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

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7. Promotion Strategies 54

8. Pricing Strategies 57

9. Market Analysis 60

10. Market Strategies 61

11. Recommendations 63

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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.

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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]

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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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6| Page
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.

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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:

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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.

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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.

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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 | P a g e
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

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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 | P a g e
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 | P a g e
15 | P a g e
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 | P a g e
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 | P a g e
• 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.

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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 | P a g e
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 | P a g e
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 | P a g e
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 | P a g e
 • 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 | P a g e
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

24 | P a g e
New Logo

25 | P a g e
26 | P a g e
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 | P a g e
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 | P a g e
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 | P a g e
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 | P a g e
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 | P a g e
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 | P a g e
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 | P a g e
Lifebuoy

Breeze

Dove

Rexona

Pears

Laundry:

Surf Excel

Rin

Wheel

Sunlight

Hair Care:

Sunsilk Naturals

Clinic

34 | P a g e
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 | P a g e
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 | P a g e
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 | P a g e
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 | P a g e
ITC LIMITED
ITC is one of India's foremost private sector companies with a market capitalisation
of nearly US $ 19 billion* and a turnover of over US $ 5.1 Billion. ITC is rated among
the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable
Companies by Forbes magazine, among India's Most Respected Companies by
BusinessWorld and among India's Most Valuable Companies by Business Today. ITC
ranks among India's `10 Most Valuable (Company) Brands', in a study conducted by
Brand Finance and published by the Economic Times. ITC also ranks among Asia's
50 best performing companies compiled by Business Week.

ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty

Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information
Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other
FMCG products. While ITC is an outstanding market leader in its traditional
businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is
rapidly gaining market share even in its nascent businesses of Packaged Foods &
Confectionery, Branded Apparel, Personal Care and Stationery.

39 | P a g e
As one of India's most valuable and respected corporations, ITC is widely perceived
to be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of
inspiration "a commitment beyond the market". In his own words: "ITC believes that
its aspiration to create enduring value for the nation provides the motive force to
sustain growing shareholder value. ITC practices this philosophy by not only driving
each of its businesses towards international competitiveness but by also
consciously contributing to enhancing the competitiveness of the larger value chain
of which it is a part."

ITC's diversified status originates from its corporate strategy aimed at creating
multiple drivers of growth anchored on its time-tested core competencies:
unmatched distribution reach, superior brand-building capabilities, effective supply
chain management and acknowledged service skills in hoteliering. Over time, the
strategic forays into new businesses are expected to garner a significant share of
these emerging high-growth markets in India.

40 | P a g e
ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is
one of the country's biggest foreign exchange earners (US $ 3.2 billion in the last
decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture
significantly enhance its competitiveness by empowering Indian farmers through
the power of the Internet. This transformational strategy, which has already become
the subject matter of a case study at Harvard Business School, is expected to
progressively create for ITC a huge rural distribution infrastructure, significantly
enhancing the Company's marketing reach.

ITC's wholly owned Information Technology subsidiary, ITC Infotech India Limited, is
aggressively pursuing emerging opportunities in providing end-to-end IT solutions,
including e-enabled services and business process outsourcing.

ITC's production facilities and hotels have won numerous national and international
awards for quality, productivity, safety and environment management systems. ITC
was the first company in India to voluntarily seek a corporate governance rating.

ITC employs over 25,000 people at more than 60 locations across India. The
Company continuously endeavors to enhance its wealth generating capabilities in a
globalising environment to consistently reward more than 3,75,000 shareholders,
fulfill the aspirations of its stakeholders and meet societal expectations. This over-
arching vision of the company is expressively captured in its corporate positioning
statement: "Enduring Value. For the nation. For the Shareholder."

Brands in Personal Care:

TC launched an exclusive line of prestige fine fragrances under the Essenza Di Wills
brand in mid 2005. The Essenza Di Wills range of perfumes reinforces ITC’s tradition
of bringing world-class products to Indian consumers to enrich the quality of their
lives.

Essenza Di Wills embodies a fine balance between the classic and the contemporary.
The brand personifies exclusivity, innate style, sophistication and magnetism.
The Essenza Di Wills line has been developed with the assistance of French
perfumery experts to give it the mystique and premium luxury quality that go with
the best of international brands.

41 | P a g e
Inizio, the signature range under Essenza Di Wills
captures the very essence of attraction between a man
and a woman with its two distinct lines - Inizio Femme
(for women) and Inizio Homme (for men). The women's
fine fragrance revolves around 'Floral Fruity Musky'
notes while the men's fine fragrance is centered on
'Oriental Woody Fruity' notes. The bath and body care
products share the same olfactory signature of the fine
fragrances, to offer a harmonized grooming experience.

he latest addition to the Essenza Di Wills portfolio is the Aqua range for men (Aqua
Homme) that offers a distinctive and fresh aquatic fragrance. The Aqua range
includes an After-Shave Lotion, a Deodorant, a Hair & Body Shampoo and a Bathing
Bar.

Essenza Di Wills has significantly enhanced its brand salience in the lifestyle space
by being the associate sponsors of the Wills Lifestyle India Fashion Week, the
country's most premier fashion event that brings together the leading designers of
the country.
The Essenza Di Wills fashion line, specially designed for the brand by one of India’s
leading designers, Varun Bahl, received high appreciation at the Spring-Summer
show in September 2007. Essenza Di Wills is available at Wills Lifestyle stores,
select John Players stores and select premium outlets.

In September 2007, ITC launched Fiama Di Wills, a premium

range of personal care products comprising shampoos,
conditioner, shower gels and soap. This premium range is a
unique blend of nature and science that promises gentle effective
care. It is an outcome of 4 years of extensive researc
iama Di Wills Shampoos developed in collaboration with Cosmetech Labs Inc., USA,
offers a range of five variants. Each of these is designed to deliver a specific hair
benefit to the consumer :

Everyday Mild (with extracts of Thyme &

Juniper) is a gentle caring shampoo suitable for
daily use.

Aqua Balance (with extracts of Magnolia

Blossoms & Watercress) is a gentle
moisturizing shampoo ideal for dry, dull hair.

42 | P a g e
Volume Boost (with extracts of Rosemary & Sage) is a gentle volumizing shampoo
ideal for thin, limp hair.

Silky Strong (with oils of Macadamia Nut and Babassu) helps make hair smooth,
silky and strong and is ideal for weak, damaged hair.

Shine in Style (with extracts of Chamomile and Green Tea) makes hair shiny and
manageable, easy to style and is ideal for dull to normal hair.

Each of these shampoos can be complemented with Fiama Di Wills

Polishing Drops conditioner. This gentle conditioner enriched with
Avocado Oil and Burdock extract promises to make hair shiny, soft
and smooth. It also gives the additional benefits of UV protection as
it contains Sunflower Seed extract, which is a natural UV absorber.

The Fiama Di Wills product line also consists of a 3-variant range of transparent
shower gels which are unique as they come with suspended beads:

• Mild Dew (enriched with soft beads, peach and

avocado extracts) is for soft, moisturized skin.

• Clear Springs (enriched with jojoba beads, sea weed

and lemongrass extracts) is for clear healthy skin.

•
Exotic Dream (enriched with glitter beads, bearberry
leaves and black currant extracts) is for stimulating
freshness.

43 | P a g e
The Fiama Di Wills range of soaps has been launched
under the sub - brand SkinSense. The first variant to be
introduced in this range is Soft Green. This is a gentle
caring soap, which helps enhance retention of skin
proteins making skin look beautiful and youthful.

Between February and June 2008, ITC expanded its personal care portfolio with the
launch of Vivel Di Wills and Vivel brands. Vivel Di Wills, a range of soaps, and Vivel,
a range of soaps and shampoos, cater to the specific needs of a wide range of
consumers.

Backed by consumer insights, these ranges offer the unique value proposition of
providing the multiple benefits of Nourishment, Protection and Hydration in every
single product. Thus providing, the ever-discerning consumer, complete care.

The Vivel Di Wills range is available in two variants. Its unique carton pack has been
developed by ITC's design team to provide a novel consumer experience.

• Vivel Di Wills Sheer Radiance is enriched with Olive Oil, to

provide skin lustre to make it radiant.

• Vivel Di Wills Sheer Crème is enriched with Shea Butter,

to moisturize skin to make it soft and supple.

The Vivel range of soaps is available in four variants:-

• Vivel Young Glow is enriched with Vitamin E and Fruit

Infusions which help in providing youthful glow to the skin.

• Vivel Satin Soft is enriched with Vitamin E and Aloe Vera

which help the skin feel beautifully soft.

• Vivel Sandal Sparkle is enriched with Sandalwood Oil and

Active Clay which helps in providing clear skin.

• Vivel Ayurveda Essence is enriched with multiple Ayurvedic

Ingredients which help protect skin from germs and harsh
environment, keeping it healthy and beautiful.

44 | P a g e
The Vivel range of shampoos is available in three variants:-

Vivel Shine & Glow is suitable for dull to normal hair

and is enriched with Green Tea Extract and
Conditioners. It adds shine to hair.

Vivel Soft & Fresh is suitable for dry to normal hair

and contains Extra Conditioners and Soya Protein. It
makes hair soft and fragrant.

Vivel Volume & Bounce is suitable for oily to normal

hair and contains Jojoba Oil and Conditioners. It adds
volume and bounce to hair.

In the popular segment, ITC has launched a range of soaps and shampoos under the
brand name Superia.

Superia Soaps enriched with natural ingredients give radiant glowing skin. Superia
Soaps are available in four variants :

1 Fragrant Flower: with the fragrance of Rose & Lavender

. Oil

2 Soft Sandal: with the fragrance of Sandal & Almond Oil

.

3 Natural Glow: with Neem & Coconut Oils

.

4 Healthy Glow: with Orange Oil

.

45 | P a g e
Superia shampoos with triple conditioners and natural ingredients
bring a natural shine to hair. Superia shampoos are available in two
variants:

Shiny Black with Triple Conditioners and the natural goodness of

Hibiscus & Brahmi extracts.

Vibrant Green with Triple Conditioners and the natural goodness of

Amla & Arnica extracts.

Another addition to the Superia shampoo portfolio, Superia Maxi

Protect Active Health shampoo contains Dandruff Fighter along with
Vitamins & Soya Protein. It fights multiple types of dandruff causing
germs and leaves hair & scalp feeling clean & healthy.

DABUR

Dabur India Limited is India's leading FMCG company with

interests in health care, personal care and foods. Dabur has a history of more than
100 years and the company has carved a niche for it self in the field of Ayurvedic
medicines. The products of Dabur are marketed in more than 50 countries
worldwide. The company has 2 major strategic business units (SBU) - Consumer
Care Division (CCD) & Consumer Health Division (CHD), and 3 Subsidiary Group
companies - Dabur Foods, Dabur Nepal and Dabur International. Dabur International
has 3 step down subsidiaries - Asian Consumer Care in Bangladesh, African
Consumer Care in Nigeria and Dabur Egypt.

46 | P a g e
The origin of Dabur can be traced back to 1884 when Dr. S.K. Burman started a
health care products manufacturing facility in a small Calcutta pharmacy. In 1896,
as a result of growing popularity of Dabur products, Dr. Burman set up a
manufacturing plant for mass production of formulations. In early 1900s, Dabur
entered the specialized area of nature based Ayurvedic medicines. In 1919, Dabur
established research laboratories to develop scientific processes and quality checks.
In 1936, Dabur became a full-fledged company with the name Dabur India (Dr. S.K.
Burman) Pvt Ltd. Dabur shifted its operations to Delhi in 1972. Dabur became a
Public Limited Company in 1986 and Dabur India Limited came into existence after
reverse merger with Vidogum Limited. In 1992, Dabur entered into a joint venture
with Agrolimen of Spain to manufacture and market confectionary items in India. In
1994, Dabur raised its first IPO. In 1998, day to day running of the company was
handed over to professionals. In 2000, Dabur achieved a turnover of Rs 1000
crores. In 2005, Dabur acquired Balsara. Dabur crossed $ 2 billion market cap in
2006.

Some of the well-known brands of Dabur are: Amla Chyawanprash, Hajmola, Lal
Dantmanjan, Nature Care, Pudin Hara, Babool Toothpaste, Hingoli, Dabur Honey,
Lemoneez, Meswak, Odonil, Real, RealActiv and Vatika.

47 | P a g e
VATIKA SHAMPOO
The natural shampoo that conditions from deep within, while gently cleansing and
nourishing your hair. Created by the Vatika Expert with a perfect balance of natural
ingredients like henna, green almonds and Shikakai. Unlike chemical shampoos that
are harsh, Vatika is mild on your hair, leaving it soft, silky and radiant, with the
gentle and caring touch of nature.

More then Vatika basic care,vatika dandruff shampoo is popular.

For persistent dandruff problem, Vatika Anti-Dandruff Shampoo is the natural
choice. This herbal treatment is completely safe and cures dandruff from within.
Enhancing your hair’s natural beauty, without damaging or making it

Vatika Anti - Dandruff Shampoo uses the natural goodness of lemon and henna.
Cleaning and curing difficult dandruff, while conditioning the hair to give it body and
strength.

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CAVIN KARE

Success is a journey not a destination. CavinKare began with a young mind

choosing the road less taken. In 1983 with a single product, CavinKare started out
as a small partnership firm. The Company that began its journey as Chik India Ltd
was renamed as CavinKare Pvt. Ltd (CKPL) in 1998. With innovative Entrepreneur
C.K. Ranganathan at the helm, CavinKare emerged into a successful business
enterprise.

Smart marketing and clear product positioning not only ensured CavinKare's growth
but also helped the company broaden its product portfolio extensively. The
company now markets ten major brands. Over the years, CavinKare has achieved a
competitive edge with sound understanding of mass marketing dynamics. The
company offers quality Personal care (hair care, skin care, home care) and Food
products borne out of a keen understanding of consumer needs and keeping up
company's the values of innovation and customer satisfaction.

Today, CavinKare, having established a firm foothold in the national market, is

increasing its popularity in the international arena. A dedicated Research &
Development centre, equipped with latest equipment and technologies, constantly
supports the various divisions in their endeavour. The Company, which primarily
relied on contract manufacturing for many years has now set up its own world class
plant at Haridwar to cater to the demand of both domestic and international
market.

CavinKare has touched a turnover of over 5000 million INR in 2007-2008. The
Company has employee strength of 976, an all India network of 1300 Stockists
catering to about 25 lakh outlets nationally. CavinKare's astute professionalism,
innovative products and consistent quality are results of its significant corporate
practice.

CHIK SHAMPOO

49 | P a g e
 Just a mention of Chik Shampoo today gives rise to varied perceptions. To the rural
and semi urban population of India, it is the preferred daily shampoo. To the market
and its players, the second largest selling shampoo in the country. To the
competition, a case study in competitive strategy

In a highly competitive FMCG category that seemed impenetrable to most

marketers. Chik Shampoo identified a humongous opportunity in rural and semi
urban India and created waves with its entry into these markets. Combining
innovative sachet packing, strategic pricing (At Re.1 and 50p) and a strong and
motivated distribution network, Chik Shampoo transformed the very nature of
shampoo packaging and usage.

THE CHIK PROMISE

With a tropical climate round the year, it is indeed a difficult task to maintain hair
softness and shine. Added to this, tangled hair has come to be the most common
complaint to girls and women. The Research and Development team at CavinKare
recognized softness and manageability to be the key issues in the maintenance and
nourishment of hair.

This paved the way for a unique formula – Active Double Conditioners that cut
across age, sex and loyalists of other shampoos to adopt Chik Shampoo. Further,

50 | P a g e
extensive communication targeted at the rural and semi urban masses showcased
the possibility of soft and manageable hair. The iconic Chik Girl in every Chik
Shampoo commercial treated her hair with the shampoo and demonstrated with
atmost ease and confidence her ability to untangle her hair with just a single motion
of running her fingers through her hair. Her testimonial signature Yun Kiya Ho Gayal
has come to be a popular phrase amongst both girls and women today.

THE CHIK USER

Chik Shampoo has always targeted both, girls and women in rural and semi urban
India. The brand has gained their confidence and become a household name by
catering to their continuously evolving requirements and preferences.

Chik Shampoo has always targeted both, girls and women in rural and
semi urban India. The brand has gained their confidence and become a
household name by catering to their continuously evolving requirements
and preferences.

51 | P a g e
4 P’S ANALYSIS OF PANTENE PRO-V
PRODUCT:
Clearly, Shampoo is more than just shampoo when P&G sells it. P&G’s great success
in the rough-and-tumble shampoo world comes from developing an innovative
product concept. An effective product concept is the first step in marketing-mix
planning.

Philip Kotler defines product as Anything that can beoffered to a market for
attention, acquisition, use or consumption that might satisfy a -want or need. It
includes physical objects, services, persons,places, organizationsand ideas.

Product planners need to think about the product on three levels. The most basic
level is the core product, which addresses the question: What is the buyer really
buying?

Theodore Levitt has pointed out that buyers 'do not buy quarter-inch drills; they buy
quarter-inch holes'. Thus when designing products, marketers must first define the
core of benefits that the product will provide to consumers.

The product planner must next build an actual product around the core product.
Actual products may have as many as five characteristics: a quality level, features,
styling, a brand name and packaging.

product is more than a simple set of tangible features. Consumers tend to see
products as complex bundles of benefits that satisfy their needs.

52 | P a g e
Source: Philip Kotler European Edition

We will now discuss our product Pantene under the following heads:

Form:

It is available in the both premium bottle pack as well as satchets.

FEATURES:

The Pantene has whole range of shampoos with different features. These are
Volume Care, Smoothing Care, Color Care, Curl Care and Basic Care, anti –
dandruff, anti-hair fall etc.

SIZE OF PACKAGE

Available in 100 ml,200 ml and 400 ml sizes

BRAND:

53 | P a g e
Pantene Pro-V continues to create a line of products that transforms dull, dry, limp
hair into healthy, shiny hair. Their slogan: “Hair so healthy, it shines!” Each of the
pro-vitamin essentials has been formulated to meet a special hair care need, in
particular panthenol.

Pantene has recently been awarded “Asia’s favorite Shampoo” in the Readers
Digest Super Brands Survey.

Pantene is currently facing issues with intense competition, but their unique Pro-
Vitamin ingredient makes hair strong and healthy. “P&G is now one of the world’s
largest beauty companies” (P&G Annual report). P&G states that Pantene is the
world’s largest hair care brand and that it grew in double digits over the last two-
years. P&G claims that this success is due in part to their unsurpassed hair
conditioning technology.

The global retail hair care market is a $34 billion industry. P&G has annual sales of
more than $4.5 billion with leading brands like Pantene. Pantene’s position in the
market is by attribute, claiming “Hair so Healthy it Shines” and their latest is a hair
care challenge saying, “Healthier Hair in just 10 Days. Guaranteed.” Pantene uses
price to slightly separate itself from its in-store competitors. The price for Pantene
products is slightly higher, identifying it as a better product. Pantene is also
positioned around the product user. It has recently done commercials with
actresses like Katrina Kaif,Sushmita Sen,Lara Dutta.” Lastly Pantene is positioned
by the competitor. It is perceived as a product that maintains great hair and
according to the sales figures it is perceived as a better product by consumers.

54 | P a g e
PRICE:

As mentioned above the 200 ml bottle was available for Rs 98 and 100 ml for Rs
51.But very recently Pantene had reduced the prices and now the same 200 ml
bottles are available for Rs 89 and 100 ML FOR Rs 41.

P&G has basically adopted Geographical pricing strategy for Pantene.They have set
different prices for Pantene in different countries.This is a very good strategic
method as it captures the local conditions as well as purchasing power of the local
population.

When Pantene launched Lively Clean,it adopted Promotional Pricing for it and
launched it at an introductory price of R78 for 200 ml bottle

It has also introduced Bundle Pricing where it has clubbed two or more products and
sold them at a reduced price.But this strategy has not been very successful as it
eroded the premium image of the Shampoo and gave the impression of desperation
of the company.

55 | P a g e
Around 2 years back in 2006 P&G reduced the rates of Pantene by 16%. By this
way what P&G did was cutting its bottle's premium over sachets. At the same time
P&G is reducing the price gaps between its own brands. While Pantene and Head &
Shoulders were sold at nearly similar price points, bringing down Pantene prices
placed it between Rejoice (Rs 39 for 100 ml) and Head & Shoulders (Rs 64 for 100
ml) and thereby segment P&G's shampoo brands at different price points. This
strategy is known as Product Line Pricing.

Very recently Pantene has changed its pricing approach and experimented with
Value Pricing Strategy. In this Procter & Gamble made dramatic and long-term
changes in its pricing and promotion strategy during which it boosted
advertising while simultaneously curbing its distribution channel deals
(in-store displays, trade deals), and significantly reducing its coupon
promotions. It is interesting to note that P&G's value pricing strategy regarding
Pantene is quite a misnomer. During this period many stores were switching to
EDLP (every day low pricing) policies, which meant that consumers would save on
their overall purchase without having to deal shop. In contrast, P&G strategy
essentially was a disguised price increase; coupons were cut by 50%, which
contributed to an increase in the customer's price paid by 20%. It is possible that
P&G lowered their wholesale price, but the retailer only enjoyed higher margins and
did not pass the savings on to the customer. Another possibility is that retailers
lowered retail prices consistently, following P&G's decrease in wholesale price, but
once promotional trade deals are factored in those everyday lower wholesale prices
did not result in a lower total price paid. For example, if P&G's old price was Rs20,
but gave deals of Rs15, at which price 90% of purchases were made, the wholesale
price equaled Rs15.7 (.90*15 + .10*20). If P&G set a "Value Price" point of Rs18,
but 100% of purchases we were made at that price, the retailer enjoyed no cost
savings-only a cost increase. If P&G had truly offered price cuts their results may
have been much different.

PROMOTION:

56 | P a g e
 The promotional strategy of Pantene is highly useful and effective. Using magazine
print advertisements and commercials allows for the opportunity to segment their
advertisements by specific magazines, specific TV shows, and specific time slots.
These strategies provide Pantene with the opportunity to wisely advertise to their
target audience.

• Pantene’s use of advertising with different ethnicities, hair types, and ages has
proven to be a critical factor because they are now developing specific hair care line
for different types of ethnicities; they were voted Asia’s number one shampoo, and
they are a highly marketable product in Europe.

• Without promotion this brand would be relatively unknown and its popularity
would not be near what has been established with promotion. Many times when a
consumer sees a product in the store that they have not heard of they will browse
over it and choose a product they know. Consumer and market knowledge are
prevalent because Pantene and P&G are built around what consumers want.

○ Public Relations is a large aspect of the P&G/Pantene promotional mix. Proctor &
Gamble does things like raising funds for children who suffer from malnutrition in
India and Pantene recently put on the “Condition for a Cause” campaign, donating
money to heart disease research. Sales Promotion is also alarge factor for Pantene,
they use marketing and business techniques to try and improve consumer’s lives.
They are always finding new and better ways to reach their consumers and
between their PR campaigns and advertising they are constantly appealing to
consumers and causing them to trust Pantene.

Personal selling is not an aspect of Pantene’s promotional selling and it would not
be wise to incorporate it. Personal selling often comes off as a sleazy salesman’s
cheap and last minute effort. Pantene’s print and TV advertisements are enough for
Pantene to bring in new customers and frequently remind its loyal customers that it
is still in the stores and going strong. Personal Selling would also be a pricey move
that would hinder rather than aid Pantene’s efforts. Lastly, advertising is an
enormous part of Pantene’s promotional mix. Without the current advertising
strategies and past ones as well, Pantene wouldn’t be the widely known and the
highly used brand that it is today.

57 | P a g e
 • The distributor needs to be aware of the brands state in the market, they
should have information on the product in order to decide if they want to be
associated with that product and if so, they will need to know enough about
the product to aid customers in finding a shampoo that is best for the them.
The idea would be to establish a relationship with as many retailers as
possible to make the brand the recommended one. Consumers need to know
as much as possible about the product. They do not want to feel as if the
company is hiding something from them and they want to be able to trust the
products they are using. Information like the ingredients, different products
the brand carries, efforts made by the brand to help others and humanity are
all factors that could affect a sale. Distribution as much information as
possible is a good idea for the company.

• The purpose in using aspects of the promotional mix is to build brand equity,
brand awareness, and frequently put our advertisements and name into the
public to be seen. The frequency in which the ads are seen is as important as
the message we are providing.

58 | P a g e
 • Pantene also gives out free samples to anyone. When visiting their website
there will be a small box of information about samples to the right, when the
online visitor clicks on that they will find that if they provide Pantene with
information about themselves they will be sent free samples. Pantene has
recently run out of free samples and leads the consumer to an apology page
which in turn directs the consumer to the page for their most recent
sweepstakes.

•Endorsers: global celebs like Hollywood stars Kirsty Alley, Rachel Hunter, Liv Tyler,
Angie Everhart and Kelly Lebrock, among others have endorsed Panteen In India,
Sushmita Sen, Katrina Kaif, Bipasha Basu, Shilpa Shetty, Sonali Bendre and Simone
Singh are among the brand ambassadors.Lara Dutta is the most recent celebrity
who has got associated with the brand.A noticeable thing about pantene
advertisements is that always Asian women are shown who have thick,long,dark
hair.

59 | P a g e
60 | P a g e
• In response to the change in appearance and types of product Pantene has said
that this change was for the better and it is easier than ever to choose
which product is best for the individual consumer. Simply pick the Pantene version
that names how you want your hair to look: Volume Care, Smoothing Care, Color
Care, Curl Care and Basic Care.

61 | P a g e
Each collection includes a shampoo, conditioner, treatment and styling products
that helps the consumer achieve their unique look. Not only did they change their
products to match the consumer’s desired style, they claim to have improved their
technologies.

• Pantene also claims that its products have ingredients that set it apart from the
competition. They state that each line of products in their collections has the right
combination to give customers the benefit that is “spelled out in the name of the
product.”

• Validity: “We conduct extensive scientific research and laboratory testing, as well
as in-home and clinical testing, to make sure our advertising claims are factual.
Because of the competitive nature of our business, though, we're unable to provide
details to individuals about the specific research we perform.”

• Hair care companies are building on the desire for women to maintain a young,
natural, and fresh look. Marketers are also beginning to key onto teenage girls
more. Girls ages 15-19 increased sales 6.9% from 1995- 2001.

• Pantene’s promotional tactics are ideal and we feel they are approaching the
target audience well.

PLACE:
Placement (or distribution): refers to how the product gets to the customer; for
example, point-of-sale placement or retailing. This fourth P has also sometimes
been called Place, referring to the channel by which a product or service is sold
(e.g. online vs. retail), which geographic region or industry, to which segment
(young adults, families, business people), etc. also referring to how the environment
in which the product is sold in can affect sales.

62 | P a g e
Pantene has an undoubtedly amazing design & distribution channel and this can be
supported

by the fact Pantene is one of the most easily available brands in the industry.

In 1998-1999. Pantene launched global corporate restructuring program called

Organization 2005,

and made several changes in structure, work processes and culture to generate
greater stretch, innovation and speed to help its products reach the market faster.

Pantene retails through Spencers,Reliance Fresh,More,RPG group and wide variety

of Kirana stores spread all over the country.

63 | P a g e
COMPETITIVE ANALYSIS OF PANTENE
Competitors are an essential part of any product’s scheme of operations.The
strategies adopted by competitors decide the operation plans for the product.So,it
becomes important to analyze the competitors on the basis of all the criterias. But
scope of this project limits us to the competitive analysis based on the 4 P’s frame
work.The main competitors for Pantene are Sunsilk from HUL,Fiamma Di wills from
ITC,Halo from Colgate Palmolive and Vatika from Dabur India Ltd.

Competitive analysis based on:

PRODUCT:

In October, 1998 Pantene extended its product line and announced that Pantene
Pro-V would be renamed Pantene Ultra-V due to a revamped formula and package.

In response to the change in appearance and types of product Pantene has said
that this change was for the better and it is easier than ever to choose which
product is best for the individual consumer.

Pantene has named it products in a way that they represent how you want your
hair to look: Volume Care, Smoothing Care, Color Care, Curl Care and Basic Care.
Each collection includes a shampoo, conditioner, treatment and styling products
that helps the consumer achieve their unique look. Not only did they change their
products to match the consumer’s desired style, they claim to have improved their
technologies.

Pantene also claims that its products have ingredients that set it apart from the
competition. They state that each line of products in their collections has the right
combination to give customers the benefit that is “spelled out in the name of the
product.”

64 | P a g e
 Pantene claims to conduct extensive scientific research and laboratory testing, as
well as in-home and clinical testing, to make sure their advertising claims are
factual.

Pantene claims to have competitive advantage on the basis of its generics and its
innovations. It has Pro Vitamin B-5 with conditioning capabilities and P&G has
based its promotion on this basic ingredient only.

Comparison of various shampoos on the basis of product attributes

Product Volume Conditioni Smoothi Curl Anti Color Basic

attributes ng ng care Hair care Care
Boost Fall
care

Pantene yes yes yes yes Recentl yes yes

y
launch
ed

Sunsilk yes yes no no yes no yes

Fiamma Di yes yes yes no no no yes

Wills

Dabur Vatika yes yes yes no no no yes

Chik no yes yes no yes no yes

Shampoo

We can see that Pantene surely has an edge on the other players in the market in
the features of product.It has got many variants as compared to the players in the
market.It has come up with a big line up of shampoos ranging from Basic Care for
normal hair to curl care for hair with heavy curls.Then there is a shampoo for people

65 | P a g e
with color hair.Apart from this they also provide anti hair fall and anti dandruff
shampoo.

But if we see the shampoo line up of other competitors we can see that no other
competitor is present in all the categories at one go.

Out of all the competitors only Sunsilk by Unilever gives it a close fight.

Price:
Before analyzing the prices first lets have a look at the prices of players in the
market:

Product/size 100 ml 125 ml 200 ml 250 ml 400 ml

Pantene Rs 47 N.A Rs.89 N.A Rs.155

Sunsilk N.A Rs.50 N.A Rs 98 Rs 150

Fiamma di wills Rs.50 N.A Rs 112 N.A Rs158

Dabur Vatika Rs. 46 N.A Rs.100 N.A Rs.142

Chik Rs 46 N.A Rs 86 Rs 144

66 | P a g e
As we can see that the ,main competitor of Pantene in terms of prices are
Sunsilk,Fiamma Di Wils,Chik ,Dabur Vatika etc.

The competitors who sell for a cheaper price include Vatika for 100 ml,Chik for all
100 ml,200 ml and 400 ml,Sunsilk for 400 ml.

We can see that though P&G has adopted value pricing strategy for Pantene,its
prices are still a notch higher then that of its competitors.

Its main competition is from Sunsilk which belongs to same premium segment and
we can observe that Sunsilk is placed at better prices as compared to Pantene.

We can see that 100 ml of Pantene is available in Rs 47 whereas at almost same

price we get 25 ml more of sunsilk(125 ml for Rs. 50)

In the 400 ml category,Pantene is the second most expensive shampoo after Fiamm
Di Wills wich is launched only 6-7 months back.

67 | P a g e
Promotion:

• The latest campaign from the stable of Pantene is Shine Pantene. With this
campaign they have positioned themselves on the stand that their product is
the best for providing shine to hair.To strengthen this Shine Campaign they
have modeled their bottles as Pearly White. Sunsilk on the other other hand
have modeled their bottles in the form of a Lady’s figure.They have
targeted the Psychology of women and the structure of their bottles gives
the same impression that this shampoo is made for the women and suits
their needs the best.

• Pantene’s use of advertising with different ethnicities, hair types, and ages
has proven to be a critical factor because they are now developing specific
hair care line for different types of ethnicities; they were voted Asia’s number
one shampoo, and they are a highly marketable product in
Europe.Compared to this all the other shampoos(fiamma di willis
,Chik,Vatika)are home grown brands and they don’t have the advantage of
the global operations of P&G.
• Pantene has also associated itself with many charitable events as well as
Beauty Contests and many movies functions. Among all the competitors only
Sunsilk has the resources to promote itself through personal relations.Rest of
the brands are just local players in this respect.

• Personal selling is not an aspect of Pantene’s promotional selling and it would

not be wise to incorporate it. Personal selling often comes off as a sleazy
salesman’s cheap and last minute effort. Pantene’s print and TV
advertisements are enough for Pantene to bring in new customers and
frequently remind its loyal customers that it is still in the stores and going
strong. Some of its competitors like Cavin Kare have used this strategy also
at the primary level.
• Many A grade celebs have associated themselves with Pantene whereas with
Chik there are no popular celeb associated.A B grade movie actress Riya sen
is the brand ambassador of Vatika and a newcomer like Deepika Padukone is
now the amabassador for Fiama si willis.Pantene is really a power house if we
talk in terms of the celebrity power.

68 | P a g e
Place:

Placement (or distribution): refers to how the product gets to the customer; for
example, point-of-sale placement or retailing. This fourth P has also sometimes
been called Place, referring to the channel by which a product or service is sold
(e.g. online vs. retail), which geographic region or industry, to which segment
(young adults, families, business people), etc. also referring to how the environment
in which the product is sold in can affect sales.

Pantene has an undoubtedly amazing design & distribution channel and this can be
supported

by the fact Pantene is one of the most easily available brands in the industry.

In 1998-1999. Pantene launched global corporate restructuring program called

Organization 2005,

and made several changes in structure, work processes and culture to generate
greater stretch, innovation and speed to help its products reach the market faster.

Pantene retails through Spencers,Reliance Fresh,More,RPG group and wide variety

of Kirana stores spread all over the country.

Among the competitors only P&G has a distribution network comparable to that of
Pantene as its is also a global biggie.Other companies are still trying to catch up
with these companies.

69 | P a g e
COMPETITIVE ADVANTAGE
Under the marketing concept, companies gain competitive advantage by designing
offers that satisfy target-consumer needs better than competitors offers. They
might deliver more customer value by offering consumers lower prices than
competitors for similar products and services, or by providing more benefits that
justify higher prices. Marketing strategies must consider the strategies of
competitors as well as the needs of target consumers. Some of the main points that
constitute the competitive advantage of P&G in general and Pantene in specific are:

P&G is one of the largest FMCG companies in the world. Its main competition is with
Unilever which has almost equal presence in the world. Procter and Gambles sales
as of November 21st, 2003 reached $44,776 million. Below are some of the
company’s key statistics for the year 2007

Source:P&G annual report,2007

Pantene is known worldwide. It was the best selling hair care line in 1995. Pantene
is known to create healthy, shiny hair.

70 | P a g e
It has Panthenol or Pro-Vitamin B5 which has the qualities to make hair shiny and
strong.

It has a very strong distribution network.Wal Mart. K-mart,Spencers,Reliance

Fresh,More etc are among its retailers.Apart from these it hasn’t neglected the
small stores or Mom and Pop stores. They are equally important component of its
supply chain and distribution network.

It is cheaper than other elite brands(Estee Lauder,L’oreal,Revlon,Salons) but always

counted among the good brands in the market.

P&G has one of the largest advertising expenditures in the whole world.Following is
the Proctor& Gamble’s advertising expenditures: In 1998 P&G’s advertising expense
reached $3,801 and dropped a little to $3,639 in 1999. From 1999 to 2002 the
advertising expenditures level off from 3,600 to 3,780. In 2003 advertising
expenditures rose from 3,773 to 4,373. Out of this, expenditure on Pantene was
$1342.

P&G is known for its innovation.It has a large diverse portfolio of products.It has got
several awards for innovation and that comes alive into its Pantene product range
as well.

Pantene ‘s customer base is also its very significant competitive advantage.It

targets women and girls and they constitute its loyal customer base.

Pantene has a good Brand Equity and there are always new kinds of hair types that
it markets to. P&G intends to build brand equity by developing distinctive products
that stand for something and that have a definite position in the market. They want
to communicate the products benefits as compared to the competitor, with a brand
that is so amazing, appealing, and reliable that the consumer begins to trust the
brand.

As per the report by Wachovia Corporation on Economics,Pantene is the most

favored brand worldwide.This gives a boost to its image and strengthens it further.

“Pantene Pro-V care collections are formulated to meet the styling needs of people
from all ethnicities.All the customers can gain personalized guidance from the
experts at the website.

71 | P a g e
Pantene appeals to a wide variety of nationalities, and not all nations feel the same
about hygiene as the American culture. Many women may find choosing the right
shampoo a limited-decision making process and other an extended decision-making
process. All women are different and with extensive reach Pantene strives for it is
difficult to pinpoint one concept.

72 | P a g e
PROMOTIONAL STRATEGY
The promotional strategy of Pantene is highly useful and effective. Using magazine
print advertisements and commercials allows for the opportunity to segment their
advertisements by specific magazines, specific TV shows, and specific time slots.
These strategies provide Pantene with the opportunity to wisely advertise to their
target audience.

• Pantene’s use of advertising with different ethnicities, hair types, and ages has
proven to be a critical factor because they are now developing specific hair care line
for different types of ethnicities; they were voted Asia’s number one shampoo, and
they are a highly marketable product in Europe.

• Without promotion our brand would be relatively unknown and its popularity
would not be near what has been established with promotion. Many times when a
consumer sees a product in the store that they have not heard of they will browse
over it and choose a product they know. Consumer and market knowledge are
prevalent because Pantene and P&G are built around what consumers want.

• Public Relations is a large aspect of the P&G/Pantene promotional mix. Proctor &
Gamble does things like raising funds for children who suffer from malnutrition in
India and Pantene recently put on the “Condition for a Cause” campaign, donating
money to heart disease research. Sales Promotion is also a

73 | P a g e
large factor for Pantene, they use marketing and business techniques to try and
improve consumer’s lives. They are always finding new and better ways to reach
their consumers and between their PR campaigns and advertising they are
constantly appealing to consumers and causing them to trust Pantene. Personal
selling is not an aspect of Pantene’s promotional selling and it would not be wise to
incorporate it. Personal selling often comes off as a sleazy salesman’s cheap and
last minute effort. Pantene’s print and TV advertisements are enough for Pantene to
bring in new customers and frequently remind its loyal customers that it is still in
the stores and going strong. Personal Selling would also be a pricey move that
would hinder rather than aid Pantene’s efforts. Lastly, advertising is an enormous
part of Pantene’s promotional mix. Without the current advertising strategies and
past ones as well, Pantene wouldn’t be the widely known and the highly used brand
that it is today.

• The distributor needs to be aware of the brands state in the market, they should
have information on the product in order to decide if they want to be associated
with that product and if so, they will need to know enough about the product to aid
customers in finding a shampoo that is best for the them. The idea would be to
establish a relationship with as many retailers as possible to make the brand the
recommended one. Consumers need to know as much as possible about the
product. They do not want to feel as if the company is hiding something from them
and they want to be able to trust the products they are using. Information like the
ingredients, different products the brand carries, efforts made by the brand

to help others and humanity are all factors that could affect a sale. Distribution as
much information as possible is a good idea for the company.

• The purpose in using aspects of the promotional mix is to build brand equity,
brand awareness, and frequently put our advertisements and name into the public
to be seen. The frequency in which the ads are seen is as important as the message
we are providing.

• Pantene also gives out free samples to anyone. When visiting their website there
will be a small box of information about samples to the right, when the online visitor
clicks on that they will find that if they provide Pantene with information about
themselves they will be sent free samples. Pantene has recently run out of free
samples and leads the consumer to an apology page which in turn directs the
consumer to the page for their most recent sweepstakes.

74 | P a g e
•Endorsers: global celebs like Hollywood stars Kirsty Alley, Rachel Hunter, Liv Tyler,
Angie Everhart and Kelly Lebrock, among others have endorsed Panteen In India,
Sushmita Sen, Katrina Kaif, Bipasha Basu, Shilpa Shetty, Sonali Bendre and Simone
Singh are among the brand ambassadors.Lara Dutta is the most recent celebrity
who has got associated with the brand.A noticeable thing abouth pantene
advertisements is that always Asian women are shown who have thick,long,dark
hair.

• In response to the change in appearance and types of product Pantene has said
that this change was for the better and it is easier than ever to choose
which product is best for the individual consumer. Simply pick the Pantene version
that names how you want your hair to look: Volume Care, Smoothing Care, Color
Care, Curl Care and Basic Care.

Each collection includes a shampoo, conditioner, treatment and styling products

that helps the consumer achieve their unique look. Not only did they change their
products to match the consumer’s desired style, they claim to have improved their
technologies.

• Pantene also claims that its products have ingredients that set it apart from the
competition. They state that each line of products in their collections has the right
combination to give customers the benefit that is “spelled out in the name of the
product.”

• Validity: “We conduct extensive scientific research and laboratory testing, as well
as in-home and clinical testing, to make sure our advertising claims are factual.
Because of the competitive nature of our business, though, we're unable to provide
details to individuals about the specific research we perform.”

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• Hair care companies are building on the desire for women to maintain a young,
natural, and fresh look. Marketers are also beginning to key onto teenage girls
more. Girls ages 15-19 increased sales 6.9% from 1995- 2001.

• Pantene’s promotional tactics are ideal and we feel they are approaching the
target audience well.

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PRICING STRATEGY

Procter & Gamble is a giant in household products, and the company which defined
many marketing strategies we now take for granted. It was the first company to
advertise nationally direct to consumers (in 1880) and it literally created the
concept of "soap opera" by sponsoring radio and television dramas targeting
women. Other inventions included the first Fluoride-based toothpaste (Crest), the
revolutionary synthetic detergent Tide, and the first disposable nappy, Pampers. P&G
found life in the first years of 21st century more difficult than it may have expected,
with earnings below expectations and a series of management shake-ups as a
result of under-performance. The group got back on track during 2002 with the
purchase of Clairol and Wella and a renewed focus on core products. Following
dynamic performance in 2003 and 2004, P&G demonstrated the strength of its
recovery with the announcement in 2005 that it had agreed a deal to acquire
legendary personal care products rival Gillette. Advertising Age estimated global
measured advertising expenditure of $8.5bn in 2006, making P&G th

Procter & Gamble made dramatic and long-term changes in its pricing and
promotion strategy for Pantene during which it boosted advertising while
simultaneously curbing its distribution channel deals (in-store displays, trade deals),
and significantly reducing its coupon promotions.

It adopted value pricing strategy wich further influenced its future marketing
decisions.

THE SCENARIO

In the early 1990's Procter & Gamble made dramatic and long-term changes in its
pricing and promotion strategy. Procter & Gamble (P&G), a leading consumer
packaged goods producer, instituted a "value pricing strategy" during which it
boosted advertising while simultaneously curbing its distribution channel deals (in-
store displays, trade deals), and significantly reducing its coupon promotions.

THE DETAILS

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What inspired P&G to initiate this value pricing strategy? First was logistical
efficiency. P&G was concerned with the cost of administering promotions, and the
effect of up-and-down swings in demand on the production system. Second, P&G
was concerned with the impact of promotions on brand loyalty, fearing that on one
hand they attracted "cherry-picking" bargain hunters who could care less about the
brand, and on the other hand they weakened the loyalty of their core customers. It
is also thought that one of the prime architects of the strategy, senior executive
Dirk Jager, personally disliked coupons with a passion. These factors inspired P&G to
break with standard marketing practices. As a result, over the course six years
(1990 through 1996) P&G reduced its coupon expenditures by over 50%, reduced
its distribution channel deal expenditures by 20%, and increased its advertising
expenditures by 20%. This was truly a contrarian strategy as during the same
period general market trends showed an increase in promotion (deals and coupons)
by 15% and a decrease in advertising by 20%.

What were the goals of value pricing? First, it sought to improve efficiency. The
administrative and production costs for promotions, deals, and coupons were
becoming increasingly expensive and cumbersome for P&G, distributors, and
retailers. Second, since the theory was that coupons and deals only invited brand
switching and destroyed brand loyalty, cutting back on deals should leave P&G with
a stronger brand franchise. And to top it off, coupon fraud was also growing at this
time with supposed nefarious links to organized crime and terrorist funding. Cutting
back on coupons would obviously sever this link.

From 1990 -1996, the net price paid by consumers of P&G products increased
20.4% (due to the decrease of coupons use by 54.3%, and reduction in price cuts).
Meanwhile P&G increased advertising by 20.7%, and decreased channel deals by
15.7%.

What was the competitive reaction? During the same time period, the overall
competition's (including companies such as Colgate, Unilever, and Gillette) net price
paid increased 10%, advertising increased 6.3%, deals increased 13.1%, and
coupons decreased 171%. Of the three competitors,

only Gillette lowered prices and it increased coupons use by 127.6% -- far more
than Colgate. Overall, the competition did not completely cooperate with P&G, but
neither did it take full advantage in a mad grab for market share.

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What was the total impact on P&G? P&G's Value Pricing Strategy showed no change
in share of requirements or category usage, but it did end up with a reduced
penetration rate, which declined 16%. This was because the cut in promotions
resulted in fewer consumers buying P&G brands, and neither the cut in promotions
nor the increase in advertising had any appreciable effect on SOR. Overall, P&G's
market share decreased 16%. Although P&G lost market share, it is possible that its
profits remained stable or even increased. It lost 16% of share, but made up for this
through increased prices 20%, a lower cost of good sold, and efficiencies in
production. However, the increase in advertising expenditures may have wiped out
most of the cost savings. Despite gain or loss in profitability, P&G lost their strategic
and esteemed position as the market leader in the consumer packaged goods
industry. Traditionally, P&G had a sharp focus on market share leadership as the
ultimate metric of succesand yet for the first time since the 1950s, Colgate
overtook P&G's Crest as the market leader.

What happened to P&G's theory that price promotions reduce loyalty? Was this
myth or fact? Analyzing P&G's value pricing strategy shows that promotion cuts
decreased penetration but did not dramatically increase loyalty. So, P&G's initial
beliefs were myths indeed. Additionally, increasing advertising had little effect on
market share. Why? When you are the market share leader the effect of advertising
is diminished. Market share leaders already have high awareness levels, and unless
your advertising provides new compelling reasons to buy (usually rooted in
innovative product differentiation)

What was the effect of the competitive response? The competitors reacted to P&G's
strategy in a way that cushioned P&G's loss - the competition could have destroyed
P&G, but P&G's losses were mostly self-inflicted. Of the competitors, Gillette was
the only one to take a contrarian strategy and was fairly successful. What do you do
about sharp competitors like Gillette? As we saw recently, P&G decided to buy this
one.

In sum, sustained cuts in promotion result in lost share in the long run. Sustained
mass advertising expenditure increases for mature, high share brands do not pay
off in the long run. Mass advertising is better suited for immature, low share brands.
Finally, competitors may not "eat your lunch" if a company chooses a strategy that
makes them vulnerable. The competition likely faces the same challenges as your
company and may follow suit with policy changes.

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Market modeling is a powerful tool. Response modeling entails using mathematical
models to translate the rich market environment into mathematical equations in an
effort to quantify the impact of marketing initiatives. Modeling competitive market
response to major policy changes is important to understanding the long-term
results of those policy changes. The next major challenge for marketers is
predicting, in advance, how the market will react to future policy changes. When a
major policy change is implemented, it fundamentally changes the market; the
rules of the game are changed. Therefore, it is inherently inaccurate to predict the
results of major policy changes based on historical data because appropriate data
does not exist.

It is interesting to note that P&G's value pricing strategy is quite a misnomer.

During this period many stores were switching to EDLP (every day low pricing)
policies, which meant that consumers would save on their overall purchase without
having to deal shop. In contrast, P&G strategy essentially was a disguised price
increase; coupons were cut by 50%, which contributed to an increase in the
customer's price paid by 20%. It is possible that P&G lowered their wholesale price,
but the retailer only enjoyed higher margins and did not pass the savings on to the
customer. Another possibility is that retailers lowered retail prices consistently,
following P&G's decrease in wholesale price, but once promotional trade deals are
factored in those everyday lower wholesale prices did not result in a lower total
price paid. For example, if P&G's old price was $20, but gave deals of $15, at which
price 90% of purchases were made, the wholesale price equaled $15.7 (.90*$15 + .
10*$20). If P&G set a "Value Price" point of $18, but 100% of purchases wewere
made at that price, the retailer enjoyed no cost savings-only a cost increase. If P&G
had truly offered price cuts, their results may have been much different.

THE BIG PICTURE

The insights into P&G's grand experiment demonstrate to us the importance of
promotional pricing, and the diminished power of mass advertising for high share
players. Analysis of P&G's value pricing strategy allows us to see how major long-
term policy changes, not short-term marketing mix changes, affect market share
and competitors' reaction. Studying P&G's value pricing strategy offers the unique
opportunity for marketers to analyze major policy changes, obtain clearer
understanding of how marketing mix changes affect brands, learn about long-term
impacts of marketing changes, and inform future policy decisions. And it is also
important to note that success can be measured more than one way. In essence,
the P&G grand experiment may have been successful when measured by profits,
and at the time those profits were being used to invest in new innovations.
However, for a company that traditionally measured success by volume (market
share) its value pricing strategy truly had a large enough adverse impact on share
that it was eventually abandoned. Some broad strategies were also adopted for
Pantene.They are:

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P&G has basically adopted Geographical pricing strategy for Pantene.They have set
different prices for Pantene in different countries.This is a very good strategic
method as it captures the local conditions as well as purchasing power of the local
population.

When Pantene launched Lively Clean,it adopted Promotional Pricing for it and
launched it at an introductory price of R78 for 200 ml bottle

It has also introduced Bundle Pricing where it has clubbed two or more products and
sold them at a reduced price.But this strategy has not been very successful as it
eroded the premium image of the Shampoo and gave the impression of desperation
of the company.

MARKET ANALYSIS AND STRATEGIES

ADOPTED BY P&G FOR PANTENE
Market Analysis:

• Market size: As far as market share is concerned P&G was 15.4% higher than its
nearest competitor. In 1999 P&G recorded a market share value of 30.1%. From all
the graphs we found, P&G continues to grow to 43,337 million in net sales, 5,186
million in net earnings and 3.69 in net earnings per share all in 2007. Pantene is in
the mature stage of the product life cycle. With all the new products and product
developments, it is likely that itcould elevate back to the competitive stage.

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MARKETING STRATEGIES

When visiting www.pantene.com the viewer will find a list of countries worldwide;
each web visitor is expected to select their country in order to be taken to a
Pantene web page corresponding with their country and language).. Pantene has
recently added two new hair care lines to target to a more diverse group of women.
In July 2003 Pantene launched its “Pantene Long Black” line specifically for Indian
women whose culture values hair as a beautiful feature on a woman. The formula
darkens each strand uniformly from root to tip through intense moisturizing as well
as reducing damage. Pantene has recently been awarded “Asia’s favorite Shampoo”
in the Readers Digest Super Brands Survey. Also on the shelf next to the pearly
white

Pantene has sponsored many Beauty Contests and Bollywood events. And T.V
programs like NACH BALIYE 4 .

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It is also associated with many corporate social initiaitives like Indian Heart
Association for “condition for a Cause.

It has come up with many offers for women where in they can meet a celebrity and
get pampered like one.

Pantene markets to women and girls. They market to all ages, races, social classes,
and economic standings.

On Pantene’s website there is a list of frequently asked question. The customers

can become the member of the Pantene family and can have their log in ids using
which they can access the website and also make use of all the facilities available

There is also a feature of expert’s advice on the website where users can seek
solutions for all of their hair problems.

Their retailers are stores like, Wal-Mart, K-Mart,and Target worldwide and Reliance
Fresh.Spencers,More etc in India Pantene can be found in all sorts of discount
stores, drugstores, and supermarkets

Apart from this they have adopted Value Pricing strategy at different times to adjust
with the local conditions and purchasing power parity of the country.In thisProcter &
Gamble made dramatic and long-term changes in its pricing and promotion
strategy during which it boosted advertising while simultaneously curbing its
distribution channel deals (in-store displays, trade deals), and significantly reducing
its coupon promotions.

It is interesting to note that P&G's value pricing strategy regarding Pantene is quite
a misnomer. During this period many stores were switching to EDLP (every day low
pricing) policies, which meant that consumers would save on their overall purchase
without having to deal shop. In contrast, P&G strategy essentially was a disguised
price increase; coupons were cut by 50%, which contributed to an increase in the
customer's price paid by 20%. It is possible that P&G lowered their wholesale price,
but the retailer only enjoyed higher margins and did not pass the savings on to the
customer. Another possibility is that retailers lowered retail prices consistently,
following P&G's decrease in wholesale price, but once promotional trade deals are
factored in those everyday lower wholesale prices did not result in a lower total
price paid. For example, if P&G's old price was Rs20, but gave deals of Rs15, at
which price 90% of purchases were made, the wholesale price equaled Rs15.7
(.90*15 + .10*20). If P&G set a "Value Price" point of Rs18, but 100% of purchases
we were made at that price, the retailer enjoyed no cost savings-only a cost
increase. If P&G had truly offered price cuts,its sales would have been more.

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RECOMMENDATIONS

• P&G has a dubious pricing strategy.In india sometimes they adopt the
premium pricing and at other times they change it to value pricing.This
creates confusion in the mind of customer.
Our recommendation is that Pantene should stick to one strategy and
develop on it.
Fluctuating prices have chances to affect the mind of customers
negatively.This should be avoided.
• P&G should keep up the efforts of bringing in more and more innovative
products.This is because ultimately nothing works for a company more than
its products.
• Some rumors about the presence of wax in Pantene shampoo affected the
market.Such rumors should be severly dealt with as they affect the brand
loyalty as well as market share.
• There were some reports which said that Pantene tests its product on
animals which ultimately proves fatal to them.This created a big problem for
Pantene by the environmentalists.This project recommends Pantene to go
more herbal and environment friendly as it affects the company’s image in
the long run.
• Pantene is still not much known in the semi urban India.Stress should be laid
on the promotion of Pantene in the interior of country as well.

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