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Proctor & Gamble Case Study

 

            
             Proctor & Gamble (P&G) is one of the world's largest manufacturers of a wide array of products, including many household grocery items - antiperspirants, baby care, household cleaners, skin care, fabric care, food & beverages, laundry, etc. At the end of 2001, P&G had net sales of over $39.2 billion1. .
             P&G is known as a dominant, aggressive developer and marketer of high-quality consumer goods. Their stock prices have returned almost 500% return in the last decade alone.2 They have been in business for over 150 years. Early on, the P&G growth strategy was isolated in three main areas - acquisitions, developing new product brands (as well as further developing existing brands), and globalization. Because of a law-suit in 1957 regarding acquisitions, P&G was forced to focus on new branding and international expansion over the next twenty years3.
             Focusing on the international aspect of business, P&G aggressively expanded their domestic household products by merely duplicating the U.S. products and marketing them into global markets. From 1953 to 1985, P&G went from an International portfolio of zero to $4 billion. Ed Artzt, the president of P&G International, refined their products by actually tailoring them to each individual global market. This refinement of marketing enabled P&G to jump to $15 billion in International sales by 1993. Ed Artzt became the CEO of P&G in 19904.
             Regarding the development of existing and new brands, P&G developed five product sectors, including Health/beauty; Food/Beverage; Paper; Soap; and Special Products (i.e. chemicals). Within each sector were product categories. Each category was then in charge of a group of brands. .
             Interestingly, in the 1980's P&G, as well as other manufacturers, grew to accept the "forward buying" of promoted merchandise. By the mid 1980's, the industry stocked a 3 month supply of many brands5. This was obviously a tremendous disadvantage to P&G, not to mention the complete industry.


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