Procter & Gamble
“Market Cap $217.84 B As of May 2014
At a Glance
- Industry: Household/Personal Care
- Founded: 1837
- Country: United States
- CEO: Alan Lafley
- Website: www.pg.com
- Employees: 121,000
- Sales: $84.74 B
- Headquarters: Cincinnati, Ohio
#40 Global 2000
- #81 in Sales
- #44 in Profit
- #192 in Assets
- #16 in Market value
#30 Innovative Companies (#27 in 2012)
Procter & Gamble Co. provides branded consumer packaged goods to its consumers around the world. Its products are sold primarily through mass merchandisers, grocery stores, membership club stores, drug stores, high frequency stores, and neighborhood stores which serve many consumers in developing markets. The company also intends to expand its presence in other channels, including department stores, perfumeries, pharmacies, salons and e-commerce. It operates through the following segments: Beauty, Grooming, Health Care, Fabric Care & Home Care and Baby Care & Family Care. The Beauty segment is comprised of cosmetics, female antiperspirant and deodorant, female personal cleansing, female shave care, hair care, hair color, hair styling, prestige products, salon professional and skin care products. This segment sells its products under the brands Head & Shoulders, Olay, Pantene, and Wella. The Grooming segment offers electronic hair removal devices, home small appliances, male blades and razors and male personal care products. This segment sells its products under the brands Braun, Fusion, Gillette, and Mach3. The Health Care segment consists of feminine care, gastrointestinal, incontinence, rapid diagnostics, respiratory, toothbrush, toothpaste, water filtration and other oral care products. This segment sells its products under the brands Always, Crest, and Oral-B. The Fabric Care & Home Care segment offers laundry additives, air care, batteries, dish care, fabric enhancers, laundry detergents and surface care products. This segment sells its products under the brands Ace, Ariel, Dawn, Downy, Duracell, Gain, Tide, and Febreze. The Baby Care & Family Care segment offers baby wipes, diapers, paper towels, tissues and toilet papers. This segment sells its products under the brands Bounty, Charmin, and Pampers. The company was founded by William Procter and James Gamble in 1837 and is headquartered in Cincinnati, OH.“
“Procter & Gamble History
William Procter, a candlemaker, and James Gamble, a soapmaker, both born in the United Kingdom of Great Britain and Ireland, emigrated from England and Ireland respectively. They settled in Cincinnati initially and met when they married sisters, Olivia and Elizabeth Norris. Alexander Norris, their father-in-law, called a meeting in which he persuaded his new sons-in-law to become business partners. On October 31, 1837, as a result of the suggestion, Procter & Gamble was created.
In 1858–1859, sales reached $1 million. By this point, approximately 80 employees worked for Procter & Gamble. During theAmerican Civil War, the company won contracts to supply the Union Army with soap and candles. In addition to the increased profits experienced during the war, the military contracts introduced soldiers from all over the country to Procter & Gamble’s products.
In the 1880s, Procter & Gamble began to market a new product, an inexpensive soap that floats in water. The company called the soap Ivory. William Arnett Procter, William Procter’s grandson, began a profit-sharing program for the company’s workforce in 1887. By giving the workers a stake in the company, he correctly assumed that they would be less likely to go on strike.
The company began to build factories in other locations in the United States because the demand for products had outgrown the capacity of the Cincinnati facilities. The company’s leaders began to diversify its products as well and, in 1911, began producing Crisco, a shortening made of vegetable oils rather than animal fats. As radio became more popular in the 1920s and 1930s, the company sponsored a number of radio programs. As a result, these shows often became commonly known as “soap operas.”
The company moved into other countries, both in terms of manufacturing and product sales, becoming an international corporation with its 1930 acquisition of the Thomas Hedley Co., based in Newcastle upon Tyne, England. After this acquisition, Procter & Gamble had their UK Headquarters at ‘Hedley House’ in Newcastle upon Tyne, until quite recently.[when?] Numerous new products and brand names were introduced over time, and Procter & Gamble began branching out into new areas. The company introduced Tide laundry detergent in 1946 and Prell shampoo in 1947. In 1955, Procter & Gamble began selling the first toothpaste to contain fluoride, known as Crest. Branching out once again in 1957, the company purchased Charmin Paper Mills and began manufacturing toilet paper and other paper products. Once again focusing on laundry, Procter & Gamble began making Downy fabric softener in 1960 and Bounce fabric softener sheets in 1972. One of the most revolutionary products to come out on the market was the company’s Pampers, first test-marketed in 1961. Prior to this point disposable diapers were not popular, althoughJohnson & Johnson had developed a product called Chux. Babies always wore cloth diapers, which were leaky and labor-intensive to wash. Pampers provided a convenient alternative, albeit at the environmental cost of more waste requiring landfilling.
Procter & Gamble acquired a number of other companies that diversified its product line and significantly increased profits. These acquisitions included Folgers Coffee, Norwich Eaton Pharmaceuticals (the makers of Pepto-Bismol), Richardson-Vicks, Noxell (Noxzema), Shulton’s Old Spice,Max Factor, and the Iams Company, among others. In 1994, the company made headlines for big losses resulting from leveraged positions ininterest rate derivatives, and subsequently sued Bankers Trust for fraud; this placed their management in the unusual position of testifying in court that they had entered into transactions that they were not capable of understanding. In 1996, Procter & Gamble again made headlines when theFood and Drug Administration approved a new product developed by the company, Olestra. Also known by its brand name ‘Olean’, Olestra is a lower-calorie substitute for fat in cooking potato chips and other snacks.
In January 2005 P&G announced an acquisition of Gillette, forming the largest consumer goods company and placing Unilever into second place. This added brands such as Gillette razors, Duracell, Braun, and Oral-B to their stable. The acquisition was approved by the European Union and the Federal Trade Commission, with conditions to a spinoff of certain overlapping brands. P&G agreed to sell its SpinBrush battery-operated electric toothbrush business to Church & Dwight. It also divested Gillette’s oral-care toothpaste line,Rembrandt toothpaste. The deodorant brands Right Guard, Soft and Dri, and Dry Idea were sold to Dial Corporation. The companies officially merged on October 1, 2005.Liquid Paper, and Gillette’s stationery division, Paper Mate were sold to Newell Rubbermaid. In 2008, P&G branched into the record business with its sponsorship of Tag Records, as an endorsement for TAG Body Spray.
P&G’s dominance in many categories of consumer products makes its brand management decisions worthy of study. For example, P&G’s corporate strategists must account for the likelihood of one of their products cannibalizing the sales of another.
On August 25, 2009, the Ireland-based pharmaceutical company Warner Chilcott announced they had bought P&G’s prescription-drug business for $3.1 billion.
P&G exited the food business in 2012 when it sold its Pringles snack food business to Kellogg’s for $2.75bn after the $2.35bn deal with former suitor Diamond Foods fell short.The company had previously sold Jif peanut butter and Folgers coffee in separate transactions to Smucker’s.
Procter & Gamble was a tier one sponsor of London’s 2012 Olympic Games and sponsored 150 Athletes.
Procter & Gamble was a tier one sponsor of Sochi’s 2014 Winter Olympic Games. It will return as a sponsor of the 2016 Summer Olympics in Rio.”
*Information from Forbes.com and Wikipedia.org
**Video published on YouTube by “P&G (Procter & Gamble)“