TOUCHING LIVES, IMPROVING LIFE…. PROCTER & GAMBLE

FACTFILEFACTFILE FoundedFounded – 1837 *(American multinational – 1837 *(American multinational

corporation)corporation) HeadquartersHeadquarters - Cincinnati, Ohio, USA - Cincinnati, Ohio, USA Key peopleKey people - A. G. Lafley, Chairman, President, - A. G. Lafley, Chairman, President,

and Chief Executive.and Chief Executive. IndustryIndustry - Consumer goods - Consumer goods RevenueRevenue - US$ 83.503 billion (2008) - US$ 83.503 billion (2008) Net incomeNet income - US$12.075 billion (2008) - US$12.075 billion (2008) EmployeesEmployees - 138,000 - 138,000 WebsiteWebsite - www.pg.com - www.pg.com Products are available in 140 countries Products are available in 140 countries

RANKS ACHIEVED RANKS ACHIEVED 8th largest corporation in the world by market 8th largest corporation in the world by market

capitalization. (2008) capitalization. (2008) 14th largest US company by profit.14th largest US company by profit. 10th in 10th in Fortune'sFortune's Most Admired Companies list (as of Most Admired Companies list (as of

2007).2007). P&G was named 2008 Advertiser of the Year by P&G was named 2008 Advertiser of the Year by

Cannes International Advertising Festival spending Cannes International Advertising Festival spending $2.62 billion $2.62 billion

Awarded inaugural social innovation award by the Awarded inaugural social innovation award by the financial times.financial times.

Ranked 2nd in the chief executive magazine’s “best Ranked 2nd in the chief executive magazine’s “best companies for leaders”.companies for leaders”.

In October 2008, P&G was named one of "In October 2008, P&G was named one of "Canada's Top 100 EmployersCanada's Top 100 Employers" by Mediacorp Canada " by Mediacorp Canada Inc., Inc.,

PASTPAST William ProcterWilliam Procter, a candlemaker, and , a candlemaker, and James GambleJames Gamble, ,

a soapmaker, immigrants from England and a soapmaker, immigrants from England and Ireland, respectively, who had settled earlier in Ireland, respectively, who had settled earlier in Cincinnati, who met as they both married sisters, Cincinnati, who met as they both married sisters, Olivia and Elizabeth Norris formed the company Olivia and Elizabeth Norris formed the company initially. initially.

Alexander Norris, their father-in law called a Alexander Norris, their father-in law called a meeting in which he convinced his new sons-in-law meeting in which he convinced his new sons-in-law to become business to become business

partners.partners. On October 31, 1837, asOn October 31, 1837, as a result of the suggestion, a result of the suggestion, Procter & Gamble was born.Procter & Gamble was born.

OPERATIONSOPERATIONS Effective July 1, 2007, the company's operations are Effective July 1, 2007, the company's operations are

categorized into three categorized into three "Global Business Units""Global Business Units" with each with each Global Business Unit divided into "Business Segments," Global Business Unit divided into "Business Segments," according to the company's June 2007 earnings release.according to the company's June 2007 earnings release.

Beauty Care Beauty Care – Beauty segment Beauty segment – Grooming segment Grooming segment

Household Care Household Care – Baby Care and Family Care segment Baby Care and Family Care segment – Fabric Care and Home Care segment Fabric Care and Home Care segment

Health & Well-Being Health & Well-Being – Health Care Health Care – Snacks, Coffee and Pet Care Snacks, Coffee and Pet Care

Twenty-four of P&G's Twenty-four of P&G's brandsbrands have more than a billion dollarshave more than a billion dollars in net annual sales and anotherin net annual sales and another 18 have sales between $500 million18 have sales between $500 million and $1 billion.and $1 billion.

MANUFACTURINGMANUFACTURING

Procter & Gamble manufactures its products Procter & Gamble manufactures its products across the globe. Manufacturing operations across the globe. Manufacturing operations are based in the following regions:are based in the following regions:

United States United States Canada Canada Latin America Latin America Europe Europe China (31 wholly-owned China (31 wholly-owned factories) and other parts factories) and other parts of Asia of Asia Africa Africa Australia Australia

PRODUCTIONSPRODUCTIONS Procter & Gamble produced and sponsored the first radio Procter & Gamble produced and sponsored the first radio

soap operassoap operas in the 1930s. in the 1930s. Past serials produced by Procter & Gamble include:Past serials produced by Procter & Gamble include: Another World Another World Lovers and Friends Lovers and Friends The Brighter Day The Brighter Day The Catli The Catli Our Private WorldOur Private World The Edge of Night The Edge of Night The First Hundred YearsThe First Hundred Years For Richer, for Poorer For Richer, for Poorer From These Roots From These Roots Search for Tomorrow Search for Tomorrow SomersetSomerset Texas Texas Young Doctor MaloneYoung Doctor Malone

EXPANSIONEXPANSION During the During the American Civil WarAmerican Civil War, the company won contracts to , the company won contracts to

supply the supply the Union ArmyUnion Army with with soapsoap and and candlescandles. In addition to the . In addition to the increased profits experienced during the war, the military contracts increased profits experienced during the war, the military contracts introduced soldiers from all over the country to Procter & Gamble's introduced soldiers from all over the country to Procter & Gamble's products.products.

In the 1880s, Procter & Gamble began to market a new product, an In the 1880s, Procter & Gamble began to market a new product, an inexpensive soap that floats in water. The company called the soap inexpensive soap that floats in water. The company called the soap IvoryIvory. .

The company began to build factories in other locations in the The company began to build factories in other locations in the United States United States

The company introduced "The company introduced "TideTide" laundry " laundry detergentdetergent in 1946 and " in 1946 and "PrellPrell" shampoo in 1950. " shampoo in 1950.

In 1955, Procter & Gamble began selling the first toothpaste to In 1955, Procter & Gamble began selling the first toothpaste to contain contain fluoridefluoride, known as ", known as "CrestCrest". ".

Branching out once again in 1957, the company purchased Branching out once again in 1957, the company purchased CharminCharmin Paper Mills and began manufacturing toilet paper and Paper Mills and began manufacturing toilet paper and other paper products. other paper products.

One of the most revolutionary products to come out on the market One of the most revolutionary products to come out on the market was the company's "was the company's "PampersPampers", first test-marketed in 1961. ", first test-marketed in 1961.

DIVERSIFICATIONDIVERSIFICATION In 1996, Procter & Gamble again made headlines In 1996, Procter & Gamble again made headlines

when the when the Food and Drug AdministrationFood and Drug Administration approved approved a new product developed by the company, a new product developed by the company, OlestraOlestra. (a substitute for fat in cooking . (a substitute for fat in cooking potato chipspotato chips ) )

In 2008, P&G branched into the record business In 2008, P&G branched into the record business with its sponsorship of with its sponsorship of Tag RecordsTag Records, as an , as an endorsement for endorsement for TAG Body SprayTAG Body Spray..

In 1911, began producing In 1911, began producing CriscoCrisco, a , a shorteningshortening made of made of vegetable oilsvegetable oils rather than rather than animal fatsanimal fats. .

As radio became more popular in the 1920s and As radio became more popular in the 1920s and 1930s, the company sponsored a number of radio 1930s, the company sponsored a number of radio programs. As a result, these shows often became programs. As a result, these shows often became commonly known as "commonly known as "soap operassoap operas".".

ACQUISITIONSACQUISITIONS In 1930 acquisition of the In 1930 acquisition of the

Newcastle upon TyneNewcastle upon Tyne-based -based Thomas Hedley Co.Thomas Hedley Co. terms of manufacturing terms of manufacturing and production.and production.

Folgers CoffeeFolgers Coffee, Norwich Eaton , Norwich Eaton Pharmaceuticals, Richardson-Vicks, Noxell, Pharmaceuticals, Richardson-Vicks, Noxell, Shulton's Shulton's Old SpiceOld Spice, , Max FactorMax Factor, and the , and the IamsIams Company, among others were also acquired.Company, among others were also acquired.

In January 2005 P&G announced an acquisition In January 2005 P&G announced an acquisition of of GilletteGillette, forming the largest consumer , forming the largest consumer goods company and placing goods company and placing UnileverUnilever into into second place. second place.

CONTROVERSY NO. 1CONTROVERSY NO. 1

“ “ Logo controversy”Logo controversy” The company received unwanted media publicity in the The company received unwanted media publicity in the

1980s when rumors were spread that their previous 1980s when rumors were spread that their previous corporate logo was a corporate logo was a SatanicSatanic symbol. The company has symbol. The company has sued and attempted to sue a number of companies like sued and attempted to sue a number of companies like AmwayAmway and individuals who have spread rumors of this and individuals who have spread rumors of this type, in some instances because they sell competitive type, in some instances because they sell competitive products and have spread such rumors for the purpose of products and have spread such rumors for the purpose of tarnishing P&G's image to increase sales of their own tarnishing P&G's image to increase sales of their own brands.brands.

However, the continuous media coverage prompted P&G to However, the continuous media coverage prompted P&G to adopt an entirely new logo consisting of just adopt an entirely new logo consisting of just

the letters P&G. In television commercials the letters P&G. In television commercials in China, the former P&G logo still appearsin China, the former P&G logo still appears at the end of each commercial, and up untilat the end of each commercial, and up until 2004, it appeared at the end of each2004, it appeared at the end of each commercial in Japan.commercial in Japan.

CONTROVERSY NO. 2CONTROVERSY NO. 2

““Crest Pro-Health Teeth Staining and Loss of Taste”Crest Pro-Health Teeth Staining and Loss of Taste” In October 2007, a class action lawsuit was In October 2007, a class action lawsuit was

filed in the State of Georgia alleging that filed in the State of Georgia alleging that many users of Crest Pro-Health many users of Crest Pro-Health mouthwash suffered stained teeth and loss mouthwash suffered stained teeth and loss of their sense of taste. of their sense of taste.

Procter & Gamble contends that these side Procter & Gamble contends that these side effects occur in only 3% of users. effects occur in only 3% of users.

The suit seeks to include The suit seeks to include disclosure warning users of disclosure warning users of these side effects on productthese side effects on product packaging.packaging.

CONTROVERSY NO.3CONTROVERSY NO.3““Environmental record”Environmental record” Researchers at the University of Massachusetts have Researchers at the University of Massachusetts have

identified Procter & Gamble as the 52nd-largest corporate identified Procter & Gamble as the 52nd-largest corporate producer of producer of air pollutionair pollution in the United States, with roughly in the United States, with roughly 350,000 pounds of toxic chemicals released annually into 350,000 pounds of toxic chemicals released annually into the air.the air.

In 2007 Procter & Gamble pledged to reduce their carbon In 2007 Procter & Gamble pledged to reduce their carbon emissions, mainly through reduction in packaging. The emissions, mainly through reduction in packaging. The stated emission reduction goal was 10% by 2012.stated emission reduction goal was 10% by 2012.

Procter & Gamble is one of the founding members of Procter & Gamble is one of the founding members of Carbon Disclosure ProjectCarbon Disclosure Project's Supply Chain Leadership 's Supply Chain Leadership Council. Council.

Procter & Gamble has for several years funded a recycling Procter & Gamble has for several years funded a recycling school in the slums of Cairo, Egypt. school in the slums of Cairo, Egypt.

CONTROVERSY NO.4CONTROVERSY NO.4

““Animal testing”Animal testing” P&G conducts P&G conducts research using animalsresearch using animals to to

demonstrate safety or efficiency of their raw demonstrate safety or efficiency of their raw materials and products.This has led to a materials and products.This has led to a worldwide campaign to raise public awareness worldwide campaign to raise public awareness and to stop P&G being involved in animal testing. and to stop P&G being involved in animal testing.

The campaign is led by Uncaged Campaigns in the The campaign is led by Uncaged Campaigns in the UK and Stop Animal Exploitation Now in the USA. UK and Stop Animal Exploitation Now in the USA.

In 2002 P&G was recognized by the In 2002 P&G was recognized by the Humane Society of the United States Humane Society of the United States for "advancing alternatives to for "advancing alternatives to animal testing".animal testing".

MARKET RESEARCHMARKET RESEARCH P&G employed market researchers for P&G employed market researchers for

every product division. The company every product division. The company also had two independent in-house also had two independent in-house research groups which were responsible research groups which were responsible for advertising research and market for advertising research and market testing...testing...

Qualitative Research ToolsQualitative Research Tools Quantitative Research ToolsQuantitative Research Tools Conducting Marketing Research OnlineConducting Marketing Research Online The BenefitsThe Benefits

Qualitative Research Tools Qualitative Research Tools Generate new ideas for product and Generate new ideas for product and

market development.market development. The researchers engaged the customers in The researchers engaged the customers in

detailed discussions over different features detailed discussions over different features of the company's products. As a result, the of the company's products. As a result, the personal interaction between the personal interaction between the researchers and the consumers was high.researchers and the consumers was high.

The major qualitative research tools used The major qualitative research tools used by P&G included focus-group discussions, by P&G included focus-group discussions, in- home visits, in-context visits and in-in- home visits, in-context visits and in-store interviews...store interviews...

Quantitative Research Tools Quantitative Research Tools

P&G also employed quantitative research P&G also employed quantitative research tools extensively. These tools helped in tools extensively. These tools helped in generating new product ideas for P&G. generating new product ideas for P&G.

While the sample sizes for quantitative While the sample sizes for quantitative research was usually larger, the personal research was usually larger, the personal interaction between the researchers and interaction between the researchers and the respondents was minimal...the respondents was minimal...

Tools like surveys through Tools like surveys through web or practical approachweb or practical approach in the market.in the market.

Conducting Marketing Research Conducting Marketing Research OnlineOnline

P&G conducted online concept tests to get P&G conducted online concept tests to get feedback from consumers. This feedback feedback from consumers. This feedback helped it in new product introduction and helped it in new product introduction and launching improved versions of existing launching improved versions of existing products...products...

The BenefitsThe Benefits: P&G's online surveys saved : P&G's online surveys saved considerable time and costs for the considerable time and costs for the company. Using traditional methods,company. Using traditional methods,

a consumer survey costa consumer survey cost the company around the company around $50,000 and took at least $50,000 and took at least three to four weeks...three to four weeks...

P&G’ s SCOPE BRAND OF MOUTHWASH

INTRODUCTION OF SCOPE INTRODUCTION OF SCOPE This mouthwash product has been around for well This mouthwash product has been around for well

over hundred years. It has good reputation as over hundred years. It has good reputation as notable brand that kills the germs that cause the notable brand that kills the germs that cause the bad breath. It also can be successful although it bad breath. It also can be successful although it not as old as Listerine product in mouthwash not as old as Listerine product in mouthwash market. market.

It has been proven to kill more germs. Otherwise It has been proven to kill more germs. Otherwise its also well knows as bad breath remedy. its also well knows as bad breath remedy.

Scope products are just not available in Scope products are just not available in original original mint flavor (green), but also in a citrus (orange), mint flavor (green), but also in a citrus (orange), peppermint (blue), cinnamon (red) flavors & new peppermint (blue), cinnamon (red) flavors & new Scope White. Its major competitor in mouthwash Scope White. Its major competitor in mouthwash market is a Listerine brand. market is a Listerine brand.

Defining Problems Defining Problems First is to develop a strategy that would ensure First is to develop a strategy that would ensure

the continued profitability of scope in the face of the continued profitability of scope in the face of these competitive threats. This means that their these competitive threats. This means that their old strategies are not suitable with the customer old strategies are not suitable with the customer needs. The innovations from other brand needs. The innovations from other brand competitors make their brand decreasing in competitors make their brand decreasing in customers satisfaction. customers satisfaction.

The second is a how to maintain their profit and The second is a how to maintain their profit and make sure the Scope brand is always be the 1st make sure the Scope brand is always be the 1st in mouthwash product ranking. This means that in mouthwash product ranking. This means that

the Scope ranking is decreasing fromthe Scope ranking is decreasing from the first choice to second choice of the first choice to second choice of customer. Listerine be the popular customer. Listerine be the popular and the first choice of customers. and the first choice of customers.

SWOT analysisSWOT analysis STRENGTHSSTRENGTHS Scope was long experience in the oral hygiene industry since 1967.Scope was long experience in the oral hygiene industry since 1967. The taste or flavor of Scope better than other mouthwashes.The taste or flavor of Scope better than other mouthwashes. High-quality product,High-quality product, quality processes and procedures. quality processes and procedures. Have a first rating in mouthwash market share.Have a first rating in mouthwash market share. WEAKNESSESWEAKNESSES Not enough make a distribution channel.Not enough make a distribution channel. Lack of canning or packaging.Lack of canning or packaging. Undifferentiated products or services with other competitor.Undifferentiated products or services with other competitor. OPPORTUNITIESOPPORTUNITIES Brand which it concentrate for a healthy oral.Brand which it concentrate for a healthy oral. Move into new market segment that offer improves profit.Move into new market segment that offer improves profit. A developing market such as in the Internet. A developing market such as in the Internet. Place more distribution channel such as more drugstore and food store Place more distribution channel such as more drugstore and food store THREATTHREAT Too many competitor in this industry.Too many competitor in this industry. Price wars with other competitor.Price wars with other competitor. Not patentable , competitor can attempt to duplicate a productNot patentable , competitor can attempt to duplicate a product

ENUMERATE THE DECISION ENUMERATE THE DECISION

FACTORSFACTORS Two sets of decision factors must be Two sets of decision factors must be

enumerated in the decision-making enumerated in the decision-making process is alternative courses of action process is alternative courses of action and uncertainties. Alternative courses of and uncertainties. Alternative courses of action are controllable decision factors action are controllable decision factors because the decision maker has complete because the decision maker has complete command of them. command of them.

Uncertainties are Uncertainties are uncontrollable factorsuncontrollable factors that the Protect & that the Protect & Gamble, Inc. cannot Gamble, Inc. cannot influence. influence.

IDENTIFY THE BEST ALTERNATIVEIDENTIFY THE BEST ALTERNATIVE

Create a product extension and innovation: For Create a product extension and innovation: For examples; produce a product that closely examples; produce a product that closely functioning like a mouthwash products such as functioning like a mouthwash products such as dental gums. Dental gums are promoted to dental gums. Dental gums are promoted to reduced plaque, whiten teeth, and reduce the risk reduced plaque, whiten teeth, and reduce the risk of tooth decay. of tooth decay.

Increase the variety of an offering. For examples Increase the variety of an offering. For examples in November 2004, P&G come out with their new in November 2004, P&G come out with their new mouthwash product called Crest Pro-Health which mouthwash product called Crest Pro-Health which present as their product extension. This product present as their product extension. This product is in the same product category of the is in the same product category of the mouthwash products. The effort is intended to mouthwash products. The effort is intended to draw Listerine users who've resisted P&G's Scope. draw Listerine users who've resisted P&G's Scope.

Develop a plan for implementing the Develop a plan for implementing the chosen alternativechosen alternative

Establish a R& D (research and Establish a R& D (research and development) group which able to development) group which able to make a new innovation of Scope make a new innovation of Scope productsproducts

Improving production by upgrading Improving production by upgrading Technology Technology

Brand building and Brand building and

better marketing better marketing

strategiesstrategies

Was the decision Was the decision appropriate? appropriate?

Yes, the decision was appropriate. As u Yes, the decision was appropriate. As u know that the Listerine has done this and know that the Listerine has done this and grown up by doing this in the last few years. grown up by doing this in the last few years.

Examples can be cited from cross functional Examples can be cited from cross functional industries where investment in marketing industries where investment in marketing the product the product

has proven successful has proven successful

like Pepsi, Sony, Nokia,like Pepsi, Sony, Nokia,

etcetc

The Future – Opportunities &Challenges

Supply Chain Service Providers Innovation Service Providers Need ‘software’ as much as ‘hardware’.

Opportunity: Lead defining the use of Contract

Manufacturerswithin the Consumer Products industry….requires capability.

Challenges: Capital / investment needed to create this

capability. Requires ‘business strategies and focus on core