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Corporate Story PnG.www.Internsindia

Corporate Story PnG.www.Internsindia

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Published by: viraj_007 on Feb 26, 2010
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01/19/2013

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Business News Analysis: Free Student Articleswww.internsindia.com-A FREE site for MBA live projects.
Copy Right© Protected 2007-2009, www.internsindia.com, Sylloge CorporationAll Rights Reserved by www.internsindia.comOnly to be used for academic purpose.
Corporate Story – P&G
Before we trace the strategic moves of P&G lets refresh some basictheories of generic strategies and new market/product matrix (Ansoff matrix). 1980s, Michael Porter gave the principle of generic strategies.These generic strategies open optons to organization that wish toachieve a sustainable competitive advantage. Cost leadership,differentiation and Focus strategy were the three thumb rule of potersgeneric strategy model. The basic context was on cometativeadvantage and competative scope. Ansoff Matix lights the options inthe deminsions of product and market ( for more information ontheoritical aspect you can request an article).In the following paragraphs we will see how P&G used these tools tosecure leadership and compete with the existing players.Year 1951, Vicks Product Inc. USA established India. It entered theIndian market with VICKS, today India's Number One Health Carebrand. The idea became quite clear in 1964 with the formation of apublic limited company, Richardson Hindustan Limited (RHL) whichobtains an Industrial License to undertake manufacture of Menthol andde mentholised peppermint oil and the brand extensions of Vicks suchas Vicks VapoRub, Vicks Cough Drops and Vicks Inhaler.In May 1967, RHL introduces CLEARASIL, America's number onepimple cream of that time. In 1979, a research revealed that thebrand Vicks VapoRub, originally positioned for children was mostlyconsumed by adults. This gave a route to another brand extension of Vicks as Vicks Action 500 in the form of capsules. The 500 was addedto the brand name as to make it remembered by rural consumers.P&G also designed the shape (capsules) so it as to make it differentfrom other products. Previously, the brand was sold throughprescription but later routed through OTC channel. This brandextension in VICKS was to strengthen P&G’s market leadership in coldand cough. The extensions were to cover all consumption modes andmarket (adults and children). The methodology matches with that of chess player who first makes all the squares safer which mightthreaten the queen (VICKS) and then play the game of competition.Plotting these brand extensions on the Ansoff matrix will make theexplanation more clear.
 
Business News Analysis: Free Student Articleswww.internsindia.com-A FREE site for MBA live projects.
Copy Right© Protected 2007-2009, www.internsindia.com, Sylloge CorporationAll Rights Reserved by www.internsindia.comOnly to be used for academic purpose.
Determination for product differentiation gave birth to an AyurvedicResearch Laboratory in 1984 by RHL. This was to keep align withCompany's mission of delivering products of superior quality in coughand colds segment. A strategic decision in October 1985 of gettingaffiliated with Proctor and Gamble, USA revamped the wholemanufacturing process and units. The RHL was renamed as P&G. Thestrategy at the corporate level was to work with different SBUs forbroader categorization like P&G Home and P&G Health and Hygiene.Till that time, J&J Health and Hygiene was enjoying the monopoly insanitary napkin segment with Stayfree brand, which was launched inthe late '80s.
 
Business News Analysis: Free Student Articleswww.internsindia.com-A FREE site for MBA live projects.
Copy Right© Protected 2007-2009, www.internsindia.com, Sylloge CorporationAll Rights Reserved by www.internsindia.comOnly to be used for academic purpose.
Year 1989, P&G stepped out for head-on with J&J in the sanitarynapkin market. With great technology, it revolutionized the Indianfeminine hygiene market with the brand Whisper against the Stayfreeof J&J. It was then that the Silky Dry variant was launched tocompete with the superior technology of the Whisper brand. But theSilky Dry variant was not able to compete on value-for-money withWhisper as consumers were unwilling to pay a premium for theproduct. The target market was mid-segment. The next entry was inthe detergent market with the brand Ariel. The lucrative growth inIndia represented a mouth-watering proposition to P&G Internationalthat has increased its stake in Procter & Gamble India to 51% andthen to 65%.In 1993, Procter & Gamble India divested the Detergents business toProcter & Gamble Home Products. In the same year P&G India startedmarketing Old Spice Brand of products.To perfectly fit in its corporate strategy, Procter & Gamble IndiaLimited changed the name of the Company to Procter & GambleHygiene and Health Care Limited. In the same year Mediker Shampoobusiness was divested to Marico Industries. This step of P&G revealedthe mind set of the company to follow the niche strategy. The focuswas on three brands; Ariel, Vicks, and Whisper.In 1999, on one side, P&G’s Vicks Action 500 (OTC) was covered withColdarin umbrella of J&J (with two brand extensions; Coldarin Plus andColdarin Cough & Cold with total market share of nearly 3.2 %).Another side was D’Cold from Paras. Reckitt Piramal, the marketing JVof Reckitt & Colman with Nicholas Piramal, was gearing up to launchDisprin Cough and Flu tablets. Its not that competition was restrictedto OTC brands, Glaxo’s brand Actifed was eating up the share butthrough the prescription route.In 2000, Procter & Gamble Hygiene and Health Care Limitedintroduced Whisper Ultra - a revolutionary and unique product in thehistory of menstrual products in India for premium segment. J&J, thethen market leader, with out losing time counter-attacked withStayfree Sure and other ultrathin sub brands**. The mid segmentmarket was threatened by low-priced sanitary napkins (from ambitiouscontenders such as Johnson and Johnson and Kimberly Clark Lever).

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