P&G

Company Overview
Procter & Gamble (P&G) is one of the worlds leading manufacturers of consumer packaged
goods. The company markets nearly 300 brands to approximately five billion consumers in
more than 160 countries. To address the needs of its worldwide customer base, P&G
employs a widely distributed product development strategy. P&G employees at the
Cincinnati headquarters collaborate with other P&G personnel and suppliers located all
over the world. Their goal: cost effectively create innovative products to improve the lives
of consumers globally and introduce them to the market ahead of the competition.
P&G India
P&G is one of the largest and amongst the fastest growing consumer goods companies in
India. Established in 1964, P&G India now serves over 650 million consumers across India.
Its presence pans across the Beauty & Grooming segment, the Household Care segment as
well as the Health & Well Being segment, with trusted brands that are household names
across India. These include Vicks, Ariel, Tide, Whisper, Olay, Gillette, Ambipur, Pampers,
Pantene, Oral-B, Head & Shoulders, Wella and Duracell. Superior product propositions and
technological innovations have enabled P&G to achieve market leadership in a majority of
categories it is present in. P&G India is committed to sustainable growth in India, and is
currently invested in the country via its five plants and over nine contract manufacturing
sites, as well as through the 26,000 jobs it creates directly and indirectly. Our sustainability
efforts focus on Environmental Protection as well as Social Responsibility to help develop
the communities we operate in.
P&G operates under three entities in India - two listed entities Procter & Gamble Hygiene
and Health Care Limited and Gillette India Limited, as well as one 100% subsidiary of the
parent company in the U.S. called Procter & Gamble Home Products.

The P&G divided it products into 2 major segments, Global Business Units (GBUs)

Organization Structure
Global Business Units (GBUs) Focus on consumers, brands and competitors in India. They are
responsible for the innovation profitability from their businesses.
Market Development Organizations (MDOs) are charged with knowing consumers and
retailers in each market.
Global Business Services (GBS) utilizes P&G talent and expert partners to provide best
best-in-class
business support services at the lowest costs.
Lean Corporate Functions ensure ongoing functional innovation and capability improvement.

Core Strengths
P&G focuses on five core strengths required to win in the consumer products industry. They are
designed to lead in each of these areas.

Purpose, Values & Principles

P&G Purpose unifies us in a common cause
and growth strategy of improving more
consumers lives in small but meaningful
ways each day. It inspires P&G people to
make a positive contribution every day.
P&G Values reflect the behaviours that
shape the tone of how they work with each
other and with their partners.

Strategy
They are focused on strategies that the right for the long- term health of the Company and will
deliver total shareholder return in the top one-third of their peer group.
The Companys long-term financial targets are:

Grow organic sales 1% to 2% faster than market growth in the categories and geographies in
which they compete,

Deliver earnings per share (EPS) growth of high single digits to low double digits, and

Generate free cash flow productivity of 90% or greater.

In order to achieve these targets, they are prioritizing the strategies and resources that will
make P&G more focused and fit to win over the near- and long-terms.

SCM model :

Distribution network
In the last two years P&G has increased its India distribution network by approximately 10%
year-on-year,
year, according to the report. However, its network is still miniscule compared to
competitors.

Old sales and distribution system

Imitating the Hindustan Lever Limited(HLL) distribution system.

Using many distributors in a limited area.

Applying every possible method to match the lever.

Tried to establish direct coverage of rural market.

Spent extensively on distribution network.
Problems in the old distribution network

Increase in cost due to increase in distribution cover.

The current volume did not justify the large distributor
distributor network.

The distributors were getting low ROI.

This resulted in distributors trying to push up volumes, but again the volume did not
meet the demand.

New sales and distribution system of P&G - Project Golden Eye

Moving to super- stockist set up

Reducing its number of distributers

Provided better ROI to the distributers

Better ROI helped the distributers to improve infrastructure

Cost saving

Large invest in advertising

Target to expend its distribution cover, appoint new distributors and plumb for
volume growth

Process of redrawing

Rationalising distributors network

Invest in storage and warehousing

Focus on key urban market

Can a change in Distribution channel bring improvement in the sales of the company?
According to us YES, a change in distribution channel can improve the sales of the Co.
1. The Co. can increase its sales with the help of trade fair & exhibition by doing direct
sales to the customers.
2. The Co. can increase its sales performance by promotion its product to the target
consumers preferred areas and location.
3. Also by organizing different prize schemes and sales contest among the customers,
dealers & the sales force the co. can increase its sales volume.

 Projects taken to foster growth

 Project 2-3-4

To strengthen its presence in India, and increase sales 20 times from its current $ 1b
level, P&G India has formulated a 'Project 2-3-4'.
2

P&G's 'Project 2-3-4,'
4,' is aimed at
2 : doubling the number of Indians who use its products,
3 : trebling per capita spending by Indians on its products and
4 : quadrupling net sales of its India operations by 2015.
Why Project 2-3-4

P & G is an organisation which traditionally deriving its bread and butter from premium
brands, and from developed market.

2009 Sales by Geographical Region

Developing
market
22%
North East
Asia
4%

North America
44%

Western
Europe
30%

Globally and within India, the company is investing heavily in innovation, R&D and
distribution. The strategy is to make several of its billion dollar brands more localised,
accessible and affordable for consumers.

The company is trying to strengthen its portfolio by bringing many more brands into the
country.

The parent company also plans to launch toothpaste brands Crest and Oral B in
emerging markets, including India by 2015.

P & G is trying to cater the gaps in its Indian portfolio include toothpaste (a 3,000 crore
market) and soaps ( 7,000 crore).

 Improving Productivity And Creating A Cost Savings Culture

They have taken significant steps to accelerate cost savings and create a more cost focused
culture within the Company, including a five-year, $10 billion cost savings initiative, which was
announced in February 2012. The cost savings program is based on:

The reduction of approximately 5,700 non-manufacturing overhead positions by the end

of fiscal year 2013.

Approximately $1.2 billion in annual cost of goods savings across raw materials,
manufacturing and transportation and warehousing expenses.

Generating efficiencies to enable us to grow marketing costs at a slightly slower rate

than sales growth while still increasing consumer reach and effectiveness, saving
approximately $1 billion over the five year period.

 Collaboration and Innovation at P&G

Why collaboration and innovation is important ?

Huge amount of workers, employees, managers and researchers

Better management

Faster and better sharing of information

Improving Productivity

Improving quality

Minimizing production cost

Reducing R&D costs

Making better and faster decisions

Most of all achieving business goals

Previous Systems and Problems

Existing methods for collaboration and innovating and developing new ideas wasnt
good enough.

No better collaborative system. Email was used for collaboration .

- Senders controls the flow of information.

- May fail to send mail to colleagues when they need it most

processes for sharing knowledge were notoriously inefficient

For companies like P & G one vendor simply isnt enough to satisfy their diverse needs.
e.g. Google search was inadequate.
- Doesnt always link information from within the company
- reliance on keywords isnt ideal for all of the topics for employees might search.

when P&G executives traveled to meet with regional managers, there was no way to
integrate all the reports and discussions into a single document.

 Information Systems used for improving productivity

Web 2.0 for online activities and websites.

Blogs for sharing information with others.

- Open for all interested parties

- Attract comments from interested users

Custom search engine start-up connectbeam.

- Allows employees to share bookmarks and tag content with descriptive words
that appear in future searches
- Facilitates social networks of coworkers to find and share information more
effectively

Information Systems used for improving Collaboration

A Complete Collaboration system led by suite of Microsoft products. Service provided

includes
 Unified communications (Voice transmission, Data transmission, IM , Email, EConferencing)
 Microsoft Live Communications Server functionality, Web conferencing with Live
Meeting & content management with SharePoint

SharePoint to store all presentations to one location, accessible from every parts of the
company.

InnovationNet, a browser-based portal, contains over 5 million research related

documents in digital format.

Tele Presence Conference Room by CISCO. An excellent way to foster collaboration

between employees across not just countries, but continents.

Challenges of using Information Systems

Employers accustomed to email, showed significant inertia to move to a new

technology.

If enough employees didnt use Collaborative Systems, the tools would be much less
useful for those that did use them.

Results of using Information Systems

80000 people using IM, 20000 MS Outlook for mailing, calendaring, contact
management, task management, note taking.

Researchers use the tools to share the data theyve collected on various brands

Marketers can more effectively access the data they need to create highly targeted ad
campaigns.

Managers are more easily able to find the people and data they need to make critical
business decisions.

Removed the problem of glue all documents to a notebook.

Using Telepresence managers and officers cad hold high-definition meetings over long
distances.

35 percent of its employees are using Telepresence regularly.

Company has saved $4 for every $1 invested in the 70 high-end telepresence systems it
has installed over the past few years.

Reduced amount of travel and cost for travel

Significant reduction of time and cost in Research and development.

Faster and more efficient management system.

 Recommended or Suggested Strategies

The practice of incomplete market coverage should not be followed because you cannot
hijack other company 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,
colour, 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 Medicare has80gm 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. This is what they have analyzed through market survey.
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 this idea with existing safeguard or introduce
safeguard into different pack sizes especially for capturing the female customers.