategic location of warehouse
Increase wholesale dealers in small town so that they can go to the
nearby villages
National coverage would be dealt with by increasing the company’s
warehouse and creating C&F agents in smaller cities

21. “ Logo controversy”
 The company received unwanted media publicity in the 1980s
when rumors were spread that their previous corporate logo was
a Satanic symbol. The company has sued and attempted to sue a
number of companies like Amway and individuals who have
spread rumors of this type, in some instances because they sell
competitive products and have spread such rumors for the
purpose of tarnishing P&G's image to increase sales of their own
brands.
 However, the continuous media coverage prompted P&G to adopt
an entirely new logo consisting of just
the letters P&G. In television commercials
in China, the former P&G logo still appears
at the end of each commercial, and up until
2004, it appeared at the end of each
commercial in Japan.

22. “Crest Pro-Health Teeth Staining and Loss of Taste”
 In October 2007, a class action lawsuit was filed in the State of
Georgia alleging that many users of Crest Pro-Health mouthwash
suffered stained teeth and loss of their sense of taste.
 Procter & Gamble contends that these side effects occur in only 3%
of users.
The suit seeks to include
disclosure warning users of
these side effects on product
packaging.

23. “Environmental record”
 Researchers at the University of Massachusetts have identified
Procter & Gamble as the 52nd-largest corporate producer of air
pollution in the United States, with roughly 350,000 pounds of
toxic chemicals released annually into the air.
 In 2007 Procter & Gamble pledged to reduce their carbon
emissions, mainly through reduction in packaging. The stated
emission reduction goal was 10% by 2012.
 Procter & Gamble is one of the founding members of Carbon
Disclosure Project's Supply Chain Leadership Council.
 Procter & Gamble has for several years funded a recycling school
in the slums of Cairo, Egypt.

24. “Animal testing”
 P&G conducts research using animals to demonstrate
safety or efficiency of their raw materials and
products.This has led to a worldwide campaign to raise
public awareness and to stop P&G being involved in
animal testing.
 The campaign is led by Uncaged Campaigns in the UK
and Stop Animal Exploitation Now in the USA.
 In 2002 P&G was recognized by the
Humane Society of the United States
for "advancing alternatives to
animal testing".

25. Procter and Gamble provides largest and
broadest portfolio of products in the household
and personal care
 industry with 24 billion dollar brands. PG
generates 43% more revenue than its closest
competitor, Unilever
 (UL). PG also maintains a relatively high
operating margin of 20.46% in 2009, the highest
amongst its
 competitors.

26.  Moreover, the company invests more than $2
billion annually in Research and Development
—
 nearly twice that of Unilever, and equal to the
combined total of its other major competitors
— Avon, Clorox
 Company (CLX), Colgate‐Palmolive Company
(CL), Energizer Holdings (ENR), Henkel,
Kimberly‐Clark (KMB),
 L'Oreal, and Reckitt Benckiser

27. Procter & Gamble manufactures its products
across the globe. Manufacturing operations are
based in the following regions:
 United States
 Canada
 Latin America
 Europe
 China (31 wholly-owned
factories) and other parts
of Asia
 Africa
 Australia

28.  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.
 The company began to build factories in other locations in the
United States
 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".
 Branching out once again in 1957, the company purchased
Charmin Paper Mills and began manufacturing toilet paper and
other paper products.
 One of the most revolutionary products to come out on the
market was the company's "Pampers", first test-marketed in 1961.

29.  In 1996, Procter & Gamble again made headlines when
the Food and Drug Administration approved a new
product developed by the company, Olestra. (a
substitute for fat in cooking potato chips )
 In 2008, P&G branched into the record business with
its sponsorship of Tag Records, as an endorsement for
TAG Body Spray.
 In 1911, began producing Crisco, a shortening made of
vegetable oils rather than animal fats.
 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".

30.  In 1930 acquisition of the Newcastle upon
Tyne-based Thomas Hedley Co. terms of
manufacturing and production.
 Folgers Coffee, Norwich Eaton
Pharmaceuticals, Richardson-Vicks, Noxell,
Shulton's Old Spice, Max Factor, and the Iams
Company, among others were also acquired.
 In January 2005 P&G announced an acquisition
of Gillette, forming the largest consumer goods
company and placing Unilever into second
place.

31. Procter and Gamble operates in over 80 countries and offers
products and services in more than 180 countries
worldwide.
Sales are divided into four main segments:
North America accounted for 44% of total sales in 2009 or
$34.8 billion.
Western Europe accounted for 22% of total sales in 2009
or $17.4 billion.
North East Asia accounted for 4% of total sales in 2009 or
$3.2 billion.
Developing Markets accounted for 30% of total sales in
2009 or $23.7 billion.

33. 1) Grow leading, global brands and core
categories
2) Build business with underserved and
unserved consumers
3) Continue to grow and develop fastergrowing,
structurally attractive businesses with
global leadership potential

34. Consumer Understanding
o Each year, Procter and Gamble interacts with nearly 5 million
consumers in over 60 countries
worldwide.
o It is important for Procter and Gamble to gain insight on
consumer understanding in order to
discover innovation opportunities and to find ways in which the
company can better serve its
customers. It is especially important for PG to recognize and
adjust to cultural differences
among its international markets.

35. Brand Building
o Procter and Gamble currently has 23 brands within its product
portfolio that individually
generate over one billion dollars in sales annually. PG also has 20
brands that generate half of a
billion dollars in annual sales. Combined, these 43 brands account
for 85% of PG’s total sales
and 90% of PG’s profit. PG maintains the strongest‐performing
portfolio of brands within its
industry. Moreover, PG maintains its key competitive advantage
for the overall success of the
firm.

36. Innovation
o Procter and Gamble is the industry leader in terms of innovation.
Each year in the U.S., the IRI
New Product Pacesetter Report ranks the best selling new
products within the consumer
market. Over the past 14 years, Procter and Gamble has had 114
top 25 pacesetters—more
than six times the number of pacesetters of their largest
competitors combined. (Pacesetter is
defined as a new, innovative Consumer Packaged Brand that
exceeds $7.5 M in its first year).

37. Established Go‐To‐Market Capability
o Procter and Gamble is ranked as the preferred supplier and
industry leader in a wide range of
capabilities including clearest company strategy, brands most
important to retailers, strong
business fundamentals and innovative marketing programs.
Scale
o Procter and Gamble is able to take advantage of its ability to
operate on a large scale. This
allows PG to share processes and procedures among the
categories under which they operate.
This also creates the ability for PG to capitalize on its international
expansion opportunities
since they have the capabilities and resources for such ventures.

38.  P&G employed market researchers for every
product division. The company also had two
independent in-house research groups which
were responsible for advertising research and
market testing...
 Qualitative Research Tools
 Quantitative Research Tools
 Conducting Marketing Research Online
 The Benefits

39.  Generate new ideas for product and market
development.
 The researchers engaged the customers in
detailed discussions over different features of
the company's products. As a result, the
personal interaction between the researchers
and the consumers was high.
 The major qualitative research tools used by
P&G included focus-group discussions, in-
home visits, in-context visits and in-store
interviews...

40.  P&G also employed quantitative research tools
extensively. These tools helped in generating
new product ideas for P&G.
 While the sample sizes for quantitative
research was usually larger, the personal
interaction between the researchers and the
respondents was minimal...
 Tools like surveys through
web or practical approach
in the market.

41.  P&G conducted online concept tests to get
feedback from consumers. This feedback
helped it in new product introduction and
launching improved versions of existing
products...
 The Benefits: P&G's online surveys saved
considerable time and costs for the company.
Using traditional methods,
a consumer survey cost
the company around
$50,000 and took at least
three to four weeks...