Case study on P & G

Prasad Kumar Nayak 7207378840

Introduction to P & G
P & G India is the subsidiary of worlds largest consumer goods company Procter & Gamble . It is ranked 86 in the 2012 fortune 500 list with a revenue of $ 82.5 billion. P&G India is one of the largest and amongst the fastest growing consumer goods companies in India. It was established in 1964, P&G India now serves over 650 million consumers across India.

P & G India Products

The various brands are Vicks, Ariel, Tide, Whisper, Olay, Gillette, Ambipur, Pampers, Pantene, Oral-B, Head & Shoulders, Wella and Duracell.

Introduction to P & G
Its presence pans across the Beauty & Grooming segment, the Household Care segment as well as the Health & Well Being segment. P&G operates under three entities in India - two listed entities 1. Procter & Gamble Hygiene and Health Care Limited and 2. Gillette India Limited, as well as one 100% subsidiary of the parent company in the U.S. called 3. Procter & Gamble Home Products.

Introduction to P & G
Now it has a direct reach of 1.3 million outlets across India. At present, India is one of the smallest markets for P&G with just $1-billion sales across three subsidiaries -Procter & Gamble Health & Hygiene, Gillette India and Procter & Gamble Home Products P & G currently invested in the country via its five plants and over nine contract manufacturing sites It creates 26,000 jobs directly and indirectly. Procter & Gamble, will build its largest manufacturing plant in the Indian sub-continent in Hyderabad by investing 345 crore.

Project 2-3-4
To strengthen its presence in India, and increase sales 20 times from its current $ 1b level, P&G India has formulated a 'Project 2-3-4'. P&G's 'Project 2-3-4,' is aimed at 2:doubling the number of Indians who use its products, 3:trebling per capita spending by Indians on its products and 4:quadrupling net sales of its India operations by 2015.

 P & G is an organisation which traditionally deriving its bread and butter from premium brands, and from developed market.
2009 Sales by Geographical Region
Developing market 22%

Why Project 2-3-4

North East Asia 4%

North America 44%

Western Europe 30%

Sources-Economic times

 Globally and within India, the company is investing heavily in innovation, R&D and distribution. The strategy is to make several of its billion dollar brands more localised, accessible and affordable for consumers. The company is trying to strengthen its portfolio by bringing many more brands into the country. The parent company also plans to launch toothpaste brands Crest and Oral B in emerging markets, including India by 2015. P & G is trying to cater the gaps in its Indian portfolio include toothpaste (a 3,000 crore market) and soaps ( 7,000 crore).

 P&G's corporate campaign kicked off in April with its first ``Thank You, Mom'' TV spot. It also has a dedicated ``Thank, You Mom'' Facebook page and app that allows people to send ``Thank you'' messages to their mothers. P&G is sponsoring more than 150 global athletes. P&G is sponsoring a few athletes like boxer Mary Kom and runner Kavita Raut, giving their mothers a chance to see them perform and hopefully win at London this year. P&G expects the campaign to drive $500 million in sales.

Thank You, Mom Campaign

1. Analyze the sales and Distribution System of P&G?

P&G keeping broaden the market by slashing its no. of distributors down to one-tenth of its size . 85% of its sales come from the top 30 towns & its current volume did not justify a large distributor network. So P&G will now have one distributer who will operate like superstockist., which help to replenish its distributors more frequently and reduce their average stock level. P&G keep growing on ROI(Return On Investment) which resulted in each distributer trying to extend its reach to push up volumes.

 With a limited number of distributers, P&G will also not need to invest in C&F agents. P & G follows wholesale format of distribution for Vicks. P&G is giving 6% margin to the distributor P & G is spending 30-35 % of its sales in Advertisement and Promotion which is highest in the industry, HUL expends only 15% of sales on Advertisement and Promotion.

Distribution network of FMCG:-

MANUFACTER PLANT
C/F DISTRIBUTOR

OUTLETS/ SHOPS
END CONSUMER/ USER

Distributor network of automobile

FACTORY DEALER

CONSUMER

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