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

TOUCHING LIVES, IMPROVING LIFE…. PROCTER & GAMBLE

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

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.,

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.

Recommendation: Long-Term Buy

Recent Price (12/04/09): $62.60 Sector: Consumer StaplesTarget Price: $65.53 Sub‐ Sector: Consumer Goods52‐Week Range: $43.93‐ $64.00 Stock Classification: Classic GrowthMarket 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

Price Performance

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 brandshave more than a billion dollarsin net annual sales and another

18 have sales between $500 millionand $1 billion.

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.

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, haircare, personal cleansing, prestige, fragrances and skin care products

Billion‐dollar brands include: Head & Shoulders, Olay, Pantene and Wellao Grooming (2009 Sales $7.54 B, 9.54% of sales revenue) —blades and razors, electrichair removal devices, facial products, shave products and home appliances

Billion‐dollar brands include: Braun, Fusion, Gillette and Mach 3

HEALTH AND WELL‐BEING Includes two sub‐segments:

o Health Care (2009 Sales $13.62 B, 17.23% of sales revenue) —feminine care, oral careand personal health care products

Billion‐dollar brandsinclude: Actonel,Always, Crest and Oral-Bo Snacks and Pet Care (2009Sales $3.11 B, 3.94% of salesrevenue)—pet food and snacks

Billon‐dollar brandsinclude: Iams andPringles

HOUSEHOLD CARE Includes two sub-segments:

o Fabric Care and Home Care(2009 Sales $23.19 B, 29.33% ofsales revenue)—air care,batteries, dish care, fabric careand surface care

Billion‐dollar brandsinclude: 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

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 StrategyProduct classification-service consumer goodProduct differentiation-form, features, performance, reliabilitySuperior technologyCSR initiativesAttractive packagingCatchy taglinesEstablished as a brand itself

Pricing StrategyOptional-feature pricing Product-line pricingCost-plus pricingCompetitive pricingDistribution pricing

Promotion StrategyMediaRadioHoardingsConsumer promotionNewspaperVarious promotional offersP&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

Place StrategyIn store placement strategyAlready existing strong links in urban areasRural penetrationDevelop marketing channels as strong and penetrated so that it would gain access to remote areasStrategic location of warehouseIncrease wholesale dealers in small town so that they can go to the nearby villagesNational coverage would be dealt with by increasing the company’s warehouse and creating C&F agents in smaller cities

“ 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 appearsat the end of each commercial, and up until2004, it appeared at the end of eachcommercial in Japan.

“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 productpackaging.

“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.

“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".

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.

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

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

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.

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".

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 IamsCompany, 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.

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.

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

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.

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.

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).

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.

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

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...

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.

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 costthe company around $50,000 and took at least three to four weeks...