Final Comp Project

A COMPREHENSIVE PROJECT REPORT

On

“Staying ahead in the market Place: Analysis of Marketing Strategies of P&G”

Submitted in the Partial Fulfillment of the Requirement for the award of the Degree of

Master of Business AdministrationBy

MUKHTAAR ABBAS Roll no. 08- MBA-30

Enrolment no.05-3842

Under the Supervision of

Prof U. M. Amin(Hony Director CMS, JMI)

CENTRE FOR MANAGEMENT STUDIESJamia Millia Islamia, New Delhi – 110025

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DeclarationI, Mukhtaar Abbas, a bonafied student of MBA (full time) programme at the centre for Management Studies, Jamia Millia Islamia, New Delhi, hereby declare that I have done a Comprehensive project entitled as “ Staying Ahead in the market place: Analysis of marketing Strategy of P&G” under the supervision of Prof U. M. Amin, Hony Director, Centre for Management Studies, JMI.

I also declare that the present project report is my original work. The content of this project has not been submitted to any other university or institute either in part or in full for the award of any degree, diploma or fellowship

Further, I assign the right to university to use the information and the content of the project to develop cases, caselets, case leads, and papers for publication and/or for use in teaching.

Place: New Delhi MUKHTAAR ABBAS Date: Roll No: 08-MBA-30.

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Certificate

This is to certify that Mr. Mukhtaar Abbas, A bonafied student of MBA (Full time) at Centre for Management Studies, has completed his comprehensive project under my direct supervision.

By performance I found him to be a v. good Learner who has shown initiative and comprehension to grasp the practical knowledge.

He is blesses with a cheerful disposition and good communication Skills.

I wish him all the best in his future pursuits.

Place: New Delhi Prof U. M. AminDate: (Hony Director, CMS)

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ACKNOWLEDGEMENT

The desire and need to thank some indispensable persons is a customary but when it comes to me I just felt it as religion. As the Intensity of sentiments deepens; we fumble for words and full in expressions. I am experiencing the same difficulty as I feel to acknowledge my project guide and supervisor, Prof U. M. Amin (Hony Director, CMS), who guided me in this project entitled “Staying Ahead in the market place: Analysis of marketing Strategy of P&G”. I am sincerely thankful to him for his help for the completion of the Project.

I express my heartfelt gratitude and regard to my Faculty Members and My Friends who have been the threshold in understanding and upbringing my competencies to move ahead in life with élan..

I am also very thankful to all the respondents who co-operate with me very nicely.

Lastly, my prayers and thanks to The Almighty, whose blessings showering on me are the heart and soul for all my being.

MUKHTAAR ABBAS

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PrefaceThis project is a step towards gaining knowledge about the real world and putting the theory to practice. I shall look forward to and gratefully acknowledge all suggestions on this small step I have taken.

The report consists of a step-wise effort towards meeting the objectives of the study. It covers in brief, the origin of the company, its growth in India, the company profile. It then, covers the step-wise process of data collection and the representation of the data together with the analysis. It also includes some suggestions put forward hoping it would help the company achieve its vision.

In my Comprehensive project I was assign the task “Staying Ahead in the market place: Analysis of marketing Strategy of P&G”

I carried out the market research by meeting and interviewing and asking to fill my questionnaire and also gathered data from secondary sources in order to achieve my objectives of the study.

This study analyzes the marketing mix of P&G and also advertising and CSR practices in order to analyze the effectiveness of these practices.

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Contents1. Executive Summary

2. Introduction

3. Industry Analysis

Porter’s five forces model

Swot analysis

Industry category and products

4. Company Profile

History

P&G in India

Financial Highlights

Organizational Structure

Purpose, Principles and values

Environmental credentials

CSR in India

5. External environmental Scanning

6. Competitive analysis

7. Marketing mix Strategy

Product

Pricing

Promotion and Communication

Packaging

Distribution

8. Research Methodology

Research objectives

Research type

Sampling

Data Collection Tools

Data collection Methodology

Hypothesis

9. Data Analysis and Interpretation

10. Findings and Conclusion

11. Annexure

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12. Bibliography

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Executive SummaryThis study seeks to understand the growth of Procter & Gamble through the in-depth analysis of marketing strategies it has adopted over a long period of time to stay ahead in the market place. This study explains how P&G has maintained its position by exploring the strategies. The study also explains how P&G became the world leader billion dollar brand from a local candle and soap maker. Further it seeks how CSR and Advertising help P&G to create and brand image for quality and innovation.

This study seeks to fulfil the following objectives with emphasized on personal care products by P&G in Indian market: To identify the factors that has led to the success of P&G over a long period of time to

stay ahead in the market place. To analyze the marketing and positioning strategies adopted by P&G. To analyze the advertisement and corporate social responsibility budgets of P&G to make

(sustain) brand image.

This study consists of some secondary and primary research and data that has been analyzed to reach out to some conclusions and to provide some recommendations.

This project analyzes the marketing mix used by the P&G in Indian Personal Care Industry and the products by P&G in this sector are:

Pantene

Olay total effects

Olay natural white

Head & Shoulders

Rejoice

The closer competitor to P&G in this sector are as HUL, ITC, Dabur and Merico.

So this study emphasizes on personal csre products of P&G in India to analyze the marketing mix strategy adopted by P&G to gain the market share and profit.

Further this study also analyze the advertising and CSR by P&G in India to measure and analyze the effectiveness of ads and CSR.

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IntroductionIndiaʹs FMCG sector is the fourth largest sector in the economy and creates employment for

more than three million people in downstream activities. Its principal constituents are

Household Care, Personal Care and Food & Beverages. The total FMCG market is in excess

of Rs. 85,000 Crores. It is currently growing at double digit growth rate and is expected to

maintain a high growth rate. FMCG Industry is characterized by a well established

distribution network, low penetration levels, low operating cost, lower per capita consumption

and intense competition between the organized and unorganized segments.

The Rs 85,000-crore Indian FMCG industry registereded a healthy growth in the third quarter

of 2008-09 despite the economic downturn. Unlike other sectors, the FMCG industry did not

slow down since Q2 2008 and registered a double digit growth rate. The industry is doing

pretty well, bucking the trend. As it is meeting the every-day demands of consumers, it will

continue to gro. Market share movements indicate that companies such as Marico Ltd and

Nestle India Ltd, with domination in their key categories, have improved their market shares

and outperformed peers in the FMCG sector. This has been also aided by the lack of

competition in the respective categories. Single product leaders such as Colgate Palmolive

India Ltd and Britannia Industries Ltd have also witnessed strength in their respective

categories, aided by innovations and strong distribution. Strong players in the economy

segment like Godrej Consumer Products Ltd in soaps and Dabur in toothpastes have also

posted market share improvement, with revived growth in semi-urban and rural markets.

By 2015, the sector is predicted to scale up to US$33.4 billion. The sector generates 5% of total factory employment in the country and is creating employment for three million people, especially in small towns and rural India.

With more players entering the FMCG sector, particularly the skin care, hair care, deodorants, convenience foods, and health foods markets,

• Indian consumers have more choices than ever.

• Some are even willing to pay premium prices for their “higher” aspirations

• Margin are becoming thinner for FMCG players as they battle higher raw material costs and invest more in marketing, slick packaging and distribution networks to gain volume and retain/gain market shares

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Industry Analysis:

India’s FMCG Market Size (In USD Billion)

Industry Dynamics:

(Porter;s Five forces Model)

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Rivalry

Supplier Power In house manufacturing or

Outsourcing Consistency in product quality Cost of input as % of total cost

Availability of Raw material

Threats of Substitutes: Cheaper products from peers

Value for money products Ability to pass on cost benefits to customers

Buyer Power: Brand identity

Price sensitivity Low switching cost

Product differentiation

Less barriers to entry: Marketing and Brand building is

difficult Economies of Scale

Huge investment in setting up large distribution network Easy available of Inputs

Higher Penetration of the Rural Population

Many companies are deepening their penetration in the rural areas as:

The FMCG sector in the urban areas is becoming quite saturated (though it will continue to dominate in the next 8 – 10 years) while the penetration in the rural areas are only about 1%.

The rural areas have and will continue to make up more than 50% (153 million) of India’s total households and accounting for more than its current 66% contribution to total FMCG consumption.

Rural India has a large consuming class with 41 per cent of India's middle-class and 58 per cent of the total disposable income.

Currently, nearly 34% of the offtake of FMCG companies come form rural areas. Companies like HUL, ITC and Colgate have already established good distribution networks in these regions. Other companies would start catering to these regions in near future.

Between 2005 and 2010, the FMCG sector in the rural and semi-urban areas will experience some 50% growth, at a CAGR of 10% and increase its market size to nearly US$ 23 billion from the 2005 level of US$11.4 billion

Demand for FMCG products is set to boom by almost 60 per cent by 2007 and more than 100 per cent by 2015. This will be driven by the rise in share of middle class (defined as the climbers and consuming class) from 67 per cent in 2003 to 88 per cent in 2015. The boom in various consumer categories, further, indicates a latent demand for various product segments. For example, the upper end of very rich and a part of the consuming class indicate a small but rapidly growing segment for branded products. The middle segment, on the other hand, indicates a large market for the mass end products. The BRICs report indicates that India's per capita disposable income, currently at US$ 556 per annum, will rise to US$ 1150 by 2015 - another FMCG demand driver. Spurt in the industrial and services sector growth is also likely to boost the urban consumption demand.

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Swot Analysis of FMCG sector in India

Strengths:

• Low operational costs

• Presence of established distribution networks in both urban and rural areas

• Presence of well-known brands in FMCG sector

Weaknesses:

• Lower scope of investing in technology and achieving economies of scale, especially in

small sectors

• Low exports levels

• "Me-tooʺ products, which illegally mimic the labels of the established brands. These

products narrow the scope of FMCG products in rural and semi-urban market.

Opportunities:

• Untapped rural market

• Rising income levels, i.e. increase in purchasing power of consumers

• Large domestic market- a population of over one billion.

• Export potential

Threats:

• Removal of import restrictions resulting in replacing of domestic brands

• Slowdown in rural demand

• Tax and regulatory structure

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Industry Category and Products:

Household Care

Personal Wash:-

The market size of personal wash is estimated to be around Rs. 8,300 Cr. The personal wash

can be segregated into three segments: Premium, Economy and Popular. The penetration level

of soaps is 92 per cent. It is available in 5 million retail stores, out of which, 75 per cent are in

the rural areas. HUL is the leader with market share of 53 per cent; Godrej occupies second

position with market share of 10 per cent. With increase in disposable incomes, growth in

rural demand is expected to increase because consumers are moving up towards premium

products. However, in the recent past there has not been much change in the volume of

premium soaps in proportion to economy soaps, because increase in prices has led some

consumers to look for cheaper substitutes.

Detergents:-

The size of the detergent market is estimated to be Rs. 12,000 Cr. Household care segment is

characterized by high degree of competition and high level of penetration. With rapid

urbanization, emergence of small pack size and sachets, the demand for the household care

products is flourishing. The demand for detergents has been growing but the regional and

small

unorganized players account for a major share of the total volume of the detergent market. In

washing powder HUL is the leader with 38 per cent of market share. Other major players are

Nirma, Henkel and Proctor & Gamble.

Personal Care

Skin Care:-

The total skin care market is estimated to be around Rs. 3,400 Cr. The skin care market is at a

primary stage in India. The penetration level of this segment in India is around 20 per cent.

With changing life styles, increase in disposable incomes, greater product choice and

availability, people are becoming aware about personal grooming. The major players in this

segment are Hindustan Unilever with a market share of 54 per cent, fol-lowed by CavinKare

with a market share of 12 per cent and Godrej with a market share of 3 per cent.

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Hair Care:-

The hair care market in India is estimated at around Rs. 3,800 Cr. The hair care market can be

segmented into hair oils, shampoos, hair colorants & conditioners, and hair gels. Marico is the

leader in Hair Oil segment with market share of 33 per cent; Dabur occu-pies second

position at 17 per cent.

Shampoos:-

The Indian shampoo market is estimated to be around Rs. 2,700 Cr. It has the penetration

level of only 13 per cent in India. Sachet makes up to 40 per cent of the total shampoo sale. It

has low penetration level even in metros. Again the market is dominated by HUL with around

47 per cent market share; P&G occupies second position with market share of around 23 per

cent. Antidandruff segment constitutes around 15 per cent of the total shampoo market. The

market is further expected to increase due to increased marketing by players and availability

of shampoos in affordable sachets.

Oral Care:-

The oral care market can be segmented into toothpaste - 60 per cent; toothpowder - 23 per

cent; toothbrushes - 17 per cent. The total toothpaste market is estimated to be around Rs.

3,500 Cr. The penetration level of toothpowder/toothpaste in urban areas is three times that of

rural areas. This segment is dominated by Colgate-Palmolive with market share of 49 per

cent, while HUL occupies second position with market share of 30 per cent. In toothpowders

market, Colgate and Dabur are the major players. The oral care market, especially toothpastes,

remains under penetrated in India with penetration level 50 per cent.

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Personal Care Products’ Market Sizes (In USD Million)

Food & Beverages

Food Segment :-

The foods category in FMCG is gaining popularity with a swing of launches by HUL, ITC,

Godrej, and others. This category has 18 major brands aggregating Rs. 4,600 Cr. Nestle and

Amul slug it out in the powders segment. The food category has also seen innovations like

softies in ice creams, ready to eat rice by HUL and pizzas by both GCMMF and Godrej

Pillsbury.

The size of the food processing industry exceeds US$65.6 billion.

• The size of the semi-processed/ready-to-eat food segment is over $1.1 billion.

Of the food processing industry,

Bread and biscuits sales exceeds US$1.7 billion;

Health beverage sales exceeds US$ 230 million;

Ice cream exceeds US$188 million

Chocolates sales exceeds US$73 million

• The soft drink (carbonated beverages and juices) market is in excess of US$1 billion,

predominantly urban (>70%), and its consumption is highly seasonal.

• Major players in this segment include Hindustan Lever, Nestle, Cadbury and Dabur

Tea :-

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The major share of tea market is dominated by unorganized players. More than 50 per cent of

the market share is capture by unorganized players. Leading branded tea players are HUL and

Tata Tea. In the hot beverage market, tea rather than coffee dominates. Coffee is consumed

largely in the southern states.

Coffee :-

The Indian beverage industry faces over supply in segments like coffee and tea. However,

more than 50 per cent of the market share is in unpacked or loose form. The major players in

this segment are Nestlé, HUL and Tata Tea.

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Company Profile

William Procter, a candlemaker, and James Gamble, a soapmaker, formed this global and

Fortune 500 Corporation in 1837. Procter and Gamble (P&G) is headquartered in Cincinnati,

Ohio. These two entrepreneurs and inventors were immigrants from England and Ireland

respectively; who chose for some reason to settle in the Cincinnati area. The company

manufactures a wide variety of consumer goods including beauty, household, health and

wellness products.

1837 — 1890

The Partnership Years.1837 was a difficult time to start a business. Although Cincinnati

was a bustling marketplace, the U.S. was gripped by financial panic. Hundreds of banks were

closing across the country. There was widespread concern that the United States was

bankrupt. Yet, William and James launched their new enterprise, more concerned about how

to compete with the 14 other soap and candle makers in their city than with the financial panic

shaking their country.

Their calm in the midst of that economic storm reflected their forward-looking approach to

the business – an approach that became the hallmark of Procter & Gamble. In the 1850s, for

example, despite rumors of an impending civil war in the U.S., they built a new plant to

sustain their growing business. Later, they pioneered one of the nation’s first profit-sharing

programs and were among the first in American industry to invest in a research laboratory. By

1890, the fledgling partnership between Procter and Gamble had grown into a multi-million

dollar corporation.

1890 — 1945

A Company Built on Innovation. By 1890, P&G was selling more than 30 different types of

soap, including Ivory. Fueled by full-color print ads in national magazines, consumer demand

for P&G soaps continued to grow. To meet this increasing demand, the Company expanded

its operations outside Cincinnati, with a plant in Kansas City, Kansas, followed by a plant in

Ontario, Canada. As each new plant opened, P&G would embark on plans for another. The

research labs were as busy as the plants. Innovative new products rolled out one after another

– Ivory Flakes, a soap in flake form for washing clothes and dishes; Chipso, the first soap

designed for washing machines; Dreft, the first synthetic house-hold detergent; and Crisco,

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the first all-vegetable shortening that changed the way consumers cooked. Each of these new

products came from P&G’s in-depth understanding of consumer needs and pioneering

approach to market research. And they were marketed through equally innovative techniques,

including radio “soap operas,” product sampling and promotional premiums.

1945 — 1980

New Lands and Dynamic Growth In 1946, P&G introduced Tide, its most important new

product since Ivory. Tide was remarkably superior to other products on the market, and it

quickly became an enormous success – so successful, in fact, that it helped fund the

Company’s rapid growth not just into new product lines but also into new markets around the

world. In the years following Tide’s introduction, P&G made its mark in several new

businesses. Crest, the first fluoride toothpaste, rose to market leadership on the strength of an

unprecedented endorsement by the American Dental Association. The Company’s

pulpmaking technology fueled its growth in the toilet tissue and paper towel businesses. And

P&G literally invented the disposable diaper category with the introduction of Pampers in

1961. The Company also strengthened its existing businesses, expanding into new food and

beverage categories – most notably with the acquisition of Folger’s coffee in 1963 – and

building on its strong laundry reputation with Downy, its first fabric softener. Most important,

however, was the Company’s growing focus on its international businesses. Convinced that

its success in new geographic markets required on-the-ground operations in these countries,

P&G began building start-up businesses, first in Mexico, then in Europe and Japan. By 1980,

P&G was doing business in 23 countries around the world, with sales of nearly $11 billion

and earnings 35 times greater than in 1945.

1980 — 1999

A Global Company As it approached its 150th anniversary in 1987, P&G was poised for the

most dramatic period of growth in its history. The Company that began as a small Midwestern

partnership had grown into one of America’s largest multinational corporations. Two

important changes marked this dynamic period. First, the Company emerged as an important

new player in health care (through the acquisitions of Norwich Eaton Pharmaceuticals and

Richardson-Vicks and the opening of the Health Care Research Center in Cincinnati) and in

cosmetics and fragrances (with the acquisitions of Noxell, Max Factor, Ellen Betrix and

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Giorgio of Beverly Hills). Second, P&G expanded its globalization plans. The Company

established a worldwide research and development network, with research hubs in the United

States, Europe, Japan and Latin America, and built a solid foundation of truly global brands.

These brands include Pantene Pro-V, Always/Whisper, Ariel and Tide, Crest, Pampers, Vicks

and Oil of Olay.

2000-Today

In the spring and summer of 2000, P&G experienced one of the most demanding challenges

in its history. After missing earnings commitments, the Company's stock declined

dramatically, resulting in a loss of nearly $50 billion in market capitalization.

A.G. Lafley, who became CEO in June 2000, reaffirmed P&G's Purpose and Values and

refocused the Company on the few choices necessary to get the business back on track:

growing its leading categories and brands with its largest retail customers in its top

geographic markets while accelerating growth in health, beauty and personal care and in fast-

growing developing markets. In the five years that followed, P&G increased sales more than

40%, doubled profits, generated more than $30 billion in free cash flow, and delivered more

than $70 billion in shareholder value. In 2005, P&G merged with The Gillette Company –

following the acquisitions of Clairol and Wella earlier in the decade. With a portfolio of 22

billion-dollar brands and a market capitalization of nearly $200 billion, P&G established itself

as one of the ten most valuable companies in the world by respecting the consumer as boss

and fulfilling its Purpose: touching lives and improving life every day.

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Over 50 Years of Sustainability Progress: (Source: www.pg.com)

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P&G in India:

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. Richardson Hindustan Limited (RHL), manufacturer of the Vicks range of

products, was rechristened 'Procter & Gamble India' in October 1985, following its

affiliation to the 'Procter & Gamble Company', USA. Procter & Gamble Hygiene and

Health Care Limited (PGHHCL) acquired its current name in 1998, reflecting the two

key segments of its business. P&G, USA has a 65 per cent stake in PGHHCL. The

parent also has a 100 per cent subsidiary, Procter & Gamble Home Products (PGHP).

The overall portfolio of the company includes healthcare; feminine-care; hair care and

fabric care businesses. PGHH operates in just two business segments – Vicks range of

cough & cold remedies and Whisper range of feminine hygiene.

Products:

Four billion times a day, P&G brands touch the lives of people around the world. The

company has one of the strongest portfolios of trusted, quality, leadership brands,

including Pampers®, Tide®, Ariel®, Whisper®, Pantene®, Mach3®, Oral-B®,

Duracell®, Olay®, Head & Shoulders®, Gillette®.

Billion-Dollar Brands

P&G is a company of leading brands. At the beginning of the decade, P&G had ten

billion-dollar brands in its portfolio — brands that generate more than one billion dollars

in sales each year. Today, P&G have 23 of these billion-dollar brands overseas. Some in

India are Olay, Tide, Pampers, Pantene, Gillette, Ariel, Oral-B, and Head & Shoulders.

Half-Billion-Dollar Brands

P&G also has 20 brands generating about $500 million or more in annual sales overseas.

When these are combined with the billion-dollar brands, P&G’s top 43 brands account

for 85% of sales and more than 90% of profit. Together, these 43 brands have delivered

a 9-year compound average sales growth rate of approximately 10% — double the

growth rate of the balance of P&G’s brand portfolio. Some are Rejoice, Dolce

&Gabbana.

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P&G acquisition of Gillete:

The Procter & Gamble Co. is embarking on its largest acquisition to date — a $57

billion deal for Gillette Co. and its shaving products and copper-top batteries that would

form the world's largest consumer-products company. After the deal, P&G added

Duracell batteries, Right Guard deodorant and Gillette razors to its more than 300

consumer brands, including Ivory Soap, Head and Shoulders shampoo,Crest toothpaste

and Bounty paper towels. The acquisition would vault P&G's sales to more than $60

billion annually.

"This combination of two best-in-class consumer products companies, at a time when

they are both operating from a position of strength, is a unique opportunity," P&G chief

executive A.G. Lafley.

Gillette also has reported strong earnings since Kilts joined the company in 2001. It has

moved to buoy its premium-line shaving and dental care products and sales of Duracell

batteries.

In its most recent quarter, Gillette reported income of $475 million, up from $416

million, as more consumers traded up to its pricier M3Power razor and the series of

hurricanes in the South boosted battery sales. Gillette also sells Oral B dental care

products

Financial Highlights:

P&G has grown sales from $39 billion to $83 billion in the past seven years. It has more

than doubled the number of brands that generate $1 billion or more in annual sales and

more than quadrupled the number of brands that generate at least $500 million.

The Company reported net earnings of $12.1 billion for the fiscal year ended June 30,

2008, an increase of 17 percent compared to $10.3 billion in 2007. Diluted net earnings

per share were $3.64 in 2008, compared to $3.04 in 2007. Net sales were $83.5 billion in

2008, up 9 percent from last year. First discretionary use of cash is dividend payments.

Common share dividends grew 13 percent to $1.45 per share in 2008, representing the

52nd consecutive fi scal year of increased common share dividends. Total dividend

payments, to both common and preferred shareholders, were $4.7 billion, $4.2 billion

and $3.7 billion in fiscal 2008, 2007 and 2006, respectively.

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Supplier diversity is a fundamental business strategy at P&G. In 2009, P&G spent more

than $2 billion with minority- and women-owned businesses. Since 2005, P&G has been

a member of the Billion Dollar Roundtable, a forum of 16 corporations that spend more

than $1 billion annually with diverse suppliers.

2009 NET SALES(% of total business segments)

Peer Group Comparison

Name of the company

CMP (Rs.)

MarketCap. (Rs.mn.)

EPS (Rs.)

P/E (x)

P/Bv (x)

Dividend (%)

Procter &Gamble

1740.00

56480.4 55.10

31.58

12.84

225.00

HUL Ltd284.70 619811.2 9.09 31.2

730.07

750.00

Nestle India 2586.6

0249388.9 68.7

837.61

52.69

425.00

ITC Ltd267.00 1010240.

99.52 28.0

57.38 370.00

(Source: First call India Equity Advisors Pvt. Ltd )

Dividend History

P&G has paid dividends without interruption since its incorporation in 1890 and has increased dividends each year for the past 53 fiscal years. P&G’s compound annual dividend growth rate is 9.5% over the last 53 years.

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21%($16.7b)

33%($26.3b)

46%($37.3b)

1956 1970 1984 1998 20090

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8Dividend per share(split adjusted in $)

Dividend per share(split ad-justed)

(in dollars, split adjusted) 1956 1970 1984 1998 2009Dividends per Share $0.01 $0.04 $0.15 $0.51 $1.64

P&G serves about four billion people in the world today. And P&G people work to

make sure the Company’s brands live up to their promise to make everyday just a little

bit better, now and for generations to come.

Purpose

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P&G 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.

Principles

P&G show respect for all individuals. The interests of the Company and the individual

are inseparable. We are strategically focused in our work. Innovation is the cornerstone

of our success. We are externally focused. We value personal mastery. We seek to be the

best. Mutual interdependency is a way of life.

Values

P&G Brands and P&G People are the foundation of P&G’s success. P&G People bring

the values to life as we focus on improving the lives of the world’s consumers.

Organizational Structure

P&G 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).

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CONSUMERS

P&G BRANDS

P&G PEOPLE

P&G VALUESIntegrityLeadershipOwnershipPassion for WinningTrust

Global Business Units

P%G’s 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 P&G brands through effective commercial innovations, marketing and sales.

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. P&G define developing markets as the

aggregate of Central & Eastern Europe/Middle East/ Africa, Latin America,

ASEAN/Australia/India and Greater China. Developed markets are comprised of North

America, Western Europe and Northeast Asia.

Global Business Services

GBS provides technology, processes and standard data tools to enable the 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.

Environmental Credentials:

All P&G products are held to P&G's high standards for environmental and human safety, we do not differentiate between which products meet these standards and which do not - they all do.

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P&G has been leading the industry with innovations like concentrated products, recycled plastic bottles and refill packages to the industry.

P&G's Central Product Safety Environment Group was established to develop new methods for evaluating the environmental safety of consumer products. P&G was one of the first companies to establish such an organization.

P&G has hundreds of scientists and engineers responsible for assessing the environmental safety of our products and operations.

P&G's environmental organization has published more than 700 articles over the past 45 years; almost 500 of those since 1990.

In 1992, P&G received the World Environment Centre Gold Medal for International Corporate Environmental Achievement.

P&G has been listed by FTSE4 Good ethical investment index since its inception.

95.93% of all materials entering P&G factories worldwide leave as finished product (waste is 4.07% of which more than 50% is recycled).

CSR by P&G India:

There are various CSR activities carried out by P&G with genuine intention

of giving back to the society.

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)

Environmental Scanning of Indian FMCG Sector:

Increase in per capita income and heightened awareness of personal appearances, have

fuelled the demand for personal care products in India and today this sector has emerged as

one of the fastest growing markets in the country.

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The personal care market in India is estimated to be worth $4-bn. Personal hygiene products

(including bath and shower products, deodorants etc.), hair care, skin care, colour cosmetics

and fragrances are the key segments of the personal care market.

Each of these segments exhibits unique trends and growth patterns. For example, the largest

segment of personal hygiene products, largely dominated by bar soaps, has grown at 5% p.a.

over the last five years. In comparison, the second largest segment of hair care products has

seen a much higher growth of 9-10% p.a. during the same period. The skin care market is

relatively smaller and is growing at a high rate while moving away from basic creams and

moisturizers to specialized products such as anti-wrinkle and dark circle removing creams.

For example, the anti-ageing segment, though only 2% of the skin care market, has been

growing at a rate greater than 90% p.a. over the last few years.

The oral care industry, especially toothpastes, remains under penetrated in India with

penetration rates below 45 per cent. With rise in per capita incomes and awareness of oral

hygiene, the growth potential is huge. Lower price and smaller packs are also likely to drive

potential uptrading. In the personal care segment, according to forecasts made by the Centre

for Industrial and Economic Research (CIER), detergent demand is likely to rise to 4,180,

000 metric tonnes by 2011-12 with an annual growth rate of 7 per cent between 2006 and

2012. The demand for toilet soap is expected to grow at an annual rate of 4 per cent between

2006-12 to 870,000 metric tonnes by 2011-12. Rapid urbanisation is expected to propel the

demand for cosmetics to 100,000 metric tonnes by 2011-12, with an annual growth rate of

10 per cent. (Source: Publication by Indian Brand Equity Foundation “IBEF”)

The Indian personal care industry has taken rapid strides in the last few years, moving

towards premium products incorporating specialty ingredients in their formulation.

However, a comparison with per capita consumption in China reflects the largely untapped

nature of the Indian market. Favourable demographic factors and increasing beauty

consciousness indicate high future demand for personal care products and specifically for

active ingredients.

Industry participants need to build greater awareness and distribution reach and develop

products tailored for the Indian market. Key trends, including nanotechnology and green

chemistry besides others, will influence their strategies. The eventual winners would be

those who ensure better value offerings to meet the needs of the Indian consumer.

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(Source: chemical weekly October 6, 2009)

WHY INDIA

Large domestic market:

India is one of the largest emerging markets, with a population of over one billion. India is one of the largest economies in the world in terms of purchasing power and has a strong middle class base of 300 million.

Urban Rural

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Population 2001-02 (mn household 53 135

Population 2009-10 (mn household) 69 153

Market (Towns/Villages) 3768 627,000

Universe of Outlets (mn) 1 3.3

(Source: Statistical Outline of India, NCAER)

India - a large consumer goods spender

An average Indian spends around 40 per cent of his income on grocery and 8 per cent on personal care products. The large share of fast moving consumer goods (FMCG) in total individual spending along with the large population base is another factor that makes India one of the largest FMCG markets. Even on an international scale, total consumer expenditure on food in India at US$ 120 billion is amongst the largest in the emerging markets, next only to China.

Consumer expenditure on food (US$ billion)

Thailand S. Korea Taiwan Brazil Russia UK India China0

20

40

60

80

100

120

140

160

180

Change in the Indian consumer profile:

Rapid urbanisation, increased literacy and rising per capita income, have all caused rapid growth and change in demand patterns, leading to an explosion of new opportunities. Around 45 per cent of the population in India is below 20 years of age and the young population is set to rise further. Aspiration levels in this age group have been fuelled by greater media exposure, unleashing a latent demand with more money and a new mindset.

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Way ahead for personal care industry in India:

What do all these trends mean for the Indian personal care industry, in general and

individual companies, in particular? The outlook of more stringent regulation governing

usage of active ingredients in personal care products implies the need to strengthen testing

capabilities to ensure adequate product safety. Also the industry needs to self regulate to

ensure performance claims made in product advertisements are commensurate with benefits

delivered to consumers. The surging demand for green products calls for better product and

application R&D capabilities to use natural ingredients more effectively. Multinational

players with international brands have a strong presence in the Indian formulation segment.

Local brands too are gaining a foothold in the market by innovatively developing value

offerings to meet the unique needs of the Indian consumer. Going ahead, it will be important

to develop R&D capabilities to further customize products for Indian consumers, create

greater awareness among the burgeoning middle class and ensure effective distribution reach

to service them. The companies that are able to develop a judicious mix of the above will be

the eventual winners. The time is ripe to review one’s strategy and come up with innovative

approaches to help realise the full potential of the Indian personal care sector, where the

ingredients market is likely to double in the next four years.

INDIA COMPETITIVENESS AND COMPARISON WITH THE WORLD MARKETS

Materials availability:

India has a diverse agro-climatic condition due to which there exists a wide-ranging and large raw material base suitable for food processing industries. India is the largest producer of livestock, milk, sugarcane, coconut, spices and cashew and is the second largest producer of rice, wheat and fruits & vegetables. India also has an ample supply of caustic soda and soda ash, the raw materials in the production of soaps and detergents – India produced 1.6 million tonnes of caustic soda in 2003-04. Tata Chemicals, one of the largest producers of synthetic soda ash in the world is located in India. The availability of these raw materials gives India the locational advantage.

Domestic FMCG market to treble:

According to estimates based on China's current per capita consumption, the Indian FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015.

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India 2003 India 201505

10152025303540

FMCG market Size (US $ billion)

11.6

33.4

(Source: HH Panel Data)

The dominance of Indian markets by unbranded products, change in eating habits and the increased affordability of the growing Indian population presents an opportunity to makers of branded products, who can convert consumers to branded products.

Cost competitiveness:

Labour cost comparison:

China Indonesia India Phillipines Thailand Malaysia Korea singapore0

5000

10000

15000

20000

25000

Labour cost per worker

729 119210082450 2705

3429

10743

21317

US

$ p

er Y

ear

(Source: DIPP)

Apart from the advantage in terms of ample raw material availability, existence of low-cost labour force also works in favour of India. Labour cost in India is amongst the lowest in Asian countries. Easy raw material availability and low labour costs have resulted in a lower cost of production. Many multi-nationals have set up large low cost production bases in India to outsource for domestic as well as export markets.

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Presence across value chain:

Indian firms also have a presence across the entire value chain of the FMCG industry from supply of raw material to final processed and packaged goods, both in the personal care products and in the food processing sector. For instance, Indian firm Amul's product portfolio includes supply of milk as well as the supply of processed dairy products like cheese and butter. This makes the firms located in India more cost competitive.

POLICY

India has enacted policies aimed at attaining international competitiveness through lifting of the quantitative restrictions, reduced excise duties, automatic foreign investment and food laws resulting in an environment that fosters growth. 100 per cent export oriented units can be set up by government approval and use of foreign brand names is now freely permitted.

FDI Policy:

Automatic investment approval (including foreign technology agreements within specified norms), up to 100 per cent foreign equity or 100 per cent for NRI and Overseas Corporate Bodies (OCBs) investment, is allowed for most of the food processing sector except malted food, alcoholic beverages and those reserved for small scale industries (SSI). 24 per cent foreign equity is permitted in the small-scale sector. Temporary approvals for imports for test marketing can also be obtained from the Director General of Foreign Trade. The evolution of a more liberal FDI policy environment in India is clearly supported by the successful operation of some of the global majors like PepsiCo in India.

Removal of Quantitative Restrictions and Reservation Policy:

The Indian government has abolished licensing for almost all food and agro-processing industries except for some items like alcohol, cane sugar, hydrogenated animal fats and oils etc., and items reserved for the exclusive manufacture in the small scale industry (SSI) sector. Quantitative restrictions were removed in 2001 and Union Budget 2004-05 further identified 85 items that would be taken out of the reserved list. This has resulted in a boom in the FMCG market through market expansion and greater product opportunities.

Central and state initiatives:

Various states governments like Himachal Pradesh, Uttaranchal and Jammu & Kashmir have encouraged companies to set up manufacturing facilities in their regions through a package of fiscal incentives. Jammu and Kashmir offers incentives such as allotment of land at concessional rates, 100 per cent subsidy on project reports and 30 per cent capital

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investment subsidy on fixed capital investment upto US$ 63,000. The Himachal Pradesh government offers sales tax and power concessions, capital subsidies and other incentives for setting up a plant in its tax free zones. Five-year tax holiday for new food processing units in fruits and vegetable processing have also been extended in the Union Budget 2004-05. Wide-ranging fiscal policy changes have been introduced progressively. Excise and import duty rates have been reduced substantially. Many processed food items are totally exempt from excise duty. Customs duties have been substantially reduced on plant and equipment, as well as on raw materials and intermediates, especially for export production. Capital goods are also freely importable, including second hand ones in the Food processing sector

Growth Prospect of Indian FMCG sector

Large Market

India has a population of more than 1.150 Billions which is just behind China. According to

the estimates, by 2030 India population will be around 1.450 Billion and will surpass China

to become the World largest in terms of population. FMCG Industry which is directly

related to the population is expected to maintain a robust growth rate.

(Source: UN Population Division: Medium variant)

Spending Pattern

An increase is spending pattern has been witnessed in Indian FMCG market. There is an

upward trend in urban as well as rural market and also an increase in spending in organ-ized

retail sector. An increase in disposable income, of household mainly because of in-crease in

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nuclear family where both the husband and wife are earning, will lead to growth rate in

FMCG goods.

Changing Profile and Mind Set of Consumer

People are becoming conscious about health and hygiene. There is a change in the mind set of the Consumer and they are now looking at “Money for Value” rather than “Value for Money”. We have seen willingness in consumers to move to evolved products/ brands, because of changing lifestyles, rising disposable income etc. Consumers are switching from economy to premium product just as we have witnessed a sharp increase in the sales of packaged water and water purifier. Findings according to a recent survey by A. C. Nielsen shows about 71 percent of Indian take notice of packaged goods labels containing nutritional information compared to two years ago which was only 59 per cent..

Marketing Mix Strategy

Product Strategy:

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Four billion times a day, P&G brands touch the lives of people around the world. The

company has one of the strongest portfolios of trusted, quality, leadership brands, including

Pantene®, Olay®, Head & Shoulders®, Rejoice® in Indian personal care industry.

Products and Their STP:

STP Process:

The growing use of the STP process has occurred as a direct result of the prevalence of mature markets, the greater diversity in customer needs, and the ability to reach specialized or niche segments. As such marketers are increasingly segmenting markets and identifying attractive segments (i.e. who to focus on and why?), in order to identify new product opportunities, develop suitable positioning and communications strategies (i.e. what message to communicate), and effectively allocate resources to key marketing activities (i.e. how much should we spend and where?). Organizations will often commission segmentation research when they want to re-scope their marketing strategy, investigate a declining brand, launch a new product, or restructure their pricing policy. Organizations operating in highly dynamic environments seek to conduct segmentation research at regular intervals, to keep in touch with changes in the marketplace.

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MarketSegmentation

(S)

TargetMarket

(T)

Brand/ProductPosition

ing(P)

Identifying

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Identifying

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Creating a

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appealto the targetmarket

e.g. male/fe

malebusinessstudents

aged18−25, 26−35,36−45,

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e.g. position HE

as internal

lyrewarding andperson

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MarketInformationMarketInformation

MarketResearch

Creative

MarketingDecisions

MarketingDecisions

STP in personal care products:

Personal care products has been segmented as Hair Care, Skin Care, Oral Care, Colour cosmetics, Bath and shower and Shampoos. P&G operates in some of the segments of personal care industry in India.

Skin Care Products:

In skin care market sector in India P&G has two products and are:

Olay Total effects Olay Natural white

1) Olay Total Effects:

Olay Total Effects is a breakthrough anti-ageing moisturizer containing the patented Vitaniacin formulation - an exclusive anti-ageing combination of niacinamide (Vitamin B3), Vitamin E and Pro-Vitamin B5 (panthenol), in addition to sunscreen protection, making it ideal for Indian skin.

The beauty breakthrough was launched by India’s leading beauty icons who have tried Olay Total Effects and seen a visible difference in their skin – Olay ambassador Sushmita Sen, celebrity hair stylists and beauty experts Dilshad Pastakia & Coleen Khan Affonso, TV Anchor & actor Tisca Chopra, health and wellness expert Shikha Sharma, Economist & Head, Future Trends (Future Group) Roopa Purshottaman, and fashion designer Anita Dongre.

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In addition, Olay Total Effect’s VitaNiacin technology was endorsed by India’s Leading Dermatologists at a conference where the results of a recent Clinical Study on Ageing-Skin were shared.

Consumer research conducted by P&G revealed that women tend to perceive only ‘fine lines & wrinkles’ as a sign of Skin ageing, when the fact is that there are 7 such signs including appearance of pores, age spots and uneven skin tone amongst others. The research also disclosed that very few women knew that the skin ageing process in fact starts in their mid-20s, and not late 30s as most perceive it. And 7 signs of skin ageing are: (i) Fine Lines and Wrinkles; (ii) Sagging Skin; (iii) Uneven Skin Tone; (iv) Age Spots; (v) Appearance of Pores; (vi) Dull Skin; and (vii) Dryness.

Regular usage of Olay Total Effects with the breakthrough VitaNiacin complex ensures just one product helps

fight the seven signs of ageing, as it…

1. Visibly reduces lines & wrinkles

2. Gives soft and smooth skin

3. Visibly reduces dark spots

4. Provides sun protection for even skin tone

5. Gives firm looking skin

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6. Provides radiant, glowing skin

7. Visibly reduces the pore size

Segmentation For Olay Total Effects:

Geographic Segmentation: As the olay total effects launch in the metro cities of India with having some beauty experts, Actresses, T.V. anchor, Fashion designers in its promotional campaign which shows that its segmentation for geographic is as:Density: Urban

Demographic Segmentation:

Gender: Female

Age: Mid 20s-50s ( As Brand Ambassadors are Kajol and Sushmita sen )

Social Class: Upper middle, lower upper

Psychographic Segmentation:

P&G operates in the premium segment of the income group. So it segmented the market into two groups according to the psychology of the customers in innovator segment (High resources person).

Thinkers: mature, satisfied and reflective people who are motivated by ideals and value knowledge favour Durability, functionality, and value in products

Achievers: favour premium products that demonstrates success to their peers.

Behavioral Segmentation:

Behavioral Occasions: Regular Occasion

Benefits: Quality and Speed

Readiness stage: Informed, interested and desirous

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Targeting:

Olay total effects is an anti-ageing cream and P&G aimed the Lower upper and upper middle social class for the product. The target population for the product is women of age between mid 20s to 50s in these social classes who are eager to look young and have desire to try something to look young and fight their ageing signs.

Positioning:

P&G positioned its product quite nicely. For Olay total effects P&G did followings to make clear the positioning of the product:-

Firstly informed the market about the signs of ageing and age of starting these signs to educate the customers. So that they can understand if they needed any anti ageing cream or not, and what is the age to start using these kind of products.

Explained product quality that it fights those 7 signs of ageing. Appointed Kajol and Sushmita sen as brand ambassadors for the product to make clear that

what exactly and how the product works by showing their comments and usage experience. Positioned olay for those who have a higher concern to look young and don’t want to show

their age signs. Positioned very clearly that olay is for premium class by using experts comments of usage

experience that is likes of celebrity hair stylists and beauty experts Dilshad Pastakia & Coleen Khan Affonso, TV Anchor & actor Tisca Chopra, health and wellness expert Shikha Sharma, Economist & Head, Future Trends (Future Group) Roopa Purshottaman, and fashion designer Anita Dongre

So, P&G positioned olay quite nicely according to their target market and benefits sought by the product.

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1) Olay Natural white:Olay natural white is a healthy fairness day cream with triple nourishing vitamins (vitamin B3, E and PRO B-5).. it refers to the niacinamide in the formation.

It works from within to give a lady reduced dark spots, lighter skin tone and a glowing skin.

Segmentation of OLAY natural white:

Geographic Segmentation: As the Olay total natural white launched in the metro cities of India. Density: Urban


Gender: Female

Age: Mid 18-mid 40s ( Specially youth as brand ambassador is Katrina Kaif )

Social Class: Upper middle, lower upper


P&G operates in the premium segment of the income group. So it segmented the market into two groups according to the psychology of the customers in innovator segment (High resources person).

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Experiencers: Young, enthusiastic ladies who seek for variety and excitement, also spend a comparatively high proportion of income on fashion.

Achievers: favour premium products that demonstrates success to their peers.



Benefits: Quality, and Speed

Readiness stage: Informed, interested and desirous

Targeting:

Ladies specially youth who

Are in upper middle or lower upper segment of social class. Spend a high proportion of income on fashion and beauty grooming Very conscious about their skin and want to make it glow. Are ready to try out something new for their skin to glow.

Positioning:

As Olay natural has been introduced in India in 2009. P&G till yet has very short time to position their Olay natural white in the consumers mind. But P&G has done a fairly good job to position it and has positioned as:

A product for the youth (ladies) by appointing Katrina Kaif as the brand ambassador for the product. A product that glow your skin from inside not the outer side by using the comment “Secret of my glowing skin is inside” of Katrina Kaif. A premium product as only launched in metro cities of India and priced at premium rates.

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Shampoos:

An interesting insight into the marketing strategy of Proctor & Gamble (P&G)….P&G plays only in the premium segment of the market in India. They have concentrated only on 3 brands of shampoo in the Indian market - Pantene,Head & Shoulders, both of them in the premium segment. Rejoice is the only P&G brand that is present in the economy segment. Given that India is such a price-sensitive market, P&G’s strategy has been to wait for HUL & other FMCG companies to develop the premium segment in India, before they launch their own brand in the segment, so that there is already a market for premium products & the chances of their brand facing rejection are low.

Shampoos are segmented as

Botanical/Herbal Vitamin/Mineral Fortified Premium Organic Ethnical

:

Pantene Pro-V has become one of P&G's most recognized billion-dollar brands. In 1995, Procter & Gamble Home Products entered the Shampoo Category with the launch of Pantene Pro-V. In India. Pantene has been diversified time to time according to the need of the customer and expand the target market.

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 September 2001, Procter & Gamble Home Products launched New Pantene Pro-V range of five shampoos in India which gave consumers the look they want Smooth & Silky for straighter hair, Volume & Fullness for thicker hair, Balanced Clean for shinier hair, Lively Clean for livelier hair and Anti-Dandruff for dandruff-free hair.

In August 2002, Pantene unveiled the launch of the Shine Morning to Night campaign that helps consumers get long lasting hair shine with regular use of Pantene.

In July 2003, Procter & Gamble Home Products Limited launched Pantene Long Black, the ultimate solution for achieving the Long and Black hair look, and Head & Shoulders Silky Black - the only shampoo in India to offer the dual benefits of 100% dandruff-free as well as silky black hair.

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In April 2004, Procter & Gamble Home Products Limited announced the launch of Pantene Hair Fall Control, which is designed to free women of their hair fall concerns by reducing hair fall due to breakage by up to 50% within just two months, thus giving them stronger, thicker looking and beautiful hair.

In October 2004, Procter & Gamble Home Products Limited launched New Pantene Amino Pro-V Complex shampoos, which makes hair ten times stronger.

(Source: www.pantene.com)

Earlier Sushmita sen was the brand ambassador of pantene but Katrina kaif has replaced Sushmita as the brand ambassador for pantene pro-v.

Segmentation:

Geographic Segmentation:

As earlier pantene was launched in metro cities of India but slowly slowly also went to the class I towns and semi urban areas of India. Density: Urban, Semi-Urban, Class I towns

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Gender: Female

Age: Mid 18-mid 40s ( Specially youth as brand ambassador is Katrina Kaif )

Social Class: Upper middle, lower upper , middle (business class)


P&G operates in the premium segment of the income group and segmented people as

Want silky and shiny hair, Strong and Long hair, Use Shampoo to get desired hair Style, Use shampoos for preserving colour in Color-treated hair, Use shampoos that correct the damages of styling equipment Shampoo to avoid Dandruff and dryness




Readiness stage: Interested and desirous

User status: Regular use

Target Market:P&G targeted ladies specially young for pantene over the period of time. It targeted the the psychographic group of ladies who wants silky and shiny hair and those who wants strong hairs.P&G in each diversified product of pantene has concentrated on both the groups. Pantene expanded its target market market from upper and upper middle class and metroes to class I towns and semi-urban areas by launching the 7.5 ml sachet of shampoo but at the same price. Later expanded a little more by reducing one rupee on sachet from 4 rs to 3 rs. expandation has been in terms of social class but demographics and psychographic segment has been same over the period of time.

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Positioning:

P&G positioned Pantene as a vitamin fortified shampoo in the premium segment of the shampoos.

A product for the youth of India as brand ambassador is Katrina Kaif (earlier Sushmita Sen was brand ambassador)

A product for the psychographic group of people who wants either silky shiny hair or strong hair or both of them by using slogans like “For Hair So Healthy It Shines”, “new nourished shine”, “Makes your hair 10 times stronger”, “Control hair fall by 50% in 2 months”, “when performance comes from within you shine by Katrina kaif”. etc over the period of time.

A premium brand Shampoo (high priced and endorsed by the youth icon of the time).

Head & Shoulders: In 1997 Procter & Gamble Home Products launches Head & Shoulders shampoo in India. Head & Shoulders was introduced into the Indian market immediately after HUL came out with it’s Clinic All Clear range of shampoos (not to be confused with Clinic Plus that straddles the mid-value & economy segments)

In November 2000, 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.

In August 2004, Procter & Gamble Home Products Limited signed Preity Zinta – Bollywood's #1 Actress, as Brand Ambassador for its Head & Shoulders anti-dandruff shampoo that gives 100% dandruff-free soft beautiful hair.

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(Source: www.pg.com/brands/head & Shoulders)

Research conducted by P&G experts reveals that almost 50 per cent of Indian dandruff sufferers are troubled by the five signs of dandruff – flakes, irritation, itchiness, dryness and oiliness daily, aggravated by external and internal factors such as hectic lifestyle, pollution, etc. Having discovered this key finding, P&G's expert scientists developed Head & Shoulders with VitaZinc.

Zinta says, "Head & Shoulders with VitaZinc has helped me look and feel my best 24 x 7. There's more to dandruff than meets the eye - it actually has five dreadful signs; firstly, the flakes in your hair and on your clothes, dryness of the scalp, a resultant itchiness, oiliness in the hair and an overall gnawing irritation that affects your appearance and mood both. Based on my excellent experience with the product, I urge all my fans to use Head & Shoulders with VitaZinc to enjoy total freedom from the five signs of dandruff"

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Segmentation:


Gender: Female and Male as well (As Famous cricketer Ajay Jadeja has endorsed it in past )

Age: Mid 18-mid 40s

Social Class: Upper middle, lower upper , middle (business class)


P&G operates in the premium segment of the income group and segmented people as

Want silky and shiny hair, Strong and Long hair, Use Shampoo to get desired hair Style, Use shampoos for preserving colour in Color-treated hair, Use shampoos that correct the damages of styling equipment Shampoo to avoid Dandruff and dryness




Readiness stage: Interested and desirous


Targeting:

P&G targeted ladies and gents as well specially young for Head & Shoulders over the period of time. It targeted the psychographic group of people who wants silky and shiny hair and those who wants a shampoo to avoid dandruff and dryness.P&G in each diversified product of Head & Shoulders has concentrated on both the groups. IT expanded its target market from upper and upper middle class and metroes to class I towns and semi-urban areas by launching the 7.5 ml sachet of shampoo but at the same price. Later expanded a little more by reducing one rupee on sachet from 4 rs to 3 rs. expandation has been in terms of social class but demographics and psychographic segment has been same over the period of time.

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Positioning:

P&G positioned Head & Shoulders as also a vitamin fortified shampoo in the premium segment of the shampoos but for a different psychographic group than pantene.

A product for the youth of India(male and female) as endorsed by Preity Zinta and Ajay Jadeja.

A product for the psychographic group of people who wants either silky shiny hair or a shampoo to avoid dandruff and dryness with no side effect and or both of them by using expert comment and advise by preity by highlighting its benefits in the ads.

A perfect anti-dandruff Shampoo by highlighting the points hoe it fights dandruff. A premium brand Shampoo (high priced and endorsed by the youth icon of the time).

Rejoice:

In January 2004, Procter & Gamble Home Products Limited announced the launch of Rejoice – Asia’s No. 1 shampoo, in India. Rejoice’s patented Micro-Silicone conditioning technology gives twice as smooth, and easy to comb hair versus ordinary shampoos, at affordable prices in 100 ml bottles and 7.5 ml sachets.

Only product of P&G that operates in economy class of India.

(Source: www.google.com)

Segmentation:


Gender: Female and Male as well

Age: Mid 18-mid 40s

Social Class: Economy Class

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P&G segmented economy class of the income as

Want silky and shiny hair, Strong and Long hair, Use Shampoo to get desired hair Style, Shampoo to avoid Dandruff and dryness





Targeting:

P&G targeted ladies and gents as well specially young in the economy class for Rejoice. It targeted the psychographic group of people who wants silky and shiny hair.

Positioning:

P&G positioned Head & Shoulders as also a vitamin fortified shampoo in the economy segment of the shampoo.

A product for the youth of India (male and female) ads by young not so famous personalities.

A product for the psychographic group of people who wants silky shiny hair..

A economy segment Shampoo (highlighted price as saying affordable and not endorsed by any superstar or icon or famous personality just concentrated to show the benefits and price of the shampoo.).

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Pricing Strategies of P&G in India:

P&G has used different pricing strategies for different products depending upon the target market. It has used geographical pricing strategy as it operates in many countries so prices of same products are different 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. With geographical pricing P&G has adopted different many different strategies and are explained further (product wise).

1) Olay Total Effects

Olay Total Effects, is a unique anti-ageing moisturizer that comes in a convenient, easy-to-squeeze pump jar, perfectly sized for every woman’s handbag, and is available in two variants - Normal (UV and Non-UV), and Gentle (UV and Non-UV); with a light, fresh scent, or fragrance-free. All Olay Total Effects moisturizers are priced at Rs. 599/- for a 50gm pump jar.

As it targets the upper middle and lower social class of India, Olay stands in the category of premium brands. P&G wanted a high perceived value in terms of product performance, customer support, product quality, trustworthiness and esteem which P&G has propositioned in the ads of Olay.

So, P&G adopted the perceived value pricing strategy and priced the Olay at a high price so that consumers will perceive it as a premium brand and can perceive the values that P&G has propositioned.

1) Olay Natural White Cream:

Olay natural white is a healthy fairness day cream with triple nourishing vitamins (vitamin B3, E and PRO B-5). It also has been priced highly as 99 Rs for 20gm tube.

P&G adopted the same pricing strategy that of total effects and that is perceived value pricing strategy and priced the Olay at a high price so that consumers will perceive it as a premium brand and can perceive the values that P&G has propositioned.

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2) Pantene:

Pantene, one of the billion dollar brand of P&G, was introduced in Indian market in 1995 in the premium segment of the shampoo market. P&G has basically adopted Geographical pricing strategy for Pantene. They have set different prices for Pantene in different countries.

When Pantene was launched in India, it was priced highly to position it as a premium product in shampoo market. In 1995, P&G adopted perceived value pricing strategy for Pantene to position it the way they wanted to be perceived.

In January 2003 P&G reduced price of Pantene 7.5 ml sachet from Rs 4 to Rs 3. Also in April 2004 P&G reduced prices of Pantene by 16% on 100ml and 200 ml bottles with no change in its superior product-quality or packaging, improving affordability to a large number of Indian consumers.

So, When Pantene was introduced P&G adopted perceived value pricing strategy and later in order to maintain their current customer and expand their target market P&G adopted Value pricing strategy that is the same quality product at a lower prices to make your current customer loyal and expand their target market.

3) Head & Shoulders:

In 1997, P&G introduced Head & Shoulders in shampoo market in the premium segment as a anti-dandruff shampoo. Pricing strategy is of P&G for Head & Shoulders remained the same as it was for Pantene.

The first price was high and almost targeted a niche segment of market and then later on cut down prices to gain more market share and capture more segments of markets.

P&G reduced prices of Head & Shoulders as the same way of Pantene that is reduced prices of 7.5 ml sachets from 4 Rs to 3 Rs, and 16% on 100 ml and 2000 ml bottles.

So P&G adopted the same strategy for pricing of Head & Shoulders as of Pantene that is Perceived value pricing strategy and later on in April 2004 Value pricing strategy to gain more market share and capture more segments of markets.

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4) Rejoice:

Rejoice is the only product of P&G in India that was launched in economy segment of market in January 2004. Rejoice was priced lower and targeted a different market segments than Pantene and Head & Shoulders. Rejoice was positioned as it gives twice as smooth, and easy to comb hair versus ordinary shampoos, at affordable prices in 100 ml bottles and 7.5 ml sachets.

So, Rejoice was priced at a competitive price. A going rate pricing strategy was adopted by P&G for Rejoice that is pricing a product at the same or less price than your competitor. Chik, clinic plus and many shampoos were there in that segment of market and P&G priced Rejoice less than these competitors.

Promotion by P&G:

P&G has used many promotional strategies that has been very successful to project and create a right product image in the consumers mind. For different product strategies used has been different over a period of time. P&G is one of the highest advertising expense company.

Olay:

Since the Olay has been launched in India, alot of advertising and promotion is going on. P&G is using all the media that is Print media (newspaper and magazines) , Broadcast media (radio and television ), Network media (cable , satellite , wireless), Electronic media (webpage) and Display media (bill boards , signs , posters).

They endorsed Kajol and Sushmita Sen their brand ambassador for OLAY total effects and Katrina Kaif for Olay Natural White Cream to make clear the target audience and position and benefits of the products.

Message for OLAY total effects has been that it makes your skin much younger and P&G has been quite successful and has positioned it well as the perfect anti-ageing cream.

And for Olay Natural White Cream message is that it glows your skin and removes dark spots to look your skin glow and is on way to success as to position a cream for younger woman.

Pantene:

P&G has promoted Pantene very nicely since it has launched in 1995. P&G usedall the media that is Print media (newspaper and magazines) , Broadcast media (radio and television ), Network media (cable , satellite , wireless), Electronic media (webpage) and Display media (bill boards , signs , posters).

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Several events werwe organised to promote its hair care products as: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.

In June 2001, Procter & Gamble in partnership with the Association of Beauty Therapy & Cosmetology (ABTC), India hosted the Pantene Artist 2001 a national stylist competition, which included categories such as Bridal Dressing, Hair Cutting and Body Painting. Present at the event was world-renowned hairdresser and stylist Jun L. Encarnecion, who demonstrated the hottest international haircuts and styles in vogue via an interesting hairhsow. Mr. Encarnecion has trained students in leading hairdressing schools like Robert Fielding School of Hair Dressing (U.K), Pierre Alexander International Academy (U.K), Vidal Sassoon Academy, (U.S.A) among others and also enjoys the reputation of being the official hairdresser for the 1993 Miss Universe pageant.

In December 2001, Procter & Gamble in partnership with the Southern India Beauty Specialists & Hairdressers Association (SIBHA) hosted the Pantene-SIBHA Look N Learn Seminar where Raman Bhardwaj hairdresser to former Miss India, Celina Jaitley demonstrated the Latest and Trendiest Hair Cuts (Modern & Classic) to beauticians and hairdressers in Chennai.

Additionally, Pantene also hosted Pantene World Teen Queen contest in Goa. Contestants from UK, USA, South Africa, Kenya, Tanzania, Mauritius, Middle East and Hong Kong participated to win the coveted World Teen Queen crown.

Endorse many celebrities as brand ambassador for Pantene that is Sushmita sen and many more. Currently Katrina kaif, the youth icon, is the brand ambassador for tPantene.

Many promotional offers were there as Price cut of pantene by 16% and reducedprice on 7.5 ml sachet, introduced new 5 ml sachet at 1.50 rs.

And the tagline has been changed time to time according to the modification in product. Some are as: gives you 10 times stronger hair, keep you shine from morning till night from shine campaign, hair fall control in 10 days and etc.

Head & Shoulders:

H&S was launched in 1997 and has been a great successs for P&G as became India’s no-1 anti dandruff sgampoo. Like Pantene same media and promotion offers of price cut has been used to promote Head & Shoulders.

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 &

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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

Additionally, Procter & Gamble Home Products announced the Beat The Summer Dandruff offer on which 200ml Head & Shoulders bottle was available for Rs.99/- only, thus giving a benefit of a Rs.23/- discount to consumers.

In August 2004, Procter & Gamble Home Products Limited signed Preity Zinta – Bollywood's #1 Actress, as Brand Ambassador for its Head & Shoulders anti-dandruff shampoo that gives 100% dandruff-free soft beautiful hair and in past they have used Ajay Jadeja, A famous cricketer, and Kareena Kapoor as their brand ambassador.

Rejoice:

Only product of P&G in India that operates in economy segments. All medias has been used for the promotion of this brand with emphasizing on the price of Rejoice. No such famous celebrity has endorsed it but some models has been used in their advertising xampaighn. No price cut or events hass been used. So to promote Rejoice P&G has been completely dependent on media dvertising.

Mechanics of Distribution Channels:

The supply chain of products in the FMCG market in India is one of the longest supply chains an

industry could really have. There are as many as 5 levels of intermediaries involved in the entire supply chain through which a product passes before reaching the end consumer. What has been observed is that even though these FMCG companies are big multinationals and Indian but face a major challenge of making their products available in the market in the right quantities and in the right time. This is simply because these companies don’t really have a wide network of sales agents and other force which is required and is ideal for catering their products to the markets. This aspect is taken over by distributors, wholesalers and retailer whose margins on these products actually double the price of these products when a final consumer buys it. The margins kept by these intermediaries range from 2% to 5%.

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The products in this industry are transported from manufacturing units via c & f agencies or warehouse to distributors who further sell the same to wholesalers or stockiest who finally sell it to the retailers in the market. These products are transported either via roadways or railways within the domestic markets and normally don’t take more than a week to reach the retailers. FMCG products are normally a high volume ball game and products have to essentially be available in the market at all given points of time and at all given points of purchase and therefore the distribution activities are highly volatile and dynamic. The supply of products takes place virtually on a daily basis in fixed quotas or otherwise, to retailers as per their requisitions and the anticipation of demand and the performance of products in the recent past. All such criteria are taken into consideration before the quantum of products being dispatched to the next level of intermediary. Since it’s a volume game, manufacturers make all possible efforts to boost sales and promote their distributors to earn more and more orders from the retailers and wholesalers. A close check is maintained on the flow of the products on a daily, weekly, fortnightly and monthly basis to determine the trend in the business and flow of products and consumption. This activity also helps to find out drawbacks of the distribution system, if any, and rectify them within time.

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Packaging:

P&G has been very good in packaging its product to provide a right image in the consumers mind and also very convenient to Handle. As packaging is important aspect of product. Product wise packaging by P&G:

Olay Total Effects:

Packaging of Olay is very good looking and convenient to use. Use of nice colors provide it a look of premium product.

Packaging in 50 gm and 20 gm is available in Indian Market.

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Olay Natural White Cream:

Packaging of Olay natural White has been quite a good looking and to be perceived as a premium product. 50gm and 20 gm packs are there in India with different packs and sobor colored packed.

Pantene, Head & Shoulders And Rejoice:

All are products in shampoo market but has been packed and use of colour in each is different according to the colour of sgampoo as Rejoice comes in Green, Head & Shoulders in White and Pantene in White, Orange and pink. So packaging of each has been in a way to project the product in the way they wanted consumers to perceive.

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(Source: www.google.com)

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Research Methodology:The research is diagnostic in nature with some qualitative research and some input from

quantitative technique. And data will be primary and secondary.

Research Objectives:

To identify the factors that has led to the success of P&G over a long period of time to stay

ahead in the market place.

To analyze the marketing and positioning strategies adopted by P&G.

To analyze the advertisement and corporate social responsibility budgets of P&G to make

(sustain) brand image

Sampling:

Non probability sampling with a mix of

Judgement sampling

Convenience sampling

Purposive sampling

Universe: Delhi NCR

Time frame: 3 months

Data collection Tools:

Texts (Research papers, Websites and articles published on P&G)

Media (advertisements and promotion)

Events

P&G annual report for investors

People (interviews)

Sample size:

100 consumers

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Hypothesis:

Hypothesis to be checked in the study are:

Pricing model of P&G is delivering value to the consumers

Advertising expenses are direct related to the revenue of the company.

CSR creates brand image in the minds of consumers.

P&G has a brand image of quality and innovation in the minds of consumers.

Various statistical tools like t-test, correlation, chi-square test will be used to check the

hypothesis.

Formulation of Research Instrument (Questionnaire):

Questionnaire was formulated keeping these points in mind;

1) Hypothesis of the project,

2) Inducing the respondent to be honest and help to answer the all questions,

3) Giving respondent a clear understanding of the questions,

Limitations:

1) Limited time period,

2) Less number of respondents as compared to population,

3) Respondent may be biased,

4) Less people were interested to answer all the question

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Data Analysis and Interpretation:

As per the data gathered by the primary research (Quetionnaire). The analysis

and interpretation of data is as:

1) Gender:

Gender

MaleFemale

42% 58

%

Interpretation: Among the respondent to the questionnaire 58% were men and 42% were

women.

2) Age:

Descriptive Statistics

N Minimum Maximum Mean Std. Deviation

VAR Age 100 21.00 48.00 31.1200 6.68978

Valid N

(listwise)100

Interpretation: Minimum age of the respondents is 21 years while maximum is 48 years

and average age of correspondents is 31 years approx.

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3) Occupation:

Business man Private Job Government Job Any other05

101520253035404550

Occupation

Interpretation: Out of total respondents 47% were businessmen, 28% private job, 18%

government job and rest 7% any other occupation.

4) Do you use personal care products:

Yes No0

102030405060708090

100

FemaleMale

Interpretation: All woman that is 100% use personal care products. While 11% man

don’t use personal care products rest 89% use the products of personal care.

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5) Company wise Usage of personal care products:

HUL P&G Merico Colgate Dabur0

5

10

15

20

25

30

35

40

Interpretation: 36% people use HUL, 28% P&G, 11% Merico. 7% Colgate and rest 18%

Daburs product in personal care products.

6) Price of Products of P&G are:

Very High High Moderate Low Reasonable0

10

20

30

40

50

60

Interpretation: 11% people things that the prices of P&G product are very high while

57% things them high and a low percentage that is 19% and 13% people perceive its price

as moderate and reasonable respectively. Not even a single person things that prices are

low.

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7) Rating on value provided by its product price:

Users Non-Users0

10

20

30

40

50

60

70

80

Rank 5Rank 4Rank 3Rank 2Rank 1

Interpretation: Out of total users of P&G approx 84.5% people ranked is as no 1 in value

provided by its pricing, 11% as rank 2, and 3.5% as rank 3. And no one ranked as 4 or 5.

Out of non users of P&G no one ranked as no one. 56% ranked as no 2 and 25 % as

ranked 3 and 12.5 % as rank 4 and rest as rank 5.

Average Ranking if rank 1 has 1 mark, rank2 has 2 and so on... then

Average Ranking = total marks/ total respondents = (24+84+54+36+35)/100 = 2.33

So average ranking of all respondent is 2.33.

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8) Quality with Innovation in Products:

Users Non-Users0

10

20

30

40

50

60

70

80

Rank 5Rank 4Rank 3Rank 2Rank 1

Interpretation: Among Users 75% rank as no 1 in the product quality with innovation

22% as rank 2 and 3% as rank 3. Among non users no one rank as no 1 and 33% as rank 2

and 41% as rank 3 and 15 % as rank 4 and rest as rank 5.

Average Rank = Total marks/ total respondents = (21+58+90+56+30)/100 = 2.54

So average rank for the product of P&G being quality with innovation is 2.54

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9) Fulfilling Social Responsibility:

Rank 1 Rank 2 Rank 3 Rank 4 Rank 50

5

10

15

20

25

30

35

40

Interpretation: 34% people things that P&G is Rank 1 in Fulfilling the corporate social

responsibility, 26 % as rank 2, 20 % as rank 3 and 15 % and 5% as rank 4 and 5

respectively.

Average Rank = Total marks/ total respondents = (34+52+60+60+25)/100 = 2.31

So average rank of P&G for fulfilling the social responsibility is 2.31.

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10) A company Should be Social Responsible:

Strongly agree

Agree Can’t Say Disagree Strongly Disagree

0

10

20

30

40

50

60

Interpretation: 31% people strongly agree that a company should be corporate social

responsible and 48% as agree and a less percentage on disagree side just a mere of 11%

(both strongly disagree and disagree)

.

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11) CSR has an impact on the image of the company:

Interpretation: 51% prople strongly agree and 28% people agree that CSR has an impact

on brand image. And a very mere percentage of people only 11% don’t agree or strongly

disagree.

Hypothesis Testing:

Hypothesis #1:- Pricing model of P&G is delivering value to the consumers

Hypothesis is accepted as by the result of data gathered by questionnaire shows that the

out of users of P&G approx 85% rank it as no 1 in value provided by its pricing. So

pricing model of P&G providing value to its customers.

Hypothesis #2:- Advertising expenses are direct related to the revenue of the company.

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Agree 51%

Disagree 8%

Correlations

Revenu

e

Advertisinexp

ense

Revenue Pearson

Correlation1 .981**

Sig. (2-tailed) .001

N 6 6

Advertisinexpen

se

Pearson

Correlation.981** 1

Sig. (2-tailed) .001

N 6 6

**. Correlation is significant at the 0.01 level (2-tailed).

As the value of Coefficient of correlation comes out to be o.981. that is a strong

correlation. So hypothesis is accepted.

Hypothesis #3:- CSR creates brand image in the minds of consumers.

Hypothesis is accepted as 70% people agree or Strongly Agree that CSR has an impact on

image of the company

Hypothesis #4:- P&G has a brand image of quality and innovation in the minds of

consumers.

Hypothesis is accepted in case of the customers of the P&G as 75% of them thing that it

provides quality with innovation.

Findings and Conclusion:

1) P&G has very well created its desired image of premium product company.

2) P&G almost 80% of P&G customers are satisfied with the quality and value provided

to them in the pricing model of P&G .

3) P&G has maintained its growth rate and position in the market from a period of decade

by rightly choosing and implementing the marketing mix strategies.

4) P&G believes in fulfilling CSR and to get a reputation of a CSR company over a period

of time.

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5) P&G is a premium class company with its product are only in premium segments

except one Rejoice in India.

6) P&G has nicely adapted to the environment of the different countries and is profitable

wordwide.

Recommendations:

1) As Indian market is dominated by the middle class and workers class, P&G should

come up with some products in that segment with such marketing strategies that does

not effect the image of premium products.

2) P&G should come up with more brands in Indian market as it is worlds 4th largest as it

only has its 7-8 brands in India out of 100 plus brands overseas.

3) P&G should have a different balance sheet in each country to recognize its most

profitable segments as of now it does it overseas.

4) P&G may come up with its own retail outlet to make distribution easy and making sure

that its products are available easily to its target market.

Bibliography:

www.pg.com

Best of HBR 1992 onwards

Journal of marketing, vol-65, 2001

www.knol.google.com

Anthony, S.D., Eyring, M., Gibson, L. (2006). Mapping your innovation strategy. Harvard Business Review.

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http://www.businessinnovationinsider.com/2007/01/the_5_principles_of_innovation.php

Remarks by the corporate director of innovation capability, procter & gamble (2006).Retrieved June 4, 2008 from

www.serve.com/athenaalliance/pdf/JWL%20remarks.pdf

www.newscom.com/cgi-bin/prnh/20090115/CLTH035LOGO-a ) www.pantene.com www.headandshoulders.com

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Final Comp Project

Documents

Transcript of Final Comp Project