PGDM-Comm 44 Paridhi Golchha

7/27/2019 PGDM-Comm 44 Paridhi Golchha

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Marketing Management of FMCG

PROCTER & GAMBLE

10/6/2013

Paridhi Golchha


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TABLE OF CONTENTS:

SNO. TOPIC NAME PAGE NO.

1 INDUSTRY DETAILS 2

2 INTRODUCTION OF P&G 3

3 VISION AND MISSION OF P&G 3

4 VALUES AND PRINICIPLE 5

5 HISTORY AND MILESTONES 6

6 PRODUCT ANALYSIS 9

7 STP 10

8 COMPETITORS ANALYSIS 11

9 MARKET ANALYSIS 12

10 SWOT ANALYSIS 13

11 PESTEL ANALYSIS 15

12 PORTERS FIVE FORCE MODEL 16

13 BCG MATRIX 18

14 RECOMMANDATIONS AND SUGGESTIONS 19

15 BIBLIOGRAPHY 20


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INDUSTRY DETAILS:

[FMCG-FAST MOVING CONSUMER GOODS]

THE TERM FMCG REFERS TO THOSE RETAIL GOODS THAT ARE GENERALLY REPLACED OR FULLY USED UP

OVER A SHORT PERIOD OF DAYS, WEEKS, OR MONTHS, AND WITHIN ONE YEAR. THIS CONTRASTS WITH

DURABLE GOODS OR MAJOR APPLIANCES SUCH AS KITCHEN APPLIANCES, WHICH ARE GENERALLY

REPLACED OVER A PERIOD OF SEVERAL YEARS.

FAST MOVING CONSUMER GOODS (FMCG) OR CONSUMER PACKAGED GOODS (CPG) ARE PRODUCTS

THAT ARE SOLD QUICKLY AT RELATIVELY LOW COST. EXAMPLES INCLUDE NON-DURABLE GOODS SUCH

AS SOFT DRINKS, TOILETRIES, GROCERY ITEMS ETC. THOUGH THE ABSOLUTE PROFIT MADE ON FMCG

PRODUCTS IS RELATIVELY SMALL, THEY GENERALLY SELL IN LARGE QUANTITIES, SO THE CUMULATIVE

PROFIT ON SUCH PRODUCTS CAN BE LARGE.

FMCGS HAVE A SHORT SHELF LIFE, EITHER AS A RESULT OF HIGH CONSUMER DEMAND OR BECAUSE THE

PRODUCT DETERIORATES RAPIDLY. SOME FMCGS SUCH AS MEAT, FRUITS AND VEGETABLES, DAIRY

PRODUCTS AND BAKED GOODS ARE HIGHLY PERISHABLE. OTHER GOODS SUCH AS ALCOHOL,

TOILETRIES, PRE-PACKAGED FOODS, SOFT DRINKS AND CLEANING PRODUCTS HAVE HIGH TURNOVER

RATES.

THE FOLLOWING ARE THE TYPICAL CHARACTERISTICS OF FMCGS:

FREQUENT PURCHASE

LOW PRICE

HIGH VOLUMES

LOW MARGINS

EXTENSIVE DISTRIBUTION NETWORKS

HIGH STOCK TURNOVER


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FMCG SCOPE AND COMPANIES:

FMCG industry, alternatively called as CPG (Consumer packaged goods) industry primarily deals with the

production, distribution and marketing of consumer packaged goods. The Fast Moving Consumer Goods

(FMCG) are those consumables which are normally consumed by the consumers at a regular interval.

Some of the prime activities of FMCG industry are selling, marketing, financing, purchasing, etc. The

industry also engaged in operations, supply chain, production and general management.

FMCG Companies Worldwide

Procter & Gamble

Unilever PLC

Taj agro international (India)

Dabur India Limited

Godrej Consumer Products (GCPL)

Other Leading FMCG companies

Some of the well known FMCG companies are Sara Lee, Nestl, Reckitt Benckiser, Unilever, Procter &

Gamble, Coca-Cola, Carlsberg, Kleenex, General Mills, Pepsi and Mars etc.

INTRODUCTION OF

Procter & Gamble Co. (P&G) is an American company based in Cincinnati, Ohio that manufactures a

wide range of consumer goods. In India Proctor & Gamble have two subsidiaries: P&G Hygiene and

Health Care Ltd. and P&G Home Products Ltd. P&G Hygiene and Health Care Limited is one of India's

fastest growing Fast Moving Consumer Goods Companies with a turnover of more than Rs. 500 crores.
http://www.pg.com/


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It has in its portfolio famous brands like Vicks & Whisper. P&G Home Products Limited deals in Fabric

Care segment and Hair Care segment. It has in its kitty global brands such as Ariel and Tide in the Fabric

Care segment, and Head & Shoulders, Pantene, and Rejoice in the Hair Care segment.

Proctor & Gamble's (P&G) Mission and Vision Statement

VISION of P&G To be a leading consumer goods company and to improve the lives of world consumers

by providing valuable and innovative products. Ten years ago Procter and gamble started the journey

to improve the lives of Pakistani consumers by providing them with world famous quality brands. P&G

want to be an outstanding organization with a passion for winning that would felt by everyone

everyday; in the office, in the field every where P&G vision is to lead business growth by proactively

identifying opportunities and positively contributing to volume growth.

We will provide branded products and services of superior quality and value that improve the lives of

the world's consumers. As a result, consumers will reward us with leadership sales, profit, and value

creation, allowing our people, our shareholders, and the communities in which we live and work to

prosper.

VALUES AND PRINICPLES OF P & G

P&G is its people and the values by which we live. We attract and recruit the finest people in the world. We build our organization from within, promoting

and rewarding people without regard to any difference unrelated to performance. We act on the

conviction that the men and women of Procter & Gamble will always be our most important asset.

LEADERSHIP:

We are all leaders in our area of responsibility, with a deep commitment to deliverleadership results.

We have a clear vision of where we are going. We focus our resources to achieve leadership objectives and strategies. We develop the capability to deliver our strategies and eliminate organizational barriers.

OWNERSHIP:


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We accept personal accountability to meet our business needs, improve our systems,and help others improve their effectiveness.

We all act like owners, treating the Company's assets as our own and behaving with the Company's long-

term success in mind

HISTORY OF P&G

Procter & Gamble Co. (P&G) is an American company based in Cincinnati, Ohio that manufactures a

wide range of consumer goods. In India Proctor & Gamble has two subsidiaries: P&G Hygiene and Health

Care Ltd. and P&G Home Products Ltd.

Procter & Gamble's relationship with India started in 1951 when Vicks Product Inc. India, a branch of

Vicks Product Inc. USA entered Indian market. In 1964, a public limited company, Richardson Hindustan

Limited (RHL) was formed which obtained an Industrial License to undertake manufacture of Menthol

and de mentholated peppermint oil and VICKS range of products such as Vicks VapoRub, Vicks Cough

Drops and Vicks Inhaler. In May 1967, RHL introduced Clearasil, then America's number one pimple

cream in Indian market. In 1979, RHL launches Vicks Action 500 and in 1984 it set up an Ayurvedic

Research Laboratory to address the common ailments of the people such as cough and cold.

In October 1985, RHL became an affiliate of The Procter & Gamble Company, USA and its name was

changed to Procter & Gamble India. In 1989, Procter & Gamble India launched Whisper - the

breakthrough technology sanitary napkin. In 1991, P&G India launched Ariel detergent. In 1992, The

Procter & Gamble Company, US increased its stake in Procter & Gamble India to 51% and then to 65%.
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In 1993, Procter & Gamble India divested the Detergents business to Procter & Gamble Home Products

and started marketing Old Spice Brand of products. In 1999 Procter & Gamble India Limited changed the

name of the Company to Procter & Gamble Hygiene and Health Care Limited.

In 1993, Procter & Gamble Home Products is incorporated as a 100% subsidiary of The Procter &Gamble Company, USA. Procter & Gamble Home Products launches Ariel Super Soaker.

In 1993, Procter & Gamble India divests the Detergents business to Procter & Gamble Home Products.

In 1995, Procter & Gamble Home Products enters the Haircare Category with the launch of Pantene Pro

In 1997 Procter & Gamble Home Products launches Head & Shoulders shampoo.

In November 2000, Procter & Gamble Home Products Limited presented India in the first International

Hair Styling and Beauty Expert Contest- Hair Asia Pacific 2000 in collaboration with Sri Lankan

Association of Hairdressers and Beautician.

During this period, Procter & Gamble Home Products also re-launched the international range of Head &

Shoulders, best-ever Anti-dandruff shampoo with an improved formula, new pack-design and logo, in

three variants - Clean & Balanced, Smooth & Silky and Refreshing Menthol, which offers the fine

combination of anti-dandruff efficacy and hair conditioning.

In January 2001, Procter & Gamble Home Products Limited and Whirlpool India Ltd. launched a special

'Ariel - Whirlpool Superwash' offer, making washing machines more affordable to the people of

Hyderabad.

On purchase of either a 500gms, 1kg or 1.5kg economy pack of New Ariel Power Compact, consumers

are automatically eligible to buy a Whirlpool Washing Machine for as low as Rs.238/- in Equal Monthly

Installments for 24 months, by filling in the application form that comes with the Ariel pack and

contacting any one of the Whirlpool dealers mentioned on the pack.

In June 2001, Procter & Gamble in partnership with the Association of Beauty Therapy & Cosmetology

(ABTC), India hosted the Pantene Artist 2001 a national stylist competition, which included categories

such as Bridal Dressing, Hair Cutting and Body Painting. Present at the event was world-renowned

hairdresser and stylist Jun L. Encarnecion, who demonstrated the hottest international haircuts and

styles in vogue via an interesting hairhsow. Mr. Encarnecion has trained students in leading hairdressing

schools like Robert Fielding School of Hair Dressing (U.K), Pierre Alexander International Academy (U.K),


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Vidal Sassoon Academy, (U.S.A) among others and also enjoys the reputation of being the official

hairdresser for the 1993 Miss Universe pageant.

In April 2002, Procter & Gamble Home Products Limited announced the launch of a special Ariel Bar

Refund Offer along with its new Advanced Ariel Compact. Under the Ariel Bar Refund Offer, consumerscould exchange their detergent bar on purchase of Advanced Ariel Compacts 1kg and 500gms packs, and

avail of a Rs.15 and Rs.7 discount respectively on MRP.

Additionally, Procter & Gamble Home Products announced the Beat The Summer Dandruff offer on

which 200ml Head & Shoulders bottle was available for Rs.99/- only, thus giving a benefit of a Rs.23/-

discount to consumers.

In June 2003, Procter & Gamble Home Products Limited launched Pampers - worlds number one selling

diaper brand with sales of US$ 6 billion annually. Pampers provides superior dryness for uninterrupted

overnight sleep, with just one pampers diaper. In India, Pampers Fresh & Dry is available in a variety of

three sizes 4s, 10s and 25

In July 2003, Procter & Gamble Home Products Limited launched Pantene Long Black, the ultimate

solution for achieving the Long and Black hair look, and Head & Shoulders Silky Black - the only shampoo

in India to offer the dual benefits of 100% dandruff-free as well as silky black hair.

In January 2004, Procter & Gamble Home Products Limited announced the launch of Rejoice Asias No.

1 shampoo, in India. Rejoices patented Micro-Silicone conditioning technology gives twice as smooth,

and easy to comb hair versus ordinary shampoos, at affordable prices in 100 ml bottles and 7.5 ml

sachets.

In August 2007, Procter & Gamble Home Products Limited signed Preity Zinta Bollywood's no.1

Actress, as Brand Ambassador for its Head & Shoulders anti-dandruff shampoo that gives 100%

dandruff-free soft beautiful hair.
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In October 2008, Procter & Gamble Home Products Limited launched New Pantene Amino Pro-V

Complex shampoos, which makes hair ten times stronger.

PRODCUT ANALYSIS:

PRODUCT DEPTH AND WIDTH:

Width number of different product lines

Length total number of items the company carries within product lines Depth number of versions offered of each product in line

SEGMENTATION, TARGETING AND POSTIONING

Procter & Gamble one of the world's premier consumer goods companies. Some 99 percent of all U.S.

households use at least one of P&G's more than 300 brands, and the typical household regularly buys

and uses from one to two dozen P&G brands. How many P&G products can you name? Why does this superb

marketer compete with itself on supermarket shelves by marketing seven different brands of laundry


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detergent? The P&G story provides a great example of how smart marketers use segmentation,

targeting, and positioning.

PROCTER & GAMBLE: Procter & Gamble (P&G) sells seven brands of laundry detergent in the United

States (Tide, Cheer, Bold, Gain, Era, Dreft, Febreze, and Ivory Snow). It also sells six brands of hand soap

(Ivory, Safeguard, Camay, Olay, Zest, and Old Spice); five brands of shampoo (Pantene, Head &

Shoulders, Pert, Physique, and Vidal Sassoon);four brands of dishwashing detergent (Dawn, Ivory, Joy,

and Cascade); three brands each of tissues and towels(Charmin, Bounty, Puffs), and deodorant

(Secret, Sure, and Old Spice); and two brands each of fabric softener(Downy and Bounce), cosmetics

(Cover Girl and Max Factor), skin care potions (Olay and Noxema), and disposable diapers (Pampers and

Luvs). Moreover, P&G has many additional brands in each category for different international markets.

For example, it sells 16 different laundry product brands in Latin America and 19in Europe, the MiddleEast, and Africa. (See Procter &Gamble's Web site at www.pg.com for a full glimpse of the company's

impressive lineup of familiar brands.)

These P&G brands compete with one another on the same supermarket shelves. But why would P&G

introduce several brands in one category instead of concentrating its resources on a single leading

brand? The answer lies in the fact that different people want different mixes of benefits from the

products they buy. Take laundry detergents as an example. People use laundry detergents to get their

clothes clean. But they also want other things from their detergentssuch as economy, bleaching

power, fabric softening, fresh smell, strength or mildness, and lots of suds or only a few. We all want

some of every one of these benefits from our detergent, but we may have different priorities for

each benefit. To some people, cleaning and bleaching power are most important; to others, fabric

softening matters most; still others want a mild, fresh-scented detergent. Thus, there are groups or

segmentsof laundry detergent buyers, and each segment seeks a special combination

of benefits. Procter & Gamble has identified at least seven important laundry detergent segments, along

with numerous sub segments, and has developed a different brand designed to meet the special

needs of each. The seven brands are positioned for different segments as follows

? Tide provides "fabric cleaning and care at its best." It's the all-purpose family detergent that is "tough

on greasy stains."


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? Cheer is the "color expert." It helps protect against fading, color transfer, and fabric wear, with or

without bleach. Cheer Free is "dermatologist tested . . . contains no irritating perfume or die."

? Bold is the detergent with built-in fabric softener and pill/fuzz removal.

? Gain, originally P&G's "enzyme" detergent, was repositioned as the detergent that gives you clean,

fresh-smelling clothes. It "cleans and freshens like sunshine. Great cleaning power and a smell that stays

clean."

? Era is "the power tool for stain removal and pre treating." It contains advanced enzymes to fight a

family's tough stains and help get the whole wash clean. Era Max has three types of active enzymes to

help fight many stains that active families encounter

? Ivory Snow is "Ninety-nine and forty-four one hundredths percent pure." It provides "mild cleansing

benefits for a pure and simple clean."

? Dreft also "helps remove tough baby stains . . . for a clean you can trust." It's "pediatrician

recommended and the first choice of mothers." It "doesn't remove the flame resistance of children's

sleepwear." Within each segment, Procter & Gamble has identified even narrower niches. For example,

you can buy regular Tide (in powder or liquid form) or any of several formulations:

? Tide with Bleach helps to "keep your whites white and your colors bright." Available in regular or

"mountain spring" scents? Tide Liquid with Bleach Alternative uses active enzymes in pre treating and

washing to break down and remove the toughest stains while whitening whites

? Tide High Efficiency "unlocks the cleaning power of high-efficiency top-loading machines" it prevents

over sudsing? Tide Clean Breeze gives the fresh scent of laundry line-dried in a clean breeze.

? Tide Mountain Spring lets you "bring the fresh clean scent of the great outdoors inside the scent

of crisp mountain air and fresh wildflowers."

? Tide Free "provides all the stain removal benefits without any dyes or perfumes."

? Tide Rapid Action Tablets are portable and powerful. It's Tide "all concentrated into a little blue and

white tablet that fits into your pocket."By segmenting the market and having several detergent brands,

Procter & Gamble has an attractive offering for consumers in all important preference groups. As a

result, P&G is really cleaning up in the $4 billion U.S. laundry detergent market. Tide, by itself, captures a


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whopping 38percent market share. All P&G brands combined take a57 percent share of the market

three times that of nearest rival Unilever and much more than any single brand could obtain by itself

Main competitors:

HUL

KIMBERLY CLARK LIVER PVT. LTD.

JOHNSON AND JOHNSON

COMPETITORS ON THE BASIS OF PRODUCT

PRODUCT NAME COMPETITORS NAME

Vicks Amirtanjan Bam, Zandu Bam, Cold Snap,

Pharmao cold

Pantene Sunsilk, Clinic Plus

Ariel Surf Excel, Rin

Whisper Kotex, Stayfree

Pamper Huggies, Snuggy Baby Diapers


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MARKET ANALYSIS:

SWOT Analysis:

Strengths:

Diversification: Product diversification with about300 products. The diverse product mix includes

personal and beauty items, household products, health and wellness, Baby and family and pet care and

nutrition.

Research and development: P&G invests 3 - 4 % of Net outside Sales in research and development

(R&D). This amount easily exceeds their leading competitors, among consumer products companies.

They also have more Ph.D.s working in labs around the world than the combined science and

engineering faculty at Harvard, MIT and Berkeley.

Innovation: In fiscal year 2004-05, P&G was granted 27,000 patents globally. P&G has produced a

number of new products like diapers; shampoo and conditioner in one; toothpaste that prevents

osteoporosis. Its diversified product mix helps in connecting technology across categories and brings

innovation to the product.

Fat profit margins: P&G announced net sales for the April - June quarter to $21.3 billion, the growth of

10%. This is the seventh year and 24thconsecutive quarter in which P&G delivered top-line growth

above the company's targets.

Strong brands: P&G has 13 Billion-Dollar Sales Brands such as: Always, Ariel, Bounty, Charmin, Crest,

Downy/Lenor, Folgers, Iams, Pampers, Pantene, Pringle's and Tide. The total sales of these thirteen

billion dollar brands taken together, would make a Fortune 100 company in itself.

Brand building: Advertisement expenditure of P&G is twice than the next company on the list

of companies which spend highly on advertising. Their idea of promoting product during weekday day

time slots when mostly housewives would be available helped in building the brand in a big way.

Wide distribution network: P&G markets its products in 160 countries with manufacturing capacities in

40 countries.

Leading market position: P&G is the world's largest consumer products company. P&G is the global

leader in all its 5 broad business segments.


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Weaknesses:

Non-profitable products: Running products which may not be profitable but still had to do it because of

keeping up with the market presence strategy. Few such products are Crest as toothpaste, Always

hygiene pads, and Dawn dishwashing bar.

Inadequate quality control: With large number of product profile, the quality control of all the products

has deteriorated. In September 2006, P&G suspended sales of the cosmetics in China after they were

found by the authorities to contain the banned substances, chromium and neodymium. The case of Rely

tampon also establishes this fact.

Mass appeal products at premium price: Some mass appeal products like Pringles are priced very high

as compared to its competitors products.

Opportunity:

Developing markets: The economies of China and India are growing at a very fast pace. The company

currently competes in only about 10 of its top 25categories in most developing countries. This provides

P&G with an opportunity to enhance its market share as well as expand its presence in other categories.

Growing bottled water market: Bottled water is a fast-growing segment in the worlds food and

beverage market owing to increasing health concerns. In May 2007, P&G launched PUR Flavor Options,

a product that allows consumers to choose flavored or unflavored water from their home water filter.

P&G could leverage its position in the bottled water segment to capitalize on the growing demand for

packaged and flavored water.

Growing healthcare industry in the US: There is a growing opportunity for disinfectant manufacturers in

the healthcare industry in the US. The aging US population would lead to increased health care spending

in the US. P&G is well positioned in the prescription drugs and healthcare segments and can leverage

this trend to boost both its revenues and market share.

Changing consumer preference: With the consumer preferences and choices, P&G because of its huge

R&D base and Connect + Develop program is well placed to come up with new and innovative products

that may suit the customer needs..

Threats:

New regulations: Due to increasing public pressure, the US Food and Drug Administration (FDA) are

expected to impose stringent quality norms on cosmetic products. New regulations may delay launch of

new products and result in higher product development expenditure. These regulations may impose


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new liabilities or increase operating expenses, either of which could result in a decline in profitability.

Competition from local low cost players: P&G faces competition from local, low-cost manufacturers in

developing countries.

Customer concentration: A significant portion of the revenues from the sale of products is derived froma few customers. Sales to Wal-Mart Stores, Inc. represent approximately 15% of its total revenue in

2007. The company gets more than billions of dollars from seven retail customers. The loss of any of

these customers will lead to a sharp decline in its revenues.

PESTEL ANALYSIS:


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PORTERS 5 FORCE MODEL:


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Threat of New Entrants

P&G possess a significant amount of market share around the world. To compete P&G, A competitor must have a large sum of capital for heavy marketing and R&D. Firms That Specialize in nice market could possibly become a threat to P&G corresponding

business segment.

Power of Buyers:

P&G is heavily dependent on wall mart and its affiliates for generating a major part of itsrevenue.

High dependence upon Wal-Mart could reduce the bargaining power of P&G.Power of Suppliers

Supplier of P&G need key customer for profitable revenue generation and will have littlebargaining power.


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Rising interest rate and declining availability of credit ultimately should not affect P&Gsrelationship with its suppliers.

Threat of Substitutes

There are substantial no of substitutes for all of P&Gs product offerings, creating an intensecompetitive environment.

In order to differentiate itself P&G must continue to provide new and innovative products tothe customer.

RECOMMENDATIONS AND SUGGESTIONS:
http://www.pg.com/http://www.pg.com/


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The practice of incomplete market coverage should not be followed because you cannot hijack other

companys customers and new customers as well. All these scenarios require following strategies:

MARKET DEVELOPMENT STRATEGY:

P&G is emphasizing on urban areas while it has neglected the suburban areas, which is also a big market

for soaps like safeguard. For this purpose, they should efficiently utilize their Marketing Information

System to collect information about the demand and attitudes of the people in these areas. By using this

strategy, safeguard can fetch the customers of competitors and will be successful in building new

customers.

PRODUCT DEVELOPMENT STRATEGY:

It describes to develop new products or modify the existing products with respect to size, color,packaging, etc.

Safeguard is a well-perceived product among the customers, and at this moment, it is available in two

sizes; 75gm and 125gm, which cannot satisfy the demand of every segment. While the products of the

competitors are available in multiple sizes which provide abundant choices for purchases to customers

for example Lifebuoy Gold has 140gm and 95gm and Medicame has 80gm soap available in the market.

This provides an opportunity to the customer to have multiple choices. It can be a threat for the market

share of safeguard. On the other hand, in case of safeguard the choice to customer is very limited.

Therefore, it is necessary that safeguard should be available in maximum possible sizes to meet the

selection criteria of the customer. As far as launching of new product is concerned, it is not necessary for

P&G at this moment, but in future, they will require taking this step as well because they have some

other soap like ivory, and zest which are very famous in international market.

MARKET PENETRATION STRATEGY:

It describes that a company tries to sell more of its product by introducing new supplementary uses.

Safeguard is that product, which contains such chemicals useful for beauty care as well. This

characteristic, we have analyzed through its product formula. Therefore, it is more useful to supplement


20/20

this idea with existing safeguard or introduce safeguard into different pack sizes especially for capturing

the female customers.

BIBLIOGRAPHY:

www.p&g.com www.wikipedia.com www.mbaboast.com www.ebooks.com www.times.com

THANK YOU

Documents

PGDM-Comm 44 Paridhi Golchha