Institute for Integrated Learning in Management

Graduate School of Management

Project on:

Corporate Social Responsibility

On

FMCG Industry

SUBMITTED TO: SUBMITTED BY:

Dr. Rajul Singh Chandresh Sharma
FT-09-741
Sec-c
 FMCG Industry

About the company –

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.

Subsets 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.

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.

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

FMCG Companies Sales/Turnover Profit Total Assets

HUL 20,601.56 2,496.45 2,483.46

Dabur india 2,417.91 373.56 877.17

Colgate 1,770.82 290.22 220.98

Godrej 1,088.01 161.55 599.8

Marico 1,921.85 142.12 676.21

Godrej Ind 880.97 19.33 1,628.10

P and G 645.02 131.41 346.64

Gillette India 588.84 117.37 425.4

Emami 651.01 67.36 324.2

Jyothy Labs 350.85 40.88 352.51

The companies mentioned 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.

P&G History
In 1993, Procter & Gamble Home Products is incorporated as a 100% subsidiary of The Procter & Gamble
Company, USA. Procter & Gamble Home Products launches Ariel Super Soaker.

In 1993, Procter & Gamble India divests the Detergents business to Procter & Gamble Home Products. 

In 1995, Procter & Gamble Home Products enters the Hair care Category with the launch of Pantene Pro-V. 

In 1997 Procter & Gamble Home Products launches Head & Shoulders shampoo. 

In 2000, Procter & Gamble Home Products introduced Tide Detergent Powder - the largest selling detergent in
the world. 

In June 2000, Procter & Gamble Home Products Limited launched Pantene Lively Clean its unique Pro-Vitamin
formula cleans oil-build up, dirt and grime in just one wash, delivering lively, free-flowing and sparkling-clean
hair. 

In August 2000, Procter & Gamble Home Products Limited launched New Ariel Power Compact detergent with a
new global technology that breathes new life into clothes, by removing dinginess from them and restoring the
original colours of the fabric, by detecting and removing deposits which are left behind from successive washes. 

In November 2000, Procter & Gamble Home Products Limited presented India in the first International Hair
Styling and Beauty Expert Contest- Hair Asia Pacific 2000 in collaboration with Sri Lankan Association of
Hairdressers and Beautician. 

During this period, Procter & Gamble Home Products also re-launched the international range of Head &
Shoulders, best-ever Anti-dandruff shampoo with an improved formula, new pack-design and logo, in three
variants - Clean & Balanced, Smooth & Silky and Refreshing Menthol, which offers the fine combination of anti-
dandruff efficacy and hair conditioning. 

Procter & Gamble Co. (P&G, NYSE: PG) is a Fortune 500, American global corporation based in Cincinnati,
Ohio, that manufactures a wide range of consumer goods. As of 2008, P&G is the 23rd largest US Company by
revenue and 14th largest 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. Procter & Gamble
has expanded dramatically throughout its history, but its headquarters still remains in Cincinnati.
P&G's dominance in many categories of consumer products makes its brand management decisions worthy of
study. For example, P&G's corporate strategists must account for the likelihood of one of their products
cannibalizing the sales of another.

MISSION:

To 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

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

We attract and recruit the finest people in the world. We build our organization from within, promoting and
rewarding people without regard to any difference unrelated to performance. We act on the conviction that the
men and women of Procter & Gamble will always be our most important asset.

LEADERSHIP:
•We are all leaders in our area of responsibility, with a deep commitment to deliver leadership results
We have a clear vision of where we are going.
We focus our resources to achieve leadership objectives and strategies.
•We develop the capability to deliver our strategies and eliminate organizational barriers.
OWNERSHIP:
•We accept personal accountability to meet our business needs, improve our systems, and help others improve
their effectiveness.
•We all act like owners, treating the Company's assets as our own and behaving with the Company's long-term
success in mind.
INTEGRITY
•We always try to do the right thing.
•We are honest and straightforward with each other.
•We operate within the letter and spirit of the law.
•We uphold the values and principles of P&G in every action and decision.
•We are data-based and intellectually honest in advocating proposals, including recognizing risks.
PASSION FOR WINNING
•We are determined to be the best at doing what matters most.
•We have a healthy dissatisfaction with the status quo.
•We have a compelling desire to improve and to win in the marketplace.
TRUST
•We respect our P&G colleagues, customers, and consumers, and treat them as we want to be treated.
•We have confidence in each other's capabilities and intentions.
•We believe that people work best when there is a foundation of trust.

ENVIRONMENTAL
Environmental Quality Policy
Procter & Gamble is committed to providing products and services of superior quality and value that
improve the lives of the world's consumers . As part of this, Procter & Gamble continually strives to improve the
environmental quality of our products, packaging and operations around the world. To carry out this commitment,
it is Procter &Gamble's policy to:
•Ensure our products, packaging and operations are safe for our employees, consumers and the environment.
•Reduce, or prevent, the environmental impact of our products and packaging in their design, manufacture,
distribution, use and disposal whenever possible. We take a leading role in developing innovative, practical
solutions to environmental issues related to our products, packaging and processes. We support the sustainable
use of resources and actively encourage reuse, recycling and composting. We share experiences and expertise
and offer assistance to others who may contribute to progress in achieving environmental goals.
•Meet or exceed the requirements of all environmental laws and regulations. We use environmentally sound
practices, even in the absence of government standards. We cooperate with governments in analyzing
environmental issues and developing cost- effective, scientifically based solutions and standards.
•Continually assess our environmental technology and programs, and monitor progress toward environmental
goals. We develop and use state-of-the-art science and product life cycle assessment, from raw materials
through disposal, to assess environmental quality

SOCIAL

CSR:
There are various CSR activities carried out by P&G with genuine intention of giving back to the society. A few
highlighted have been discussed within this project.
They are:
•PROJECT SHIKSHA – SECURE YOUR CHILD’S FUTURE (2003)
•REBUILDING LIVES IN EARTHQUAKE HIT BHUJ (2001/2002)
•PROJECT POSHAN – FIGHTING MALNUTRITION IN INDIA
(2000)
PROJECT OPEN MINDS – EDUCATING INDIAS WORKING YOUTH
(1999)
•PROJECT DRISHTI – THE FIRST EVER SIGHT RESTORATION
PROGRM IN INDIA(1999)
•PROJECT FUTURE FOCUS - THE FIRST EVER ROUND WRITE IN
CAREER GUIDANCE SERVICE (1998)
•PROJECT PEACE - ENVIRONMENTAL EDUCATION PROGRAMME
(1996)

Let us now study each of these projects.

 PROJECT SHIKSHA – SECURE YOUR CHILD’S FUTURE (2003)
With a mission to make a difference to current alarming situation of children’s’ literacy, Procter & Gamble (P&G)
has joined hands with India’s premier child rights organization Child Relief and You (CRY) and Sony
Entertainment Television to launch ‘Shiksha’ , a program to help educate underprivileged children across India.
Under Shiksha, P&G and Sony appealed to their consumers and viewers to support the cause and make it easy
for them to do so - all an individual has to do is purchase a large pack of either Tide, Ariel, Pantene, Head &
Shoulders, Rejoice, Vicks Vapo Rub or Pampers during April, May and June 2005, and he/she will help support
one day’s education of one child per pack purchased. Irrespective of the sale of its brands from Shiksha, P&G
has committed a minimum of Rs. 1 crore to CRY. Education has managed to reach the underprivileged and even
the poorest of the poor, children numbering around 87,000 in India. Thanks to the corporate social responsibility
(CSR) initiatives of FMCG major Proctor& Gamble (P&G).
P&G's CSR programme in partnership with CRY empowers consumers across the country to participate and
support the education of marginalised children in India via a simple purchase of any of P&G's products .
P&G India closed Shiksha '08 with the largest-ever contribution of Rs 3.2crore to CRY and other initiatives
reaching out to over 87,000 children in the coming year. With a motto of 'Padhega India, Badhega India', Shiksha
believes that the secret to a brighter India lies in children attaining their right to free ,quality education

 REBUILDING LIVES IN EARTHQUAKE HIT BHUJ(2001/2002)

P&G in partnership with Swayam Shikshan Prayog (SSP) opened four Community Resource Centers
for the earthquake victims in the Chakasari Paggivand, Hanjiya and Jodhpur vands (hamlets) of Rapar Taluka,
Kutch District, Gujarat. The Community Centres provide basic education for children; training on building
earthquake-resistant shelters and has supported the formation of 22 Women's Savings Groups which contribute
towards an income-generating fund, for future entrepreneurial activity. The P&G-SSP project positively impacts
25 villages, 3750 families and 22,500 people and helped mobilize women’s groups and communities in Gujarat
for their long-term sustainable development. Credit fund will be provided as a revolving fund to self-help groups.
The operational cost for each Centre is Rs, 25,000 met by P&G. The centres have been built from a Gujarat
Earthquake Relief Fund created after the earthquake of 26th January 2001 by employees of P&G India ,
Brussels, Japan, Canada, among others and the Company contribution. P&G employees also made contributions
directly to the Red Cross Society for other rehabilitation work in Gujarat.
In addition, P&G is currently working on forming women’s micro-credit groups to ensure the
sustainability of these community centres and to further empower these women and increasing the number of
community centres from four to seven.

 PROJECT POSHAN – FIGHTING MALNUTRITION IN INDIA

(2000)
P&G and UNICEF launched Project Poshan to combat malnutrition in India. India has 40% of the
world’s malnourished children. POSHAN targeted three key projects: an Adolescent Girls’ Initiative to educate
girls in Mumbai slums on health problems and improve their lives with Anemia prevention through IFA tablets; a
Women’s Parenting Network in Chennai to provide information on care during pregnancy; and Day care projects
in Jaipur, which focused on increased food intake and micro-nutrients. Once again, P&G raised Rs. 50 lakhs by
contributing Re. 1/- from sales of large size packs of Ariel, Whisper, Head & Shoulders and Pantene sold in the
months of May, June and July 2000.

 PROJECT OPEN MINDS – EDUCATING INDIAS WORKING YOUTH

(1999)
P&G in partnership with UNICEF launched Project Open Minds to support and educate children across
the Australia, ASEAN and the India (AAI) region. According to UNICEF, only 55% of the children of India
complete primary education. The support that P&G provided was in terms of money and publicity. For every large
size pack of Vicks Vapo Rub, Whisper, Ariel Power Compact, Head & Shoulders and Pantene purchased by
consumers during November 1999 to January 2000, P&G on behalf of consumers contributed the cost of one
day’s education of a working child to the ‘OPEN MINDS’ fund. In India P&G raised Rs. 1.25 crore for
‘OPENMINDS’ which was donated to UNICEF in February 2000

 PROJECT DRISHTI – THE FIRST EVER SIGHT RESTORATION

PROGRM IN INDIA (1999)
P&G tied up with the National Association for the Blind (NAB) to launch Project Drishti and restore
eyesight to 250 blind girls through corneal transplant operations. FOGSI (Federation of Obstetricians and
Gynaecologist Societies of India) and UNICEF had declared 1999 as the Year of the Adolescent Girl. On
studying the problems of the blind girl, P&G realized that, what better way to celebrate the FOGSI-UNICEF, Year
of the Adolescent Girl (YOGA) than to attempt to give sight to as many blind girls that the company could. Till
date 138 sight restoration operations have been successfully conducted across the country.

 PROJECT FUTURE FOCUS - THE FIRST EVER ROUND WRITE IN

CAREER GUIDANCE SERVICE (1998)
P&G in association with Resource Management Group (RMG)launched a 365 days Free Write-In
Service ‘P&G Future Focus’ for the first time to the youth of India, where a panel of professional Career
Counsellors would send personalized answers to letters within 15 days of the receipt of the queries.

 PROJECT PEACE - ENVIRONMENTAL EDUCATION PROGRAMME

(1996)

P&G launched PEACE – a unique Environmental Education Program for children in schools across
Bombay and Thane representing a cross-section of economic backgrounds. Children were exposed to a
fascinating account of the Indian environmental scenario. The Multiplicity of Eco-Systems in India, Air around Us,
Water, Solid Waste and Adopting Conservation in our Lifestyles were the topics dealt with using interesting
media like music, games, project-work, slides, video films, group discussions, etc.

CSR ACTIVITIES AT GLOBAL LEVEL

Pursuing a Sustainability Business So how are companies trying to meet this challenge? P&G has
worked with UNICEF to combat micronutrient malnutrition. Over half a billion people world wide are deficient in
iodine, iron and vitamin A, resulting in stunts growth, impaired learning, increased child and maternal mortality.
250,000 children go blind every year. To address this problem, P&G developed a powdered drink product, Nutri
Star, which effectively delivers the missing micronutrients. The product was clinically Business Council for
Sustainable Development Report, April 2001. WBCSD, Geneva9 WBCSD, 2002.Sustainable Livelihoods – the
business connection. World Business Council for Sustainable Development, Conches, Switzerland. tested in
Tanzania, test marketed in the Philippines ,then marketed in Venezuela .Every year ,over three million people,
many of them children, die from diarrhea. One billion two hundred million people are without access to safe
drinking water, yet safe water would reduce diarrhea incidence by about one-third. The UN Millennium goal
equates to delivering safe drinking water to125,000 new people every day. The consumer marketplace is one of
the few places where one can envision creating that kind of scale. Yet it has been largely ignored until now in the
pursuit of safe drinking water. Several years ago, P&G purchased the PuR brand, a U.S. based in home water
purification business. We are developing low cost technologies, and business models to bring those technologies
to consumers, that will be effective on the more serious water problems in the developing world. Similarly, over 2
billion people are without adequate sanitation, and better hygiene can reduce deaths caused by diarrhoea by up
to 33%. P&G has been in the bar soap business for decades, and our Safeguard brand ,working in developing
countries with local health ministries to create awareness about the importance of hygiene, is showing how
public-private partnerships can reach far more people with health messages than either the ministry or we could
do individually. Individuals will change their consumption practices when they realize they can improve their
quality of life. In many parts of the world, dental hygiene is virtually Un known, or poorly developed. P&G has
partnered with national organizations in many countries, including China, Poland and Russia to raise awareness.
Clinical studies in Poland and Russia showed a 60%reduction in cavities. In the process, we laid the foundation
for a new market where none existed before. There is also the possibility to link developed world markets to
developing world needs, through cause-related marketing initiatives. P&G’s Fairy brand organized an initiative
Finding the Sustainable Development Business Case 2-56 George Carpenter and Peter White Corporate
Environmental Strategy : International Journal for Sustainable Business with UNICEF to help combat tuberculosis
in West Africa. For every bottle of product purchased, P&G paid for a TB vaccine to be delivered by UNICEF
where it was most needed. This initiative was run in Spain and Portugal, then twice in the UK, and in total
delivered some 11 million TB vaccines, while building P&G’s business. These product and business model
innovations can significantly improve lives, and help build business. This is not business as usual and it is not
philanthropy; it is building social, environmental and economic sustainability into business in a strategic way.
Developing new products and new business models for developing markets present significant challenges,
however, and not all initiatives succeed. Our Nuristan product, for example, was intended for developing world
markets, yet was developed with a developed world mindset. It included all of the available technology, rather
than being aimed for a low purchase price. Consequently it proved impossible to reach all of the consumers who
needed the product. Combined with political instability in Venezuela which prevented us from refining our
business model, this led to Nuristan being withdrawn from test markets. Managing Sustainable Development The
importance of the business case for delivering sustainable development cannot be overstressed. If we rely on
philanthropy to deliver improved quality of life around the world, it will only go as far as the funding will allow. If
we rely on the moral case alone, it will be restricted to those companies driven by high ethical standards. If there
is a real business case, however, then such initiatives will continue to grow and spread, and we can start to
achieve the considerable scale that is needed to deliver against the millennium development goals. Once there is
a real business case, the water will start to run downhill; until now we’ve been trying to push it uphill. The real
business case requires that companies link opportunity with responsibility. If the focus stays limited to just areas
of corporate responsibility, the oft-quoted view that sustainability provides long term value, but short term costs,
will prevail. It can also cause problems with how sustainability is managed within companies. If it is seen only as
a responsibility, sustainable development will be treated as an issue to be managed, rather than as a business
opportunity to be pursued. Consequently, it will be managed by a corporate function, much as health, safety and
environment has been managed in the past. Only if responsibility is linked with opportunity is sustainable
development likely to get the attention of senior management and become built into businesses in a strategic
way. In Conclusion to find the real business case for sustainable development, companies need to find ways to
link opportunity with responsibility. They need to:
• Turn attention from just eliminating negatives to creating positives;
• Move beyond eliminating “non-value” to creating “new value;”
• Not just look for market-based solutions, but see the market itself as a solution; and
• Evolve from seeing the value of sustainability as removing the risk from business, to seeing sustainability as
their business. In no way do we claim that we, or our company, have fully figured out the business case for
sustainable development. However, we do know that a robust business case is necessary to deliver a better
quality of life on the scale needed to achieve the development goals that the world has set.
When Procter & Gamble had to promote Bio mat, a laundry detergent in Israel, they were in a quandary. Their
primary audience were the Jews who were orthodox to the core. They shunned conventional mass media like TV
& radio as they saw it as bad influence. P&G decided to appeal to their motivation for charity - to help the needy.
The initiative included a road show of a mobile Laundromat - people were urged to give their old clothes for
charity. These clothes would then be cleaned at the Laundromat (using Bio mat, of course) and then given to the
needy.
While this may not be the conventional CSR initiative (long term, cause-related) other such examples
abound. In India, Sakthi Masala has been consistent in its CSR effort to help the disabled. They offer
employment opportunities and rehabilitation centres for the disabled. P&G India's CSR initiative - Shiksha - has
been successfully contributing to CRY. They motivate consumers to purchase certain brands of P&G - a part of
the sale proceeds are then contributed to the CR fund

P&G's Partnerships with NGOs to Deliver Water Purification Product:

In 2003, a $20 million R&D and marketing project at Procter & Gamble (P&G) had reached a financial impasse
after eight years of work. A decade earlier, the company had spotted an opportunity to supply a water-purifying
product to the developing world, which, it was hoped, would increase the company's share of the mass consumer
market in the emerging economies.
At the same time, the company believed it could save lives by providing a simple way to purify household and
drinking water. Unsafe water supplies and inadequate sanitation kill more than 3 million people every year,
making this problem collectively more lethal than Aids.
The project stalled in late 2003 when it became clear that the financial returns for selling a powder product called
PUR Purifier of Water did not justify further investment in commercial terms. At this point, P&G changed tack,
transforming the project into a corporate social responsibility (CSR) programme. Alan Lafley, P&G's president
and chief executive, moved it to the corporate sustainability department (CSD), itself a new division. There after,
the company developed partnerships with not-for-profit organisations in social, health services and humanitarian
relief to market and distribute the product more effectively. Procter & Gamble's partnership with non-profit
organisations is proof that local markets can be won over to new products.
In 2003, a $20 million R&D and marketing project at Procter & Gamble (P&G) had reached a financial impasse
after eight years of work. A decade earlier, the company had spotted an opportunity to supply a water-purifying
product to the developing world, which, it was hoped, would increase the company's share of the mass consumer
market in the emerging economies.
At the same time, the company believed it could save lives by providing a simple way to purify household and
drinking water. Unsafe water supplies and inadequate sanitation kill more than 3 million people every year,
making this problem collectively more lethal than Aids. The project stalled in late 2003 when it became clear that
the financial returns for selling a powder product called PUR Purifier of Water did not justify further investment in
commercial terms. At this point, P&G changed tack, transforming the project into a corporate social responsibility
(CSR) programme. Alan Lafley, P&G's president and chief executive, moved it to the corporate sustainability
department (CSD), itself a new division. There after, the company developed partnerships with not-for-profit
organisations in social, health services and humanitarian relief to market and distribute the product more
effectively.
P&G Pakistan tried the commercial route once more in 2004, but the results were not encouraging. In 2005, P&G
officially announced its new non-commercial approach and its decision to sell PUR at $0.04 per sachet, the cost
of production. PUR would be sold at cost to non-profit partners, but a large number of donations of the product
would be paid for by P&G corporate philanthropy and employee donations.
The new non-profit strategy proved a success and by the end of 2006, P&G had sold 57 million sachets, at cost,
to humanitarian organisations, in contrast to the mere 3 million sachets sold during the commercial phase. The
biggest lesson of this study is that P&G knew when to close the commercial venture and when to leverage
partnerships with non-profit organisations to fulfil a broader social need. It did so with clear expectations about
the cost of making it sustainable, meaning that PUR would be a non-profit venture - driven by a social mission
rather than profits. It left the social marketing - educating the target customer about the risks of untreated water
and distributing the product at an affordable price - to the non-profit organisations.
P&G first researched new water-purifying technologies in 1991, following a major outbreak of cholera in Central
America. P&G's diluted chlorine bleach water-purification technology was not well received by all its target
customers in the region, some of whom said that the water looked dirty and tasted of chlorine. In 1995, the
company signed a collaborative search agreement with the US Centres for Disease Control and Prevention
(CDC) to test and develop water-purification products.
After joining forces with CDC, P&G tested a low-cost water filter in Guatemala, but local people complained that
the filters clogged up too quickly. P&G then reverse-engineered the municipal water treatment process, leading
to the discovery of the powder product. PUR is a sachet of powder, which when swirled into a 10-litre bucket of
dirty water results in clean and safe drinking water. It was launched in 2000, priced for a low-income commercial
market at $0.08-$0.10 sachet. Independent studies show that it is effective in reducing the cases of water-borne
disease, with an upper range of 90% and an average disease reduction rate of 50%. However, after three years
of market tests in Guatemala, Morocco and Pakistan, the product had not made a profit. Mixed results came back
in 2003, with repeat purchase rates of 5%, 10%and sometimes 25%.
The decision then facing Lafley was clear: push ahead on the PUR initiative, given its public health benefits, or
terminate the initiative, given its costs and low returns. Employees who had worked with the product, how ever,
found it difficult to shut down a product line that held so much promise. Greg All good, who worked in the
consumer health products unit, recalls an internal memo: "The memo had no conclusion about what to do with
the product, but it was very clear that no product engaged our employees and our stakeholders - customers,
governments, UN groups, NGOs - like this one."PUR was relaunched as a CSR product in 2004 within the Safe
Drinking Water Alliance, a partnership comprising P&G and the Johns Hopkins University Bloomberg School of
Public Health's Centre for Communication Programs (CCP), Population Services International (PSI) and UK
charity Care. The Safe Drinking Water Alliance was the first in a series of partnerships between P&G and non-
profit organisations featuring PUR and was designed as a pilot programme to test three marketing strategies:
social marketing, commercial marketing and disaster and humanitarian relief networks.
Now working in P&G's CSD unit as director of the Children's Safe Drinking Water (CSDW) programme, All good
says: "Our purpose as a company is to improve the lives of the world's consumers. Our brands, such as Pantene,
Oil of Olay, Always, Tide and Ariel, touch consumers every day in ways that meet their needs. Our focal
philanthropy programme, the Children's Safe Drinking Water programme, makes our purpose as a company
tangible for our employees and critical stakeholders."
Simple in theory, but finding the right formula is often more difficult. Local barriers to entry are often tricky to
overcome in 'bottom of the pyramid' markets. Certainly, P&G discovered that traditional marketing methods did
not work; consumers were suspicious of new products that required them to change the way they managed their
lives. During 2004, it began a new testing strategy. Putting the product into the CSD unit and turnint into a non-
profit venture gave enthusiasts such as All good the room to explore alternative marketing
Corporate Social Responsibility: Procter & Gamble

In the 1990s, when one spoke of Corporate Social Responsibility, it was very quickly concluded to be
donations. It was understood to be a philanthropic gesture which the organisations undertook as
their responsibility towards the society. In this context, Corporate Social Responsibility (CSR) or
Corporate Citizenship had different implications for different companies. For some companies, CSR
could largely mean compliance and altruism. Many others would observe it as a more strategic
framework that took into account a company’s relationships and overall impact on the society.
Companies also have a way of practicing CSR internally within the organisation for their employees
and associates.

In the twenty first century, however, companies have been generating innovative ideas and methods
to incorporate social responsibility in congruence with organisational goals. To implement these
social goals, the companies are partnering with the government and the Non-Government
Organisations (NGOs).

The Shiksha initiative by Procter and Gamble and CRY partnership for educating children in India is a
perfect example of such a partnership between a corporate and an NGO. CRY’s goal and P&G’s
altruism to reach out to illiterate children in India and provide them with the basic right to education
resulted in the launch of Shiksha. Shiksha is a part of P&G’s global philanthropy programme ‘Live,
Learn and Thrive’ that focuses on the development of children in need across the globe, specifically
in terms of education. Strategically, P&G has incorporated a part of their contribution to this
initiative in the selling price of its products. In 2008, through this initiative, P&G was able to
contribute Rs 3.2 crores to CRY and other social partners and impact the lives of almost 87,000
children across India.

With increased competitiveness in the private sector, it is critical for an organisation to leverage its
social activities in order to gain a competitive advantage. The increased credibility and goodwill
earned from the customers and associates is an invaluable intangible asset for the organisation. As in
the case of P&G, the marketing and advertising activities highlight that if a customer purchases P&G
products, he or she is contributing towards a national level literacy programme for underprivileged
children. Therefore, even if P&G products are priced marginally higher than its competitors, the
price is compensated by a feel good factor for P&G customers of being indirect donors to eradication
of illiteracy. For employees and associates, it is a matter of immense pride to be a part of an
organisation that has a strong CSR commitment.

Another example is of the pharmaceutical industry, where it becomes imperative to either

collaborate with NGOs or with the government to be able to reach out to a large population and
provide medicines to the needy at affordable prices. This sector has strict price controls and
regulations by the government. Therefore, only by partnering with the government, hospitals and
the society can the company introduce drugs at affordable prices for distributive justice. Cipla, the
Indian pharmaceutical giant fulfils its corporate social responsibility obligations by selling a cocktail
of three anti-HIV drugs, Stavudine, Lamivudine and Nevirapine to the Nobel Prize-winning voluntary
agency Medicine Sans Frontiers (MSF) at a rate of $350, and at $600 to other NGOs over the world,
the price of which in the international market ranges from $1,000-15,000. This has not only made
the drugs accessible to a wider range of people, but it has also forced other pharmaceutical houses
to lower their prices, increasing the accessibility of these drugs, especially in the developing
countries.

Corporate social responsibility practices have been evolving steadily. Private organisations are now
more interested in creating sustainable livelihoods and economic development following the triple
bottom line approach. The socially responsible companies have begun to realise that the money that
goes in should not just be flowing in a uni-directional manner but should also lead to the creation of
wealth in the economically underdeveloped regions. ITC’s e-Chou pal is a great developmental
initiative which, apart from bringing Information and Communication Technology to the agriculture
sector, has also added value to its own agricultural products. This kind of an application of the
principles of sustainable development for a corporate through the introduction of a CSR policy is
often accompanied by triple bottom line reporting, which declares not only financial results but also
the social and environmental impact of the business.

In the FMCG industry, Hindustan Unilever’s Limited’s (HUL) Project Shakti is a classic case of CSR
beyond philanthropy. Project Shakti was initiated by HUL in 2001 to empower and create sustainable
livelihoods for the marginalised women in rural India by providing them income-generating
opportunities. By partnering with NGOs and Self Help Groups, these women have not only been able
to increase the sales of products and outreach in the economically poor regions of India which
otherwise is a mundane task, but also generate income and empowerment for the underprivileged
women. Today, HUL’s rural sales contribute towards a major chunk of their total sales, making this a
highly successful business model which is in tune with the triple bottom line approach. Such has
been the success that the global arm of HUL now plans to replicate this successful business model at
an international level.

Therefore, in a large measure, while industrial processes have been in the forefront of pollution and
while businesses in a wider sense are a driving force on over-consumption, it is also the case that the
business community is sensitive to the socio-economic disparities and environmental danger. In all
the above cited scenarios, it is obvious how companies are becoming more conscious of the strength
of their impact on the society and their role in bringing about a positive change and contributing
towards bridging the gap between the haves and the have-nots.

In the Indian scenario, many corporate enterprises are displaying social sensitiveness and addressing
community needs. The drivers of corporate-led social initiatives are many, ranging from
philanthropic virtues to self interest, but perhaps the more prominent are the revolutionised
information society, growing consumerism, government regulations and fierce competition.
According to a survey carried out in June 2008 by TNS India (a research organisation) and the Times
Foundation, over 90 per cent of all major Indian organisations surveyed were involved in CSR
initiatives. The leading areas that corporations were involved in were livelihood promotion,
education, health, environment, and women empowerment.

What is evident in most of the CSR practices is that the partnership of the private sector with NGOs
is no longer based on short-term needs. CSR has now become a part of the corporate strategy
thinking and focuses on building a long-term partnership with the NGOs and social enterprises.
Corporate alliance with NGOs is now a result-oriented triple bottom line approach of financial
profits, socio-economic development and the environment. The goal of this planned alliance is to
bring about a socio-economic change in the lives of the needy through a combined effort. The
strengths of both - the corporate being financially strong and NGOs and government with the
expertise of their respective domain - are being leveraged to make a greater impact through a joint
initiative.

In spite of the increased social initiatives undertaken by the private sector, developing economies
like India are faced with complex socio-economic challenges where over 300 million people still live
below the poverty line. The pivotal role of the corporate sector in a dynamically changing economic
environment and increasing discrepancies cannot be understated. As such, companies need to shift
their focus from merely being funding agents to becoming active participants and real contributors
in their social initiatives. CSR beyond philanthropy, with its triple bottom line approach to create
sustainable development for the bottom of the pyramid, is a long-term viable solution for
developing countries like India. This creation of socio-economic sustainability at the bottom of the
pyramid is a trigger that will ultimately have the ripple effect of reducing existing disparities in the
long term. The need of the hour is change, social – economic – environmental, for a better future
and a better today.