At first glance, the numbers seem to speak for themselves. 2009 net sales – $79.0 billion. While other companies were floundering in the midst of a recession, P&G held its own, and still maintains its position as the world’s largest consumer goods company. As grand as it may seem though, this is the culmination of over hundred years of marketing excellence. Perhaps the best place to begin would be at the very beginning itself.
Like all other companies which have survived the test of time, P&G too has a story behind it. It’s founders, William Procter and James Gamble, came from England and Ireland respectively. They both found common ground when they married the sisters Olivia and Elizabeth Norris, and settled in Cincinnati. Procter was a distinguished candle maker and Gamble was apprentice to a soap maker. However, upon the suggestion of their father-in-law, they both joined hands, and thus was born Procter and Gamble, in 1837. While they discontinued their candle business in 1920, due to the invention of the light bulb by a certain Thomas Alva Edison, they have continued to stay in the soap business, while expanding into many more, and now stand as the world’s largest consumer goods company, this last being achieved as recently as 2005, when they acquired Gillette and displaced Unilever from the top slot.
In India, P&G operates through three subsidiaries which share a common management and distribution structure – Procter and Gamble Hygiene and Health Care Ltd (PGHH), Procter and Gamble Home Products Ltd (PGHP), and Gillette India Ltd. It is behind HUL as the second largest FMCG company in India. P&G’s President and Chief Executive, Robert McDonald has said in 2009 that over the next five years P&G would add a billion new customers, and that the bulk of these would be coming from India and China.
Indeed, their ambitious plans for this region become apparent when we look at the figures. In terms of per capita spend, America is way ahead, at $112 per capita. Germany has a respectable $45, and even Mexico notched up $20. But Indians spend less than a dollar on P&G products. While reaching the level of America would be a bit overambitious at this point, P&G India still aims to make sure they can match India to Mexico. Of course, Mexico took 60 years to reach it, but they hope it will be a shorter wait for India.
P&G is no stranger when it comes to innovation. The celebrated concept of Brand Management originated from none other than within this firm. In the famous 3-page memo by Neil McElroy in the 1930’s, he argued that more attention should be paid to products, including the flagship product, in order to prevent competition between them. He also suggested that in addition to having a person in charge of each brand, there should be a substantial team of people devoted to thinking about every aspect of marketing it. Needless to say, his suggestions were taken up, first by P&G, and eventually by the whole marketing world.
They are also one of the pioneers behind the concept of soap operas. These originated as radio soap operas produced and sponsored by P&G in the 1930’s. In all likelihood, the term ‘soap opera’ was coined keeping P&G’s connection with detergents in mind. P&G kept on sponsoring them as they switched to television in the 1950’s. Even now, it maintains its link with this medium, as evidenced by its recent partnership with Walmart to produce family friendly television, to be aired on NBC, in the US.
The numerous super brands it has in India are a testimony to their marketing calibre. Their relationship with India started when they entered the market with Vicks in 1951. In 2000, Procter & Gamble Home Products introduced Tide Detergent Powder – the largest selling detergent in the world. In 2003, Procter & Gamble Home Products Limited launched Pampers – world’s number one selling diaper brand. They have firmly entrenched themselves in the Feminine Care market with Whisper Sanitary Napkins.
Recently, P&G launched a campaign in China, keeping in mind the fortuitous coincidence of Valentine’s Day and the Chinese Lunar New Year both occurring on the same date, an event which takes place only once every 50 years. The campaign, called ‘Moments’, targets young men, who, at this crucial juncture, want to look good for both family and girls. It allows P&G to engage young men on an emotional level about the importance of being well-groomed.
Though its earnings may have crossed many a landmark, there is also a human side to the company. P&G’s contributions to Haiti relief have exceeded $2 million. P&G has committed to providing six million packets of PUR, a technology that purifies contaminated water. This quantity is enough to treat 60 million litres of water (a 3-month supply for 340,000 people).