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ACKNOWLEDGEMENT

We would like to thank our Professor K.C Prakash for giving us the opportunity to enhance our
knowledge on the subject. We are also grateful for his support and encouragement all
throughout.We also thank our peer members who have enriched our knowledge with immense
discussions on the topic.

Sl.No.

Topic

Pg. No.

1.

Company Profile

2

2.

Detailed description of the company

8

3.

Industry Profile

20

4.

4 P’s Analysis

38

5.

Competetive Anaysis

47

6

Competitive Advantage

52

1 | Page

7.

Promotion Strategies

54

8.

Pricing Strategies

57

9.

Market Analysis

60

10.

Market Strategies

61

11.

Recommendations

63

2 | Page

COMPANY PROFILE

Three billion times a day, P&G brands touch the lives of people around the world.
This is the company which is rooted in the principles of personal integrity, respect
for the individual and doing what's right for the long-term. Before analyzing the
company on various parameters let’s first have a view of the company profile.

Procter & Gamble Co. (P&G, NYSE: PG) is a Fortune 500, American multinational
corporation based in Cincinnati, Ohio, that manufactures a wide range of consumer
goods. It is a brand behemoth. The world's number one maker of household
products courts market share and billion-dollar brands. As of 2008, P&G is the 6th
largest corporation in the world by market capitalization and 14th largest US
company by profit. It is 10th in Fortune's Most Admired Companies list (as of 2007).
P&G is credited with many business innovations including brand management, the
soap opera, and "Connect & Develop" innovation.

According to the Nielsen Company, in 2007 P&G spent more on U.S. advertising
than any other company; the $2.62 billion it spent is almost twice as much as
General Motors, the next company on the Nielsen list. P&G was named 2008
Advertiser of the Year by Cannes International Advertising Festival. est company in
the world in Fast Moving Consumer Goods (FMCG) industry.

3 | Page

It manufactures nearly 300 brands (such as: Ariel, Blend-a-Med, Bonux,
Head&Shoulders, Pampers, Always, Fairy, Gillette, Wella) to nearly five billion
customers, competing in 160 marketplaces. More than 130 000 employees in more
than 80 countries worldwide work everyday to provide products of superior quality
and value to the world's consumers. As the company’s global involvement,
commitment and operations have grown, it has continually analyzed and adapted
the way it does business.

It is a company whose actions reflect its ethics and whose people live their values,
As a “build from within” organization, it sees over 90% of our people start at an
entry level and then progress and prosper throughout the organization. This means
it invests heavily in talent, through training and development opportunities.

HISTORY

William Procter, a candlemaker, and James Gamble, a soapmaker, formed distinct
companies. The two men, immigrants from England and Ireland respectively who
had settled earlier in Cincinnati, might never have met, had they not married
sisters, Olivia and Elizabeth Norris.[6]

4 | Page

Since both their industries used similar resources, the Panic of 1837 caused intense
competition between the two and as a result it led to discord with the family.
Alexander Norris, their father-in law decided to call a meeting where he convinced
his new sons-in-law to become business partners. On October 31, 1837, as a result of
the suggestion, a new enterprise was born: Procter & Gamble.

The company prospered during the nineteenth century. In 1859, sales reached one
million dollars. By this point, approximately eighty employees worked for Procter &
Gamble. 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. Once the war was over and the men returned
home, they continued to purchase the company'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. In the decades that
followed, Procter & Gamble continued to grow and change. The company became
known for its progressive work environment in the late nineteenth century. William
Arnett Procter, William Procter's grandson, established a profit-sharing program for
the company's workforce in 1887. He hoped that by giving the workers a stake in the
company, they would be less inclined to go on strike.

Over time, the company began to focus most of its attention on soap, producing
more than thirty different types by the 1890s. As electricity became more and more
common, there was less need for the candles that Procter & Gamble had made
since its inception. Ultimately, the company chose to stop manufacturing candles in
1920.

In the early twentieth century, Procter & Gamble continued to grow. The company
began to build factories in other locations in the United States, because the demand
for products had outgrown the capacity of the Cincinnati facilities. The company's
leaders began to diversify its products as well and, in 1911, began producing Crisco,
a shortening made of vegetable oils rather than animal fats. In the early 1900s,
Procter & Gamble also became known for its research laboratories, where scientists
worked to create new products. Company leadership also pioneered in the area of
market research, investigating consumer needs and product appeal. 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".

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Throughout the twentieth century, Procter & Gamble continued to prosper. The
company moved into other countries, both in terms of manufacturing and product
sales, becoming an international corporation with its 1930 acquisition of the
Newcastle upon Tyne-based Thomas Hedley Co. Procter & Gamble maintained a
strong link to the North East of England after this acquisition. In addition, numerous
new products and brand names were introduced over time, and Procter & Gamble
began branching out into new areas. 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. Once again focusing on
laundry, Procter & Gamble began making "Downy" fabric softener in 1960 and
"Bounce" fabric softener sheets in 1972. One of the most revolutionary products to
come out on the market was the company's "Pampers", first test-marketed in 1961.
Prior to this point disposable diapers were not popular, although Johnson & Johnson
had developed a product called "Chux". Babies always wore cloth diapers, which
were leaky and labor intensive to wash. Pampers simplified the diapering process.

Over the second half of the twentieth century, Procter & Gamble acquired a number
of other companies that diversified its product line and increased profits
significantly. These acquisitions included Folgers Coffee, Norwich Eaton
Pharmaceuticals, Richardson-Vicks, Noxell, Shulton's Old Spice, Max Factor, and the
Iams Company, among others. In 1994, the company made headlines for big losses
resulting from leveraged positions in interest rate derivatives, and subsequently
sued Bankers Trust for fraud; this placed their management in the unusual position
of testifying in court that they had entered into transactions they were not capable
of understanding. In 1996, Procter & Gamble again made headlines when the Food
and Drug Administration approved a new product developed by the company,
Olestra. Also known by its brand name Olean, Olestra is a substitute for fat in
cooking potato chips and other snacks that during its development stages is known
to have caused anal leakage and gastro-intestinal difficulties in humans.

Procter & Gamble has expanded dramatically throughout its history, but its
headquarters still remains in Cincinnati. {Source, Ohio History Central.}

In January 2005 P&G announced an acquisition of Gillette, forming the largest
consumer goods company and placing the Anglo-Dutch Unilever into second place.
This added brands such as Gillette razors, Duracell, Braun, and Oral-B to their
stable. The acquisition was approved by the European Union and the Federal Trade
Commission, with conditions to a spinoff of certain overlapping brands. P&G has
agreed to sell its SpinBrush battery-operated electric toothbrush business to Church
& Dwight. It also divested Gillette's oral-care toothpaste line, Rembrandt. The
deodorant brands Right Guard, Soft & Dri, and Dry Idea were sold to Dial
Corporation.[7]

The companies officially merged October 1, 2005.

7 | Page

P&G's dominance in many categories of consumer products makes its brand
management decisions worthy of study. [8]

For example, P&G's corporate strategists
must account for the likelihood of one of their products cannibalizing the sales of
another.[9]

PURPOSE AND MISSION:

The company has its mission statement as follows-:

“We will provide branded products and services of superior quality and value that
improve the lives of the world's consumers, now and for generations to come. 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:

8 | Page

P&G is its people and the values by which we live.

P&G attracts and recruits the finest people in the world. It has built the organization
from within, promoting and rewarding people without regard to any difference
unrelated to performance. It acts on the conviction that the men and women of
Procter & Gamble always will be their most important assets.

Integrity

Proctor & Gamble

always tries to do the right thing.

is honest and straightforward with customers and employees

upholds the values and principles of P&G in every action and decision.

is data-based and intellectually honest in advocating proposals, including
recognizing risks.

Passion for Winning

Proctor & Gamble

Is determined to be the best at doing what matters most.

has a healthy dissatisfaction with the status quo.

Has a compelling desire to improve and to win in the
marketplace.

Leadership

The employees are all leaders in our area of responsibility, with a deep
commitment to delivering leadership results.

The company has a clear vision of where it is going.

9 | Page

The focus is on achieving leadership objectives and strategies.

Capabilties are developed to deliver the strategies and eliminate organizational
barriers.

Trust

There is mutual respect among the colleagues, customers and
consumers,

Employees have confidence in each other's capabilities and
intentions.

The company believes that people work best when there is a
foundation of trust.

Ownership

The organization accepts personal accountability to meet the business needs,
improve the systems and help others improve their effectiveness.

10 | Page

DETAILED DESCRIPTION OF COMPANY

P&G’s business is focused on providing branded consumer goods products. Their
goal is to provide products of superior quality and value to improve the lives of the
world’s consumers. They believe thiswill result in leadership sales, profits and value
creation, allowing employees, shareholders and the communities in which they
operate to prosper. Their products are sold in more than 180 countries primarily
through mass merchandisers, grocery stores, membership club stores and drug
stores. They continue to expand their presence in other channels including
department stores, salons and “high frequency stores,”the neighborhood stores
which serve many consumers in developing markets. They have on-the-ground
operations in approximately 80

countries.

They market environment is highly competitive, with global, regional and local
competitors. In many of the markets and industry segments in which they sell their
products, they compete against other branded products as well as retailers’ private-
label brands. Additionally, many

of the product segments in which they compete are differentiated by price (referred
to as premium, mid-tier and value-tier products).

Generally speaking, they compete with premium and mid-tier products and are well
positioned in the industry segments and markets in which they operate — often
holding a leadership or significant market share position.

Organizational Structure

Our organizational structure is comprised of three Global Business Units (GBUs) and
a Global Operations group. The Global Operations group consists of the Market
Development Organization (MDO) and Global Business Services (GBS).

Global Bussines Units

Our three GBUs are Beauty, Health and Well-Being, and Household Care. The
primary responsibility of the GBUs is to develop the overall strategy for our brands.
They identify common consumer needs, develop new product innovations and
upgrades, and build our brands through effective commercial innovations,
marketing and sales.

Under U.S. GAAP, the business units comprising the GBUs are aggregated into six
reportable segments: Beauty; Grooming; Health Care; Snacks, Coffee and Pet Care;
Fabric Care and Home Care; and BabyCare and Family Care. The following provides
additional detail on our GBUs and reportable segments and the key product and
brand composition within each.

11 | Page

Management’s Discussion and Analysis

Effective July 1, 2007, the company's operations are categorized into 3 "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

12 | Page

Beauty:

We are a global market leader in beauty and compete in markets which comprise
approximately $230 billion in global retailsales. Most of the beauty markets in which
we compete are highlyfragmented with a large number of global and local
competitors.They are the global market leader in hair care with over 20% of
theglobal market share. In skin care, we compete primarily with theOlay brand,
which is the top facial skin care retail brand in the world.They are also one of the
global market leaders in prestige fragrances,primarily behind the Gucci, Hugo Boss
and Dolce & Gabbanafragrance brands.

13 | Page

Grooming:

This segment consists of blades and razors, face and shave preparation products
(such as shaving cream), electric hair removal devices and small household
appliances. They hold leadership market share in the manual blades and razors
market on a global basis and in almost all of the geographies in which they
compete.

14 | Page

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behind Mach3, Fusion, Venus and the Gillette franchise. Their electric hair removal
devices and small home appliances are sold under the Braun brand in a number of
markets around the world, where we compete against both global and regional
competitors. Our primary focus in this area is in electric hair removal devices, such
as electric razors and epilators, where we hold over 30% and over 50% of the male
and female markets, respectively.

Health and Well-Being

Health Care: They compete in oral care, feminine care, and pharmaceuticals and
personal health. In oral care, there are several global competitors in the market,
and theyhave the number two market share position at approximately 20% of the
global market. They are the global market leader in the feminine care category with
about one-third of the global market share. In pharmaceuticals and personal health,
we have approximately one-third of the global bisphosphonates market for the
treatment of osteoporosis under the Actonel brand. They are the market leader in
nonprescription heartburn medications and in respiratory treatments behind
Prilosec OTC and Vicks, respectively.Snacks, Coffee and Pet Care: In snacks, we
compete against both global and local competitors and have a global market share
of approximately 10% in the potato chips market behind our Pringles brand. Their
coffee business competes almost solely in North America,where we hold a
leadership position with approximately one-third of the U.S. market, primarily
behind our Folgers brand. They have announced plans to separate our coffee
business and merge it with The J. M. Smucker Company in a transaction that is
expected to close in the second quarter of fiscal 2009. In pet care, they compete in
several markets around the globe in the premium pet care segment,behind the
Iams and Eukanuba brands. The vast majority of their pet care business is in North
America, where they have about a 10% shareof the market.

Household Care

Fabric Care and Home Care: This segment is comprised of a variety of fabric care
products, including laundry cleaning products and fabric conditioners; home care
products, including dish care, surface cleaners and air fresheners; and batteries. In
fabric care, they generally have the number one or number two share position in
the markets in which we compete and are the global market leader, with
approximately one-third of the global market share. Their global home care market
share is about 20% across the categories in which they compete. In batteries, we
compete primarily behind the Duracell brand and have over 40% of the global
alkaline battery market share.Baby Care and Family Care: In baby care, they
compete primarily in diapers, training pants and baby wipes, with over one-third of
the global market share. They are the number one or number two baby care
competitor in most of the key markets in which they compete,primarily behind
Pampers, the Company’s largest brand, with annual net sales of approximately $8
billion.

16 | Page

Global Operations

Market Development Organization

MDO is responsible for developing go-to-market plans at the local level. The MDO
includes dedicated retail customer, trade channel and country-specific teams. It is
organized along seven geographic regions:

North America, Western Europe, Northeast Asia, Central & Eastern Europe/Middle
East/Africa, Latin America, ASEAN/Australia/India and Greater China.

GBS provides technology, processes and standard data tools to enablethe GBUs and
the MDO to better understand the business and better serve consumers and
customers. The GBS organization is responsible for providing world-class solutions
at a low cost and with minimal capital investment.

Strategic Focus

P&G is focused on strategies that it believes are right for the long-term health of the
Company and will increase returns for shareholders.

The Company’s annual financial targets are:

• Organic sales growth of 4% to 6%. This is comprised of:

––3% to 5% pre-Gillette organic sales growth target, plus

––1% of growth acceleration behind revenue synergies associated with the Gillette
acquisition.

• Diluted net earnings per share (EPS) growth of 10% or better,excluding the net
impact of Gillette dilution.

• Free cash flow productivity of 90% or greater (defined as the ratio of operating
cash flow less capital expenditures to net earnings).

––Capital spending at or below 4% of net sales annually.

In order to achieve these targets, we focus on our core strengths of consumer
understanding, branding, innovation, go-to-market capability

and global scale and scope against the following growth areas:

• Grow our leading brands in our biggest markets and with our winning customers.

17 | Page

• Shift our portfolio mix to faster-growing businesses with higher gross margins that
are less asset-intensive.

• Grow disproportionately in developing markets and with value conscious
consumers.

To sustain consistent and reliable sales and earnings growth in line with our
financial targets, we have identified four key enablers:

• Building a diversified and balanced portfolio of businesses, brands and
geographies to deliver consistent, reliable top- and bottom-line growth. Their
portfolio of businesses provides a unique combination of stability, scale and growth.
They compete primarily in 22 global product categories and are a market leader in
over two-thirds of these categories. In addition, their portfolio includes

24 brands that generate over $1 billion in annual sales and 20 brands that generate
between $500 million and $1 billion in annual sales. Combined, these 44 brands
account for 85% or more of their sales and profits. These brands are platforms for
future innovations that will drive sales growth, expand categories for retail
customers and differentiate brands in the minds of consumers. Their geographic
portfolio includes a healthy balance of developed and developing market
businesses. Approximately 40% of sales are generated from the United States, our
home market, and developing markets account for approximately 30% of sales.

• Investing in innovation and core P&G capabilities and strengths to enable us to
reach more of the world’s consumers with quality, affordable products. This includes
expanding our presence in markets and reaching more consumers where we are
underrepresented,including value-conscious consumers.

• Leveraging the Company’s organizational structure to drive clear focus,
accountability and improved go-to-market capability.

––The GBU organizations leverage their consumer understanding to develop the
overall strategy for our brands. They identify common consumer needs, develop
new products and build our brandsthrough effective marketing innovations and
product upgrades.

The GBU is focused on winning the “second moment of truth” —

when the consumer uses the product and evaluates how well the product meets his
or her expectations.

––The MDO develops go-to-market plans at the local level, leveraging their
understanding of the local consumers and customers.

18 | Page

The MDO is focused on winning the “first moment of truth” —

when a consumer stands in front of the shelf and chooses a product from among
many competitive offerings.

–– Global Business Services operates as the “back office” for the GBUs and the
MDO, providing cost-effective world-class technology, processes and standard data
tools to better understand the business and better serve consumers and customers.
GBS personnel, or highly efficient and effective third-party partners, provide these
services.

• Focusing on cost improvement and cash productivity. Each organization is
evaluated on its ability to support the Company’s financial goals and increase total
shareholder return. This includes an evaluation of net sales growth, earnings
growth, profit margin expansion and cash productivity. Our organizations are
evaluated on their ability to generate cash, for example, by increasing productivity,I
mproving capacity utilization, meeting capital spending targets and reducing
working capital required to run the business.

19 | Page

RESULTS OF OPERATIONS

Net Sales

Net sales increased 9% in 2008 to $83.5 billion behind 4% unit volume growth, a
favorable 5% foreign exchange impact and a positive 1% pricing impact. Favorable
foreign exchange resulted primarily from the strengthening of European and other
currencies relative to the U.S. dollar. Price increases were taken across a number of
our businesses primarily to offset higher commodity costs. Mix had a negative 1%
impact on net sales primarily due to disproportionate growth in developing regions,
where selling prices are below the Company average. Each reportable segment
posted year-on-year volume growth, with mid-single-digit growth in Fabric Care and
Home Care, Baby Care and Family Care, Grooming and Health Care and low-single-
digit growth in Beauty and Snacks, Coffee and Pet Care. Each geographic region
posted year-on-year volume growth except Western Europe, which was down low-
single digits due to the impact of divestitures.Excluding the impact of acquisitions
and divestitures, every geographic region delivered year-on-year volume growth.
Volume grew primarily behind initiative activity on key brands and continued
double-digit growth in developing regions. Organic sales increased 5% behind
organic volume growth of 5%, which excludes the impact of acquisitions and
divestitures. Each reportable segment posted year-on-yearorganic sales and
organic volume growth.

Net sales increased 12% in 2007 to $76.5 billion. Sales were up behind 9% unit
volume growth, including the impact of an extra three months of Gillette results in
2007. Organic volume increased 5%. Developing regions continued to lead the
growth with double-digit increases for the year. All reportable segments increased
organic volume for the year except the Snacks, Coffee and Pet Care segment.
Higher pricing, primarily in coffee and Health Care, contributed 1% to sales growth.

Product mix had no net impact on sales as a more premium product mix driven by
the additional three months of Gillette results in 2007 was offset by the negative
mix impact of disproportionate growth in developing markets, where the average
unit sales price is lower than the Company average. Favorable foreign exchange
contributed 2% to net sales growth. Organic sales increased 5% versus 2006 with
each reportable segment posting year-on-year growth.

Management and staff

20 | Page

Current members of the board of directors of Procter & Gamble are: Alan Lafley,
Clayton Daley Jr., Charles Lee, Ralph Snyderman M.D., Margaret Whitman, W. J.
McNerney Jr., Lynn Martin, Johnathan Rodgers, Ernesto Zedillo, Scott Cook, Rajat Gupta,
Patricia Woertz, and Kenneth Chenault.

In 2007, the P&G's Canadian division was named one of Canada's Top 100 Employers,
as published in Maclean's magazine, the only consumer products company to receive
this honor.

21 | Page

Procter & Gamble brands

24 of P&G's brands have more than a billion dollars in net annual sales and another
18 have sales between $500 million and $1 billion.

Billion dollar brands

•Always is a brand of feminine hygiene products, including maxi pads, pantiliners
(sometimes called Alldays), and feminine wipes.

•Ariel is a brand of washing powder/liquid, available in numerous forms and

scents.

•Actonel is brand of Osteoporosis drug Risedronate co marketed by Sanofi-

Aventis.

•Bounty is a brand of paper towel sold in the United States, Canada and the
United Kingdom

•Braun is a small-appliances manufacturer specializing in electric razors,
coffeemakers, toasters, and blenders.

•Crest is a brand of toothpaste.

•Dawn is a brand of dishwashing detergent.

•Downy/Lenor is a brand of fabric softener.

•Duracell is a brand of batteries and flashlights.

•Fusion is a brand of mens wet shave razors, and is the quickest P&G brand to
have reached $1 billion in annual sales

•Gain is a brand of laundry detergent and fabric softeners.

•Gillette is a safety razor manufacturer.

•Head & Shoulders is a brand of shampoo.

•High Endurance is a deodorant by Old Spice

•Ivory is a soap

•Nice 'n Easy is a hair color product.

•Olay is a brand of women's skin care products.

•Oral-B is a brand of toothbrush.

22 | Page

•Pampers is a brand of disposable diapers

•Pantene is a brand of haircare.

•Prilosec OTC is a brand of heartburn medicine co-marketed by AstraZeneca.

•Pringles is a famous brand of potato chips.

•Puffs is a type of facial tissue.

•Secret is a deodorant

•Tide is a brand of laundry detergent.

•Vicks is a brand of over-the-counter medicines

•Wella is a brand of hair care (shampoo, conditioner, styling, hair color).

•Whisper is a brand of pantyliners

Manufacturing

Procter & Gamble manufactures its products across the globe. Manufacturing
operations are based in the following geographies

US

Canada

Latin America

Europe

China (31 wholly-owned factories) and other parts of Asia

Africa

P&G LOGO

The company received unwanted media publicity in the 1980s when an urban legend spread that
their previous corporate logo was a Satanic symbol. The accusation is based on a particular
passage in the Bible, specifically Revelation 12:1, which states: "And there appeared a great
wonder in heaven; a woman clothed with the sun, and the moon under her feet, and upon her
head a crown of twelve stars." Since P&G's logo consists of a man's face on a moon surrounded
by thirteen stars, some have claimed that the logo is a mockery of the heavenly symbol alluded

23 | Page

to in the aforementioned verse, and hence the logo is Satanic. Where the beard meets the
surrounding circle, a mirror image of the number 666 can be seen when viewed from inside the
logo, and this has been interpreted as the reflected number of the beast, again linked to Satanism.
Also, there are two horns like a lamb that are said to represent the false prophet. These
interpretations have been denied by company officials, and no evidence linking the company to
the Church of Satan or any other occult organization has ever been presented. 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.
As stated in one of the resulting lawsuits, the logo originated in 1851 as the symbol for their Star
brand of candles. It was later altered to show the man in the moon overlooking 13 stars, which
were meant to commemorate the original 13 colonies.[17]
An example of one such rumor was the fabricated account that the president of P&G had
appeared on a Saturday edition of The Phil Donahue Show. He declared that he was a Satanist
and that the company's logo was Satanic. This rumor circulated despite the facts that the
company's president has never made such a statement in public, had never appeared on Phil
Donahue's show, and that Donahue's show never ran on Saturdays. Later variations of this rumor
replaced the Donahue show with Geraldo Rivera's show.[18]
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.

Original Logo

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New Logo

25 | Page

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INDUSTRY PROFILE

What are Fast Moving Consumer Goods (FMCG)?

Products which have a quick turnover, and relatively low cost are known as Fast
Moving Consumer Goods (FMCG). FMCG products are those that get replaced within
a year. Examples of FMCG generally include a wide range of frequently purchased
consumer products such as toiletries, soap, cosmetics, tooth cleaning products,
shaving products and detergents, as well as other non-durables such as glassware,
bulbs, batteries, paper products, and plastic goods. FMCG may also include
pharmaceuticals, consumer electronics, packaged food products, soft drinks, tissue
paper, and chocolate bars.

A subset of FMCGs are Fast Moving Consumer Electronics which include innovative
electronic products such as mobile phones, MP3 players, digital cameras, GPS
Systems and Laptops. These are replaced more frequently than other electronic
products.

White goods in FMCG refer to household electronic items such as Refrigerators,
T.Vs, Music Systems, etc.

In 2005, the Rs. 48,000-crore FMCG segment was one of the fast growing industries
in India. According to the AC Nielsen India study, the industry grew 5.3% in value
between 2004 and 2005.

Indian FMCG Sector

The Indian FMCG sector is the fourth largest in the economy and has a market size
of US$13.1 billion. Well-established distribution networks, as well as intense
competition between the organised and unorganised segments are the
characteristics of this sector. FMCG in India has a strong and competitive MNC
presence across the entire value chain. It has been predicted that the FMCG market
will reach to US$ 33.4 billion in 2015 from US $ billion 11.6 in 2003. The middle
class and the rural segments of the Indian population are the most promising
market for FMCG, and give brand makers the opportunity to convert them to
branded products. Most of the product categories like jams, toothpaste, skin care,
shampoos, etc, in India, have low per capita consumption as well as low penetration
level, but the potential for growth is huge.

The Indian Economy is surging ahead by leaps and bounds, keeping pace with rapid
urbanization, increased literacy levels, and rising per capita income.

27 | Page

The big firms are growing bigger and small-time companies are catching up as well.
According to the study conducted by AC Nielsen, 62 of the top 100 brands are
owned by MNCs, and the balance by Indian companies. Fifteen companies own
these 62 brands, and 27 of these are owned by Hindustan Lever. Pepsi is at number
three followed by Thums Up. Britannia takes the fifth place, followed by Colgate (6),
Nirma (7), Coca-Cola (8) and Parle (9). These are figures the soft drink and cigarette
companies have always shied away from revealing. Personal care, cigarettes, and
soft drinks are the three biggest categories in FMCG. Between them, they account
for 35 of the top 100 brands.

Exhibit I
THE TOP 10 COMPANIES IN FMCG SECTOR

S. NO.Companies

1.

Hindustan Unilever Ltd.

2.

ITC (Indian Tobacco Company)

3.

Nestlé India

4.

GCMMF (AMUL)

5.

Dabur India

6.

Asian Paints (India)

7.

Cadbury India

8.

Britannia Industries

9.

Procter & Gamble Hygiene
and Health Care

10.

Marico Industries

28 | Page

Source: Naukrihub.com

The companies mentioned in Exhibit I, are the leaders in their respective sectors.
The personal care category has the largest number of brands, i.e., 21, inclusive of
Lux, Lifebuoy, Fair and Lovely, Vicks, and Ponds. There are 11 HLL brands in the
21, aggregating Rs. 3,799 crore or 54% of the personal care category. Cigarettes
account for 17% of the top 100 FMCG sales, and just below the personal care
category. ITC alone accounts for 60% volume market share and 70% by value of all
filter cigarettes in India.

The foods category in FMCG is gaining popularity with a swing of launches by HLL,
ITC, Godrej, and others. This category has 18 major brands, aggregating Rs. 4,637
crore. Nestle and Amul slug it out in the powders segment. The food category has
also seen innovations like softies in ice creams, chapattis by HLL, ready to eat rice
by HLL and pizzas by both GCMMF and Godrej Pillsbury. This category seems to
have faster development than the stagnating personal care category. Amul, India's
largest foods company, has a good presence in the food category with its ice-
creams, curd, milk, butter, cheese, and so on. Britannia also ranks in the top 100
FMCG brands, dominates the biscuits category and has launched a series of
products at various prices.

In the household care category (like mosquito repellents), Godrej and Reckitt are
two players. Goodknight from Godrej, is worth above Rs 217 crore, followed by
Reckitt's Mortein at Rs 149 crore. In the shampoo category, HLL's Clinic and Sunsilk
make it to the top 100, although P&G's Head and Shoulders and Pantene are also
trying hard to be positioned on top. Clinic is nearly double the size of Sunsilk.

Dabur is among the top five FMCG companies in India and is a herbal specialist.
With a turnover of Rs. 19 billion (approx. US$ 420 million) in 2005-2006, Dabur has
brands like Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola and Real. Asian
Paints is enjoying a formidable presence in the Indian sub-continent, Southeast
Asia, Far East, Middle East, South Pacific, Caribbean, Africa and Europe. Asian Paints
is India's largest paint company, with a turnover of Rs.22.6 billion (around USD 513
million). Forbes Global magazine, USA, ranked Asian Paints among the 200 Best
Small Companies in the World

Cadbury India is the market leader in the chocolate confectionery market with a
70% market share and is ranked number two in the total food drinks market. Its
popular brands include Cadbury's Dairy Milk, 5 Star, Eclairs, and Gems. The Rs.15.6
billion (USD 380 Million) Marico is a leading Indian group in consumer products and
services in the Global Beauty and Wellness space.

Outlook

29 | Page

There is a huge growth potential for all the FMCG companies as the per capita
consumption of almost all products in the country is amis amongst the lowest in the
world. Again the demand or prospect could be increased further if these companies
can change the consumer's mindset and offer new generation products. Earlier,
Indian consumers were using non-branded apparel, but today, clothes of different
brands are available and the same consumers are willing to pay more for branded
quality clothes. It's the quality, promotion and innovation of products, which can
drive many sectors.

The personal care sector of P&G is considered for this project.The Pantene shampoo
is taken as a representative of this sector and it will be further analyzed on the
varios parameters.

First of all let us have a look at the various competitors of P&G in this sector and
that too in the shampoo product line

The Brand that is selected for this analytical report isPantene.We will analyze the
various competitors of P&G in the personal care segment.Some of them are
Hindustan Unilever Ltd, Colgate Palmolive,ITC,Marico Industries,Dabur, For every
company we have discussed only one product from the Hair Care segment in detail.

UNILEVER

30 | Page

Unilever is a multi-national corporation, formed of Anglo-Dutch parentage that owns
many of the world's consumer product brands in foods, beverages, cleaning agents and
personal care products. Unilever employs nearly 180,000 people[1]

and had a worldwide

revenue of almost €40 billion in 2005.

Unilever is a dual-listed company consisting of Unilever NV in Rotterdam, Netherlands
and Unilever PLC in London, England. This arrangement is similar to that of Reed
Elsevier, and that of Royal Dutch Shell prior to their unified structure. Both Unilever
companies have the same directors and effectively operate as a single business.
The current non-executive Chairman of Unilever N.V. and PLC is Michael Treschow
while Patrick Cescau is Group Chief Executive, who will retire at the end of 2008. Mr
Paul Polman will succeed Patrick Cescau as Group Chief Executive. The company is
widely listed on the world's stock exchanges

31 | Page

History

Unilever was created in 1930 by the merger of British soapmaker Lever Brothers
and Dutch margarine producer Margarine Unie, a logical merger as palm oil was a
major raw material for both margarines and soaps and could be imported more
efficiently in larger quantities.

In the 1930s the business of Unilever grew and new ventures were launched in
Latin America. In 1972 Unilever purchased A&W Restaurants' Canadian division but
sold its shares through a management buyout to former A&W Food Services of
Canada CEO Jeffrey Mooney in July 1995.[4]

By 1980 soap and edible fats contributed
just 40% of profits, compared with an original 90%. In 1984 the company bought
the brand Brooke Bond (maker of PG Tips tea).

In 1987 Unilever strengthened its position in the world skin care market by
acquiring Chesebrough-Ponds, the maker of Ragú, Pond's, Aqua-Net, Cutex Nail
Polish, Pepsodent toothpaste, and Vaseline. In 1989 Unilever bought Calvin Klein
Cosmetics, Fabergé, and Elizabeth Arden, but the latter was later sold (in 2000) to
FFI Fragrances. [5]

In 1996 Unilever purchased Helene Curtis Industries, giving the company "a
powerful new presence in the United States shampoo and deodorant market". [6]
The purchase brought Unilever the Suave and Finesse hair-care product brands and
Degree deodorant brand. [7]

In 2000 the company absorbed the American business Best Foods, strengthening its
presence in North America and extending its portfolio of foods brands. In a single
day in April 2000, it bought, ironically, both Ben & Jerry's, known for its calorie-rich
ice creams, and Slim Fast.

The company is fully multinational with operating companies and factories on every
continent (except Antarctica) and research laboratories at Colworth and Port
Sunlight in England; Vlaardingen in the Netherlands; Trumbull, Connecticut, and
Englewood Cliffs, New Jersey in the United States; Bangalore in India Pakistan; and
Shanghai in China.Its Indian arm is known as Hindustan Unilever Ltd.

Hindustan Unilever Ltd.

Hindustan Unilever Limited (abbreviated to HUL), formerly Hindustan Lever
Limited , is India's largest consumer products company and was formed in 1933 as
Lever Brothers India Limited. It is currently headquartered in Mumbai, India and its
41,000 employees are headed by Harish Manwani, the non-executive chairman of the
board. HUL is the market leader in Indian products such as tea, soaps, detergents, as
its products have become daily household name in India. The Anglo-Dutch company
Unilever owns a majority stake in Hindustan Unilever Limited.

32 | Page

The company was renamed in late June 2007 "Hindustan Unilever Limited".

Introduction

. The company focuses on efficient delivery to consumers with an improved supply
chain, brand building initiatives and innovation, which has helped the company to
sustain its leadership position in the overall FMCG category in India.

It offers foods, beverages, home care, and personal care products. Its operations
are divided into seven reportable divisions: soaps and detergents, personal
products, beverages, foods, ice creams, exports, and other operations.

The company derives 44.3% of its revenues from soaps and detergents, 26.6% from
personal care products, 10.5% from beverages, and the rest from foods, ice creams,
exports, and other products.

Brands in the Personal Care category

The personal care product family or category is further sub-divided into seven
categories:

Personal Wash:

Lux

Liril

Hamam

33 | Page

Lifebuoy

Breeze

Dove

Rexona

Pears

Laundry:

Surf Excel

Rin

Wheel

Sunlight

Hair Care:

Sunsilk Naturals

Clinic

34 | Page

Deoderants:

Axe

Rexona

Skin Care:

Fair & Lovely

Ponds

Aviance

Vaseline

Oral Care:

Pepsodent

Close Up

Cosmetics:

Lakme

Sunsilk

Launched in 1964, Sunsilk is the largest beauty shampoo brand in the country.
Positioned as the 'Hair Expert', Sunsilk has identified different hair needs and offers
the consumer a shampoo that gives her the desired results.

The benefits are more compelling and relevant since the variants are harmonised in
terms of the product mix - fragrance, colour and ingredients are all well linked to
cue the overall synergy. The range comes in premium packaging and design. The
accent is on "It knows you, and hence knows exactly what your hair needs".

brand of hair care products for women produced by the Unilever group. It was
launched in 1954 in the United Kingdom. By 1959, it was available in eighteen
different countries worldwide. Currently, Sunsilk products are available in over 50
countries throughout Asia, The Middle East, North Africa and Latin America, where is
known as Sedal. In Brazil, this brand is known as Seda.

35 | Page

Old Campaign

In the early years, Sunsilk focused much of its marketing attention on gaining
international presence. To do this, they targeted different market segments or
countries with specialized products designed to address hair "issues" of each
culture. For example in the UK, the core benefit in the 1960s was shiny hair.

High interest internationally led to a dramatic decline in support in the United
States and UK. Because of this, many years went by with little or no advertising
which caused the brand to be viewed as targeted at older women. Although this
was not Sunsilk's intention the outcome was inevitable.

During the 1980s a push viewed by many Unilever insiders as "last-ditch" was made
to revitalize the brand in Australia followed by other countries [1]

. The advertising

featured Beverly Hills stylist Dusty Fleming and although this was successful in
Australia the impact on the brand in the UK was catastrophic. By 1991 the former
No1 shampoo product was delisted in the UK.

Because of the brand loyalty among older users, combined with almost a generation
of non-use, Sunsilk found it very difficult to gain market share and attract a younger
audience.

A new campaign was launched to recruit younger users. To do this, products also
needed rejuvenating. Sunsilk decided that in addition to segmenting markets
country by country, they should also segment by hair type within each market. The
new products focused on hair color, texture, feeling, dryness, etc. The updated
Sunsilk campaign, "Get Hairapy", followed the same strategy, marking a bold move
towards users in their 20s and upwards said to be in their "quarter-life crisis". The
target audience was also defined as single, fashion-conscious, working women who
economized when looking good: women "on-the-go".

The new product lines, which feature product threesomes include: Anti-Flat, Anti-
Poof, Hydra TLC, Straighten-Up, De-Frizz, No Major Issues, ThermaShine, Beyond
Brunette Color Boost (Auburn tones and non-highlighted brunette colorers) and
Blonde Bombshell (all over blondes and highlighters).

Sunsilk also updated its website to reflect its realigned image. The new site,
www.gethairapy.com, became the main focus of the campaign. Commercials and
print ads encouraged direct response via the website which included a "get hairapy"
blog.

36 | Page

The blog is written by "The Hairapy Guys", a trio of young men with "Queer Eye for
the Straight Guy" appeal. The aim of the Hairapy Guys is to act as lifestyle specialists
with thoughts and tips on hair care, dating and other typical twenty-something
issues. The blog tagline is "help you laugh away your hair and life problems". The
myspace account attracts as many as 18,000 subscribers. The Hairapy Guys have
also been incorporated into various television shows such as “the Best Week Ever”
where they engage in celebrity gossip, “Flavor of Love” with 30-second promos on
the hairstyles of the would-be girlfriends, and fashion shows on the E! channel.

37 | Page

Life Can't Wait

Sunsilk’s latest campaign, Life Can’t Wait, aims to inspire women all over the globe
to live their lives to the fullest. To launch Sunsilk’s campaign the brand unveiled
their Life Can't Wait advertisement during the Super Bowl XLII on February 3 2008.
The founding idea behind the campaign is that hair can dramatically alter a girl’s
mood and actions. The philosophy behind it is that by taking appearance into their
own hands, girls are equally taking positive steps towards being more in control of
their life: “Hair On= Life On”

The Life Can't Wait campaign features three of the world's most iconic women;
Madonna, Shakira and Marilyn Monroe, who all symbolise the power of expression and
making life happen. Spanning four continents and fifteen countries, the campaign
showcases these universal icons and reveals significant and life-defining moments
in their lives: moments which inspired them to discover themselves, their identities
and their always-evolving styles.

Sunsilk is targeting young women across the world, giving them the opportunity to
share with each other their own life stories fitting the Life Can’t Wait theme – of how
they have thrown caution to the wind and taken a chance which resulted in a life
changing experience!

The US were first to launch Life Can't Wait, and have hosted an event where girls
with great hair shared their life can't wait stories. Girls from the USA voted for their
winner, a DJ from California named Tatiana.

Background to the campaign

Created by DeGrippes Gobe in Paris, the Life Can't Wait campaign was born from
the global insight that hair, more than any other physical attribute, plays a crucial
role in a girl's power to transform and express herself. Research conducted in six
countries with 3,000 women revealed the universal truth that twenty-something
women find having "good" hair can be a trigger for seizing opportunities.

The Sunsilk Global Survey was carried out by Sunsilk in Thailand, India, Brazil, USA,
Russia and Mexico between August and September 2007. One finding from the
research was that ‘eight out of ten girls (84%) worldwide had missed out on
something good – such as a pay rise or a blind date – because they didn’t have the
confidence to act instantly and take risks.

38 | Page

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