Session 21

Budget
Team 6
Company- P&G
Product- Shampoo

Kamakshee Bhardwaj PGFA1923

Ritanshu Jaiswal PGFA1940
Prachi Singh PGFA1932
Somya Kapoor PGFA1954
Jyoti Jaiswal PGFA1913
 Marketing Objective
Increase in market share from 26% in 2019-2020 to 29% in 2020-2021, by introducing
new brand “herbal essence” in India.
• CAGR of shampoo industry is 6.5 % therefore we assume growth of 3%.
• Sales posted in 2019-20 is 6001 crore (1)
• Net profit posted in 2019-20 of 616.4 crore(1)
• India’s shampoo industry worth is 22500 crores (2)

Amount in crore

2019-2020 2020-2021
Sales 6,001 6,181
Net Profit 616.4 635
• We computed the budget by taking three posibilities:
1) Pessimistic (worst aspect of things)which is actually incurred in last year and
we have taken our budget as it is.
2) Most likely which is based on going trend (15% growth).
3) Optimistic which can be most profitable, i.e. 120% hike in sales. [3]
• Marketing budget
• Marketing expense
• Action plan + additional expense & profit and impact.
• Introducing new product and its impact- unless and until we don’t know profit
from the new [product, cannot launch new product.
• Break even for market plan - contribution
• Break even for determining the price
• Investment in technology in sales force management
 Low (pessimistic) Medium (most likely) High (Optimistic)
100% 115% 120%

Net Sales: 9,72,00,00,000 11,17,80,00,000 11,66,40,00,000

Cost of sales 6,80,40,00,000 7,82,46,00,000 8,16,48,00,000

Gross margin (30%) 2,91,60,00,000 3,35,34,00,000 3,49,92,00,000

Expenses

Direct selling(28%) 59,87,52,000 56,33,71,200 48,98,88,000

Advertising (18%) 38,49,12,000 36,21,67,200 31,49,28,000

Transporation & Storage(12%) 25,66,08,000 24,14,44,800 20,99,52,000

Depreciation(7%) 14,96,88,000 14,08,42,800 12,24,72,000

Credit & Collections(7%) 14,96,88,000 14,08,42,800 12,24,72,000

Financial & Clerical(13%) 27,79,92,000 26,15,65,200 22,74,48,000

Administrative(15%) 32,07,60,000 30,18,06,000 26,24,40,000

Total Expenses: 2,13,84,00,000 2,01,20,40,000 1,74,96,00,000

Profit before taxes 77,76,00,000 1,34,13,60,000 1,74,96,00,000

8 12 15
Bibliography
1. https://economictimes.indiatimes.com/industry/cons-products/fm
cg/pg-homes-sales-rise-14-on-rural-expansion/articleshow/71830
300.cms?from=mdr

2. https
://www.rediff.com/business/report/indias-hair-care-industry-is-wo
rth-rs-22500-crores/20190113.htm
3. https://www.livemint.com/companies/news/procter-gamble-hygiene-
and-health-care-net-profit-rises-8-in-march-quarter-15573103436
43.html