GENERAL PROBLEM STATEMENT
Can Proctor and Gamble survive and prosper by reinventing existing products in environment that requires new innovations? And will P&G be able to meet their target of 50% of the market share in each segment?
ANALYSIS
General Environment
Which of the general environment segments are most relevant to the consumer products industry? What are the main opportunities and threats affecting the company?
Demographics— Proctor and Gamble is one of the largest consumer product companies in the world. They registered in the 2004 fiscal year global sales of $51.4 billion in the segments of fabric and home care, beauty care, baby and family care, healthcare, and snacks and beverages. The products in these segments include Tide, Crest, Charmin, Downy, Pampers, Folgers, Bounty, Ariel, Pringles, Always, Pantene, and Iams. The industry is growing rapidly due to the high demand of these products, because of increased competition. There is a higher population density caused by the increase in households per year. The total population in the US is approximately 300 million and growing. 67% of the population is between the ages of 15-65 years of age, which is the market that P&G is targeting. P&G offers 300 brands in 160 countries and an increase of 500% over the last decade means an increase in consumer activity.
Sociocultural— Americans are increasingly worried about better products in their industry. They are high-end consumers when it relates to consumer products. They wish to get better innovative products and are willing to pay for them. People are concerned about their quality of life, hygiene, and being able to pamper themselves with luxury. The consumer products industry is based primarily on brand name, and brand loyalty. A consumer will forgo buying a product if it is unfamiliar to them. For example, in Germany, Jager changed the brand name to American style Dawn from the brand name of Fairy. This caused a dramatic decrease in sales.
Economy— GDP growth in 2004 was 4.2%, compared to the next 3 years combining for only 3.8% growth. Personal debt relative to the average income is high, making consumers vulnerable to rising interest rates. Inflation rates have stayed about the same since 2004 at 3%. The consumer products industry will capitalize on the economy because of the industry growth.
Political/Legal— Proctor and Gamble is facing an ongoing investigation on their animal testing for products.
These animals used for testing products commonly include mice, rats, rabbits, monkeys, hamsters, guinea pigs, dogs and cats. These animals are forced to test new products before they are sold to humans, and even though there are numerous valid substitutes for us to test products on, the law doesn’t require that we do. What’s even more horrifying is that no animal experiment is illegal, and therefore these ‘tests’ can be completely irrelevant to human health, and no matter how painful or cruel the test may be to animals it is completely legal. Some companies that test their products on animals include Almay, Johnson & Johnson, Clearasil, Axe, Lancôme (owned by L’Oréal), and Pantene (owned by Procter & Gamble).
The three chapters assigned to be read out of Satisfaction Guaranteed: The Making of the American Mass Market, a novel by Susan Strasser, outline the consumer culture of the United States around the end of 19th century, following the conclusion of the civil war. The chapters work chronologically and describe the rapid evolution of companies’ production, advertising and branding techniques. The reading also hits some of the main goods introduced at the time, most of which we still use today, and the troubles that companies faced convincing the public to invest in (purchase) their product for the first time. The problem with introducing thousands of products that no one had ever heard of? Most people will naturally pick the safe bet when spending
When people go shopping there are limitless choices of one product made by different companies, all choices of this product basically do the same thing, but what makes them different is the brand’s name. Companies with brands are trying to get their consumers by presenting their commodities in ways
The Procter and Gamble Company. (2013, November 17). Company Strategy. Retrieved March 22, 2014, from http://www.pginvestor.com: http://www.pginvestor.com/GenPage.aspx?IID=4004124&GKP=208821
P&G was founded in 1837 by William Procter and James Gamble as a maker of soaps and candles. P&G was known in Corporate America as a company to be admired and imitated. In addition, it was envied for its profitability as well as strong brand name. P&G has a long standing reputation as having life long employees. This dedication and loyalty by P&G's employees created the notion that outside sources were unwelcome and all products and ideas must come from within, however, this is not the way of the future.
The soft drink industry in the United States is a highly profitably, but competitive market. In 2000 alone, consumers on average drank 53 gallons of soft drinks per person a year. There are three major companies that hold the majority of sales in the carbonated soft drink industry in the United States. They are the Coca Cola Company with 44.1% market share, followed by The Pepsi-Cola Company with 31.4% market share, and Dr. Pepper/Seven Up, Inc. with 14.7% market share. Each company respectively has numerous brands that it sales. These top brands account for almost 73% of soft drink sales in the United States. Dr. Pepper/Seven Up, Inc. owns two of the top ten brands sold. Colas are the dominant flavor in the U.S carbonated soft drink industry; however, popularity for flavored soft drinks has grown in recent years. The changing demographics of the U.S population have been an important factor in the growing popularity of these flavored soft drinks. The possible impact of this factor will be addressed later in the case.
During 1911, Proctor and Gamble introduced Crisco, the first all-vegetable shortening, beginning what would be the first in a long line of different unrelated products the company would develop in the future. Such products include Tide washing detergent, Crest toothpaste, Charmin toilet paper, Pampers baby diapers, Folgers coffee, Bounce fabric softener, Pert Plus shampoo, and Bounty paper towels, just to name a few. With these products, and the more than thousand others, Proctor and Gamble leads the world in sales in almost all categories of household products. Sales hit the one million mark by 1859, roughly 22 years after the company was formed.
Procter and Gamble (P&G) and Colgate-Palmolive (C-P) are two of the largest consumer goods company in the world and have been in the industry since the 80s. The companies manufacture and market fast moving consumer goods (FMCG) such as household products, personal care and hygiene, targeting at various segments of consumers. Among the brands carried by P&G are Downy, Olay, Tide, Clairol and Bounty. Popular brands under C-P are Palmolive, Kleenex, and Colgate.
McTigue Pierce, L. (2005, July). Pfizer: Growth amid adversity. Food & Drug Packaging, 69, p. 60.
2. How is the toothbrush market segmented .? Compare consumer behavior for toothbrushes and toothpaste ..?
In 1837, James Gamble and William Procter, formerly of the UK, started a family-run soap and candle company after they married sisters. The company they formed so long ago grew to be an American multinational consumer goods company. This company is Procter & Gamble Co, better known as P&G.Its headquarters is located in Downtown Cincinnati, Ohio. Although it started out as a candle and soap manufacturer, today it offers a wide range of products in fabric and home care, health and grooming, beauty and baby, feminine and family care. Currently, P&G has 47 brands in its portfolio, 23 of which are worth a billion dollars and more and 14 which are worth about half a billion to a billion. Its slogan “Touching lives, improving life.” is a
Once America’s most innovative consumer products company, Procter and Gamble (P&G) started by selling soaps and candles in a small Cincinnati storefront in 1837 (Procter and Gamble, 2008). After a hundred and seventy-one years P&G has grown to over one hundred household brands in over eighty countries (Markels 2006). Their products range from air fresheners to prescription drugs. However, as P&G headed into the twenty-first century they announced that they would not be meeting their 1st quarter earnings forecast [Lafley, 2003]. Revenue margins were dropping and P&G was quickly losing market share to Kimberly Clark and Johnson & Johnson. After missed earnings P&G’s stock price fell from $59.18 to $26.50 between January 2000 and March 2000 (PG). Upset, the board of directors pressured then CEO Durk Jager to resign after a lack luster attempt at turning P&G around and replaced him A.G Lafley, an unproven CEO, whom analysts felt lacked the experience to give P&G a much needed clean up (Lafley, 2003).
Simple household items such as lotions, shampoos and cosmetics aren’t very expensive and are within reach of the public, yet the public is not knowledgeable of the fact that the products that they use everyday are put through a series of tests which involve the use of harmless animals. Several large commercial companies do not make products for animals; they decide that using these harmless creatures for the testing of their products, could be harmful to animals, still go forward with these types of procedures on an everyday basis. Although these animals are unable to defend themselves or show signs of any form of consent for the near death procedures, these companies find this as a cheap solution for testing their products before placing them on the market. There are many other alternatives to testing animals, such as embryonic stem cell research. Animal experimentation is wrong and it can be avoided, but companies which are greedy for money choose not to.
Colgate is a high ranked oral hygiene company that produces toothpastes, mouthwashes, toothbrushes and dental floss that was founded in 1807 by William Colgate in New York City. In 1820, Colgate built their first starch factory in New Jersey. Years later, in 1857, the founder William Colgate death resulted in the company being passed down to his son Samuel Colgate. In 1864, Colgate collaborated with B.J. Johnson who founded the Palmolive Company. The Colgate-Palmolive Company began having much success in the late 1800’s with all of their new products such as hand soaps and the many different appearances of toothpaste from glass jars to collapsible tubes. In 1900, Colgate won top honors in Paris at the World’s Fair for their soaps and perfumes. Colgate was very successful internationally that they came established in Europe, Canada, Asia, Latin America, and Africa. After so many accomplishments internationally and locally, “Colgate-Palmolive Company” was officially the company’s name in 1953. By the late 1900’s, Colgate sold over 1.6 million toothbrushes annually and was serving over 56 countries and hits the $5 billion mark in sales. The company began initiating an Oral Care program after collaborating up Kolynos in Latin America. The oral care program, which is called Bright Smiles, Bright Futures that is established to 50 countries and serves over 50 million children a year. Today, the CEO of Colgate is Ian M. Cook & Colgate’s focuses are Oral Care, Personal Care, Pet Nutrition, and Home Care and provides in over 200 countries and have numerous awards including 2013 World’s Most Ethical Companies from Ethisphere Magazine. In my research, based on preliminary information, I will find evidence that will attempt to pro...
Despite the facts that many of the most powerful markets on the planet operate within the capitalistic principle of free trade. Despite the fact that Western Europe is now border-free within its bounds and uses the same common currency. And despite the fact that the USSR s Iron Curtain has fallen more than a decade ago, the people of this world have never expressed their need to belong to a national identity as much as they do today. In response to international organized terrorism, mass media and political pressure, the average consumer today is looking for security, truth, and for a product tailored to his need. A product that reflects the international society we live in today but also carries the cultural identity of the consumer buying it. Or at least carries one that can be compatible with it.