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TOUC HIN G LI VES, IMP RO VING LIFE… . PROC TER & GAMBLE
FACTFILE
Founded – 1837 *(American multinational corporation) Headquarters - Cincinnati, Ohio, USA Key people - A. G. Lafley, Chairman, President, and Chief Executive. Industry - Consumer goods Revenue - US$ 83.503 billion (2008) Net income - US$12.075 billion (2008) Employees - 138,000 Website - www.pg.com Products are available in 140 countries
RANKS ACHIEVED
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.,
PAST
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.
OPERATIONS
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. Beauty Care – Beauty segment – Grooming segment
Household Care
– Baby Care and Family Care segment – Fabric Care and Home Care segment
Health & Well-Being
– Health Care – Snacks, Coffee and Pet Care 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
MANUFACTURING 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
PRODUCTIONS
Procter & Gamble produced and sponsored the first radio soap operas in the 1930s. Past serials produced by Procter & Gamble include: Another World Lovers and Friends The Brighter Day The Catli Our Private World The Edge of Night The First Hundred Years For Richer, for Poorer From These Roots Search for Tomorrow Somerset Texas Young Doctor Malone
EXPANSION
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.
DIVERSIFICATION
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".
ACQUISITIONS
In 1930 acquisition of the Newcastle upon Tynebased 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.
CONTROVERSY NO. 1 “ 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.
CONTROVERSY NO. 2 “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.
CONTROVERSY NO.3 “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.
CONTROVERSY NO.4 “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".
MARK ET RESE ARCH 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
Qualitative Research Tools
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...
Quantitative Research Tools
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.
Conduc ti ng Ma rke ting Researc h Onli ne 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...
P&G’ s SCOPE BRAND OF MOUTHWASH
INTRODUCTION OF SCOPE
This mouthwash product has been around for well over hundred years. It has good reputation as notable brand that kills the germs that cause the bad breath. It also can be successful although it not as old as Listerine product in mouthwash market. It has been proven to kill more germs. Otherwise its also well knows as bad breath remedy. Scope products are just not available in original mint flavor (green), but also in a citrus (orange), peppermint (blue), cinnamon (red) flavors & new Scope White. Its major competitor in mouthwash market is a Listerine brand.
Defining Problems
First is to develop a strategy that would ensure the continued profitability of scope in the face of these competitive threats. This means that their old strategies are not suitable with the customer needs. The innovations from other brand competitors make their brand decreasing in customers satisfaction. The second is a how to maintain their profit and make sure the Scope brand is always be the 1st in mouthwash product ranking. This means that the Scope ranking is decreasing from the first choice to second choice of customer. Listerine be the popular and the first choice of customers.
SWOT analysis STRENGTHS Scope was long experience in the oral hygiene industry since 1967. The taste or flavor of Scope better than other mouthwashes. High-quality product, quality processes and procedures. Have a first rating in mouthwash market share. WEAKNESSES Not enough make a distribution channel. Lack of canning or packaging. Undifferentiated products or services with other competitor. OPPORTUNITIES Brand which it concentrate for a healthy oral. Move into new market segment that offer improves profit. A developing market such as in the Internet. Place more distribution channel such as more drugstore and food store THREAT Too many competitor in this industry. Price wars with other competitor. Not patentable , competitor can attempt to duplicate a product
ENUMERATE THE DECISION FACTORS
Two sets of decision factors must be enumerated in the decision-making process is alternative courses of action and uncertainties. Alternative courses of action are controllable decision factors because the decision maker has complete command of them. Uncertainties are uncontrollable factors that the Protect & Gamble, Inc. cannot influence.
IDENTIFY THE BEST ALTERNATIVE
Create a product extension and innovation: For examples; produce a product that closely functioning like a mouthwash products such as dental gums. Dental gums are promoted to reduced plaque, whiten teeth, and reduce the risk of tooth decay. Increase the variety of an offering. For examples in November 2004, P&G come out with their new mouthwash product called Crest Pro-Health which present as their product extension. This product is in the same product category of the mouthwash products. The effort is intended to draw Listerine users who've resisted P&G's Scope.
Develop a plan for implementing the chosen alternative Establish
a R& D (research and development) group which able to make a new innovation of Scope products Improving production by upgrading Technology Brand building and better marketing strategies
Was the decision appropriate?
Yes, the decision was appropriate. As u know that the Listerine has done this and grown up by doing this in the last few years. Examples can be cited from cross functional industries where investment in marketing the product has proven successful like Pepsi, Sony, Nokia, etc
The Fut ure – Oppor tuni ti es & Chall enge s
Suppl y Cha in Ser vice Pro vi de rs In nova ti on Ser vi ce Pro vi der s Need ‘so ftwa re ’ as mu ch as ‘h ar dware’.
Opp ortuni ty: Lead de fini ng the use of Co nt ract Man ufacturer s wit hin the Consu mer Pr oducts in du st ry…. requ ires cap abi li ty. Chall en ges : Cap it al / inv est men t nee de d to cr eat e thi s capa bil it y. Req ui res ‘bus in es s st rat eg ies and focu s on co re
FACTFILE
Founded – 1837 *(American multinational corporation) Headquarters - Cincinnati, Ohio, USA Key people - A. G. Lafley, Chairman, President, and Chief Executive. Industry - Consumer goods Revenue - US$ 83.503 billion (2008) Net income - US$12.075 billion (2008) Employees - 138,000 Website - www.pg.com Products are available in 140 countries
RANKS ACHIEVED
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.,
PAST
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.
OPERATIONS
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. Beauty Care – Beauty segment – Grooming segment
Household Care
– Baby Care and Family Care segment – Fabric Care and Home Care segment
Health & Well-Being
– Health Care – Snacks, Coffee and Pet Care 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
MANUFACTURING 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
PRODUCTIONS
Procter & Gamble produced and sponsored the first radio soap operas in the 1930s. Past serials produced by Procter & Gamble include: Another World Lovers and Friends The Brighter Day The Catli Our Private World The Edge of Night The First Hundred Years For Richer, for Poorer From These Roots Search for Tomorrow Somerset Texas Young Doctor Malone
EXPANSION
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.
DIVERSIFICATION
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".
ACQUISITIONS
In 1930 acquisition of the Newcastle upon Tynebased 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.
CONTROVERSY NO. 1 “ 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.
CONTROVERSY NO. 2 “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.
CONTROVERSY NO.3 “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.
CONTROVERSY NO.4 “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".
MARK ET RESE ARCH 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
Qualitative Research Tools
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...
Quantitative Research Tools
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.
Conduc ti ng Ma rke ting Researc h Onli ne 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...
P&G’ s SCOPE BRAND OF MOUTHWASH
INTRODUCTION OF SCOPE
This mouthwash product has been around for well over hundred years. It has good reputation as notable brand that kills the germs that cause the bad breath. It also can be successful although it not as old as Listerine product in mouthwash market. It has been proven to kill more germs. Otherwise its also well knows as bad breath remedy. Scope products are just not available in original mint flavor (green), but also in a citrus (orange), peppermint (blue), cinnamon (red) flavors & new Scope White. Its major competitor in mouthwash market is a Listerine brand.
Defining Problems
First is to develop a strategy that would ensure the continued profitability of scope in the face of these competitive threats. This means that their old strategies are not suitable with the customer needs. The innovations from other brand competitors make their brand decreasing in customers satisfaction. The second is a how to maintain their profit and make sure the Scope brand is always be the 1st in mouthwash product ranking. This means that the Scope ranking is decreasing from the first choice to second choice of customer. Listerine be the popular and the first choice of customers.
SWOT analysis STRENGTHS Scope was long experience in the oral hygiene industry since 1967. The taste or flavor of Scope better than other mouthwashes. High-quality product, quality processes and procedures. Have a first rating in mouthwash market share. WEAKNESSES Not enough make a distribution channel. Lack of canning or packaging. Undifferentiated products or services with other competitor. OPPORTUNITIES Brand which it concentrate for a healthy oral. Move into new market segment that offer improves profit. A developing market such as in the Internet. Place more distribution channel such as more drugstore and food store THREAT Too many competitor in this industry. Price wars with other competitor. Not patentable , competitor can attempt to duplicate a product
ENUMERATE THE DECISION FACTORS
Two sets of decision factors must be enumerated in the decision-making process is alternative courses of action and uncertainties. Alternative courses of action are controllable decision factors because the decision maker has complete command of them. Uncertainties are uncontrollable factors that the Protect & Gamble, Inc. cannot influence.
IDENTIFY THE BEST ALTERNATIVE
Create a product extension and innovation: For examples; produce a product that closely functioning like a mouthwash products such as dental gums. Dental gums are promoted to reduced plaque, whiten teeth, and reduce the risk of tooth decay. Increase the variety of an offering. For examples in November 2004, P&G come out with their new mouthwash product called Crest Pro-Health which present as their product extension. This product is in the same product category of the mouthwash products. The effort is intended to draw Listerine users who've resisted P&G's Scope.
Develop a plan for implementing the chosen alternative Establish
a R& D (research and development) group which able to make a new innovation of Scope products Improving production by upgrading Technology Brand building and better marketing strategies
Was the decision appropriate?
Yes, the decision was appropriate. As u know that the Listerine has done this and grown up by doing this in the last few years. Examples can be cited from cross functional industries where investment in marketing the product has proven successful like Pepsi, Sony, Nokia, etc
The Fut ure – Oppor tuni ti es & Chall enge s
Suppl y Cha in Ser vice Pro vi de rs In nova ti on Ser vi ce Pro vi der s Need ‘so ftwa re ’ as mu ch as ‘h ar dware’.
Opp ortuni ty: Lead de fini ng the use of Co nt ract Man ufacturer s wit hin the Consu mer Pr oducts in du st ry…. requ ires cap abi li ty. Chall en ges : Cap it al / inv est men t nee de d to cr eat e thi s capa bil it y. Req ui res ‘bus in es s st rat eg ies and focu s on co re
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