You are on page 1of 24


Proctor and Gamble of Pakistan is a subsidiary of Procter and Gamble USA established in1990 and started production in 1991.The P&G Company were founded in 1837 in Cincinnati, Ohio and from the very beginning have been a leading manufacturer and marketer of the consumer goods. Company sells more than 250 brands in more than 130 countries and its operations are in more than 70 countries. It is therefore also rated in the top 25 of the FORTUNE 500 companies. Procter and Gamble is actually the name of two persons William Procter and James Gamble. Both of them wives were sisters and their father in-law asked them to become partners. In the start Procter’s business was candle making and Gamble’s business was soap making. The Partnership year 1837 was a difficult time to start the business although Cincinnati was a bustling market place; the nation was gripped by financial panic. Hundreds of banks were closing around the country. In the 1850s, despite rumors of an impeding civil war in the US, they built a new plant to sustain their growing business. Later they pioneered one of the nation’s profit sharing programs and were among the first in American industry to invest in the research laboratory. By 1890, the fledgling partnership between the Procter and Gamble had grown into multi million dollar corporation .Television in USA introduced in 1939and P&G is the only company that commercialize its product just after five months .With the passage of time P&G acquire different other companies to enhance the business. In 1980, as it approached its 150th anniversary, P&G was poised for a most dramatic period of growth in its history. Company serves 106000emloyees allover the world. P&g is a recognized leader in the development, manufacturing and marketing of superior fabric & home care, baby care, feminine care, tissues & towel, beauty care, health care, and food.


· · · · · · ·

The first branded products The first profit sharing program The first vegetable oil The first market research department The first company to introduce brand management The first company to introduce the concept of soap operas advertising Crest, the first toothpaste with fluoride P&G literally invented the disposable diaper category

P&G started its operations in Pakistan in 1991. First it introduces its brand of Head& Shoulder After that it gave brand of Vicks and Olay oil. Now company has eleven brands in Pakistan .The yearly sales consistently doubled during the past three years. P&G Pakistan establish local manufacturing base.

· · · · · · · · · · Head & Shoulder Pert Plus Vicks Pentene Rejoice Camay Safeguard Pampers Always Ariel

VISION of P&G “To be a leading consumer goods company and to improve the lives of world consumers by providing valuable and innovative products”. in the field every where P&G vision is to lead business growth by proactively identifying opportunities and positively contributing to volume growth. As a result.TOTAL SALES OF P&G IN PAKISTAN: In 1991 =1.1Billion Rs In 2001= 12 Billion Rs EYES ON THE FUTURE: Doubling unit volume every years Achieving share growth in the majority of its categories Delivering total shareholder return that ranks P&G over time among the top third of its peer group. shareholders and the communities in which they live and work will prosper. . P&G's goal is to continue to provide products of superior quality and value to the world's consumers. people. Most importantly. P&G want to be an outstanding organization with a passion for winning that would felt by everyone everyday. MISSION STATEMENT We will provide products and services of superior quality and value that improve the lives of the world's consumers. Ten years ago Procter and gamble started the journey to improve the lives of Pakistani consumers by providing them with world famous quality brands. P&G's business. in the office.

Produce quality products at very competitive costs. and structure of the organization are the main miles stones to analyze the company’s strength. suppliers. attract. motivate and retain the talent needed to lead and grow P&G’s business. To be a thought leader within each corporate function. Remains on the cutting edge of the industry. profit and value creation. developed by a given group as it learn to cope with its problem of external adoption and internal integration. Build superior relationships with all the parties who contribute to fulfilling their corporate purpose. and the communities in which we live and work to prosper. universities and government. Strive to be best in all areas of strategic importance to the company. CORE VALUES . allowing our people. Be competitive with other high quality companies in order to help. principles. including their customers. To be the first consumer goods company in Pakistan. GOALS • • • • • Think globally act locally Build major global brands through strong programs based on local understanding. OBJECTIVES • Bring together transactional activities such as accounting and order management in a single organization to provide services to all p&g units at best in class. packaging and operations around the world. • • • • • ANALYSIS OF VALUES & PRINCIPLES Organization’s culture is a pattern of basic assumption invented. consumers will reward us with leadership sales.As a result. our shareholders. Values. policies. Improve the environmental quality of its products.

They build their organization from within. and consumers and treat them. LOCAL PRODUCERSS . They are honest and straightforward with each other. treating the Company’s assets. They all act like owners. They operate within the letter and spirit of the law. They have confidence in each other’s capabilities and intentions. stable. customers. TRUST: they respect their P&G colleagues. They focus their resources to achieve leadership objectives and strategies. They uphold the values and principles of P&G in every action and decision. about which less information. This group is becoming more and more concern to their own incentives/margin. They believe that people work best when there is a foundation of trust. They are data based and intellectually honest in advocating proposals. which makes its environment complex are: RETAILERS A group having strong influence over the opinion of the consumers regarding which soap should be purchased.P&G PEOPLE: They attract and recruit the finest people in the world. INTEGRITY: they always try to do the right thing. promoting and rewarding people without regard to any difference unrelated to performance. including recognizing risks. as they want to be treated. as they’re own and behaving with the Company’s long-term success in mind. LEADERSHIP: They are all leaders in their area of responsibility with a deep commitment to deliver leadership results. OWNERSHIP: They accept personal accountability to meet the business needs. because the changes in these factors is predictable factors. They have a compelling desire to improve and to win in the marketplace. They develop the capability to deliver their strategies and eliminate organizational barriers. They act on the conviction that the men and women of Procter & Gamble will always be their most important asset. They have a healthy dissatisfaction with the status quo. improve their systems and help others improve their effectiveness. PASSION FOR WINNING: they are determined to be the best at doing what matters most. complex because there is a number of factors in its environment. They have a clear vision of where they are going. ENVIRONMENTAL ANALYSIS NATURE OF THE ENVIRONMENT P&G Safeguard is operating in a complex and stable environment.

TECHNOLOGICAL . the living standard which is forcing the people to use standardized product and people are diverting from the beauty soap to anti bacterial soap. persistently reducing the purchasing power of the people and dropping people from high price soap to low price soap and providing more fuel for expansion of local Producers. ECONOMIC FORCES · · · Increasing inflation in the country. REFERENCE GROUP People having social influence on their neighbors also affect on the sale of soap. PEST ANALYSIS POLITICAL AND LEGAL FORCES Rapid changes in the political scenario of the country along with the uncertain policies of the Government have made the whole business community as uncertain. along with this. Also there is terrorism prevailing in the important cities of the country like Karachi and Afghan War. under fix tax system or hidden units evading tax and growing like mushroom. exploiting consumers through retailers. Policies about taxes are changing continuously due to changing government. increasing inflation in the country have made it difficult for soap industry to transfer the whole increased cost at the consumer. TECHNOLOGY Moderate changes in the technology of soap manufacturing decrease the PLC of soap. URBANIZATION Increase in rate of urbanization especially in Pakistan has made the environment more complex of soap industry. thus forcing the industry to operate at a very low margin.Small soap manufacturing units. having no or very low overhead charges. Sanctions imposed by the developed nations on Pakistan due to nuclear experimentation create the uncertainty in business activities. Increased import duties on the finished goods and raw material have increased the price of the product. involve in the low price soap war. SOCIAL · The greater the tendency towards urbanization in Pakistan. which are affecting the business activities.

. safeguard gives protections against germs. Highly health caring product. only two sizes are available. P&G’s good relations with the supplier. Fifth-lowest property loss. More concern towards total quality management. Highly enthusiastic sales team of the company. WEAKNESSES • Safeguard is available in limited pack sizes. Worldwide research and technology. Direct contact with customers. Well-established and renowned distributors. Fourth-lowest lost Workday Rate for employees. SWOT ANALYSIS STRENGTHS • • • • • • • • • • • • • • • Heavy and impressive promotional plan for safeguard. One is 125 gm and other is 75 gm. They identified directly influence group such as wives and children in their target market. Strong social & corporate image of P&G. Fifth-lowest Injury/Illness Rate for employees. but innovations is required so that the product does not become obsolete. Strong financial position of company.· No major and rapid breakthrough in the technology of soap and their manufacturing process. Strong emphasis on environmental prosperity. engineering and manufacturing.

Threat of new entrants is also present. Increasing inflation in the country is also a major threat of P&G because it is reducing the purchasing power of consumers. The main reasons for this growth are: Rapid growth in population. because they are providing low price soaps and try to penetrate in their local market by replacing the branded products. Due to rising awareness among people. the soap market is growing at an annual rate of 9.• • Unwilling to serve low-income market. • • . because they are already involved in different related businesses and providing raw material for soap production to different manufacturing companies like Colgate Palmolive. there are lots of opportunities for P&G to exploit this growing market by introducing new soaps. High urbanization Increase in awareness among people about new advancements. Due to this growing market. etc.8%. Price is especially very high towards lower income groups. Due to limited manufacturing facility. • • • • • • THREATS • Increasing market share of local Producers. Therefore. they cannot reduce production cost of the safeguard OPPORTUNITIES • According to the information obtained by Chamber of Commerce and Industry Lahore. Therefore. P&G has a good corporate image among consumers. As Lever Brothers is a potential threat in soap industry. they can get maximum share from the soap industry by introducing multiple brands of soaps because they have already different soaps in their international health and beauty care product line. it is a good opportunity to capture this segment through efficient marketing practices. switching trend toward health care soaps is high. The local Producers are playing an important role in soap industry.

there are five forces which affect the competitive position in an industry and these forces are as follows:Competitive rivalry Buyer’s power Supplier’s power Threat of new entrants Substitute products COMPETITIVE RIVALRY Competition is concerned with the degree of rivalry within the industry. In the structure analysis. Generally. certain questions like what are the strengths of these pressures. what type of competition is prevailing and what future competitive conditions will be included. In the soap industry. Reckit Benckiser 1) 2) 3) 4) 5) · · · .STRUCTURAL ANALYSIS PORTER MODEL Structural analysis helps to analyze the competitive process as well as the sources of competitive pressure. Lever Brothers Pakistan Limited Colgate-Palmolive Ltd. the competitors are. Danger of rivalry is greater when the competitors are of equal size..

which is 9. the industry is considered to be secure and attractive.So competition is very tight. BUYER’S POWER When there are a few number of buyers those purchase the large portion of a company’s sale. the buyers are the distributors. there are chances that ICI may enter into the soap industry. they have maximum power. Also the available soaps have a strong image among consumers and it is very difficult for new comers to break that image. Anyhow. Because to capture the high market share. Substitute of the anti bacterial soap is beauty soap. an organized distribution channel is required for this industry which carry heavy cost. Rivalry is greater between these three firms due to their equal sizes. So there is low threat of substitute to the soap. It seems that it offered very lucrative business opportunities but these opportunities also carry threats with them. Competition with local Producers COMPETITORS IN ORGANIZED SECTOR . But due to rise in inflation in the country. THREAT OF NEW ENTRANTS It is generally said that the industry where the threat of new entrants is low.8% per annum. Since the quality of these substitutes is not comparable. Soap industry shows growth rate. the threat of new entrants is low but not zero. THREAT OF SUBSTITUTES Substitute means a product which can perform the same functions as the original product can perform. Because. it is very difficult for new comers to enter into the soap industry. the barriers to new entrants are large initial capital requirements and product differentiation as well. Due to these reasons. But in the case of soap industry. threat of the substitute of high price soap like Safeguard is gradually increasing. SUPPLIER’S POWER Supplier’s power is less because they are having support from their parent company for raw material and technological assistance. COMPETITOR’S ANALYSIS Competitors of Safeguard can be categorized into two segments:1. then in this case. Competitors in organized sector 2. In the case of soap industry. to whom bulk amount of products is sold and this sale is maximally on the cash basis. So the buyers have no handsome power to interrupt or interfere in the Soap industry.

There is a campaign started by company in order to cover the rural population. lifebuoy with 95gms is a lower price product for lower income people. while lifebuoy 140gms is high price quality product for upper class. No bonus is given to retailers. as most of the population lives in the villages. It must be seen to provide a quality of service. Distributor’s full force reaches almost every retailer irrespective of the size and delivers the product to him or her. They have heavily advertised their products on mass media. For example. which became the lot selling soap. They introduced soap with the name Lifebuoy Gold 1997. because their market share is maximum in soap industry and they are carrying marvelous profits. while they have R&D cells in the countries in which the operations of business are going on. There is no scheme for retailers of any kind. Mostly they are following Pull Strategy. These R&D cells are responsible to identify the technological breakthrough.LEVER BROTHERS LIMITED Lever Brother Limited is the oldest company in Pakistan. The company sets out to deliver the customers the right science with the right processes at the right place. which is the best in the market. they have made rural cluster zones. The company has strong financial background and has much excess budget for launching a new product. Also no discount is available on bulk purchases. taking place in these . middle class and lower class. Distributors also distribute the products to villages also after taking into consideration the budget as well as the business level of that village. It is operating in Pakistan since its independence. P&G Pakistan has a strong back from the P&G worldwide network of research and development P&G’s innovations is a major competitive strength and is driven by the market place. For this purpose. P&G is spending millions of dollars in R&D worldwide. and distribution channel. They display their product brochures at every retailer. They have produced products for each class with respect to different prices. Their target market is upper class. They company offers 6% profit margin to retailers on retail price. RESEARCH AND DEVELOPMENT With respect to R&D. Lever Brothers Limited emphasizes on the direct approach to the consumer and they have well-established sales force.

3% of the company’s profit.915 358. The impressive growth recorded by the soap industry enabled it to make this contribution. in 000) Year 1999 2000 2001 Sales 276.4% 50% 125% 2001 5.countries.525 A financial analysis for the last three years is: Year Operating Profit Margin Asset Turnover Return on Assets Increase in Sales Increase in Assets 1999 6. They are mostly customer oriented for which they test the products in the market and then introduce it to the whole target market.9% 6. This is due to increase in sales of safeguard in 1999. .6. corporate name is at its back as sound credit worthiness for any borrowed fund. FINANCIAL RESOURCES The safeguard business accounts contribute nearly 6.7% 8 times 34.2% 8. times 32% 112% 128% Along with this internal resource generation.3 times 35% 60% 120% 2000 6. SALES VOLUME (Rs.558 308.

MARKETING STRATEGIES PROMOTIONAL STRATEGIES P&G gives high emphasis on direct approach to customers.. distribution network which is a renowned distribution company.EXISTING STRATEGIES OF P&G for SAFEGUARD P&G is following different strategies in different marketing practices for safeguard. DISTRIBUTION STRATEGIES As described earlier that P&G is distributing safeguard through International Brands Ltd. They involve children and house wises in their campaign and then asks them to give comments. This way they create awareness and demand for the safeguard. Its sales teams visits schools after schools along with the medical practitioners and demonstrate experiments of hand and face washing in comparison with other soaps. they follow the policy that their commercials will not be executed right before and after the commercial of competitors. there is an Area Sales manager of P&G who is responsible to watch the . often sponsors famous plays on dramas on TV. P&G gives high media coverage to Safeguard. They try to satisfy the customer at the spot and then sell a small size of 75 gm pack for trial basis. In each IBL office. They also advertise these practices on television. Regarding the commercials on TV.

which determine the strategies of company regarding a product. 21 for 125 gm pack. BOSTON CONSULTANT GROUP MATRIX Market Share . we can say they are somewhat following competitive price strategy. PRODUCT STRATEGIES Safeguard is quality product as described earlier and P&G do not compromise on quality. they are following differentiation strategy.activities of IBL regarding distribution of Safeguard and make direct contact with customers to obtain the complaints. Therefore. in product strategy. 21 which is equal to the major competitor product Detol soap having price of Rs. There are the marketing strategies of safeguard but there are a group of strategies. Therefore. PRICING STRATEGIES P&G always emphasizes safeguard as quality product and they try to differentiate it as compared to competitors. But they have set the price of 125 gm of Safeguard Rs.

1 The BCG Matrix tells about the position of the products either as star. cash cow.High Low High 100 Safeguard STAR QUESTION MARK Market Growth Low 10 Market share CASH COW 1 DOG 0. question mark or dog. The two dimensions of this .

Second. the market growth rate of soap business is faster than general economy. P&G have resources to move it towards star. GENERAL ELECTRIC COMPANY MATRIX General Electric Company (GEC) Matrix uses the dimensions of industry attractiveness and business strengths to identify the current position of the company and suggests which type of strategy should be used. which is 9. following factors are applicable: . In soap industry. To measure each dimension. It is recommended for question mark to follow growth-oriented strategies and more investment.matrix are the relative market share and on y –axis industry growth rate. For growth strategy. From the 10th of April another production unit has started production for safe guard to meet the expanding marketing needs.8% per annum. The above analysis shows that safeguard is a question mark in soap industry. The market share of safeguard (P&G) in soap industry is lower than their competitors because of price sensitivity and its market share is increasing. certain factors are selected. company should seek out new opportunities. So they are now spending $ 3 million to expand the Hub plant where safeguard is manufactured. This is due to increasing population and urbanization in the country.

5 15 30 and 15 15 100 .60 .90 18 .BUSINESS STRENGTHS Rating Factors Weight 1=High .5 70 INDUSTRY ATTRACTIVENESS Rating Factors Weight 1=High .60 . 5=Medium 0=Low 1 Score Market size and growth rate Intensity of 30 30 20 .50 Score Company’s relative market share Price competitiveness Financial strength Knowledge of customers market Technological Advancement Total 25 12.70 9 27 9 10.90 . 5=Mediu m 0=Low .

25 10 . the factors considered and intensity of their influence is given below: - .competition Profitability Capital requirement Opportunities and threats Barriers to entry and exit Total 10 15 15 .75 SPACE MATRIX Strategic Position and Action Evaluation Matrix is useful for determining the current strategic position of the organization with reference to its environment and helps deciding the strategy profiles for the company. In the context of P&G.5 11.75 6 10.50 5 100 80.70 .60 .

COMPETITIVE ADVANTAGE Rating Factors -6=Low 0=High Market share -4 Product quality -1 Customer loyalty -3 Control over distributors and -2 suppliers Promotional activities Product price -1 -3 -1 Technical knowhow TOTAL Average -15 -2.14=-2 .

ENVIRONMENTAL STABILITY Rating Factors -6=Low 0=High Technological changes -3 Rate of inflation -2 Barriers to entry into market -3 Competitive pressure -1 Demand variability -5 Price elasticity of demand -3 Total -17 Average -2.5 +4 +5 +2.83=-3 INDUSTRY STRENGTH Rating Factors Growth potential Profit potential Financial stability Technological know how Resources utilization 0=Low +6=High +5 +3.5 .

This is probably done for a product. Market penetration can be done through heavy advertisement and by providing products of different sizes and types for . which is at the growth stage. Therefore. the suitable strategies for P&G safeguard are:· · · Market penetration Market development Product development MARKET PENETRATION Market penetration means to exploit the available consumer efficiently to achieve high market share.Ease of entry into market Total Average SCORE ON X=AXIS Competitive Advantage Industrial Strength Total Score on x-axis SCORE ON Y-AXIS Financial Strength Environmental Stability = Total Score on y-axis Coordinates (+2_+2) = = = +4 +24 +4 = +4 -2 -2(+(+4)=+2 = -3 -3 +(+5) = +2 +5 The direction vector points towards the aggressive quadrant.

For safeguard P&G is intensifying the efforts to increase the market share in growing industry because soap industry is growing with an annual rate of 9. For this purpose.8%. we can say they are following consolidation strategy for safeguard. Therefore. because they are intensifying their efforts on advertisement and promotional activities. development of internal resources is emphasized. MARKET DEVELOPMENT In market development strategy. organization should find the new uses of product. focusing on urban areas and more emphasis on middle and upper class. PRODUCT DEVELOPMENT For product development. Therefore. . Therefore. highly extensive distribution channel should be used. P&G should acquire one more product or manufacturing plant for the production of safeguard to capture the wide market. new segments and entering into new geographic areas. they should identify the new such as for crockery purpose and explore the new and potential customers. Still safeguard is being used for germs protection purpose.different consumers.

they should efficiently utilize their Marketing Information System to collect information about the demand and attitudes of the people in these areas. 75gm and 125gm. which is also a big market for soaps like safeguard. which cannot satisfy .PROPOSED STRATEGIES The practice of incomplete market coverage should not be followed because you cannot hijack other company’s customers and new customers as well. Safeguard is a well-perceived product among the customers. By using this strategy. etc. For this purpose. packaging. PRODUCT DEVELOPMENT STRATEGY It describes to develop new products or modify the existing products with respect to size. and at this moment. color. safeguard can fetch the customers of competitors and will be successful in building new customers. All these problems require following strategies: MARKET DEVELOPMENT STRATEGY P&G is emphasizing on urban areas while it has neglected the suburban areas. it is available in two sizes.

Therefore. and zest which are very famous in international market. . As far as launching of new product is concerned.the demand of every segment. It can be a threat for the market share of safeguard. MARKET PENETRATION STRATEGY It describes that a company tries to sell more of its product by introducing new supplementary uses. On the other hand. While the products of the competitors are available in multiple sizes which provide abundant choices for purchases to customers for example Lifebuoy Gold has 140gm and 95gm and Medicame has 80gm soap available in the market This provide an opportunity to the customer to have multiple choices. in case of safeguard the choice to customer is very limited. it is not necessary for P&G at this moment. which contains such chemicals useful for beauty care as well. they will require taking this step as well because they have some other soap like ivory. Therefore. it is more useful to supplement this idea with existing safeguard or introduce safeguard into different pack sizes especially for capturing the female customers. it is necessary that safeguard should be available in maximum possible sizes to meet the selection criteria of the customer. Safeguard is that product. This characteristic. we have analyzed through its product formula. but in future. This is what they have analyzed through market survey.