A COMPREHENSIVE PROJECT REPORT

On

“Staying ahead in the market Place: Analysis of

Marketing Strategies of P&G”

Submitted in the Partial Fulfillment of the Requirement

for the award of the Degree of

Master of Business Administration

By

MUKHTAAR ABBAS
Roll no. 08- MBA-30
Enrolment no.05-3842

Under the Supervision of

Prof U. M. Amin
(Hony Director CMS, JMI)

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 CENTRE FOR MANAGEMENT STUDIES
Jamia Millia Islamia, New Delhi – 110025
Declaration
I, Mukhtaar Abbas, a bonafied student of MBA (full time) programme at the centre for
Management Studies, Jamia Millia Islamia, New Delhi, hereby declare that I have done a
Comprehensive project entitled as “ Staying Ahead in the market place: Analysis of
marketing Strategy of P&G” under the supervision of Prof U. M. Amin, Hony Director,
Centre for Management Studies, JMI.
I also declare that the present project report is my original work. The content of this project
has not been submitted to any other university or institute either in part or in full for the
award of any degree, diploma or fellowship
Further, I assign the right to university to use the information and the content of the project to
develop cases, caselets, case leads, and papers for publication and/or for use in teaching.

Place: New Delhi MUKHTAAR ABBAS

Date: Roll No: 08-MBA-30.

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 Certificate

This is to certify that Mr. Mukhtaar Abbas, A bonafied student of MBA (Full time) at Centre
for Management Studies, has completed his comprehensive project under my direct
supervision.

By performance I found him to be a v. good Learner who has shown initiative and
comprehension to grasp the practical knowledge.

He is blesses with a cheerful disposition and good communication Skills.

I wish him all the best in his future pursuits.

Place: New Delhi Prof U. M. Amin

Date: (Hony Director, CMS)

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 ACKNOWLEDGEMENT
The desire and need to thank some indispensable persons is a customary but when it comes to
me I just felt it as religion. As the Intensity of sentiments deepens; we fumble for words and
full in expressions. I am experiencing the same difficulty as I feel to acknowledge my project
guide and supervisor, Prof U. M. Amin (Hony Director, CMS), who guided me in this
project entitled “Staying Ahead in the market place: Analysis of marketing Strategy of
P&G”. I am sincerely thankful to him for his help for the completion of the Project.
I express my heartfelt gratitude and regard to my Faculty Members and My Friends who
have been the threshold in understanding and upbringing my competencies to move ahead in
life with élan..
I am also very thankful to all the respondents who co-operate with me very nicely.
Lastly, my prayers and thanks to The Almighty, whose blessings showering on me are the
heart and soul for all my being.

MUKHTAAR ABBAS

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 Preface
This project is a step towards gaining knowledge about the real world and putting the theory
to practice. I shall look forward to and gratefully acknowledge all suggestions on this small
step I have taken.
The report consists of a step-wise effort towards meeting the objectives of the study. It covers
in brief, the origin of the company, its growth in India, the company profile. It then, covers
the step-wise process of data collection and the representation of the data together with the
analysis. It also includes some suggestions put forward hoping it would help the company
achieve its vision.
In my Comprehensive project I was assign the task “Staying Ahead in the market place:
Analysis of marketing Strategy of P&G”
I carried out the market research by meeting and interviewing and asking to fill my
questionnaire and also gathered data from secondary sources in order to achieve my
objectives of the study.
This study analyzes the marketing mix of P&G and also advertising and CSR practices in
order to analyze the effectiveness of these practices.

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 Contents
1. Executive Summary
2. Introduction
3. Industry Analysis
➢ Porter’s five forces model
➢ Swot analysis
➢ Industry category and products
1. Company Profile
➢ History
➢ P&G in India
➢ Financial Highlights
➢ Organizational Structure
➢ Purpose, Principles and values
➢ Environmental credentials
➢ CSR in India
1. External environmental Scanning
2. Competitive analysis
3. Marketing mix Strategy
➢ Product
➢ Pricing
➢ Promotion and Communication
➢ Packaging
➢ Distribution
1. Research Methodology
➢ Research objectives
➢ Research type
➢ Sampling

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 ➢ Data Collection Tools
➢ Data collection Methodology
➢ Hypothesis
1. Data Analysis and Interpretation
2. Findings and Conclusion
3. Annexure
4. Bibliography

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 Executive Summary
This study seeks to understand the growth of Procter & Gamble through the in-depth analysis
of marketing strategies it has adopted over a long period of time to stay ahead in the market
place. This study explains how P&G has maintained its position by exploring the strategies.
The study also explains how P&G became the world leader billion dollar brand from a local
candle and soap maker. Further it seeks how CSR and Advertising help P&G to create and
brand image for quality and innovation.
This study seeks to fulfil the following objectives with emphasized on
personal care products by P&G in Indian market:
➢ To identify the factors that has led to the success of P&G over a long period of time to
stay ahead in the market place.
➢ To analyze the marketing and positioning strategies adopted by P&G.
➢ To analyze the advertisement and corporate social responsibility budgets of P&G to
make (sustain) brand image.

This study consists of some secondary and primary research and data that has been analyzed
to reach out to some conclusions and to provide some recommendations.
This project analyzes the marketing mix used by the P&G in Indian Personal Care Industry
and the products by P&G in this sector are:
➢ Pantene
➢ Olay total effects
➢ Olay natural white
➢ Head & Shoulders
➢ Rejoice
The closer competitor to P&G in this sector are as HUL, ITC, Dabur and Merico.
So this study emphasizes on personal csre products of P&G in India to analyze the marketing
mix strategy adopted by P&G to gain the market share and profit.

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Further this study also analyze the advertising and CSR by P&G in India to measure and
analyze the effectiveness of ads and CSR.

Introduction
Indiaʹs FMCG sector is the fourth largest sector in the economy and creates employment for
more than three million people in downstream activities. Its principal constituents are
Household Care, Personal Care and Food & Beverages. The total FMCG market is in excess
of Rs. 85,000 Crores. It is currently growing at double digit growth rate and is expected to
maintain a high growth rate. FMCG Industry is characterized by a well established
distribution network, low penetration levels, low operating cost, lower per capita
consumption and intense competition between the organized and unorganized segments.

The Rs 85,000-crore Indian FMCG industry registereded a healthy growth in the third quarter
of 2008-09 despite the economic downturn. Unlike other sectors, the FMCG industry did not
slow down since Q2 2008 and registered a double digit growth rate. The industry is doing
pretty well, bucking the trend. As it is meeting the every-day demands of consumers, it will
continue to gro. Market share movements indicate that companies such as Marico Ltd and
Nestle India Ltd, with domination in their key categories, have improved their market shares
and outperformed peers in the FMCG sector. This has been also aided by the lack of
competition in the respective categories. Single product leaders such as Colgate Palmolive
India Ltd and Britannia Industries Ltd have also witnessed strength in their respective
categories, aided by innovations and strong distribution. Strong players in the economy
segment like Godrej Consumer Products Ltd in soaps and Dabur in toothpastes have also
posted market share improvement, with revived growth in semi-urban and rural markets.

By 2015, the sector is predicted to scale up to US$33.4 billion. The sector generates 5% of
total factory employment in the country and is creating employment for three million people,
especially in small towns and rural India.

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With more players entering the FMCG sector, particularly the skin care, hair care,
deodorants, convenience foods, and health foods markets,
• Indian consumers have more choices than ever.
• Some are even willing to pay premium prices for their “higher” aspirations
• Margin are becoming thinner for FMCG players as they battle higher raw material costs and
invest more in marketing, slick packaging and distribution networks to gain volume and
retain/gain market shares

Industry Analysis:

India’s FMCG Market Size (In USD Billion)

Industry Dynamics:

(Porter;s Five forces Model)

Higher Penetration of the Rural Population

Many companies are deepening their penetration in the rural areas as:
• The FMCG sector in the urban areas is becoming quite saturated (though it will continue
to dominate in the next 8 – 10 years) while the penetration in the rural areas are only about
1%.

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• The rural areas have and will continue to make up more than 50% (153 million) of India’s
total households and accounting for more than its current 66% contribution to total FMCG
consumption.
• Rural India has a large consuming class with 41 per cent of India's middle-class and 58 per
cent of the total disposable income.
• Currently, nearly 34% of the offtake of FMCG companies come form rural areas.
Companies like HUL, ITC and Colgate have already established good distribution
networks in these regions. Other companies would start catering to these regions in near
future.
• Between 2005 and 2010, the FMCG sector in the rural and semi-urban areas will
experience some 50% growth, at a CAGR of 10% and increase its market size to nearly
US$ 23 billion from the 2005 level of US$11.4 billion

Demand for FMCG products is set to boom by almost 60 per cent by 2007 and more than 100
per cent by 2015. This will be driven by the rise in share of middle class (defined as the
climbers and consuming class) from 67 per cent in 2003 to 88 per cent in 2015. The boom in
various consumer categories, further, indicates a latent demand for various product segments.
For example, the upper end of very rich and a part of the consuming class indicate a small but
rapidly growing segment for branded products. The middle segment, on the other hand,
indicates a large market for the mass end products. The BRICs report indicates that India's
per capita disposable income, currently at US$ 556 per annum, will rise to US$ 1150 by 2015
- another FMCG demand driver. Spurt in the industrial and services sector growth is also
likely to boost the urban consumption demand.

Swot Analysis of FMCG sector in India

Strengths:

• Low operational costs

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• Presence of established distribution networks in both urban and rural areas

• Presence of well-known brands in FMCG sector

Weaknesses:

• Lower scope of investing in technology and achieving economies of scale, especially in

small sectors

• Low exports levels

• "Me-tooʺ products, which illegally mimic the labels of the established brands. These
products narrow the scope of FMCG products in rural and semi-urban market.

Opportunities:

• Untapped rural market

• Rising income levels, i.e. increase in purchasing power of consumers

• Large domestic market- a population of over one billion.

• Export potential

Threats:

• Removal of import restrictions resulting in replacing of domestic brands

• Slowdown in rural demand

• Tax and regulatory structure

Industry Category and Products:

Household Care

Personal Wash:-

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The market size of personal wash is estimated to be around Rs. 8,300 Cr. The personal wash
can be segregated into three segments: Premium, Economy and Popular. The penetration
level of soaps is 92 per cent. It is available in 5 million retail stores, out of which, 75 per cent
are in the rural areas. HUL is the leader with market share of 53 per cent; Godrej occupies
second position with market share of 10 per cent. With increase in disposable incomes,
growth in rural demand is expected to increase because consumers are moving up towards
premium products. However, in the recent past there has not been much change in the volume
of premium soaps in proportion to economy soaps, because increase in prices has led some
consumers to look for cheaper substitutes.

Detergents:-

The size of the detergent market is estimated to be Rs. 12,000 Cr. Household care segment is
characterized by high degree of competition and high level of penetration. With rapid
urbanization, emergence of small pack size and sachets, the demand for the household care
products is flourishing. The demand for detergents has been growing but the regional and
small

unorganized players account for a major share of the total volume of the detergent market. In
washing powder HUL is the leader with 38 per cent of market share. Other major players are
Nirma, Henkel and Proctor & Gamble.

Personal Care

Skin Care:-

The total skin care market is estimated to be around Rs. 3,400 Cr. The skin care market is at a
primary stage in India. The penetration level of this segment in India is around 20 per cent.
With changing life styles, increase in disposable incomes, greater product choice and
availability, people are becoming aware about personal grooming. The major players in this
segment are Hindustan Unilever with a market share of 54 per cent, fol-lowed by CavinKare
with a market share of 12 per cent and Godrej with a market share of 3 per cent.

Hair Care:-

The hair care market in India is estimated at around Rs. 3,800 Cr. The hair care market can be
segmented into hair oils, shampoos, hair colorants & conditioners, and hair gels. Marico is

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the leader in Hair Oil segment with market share of 33 per cent; Dabur occu-pies second
position at 17 per cent.

Shampoos:-

The Indian shampoo market is estimated to be around Rs. 2,700 Cr. It has the penetration
level of only 13 per cent in India. Sachet makes up to 40 per cent of the total shampoo sale. It
has low penetration level even in metros. Again the market is dominated by HUL with around
47 per cent market share; P&G occupies second position with market share of around 23 per
cent. Antidandruff segment constitutes around 15 per cent of the total shampoo market. The
market is further expected to increase due to increased marketing by players and availability
of shampoos in affordable sachets.

Oral Care:-

The oral care market can be segmented into toothpaste - 60 per cent; toothpowder - 23 per
cent; toothbrushes - 17 per cent. The total toothpaste market is estimated to be around Rs.
3,500 Cr. The penetration level of toothpowder/toothpaste in urban areas is three times that of
rural areas. This segment is dominated by Colgate-Palmolive with market share of 49 per
cent, while HUL occupies second position with market share of 30 per cent. In toothpowders
market, Colgate and Dabur are the major players. The oral care market, especially
toothpastes, remains under penetrated in India with penetration level 50 per cent.

Personal Care Products’ Market Sizes (In USD Million)

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Food & Beverages

Food Segment :-

The foods category in FMCG is gaining popularity with a swing of launches by HUL, ITC,
Godrej, and others. This category has 18 major brands aggregating Rs. 4,600 Cr. Nestle and
Amul slug it out in the powders segment. The food category has also seen innovations like
softies in ice creams, ready to eat rice by HUL and pizzas by both GCMMF and Godrej
Pillsbury.

The size of the food processing industry exceeds US$65.6 billion.

• The size of the semi-processed/ready-to-eat food segment is over $1.1 billion.

Of the food processing industry,

• Bread and biscuits sales exceeds US$1.7 billion;

• Health beverage sales exceeds US$ 230 million;
• Ice cream exceeds US$188 million
• Chocolates sales exceeds US$73 million

• The soft drink (carbonated beverages and juices) market is in excess of US$1 billion,
predominantly urban (>70%), and its consumption is highly seasonal.

• Major players in this segment include Hindustan Lever, Nestle, Cadbury and Dabur

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Tea :-

The major share of tea market is dominated by unorganized players. More than 50 per cent of
the market share is capture by unorganized players. Leading branded tea players are HUL and
Tata Tea. In the hot beverage market, tea rather than coffee dominates. Coffee is consumed
largely in the southern states.

Coffee :-

The Indian beverage industry faces over supply in segments like coffee and tea. However,
more than 50 per cent of the market share is in unpacked or loose form. The major players in
this segment are Nestlé, HUL and Tata Tea.

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 Company Profile

William Procter, a candlemaker, and James Gamble, a soapmaker, formed this global and
Fortune 500 Corporation in 1837. Procter and Gamble (P&G) is headquartered in Cincinnati,
Ohio. These two entrepreneurs and inventors were immigrants from England and Ireland
respectively; who chose for some reason to settle in the Cincinnati area. The company
manufactures a wide variety of consumer goods including beauty, household, health and
wellness products.

1837 — 1890

The Partnership Years.1837 was a difficult time to start a business. Although Cincinnati
was a bustling marketplace, the U.S. was gripped by financial panic. Hundreds of banks were
closing across the country. There was widespread concern that the United States was
bankrupt. Yet, William and James launched their new enterprise, more concerned about how
to compete with the 14 other soap and candle makers in their city than with the financial
panic shaking their country.

Their calm in the midst of that economic storm reflected their forward-looking approach to
the business – an approach that became the hallmark of Procter & Gamble. In the 1850s, for
example, despite rumors of an impending civil war in the U.S., they built a new plant to
sustain their growing business. Later, they pioneered one of the nation’s first profit-sharing
programs and were among the first in American industry to invest in a research laboratory.
By 1890, the fledgling partnership between Procter and Gamble had grown into a multi-
million dollar corporation.

1890 — 1945

A Company Built on Innovation. By 1890, P&G was selling more than 30 different types of
soap, including Ivory. Fueled by full-color print ads in national magazines, consumer demand
for P&G soaps continued to grow. To meet this increasing demand, the Company expanded
its operations outside Cincinnati, with a plant in Kansas City, Kansas, followed by a plant in
Ontario, Canada. As each new plant opened, P&G would embark on plans for another. The

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research labs were as busy as the plants. Innovative new products rolled out one after another
– Ivory Flakes, a soap in flake form for washing clothes and dishes; Chipso, the first soap
designed for washing machines; Dreft, the first synthetic house-hold detergent; and Crisco,
the first all-vegetable shortening that changed the way consumers cooked. Each of these new
products came from P&G’s in-depth understanding of consumer needs and pioneering
approach to market research. And they were marketed through equally innovative techniques,
including radio “soap operas,” product sampling and promotional premiums.

1945 — 1980

New Lands and Dynamic Growth In 1946, P&G introduced Tide, its most important new
product since Ivory. Tide was remarkably superior to other products on the market, and it
quickly became an enormous success – so successful, in fact, that it helped fund the
Company’s rapid growth not just into new product lines but also into new markets around the
world. In the years following Tide’s introduction, P&G made its mark in several new
businesses. Crest, the first fluoride toothpaste, rose to market leadership on the strength of an
unprecedented endorsement by the American Dental Association. The Company’s
pulpmaking technology fueled its growth in the toilet tissue and paper towel businesses. And
P&G literally invented the disposable diaper category with the introduction of Pampers in
1961. The Company also strengthened its existing businesses, expanding into new food and
beverage categories – most notably with the acquisition of Folger’s coffee in 1963 – and
building on its strong laundry reputation with Downy, its first fabric softener. Most
important, however, was the Company’s growing focus on its international businesses.
Convinced that its success in new geographic markets required on-the-ground operations in
these countries, P&G began building start-up businesses, first in Mexico, then in Europe and
Japan. By 1980, P&G was doing business in 23 countries around the world, with sales of
nearly $11 billion and earnings 35 times greater than in 1945.

1980 — 1999

A Global Company As it approached its 150th anniversary in 1987, P&G was poised for the
most dramatic period of growth in its history. The Company that began as a small
Midwestern partnership had grown into one of America’s largest multinational corporations.

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Two important changes marked this dynamic period. First, the Company emerged as an
important new player in health care (through the acquisitions of Norwich Eaton
Pharmaceuticals and Richardson-Vicks and the opening of the Health Care Research Center
in Cincinnati) and in cosmetics and fragrances (with the acquisitions of Noxell, Max Factor,
Ellen Betrix and Giorgio of Beverly Hills). Second, P&G expanded its globalization plans.
The Company established a worldwide research and development network, with research
hubs in the United States, Europe, Japan and Latin America, and built a solid foundation of
truly global brands. These brands include Pantene Pro-V, Always/Whisper, Ariel and Tide,
Crest, Pampers, Vicks and Oil of Olay.

2000-Today

In the spring and summer of 2000, P&G experienced one of the most demanding challenges
in its history. After missing earnings commitments, the Company's stock declined
dramatically, resulting in a loss of nearly $50 billion in market capitalization.

A.G. Lafley, who became CEO in June 2000, reaffirmed P&G's Purpose and Values and
refocused the Company on the few choices necessary to get the business back on track:
growing its leading categories and brands with its largest retail customers in its top
geographic markets while accelerating growth in health, beauty and personal care and in fast-
growing developing markets. In the five years that followed, P&G increased sales more than
40%, doubled profits, generated more than $30 billion in free cash flow, and delivered more
than $70 billion in shareholder value. In 2005, P&G merged with The Gillette Company –
following the acquisitions of Clairol and Wella earlier in the decade. With a portfolio of 22
billion-dollar brands and a market capitalization of nearly $200 billion, P&G established
itself as one of the ten most valuable companies in the world by respecting the consumer as
boss and fulfilling its Purpose: touching lives and improving life every day.

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Over 50 Years of Sustainability Progress: (Source: www.pg.com)

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P&G in India:

In 1993, Procter & Gamble Home Products is incorporated as a 100% subsidiary of The
Procter & Gamble Company, USA. Procter & Gamble Home Products launches Ariel
Super Soaker. Richardson Hindustan Limited (RHL), manufacturer of the Vicks range
of products, was rechristened 'Procter & Gamble India' in October 1985, following its
affiliation to the 'Procter & Gamble Company', USA. Procter & Gamble Hygiene and
Health Care Limited (PGHHCL) acquired its current name in 1998, reflecting the two
key segments of its business. P&G, USA has a 65 per cent stake in PGHHCL. The
parent also has a 100 per cent subsidiary, Procter & Gamble Home Products (PGHP).
The overall portfolio of the company includes healthcare; feminine-care; hair care and
fabric care businesses. PGHH operates in just two business segments – Vicks range of
cough & cold remedies and Whisper range of feminine hygiene.

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Products:

Four billion times a day, P&G brands touch the lives of people around the world. The
company has one of the strongest portfolios of trusted, quality, leadership brands,
including Pampers®, Tide®, Ariel®, Whisper®, Pantene®, Mach3®, Oral-B®,
Duracell®, Olay®, Head & Shoulders®, Gillette®.

Billion-Dollar Brands
P&G is a company of leading brands. At the beginning of the decade, P&G had ten
billion-dollar brands in its portfolio — brands that generate more than one billion dollars
in sales each year. Today, P&G have 23 of these billion-dollar brands overseas. Some in
India are Olay, Tide, Pampers, Pantene, Gillette, Ariel, Oral-B, and Head & Shoulders.

Half-Billion-Dollar Brands

P&G also has 20 brands generating about $500 million or more in annual sales overseas.
When these are combined with the billion-dollar brands, P&G’s top 43 brands account
for 85% of sales and more than 90% of profit. Together, these 43 brands have delivered
a 9-year compound average sales growth rate of approximately 10% — double the
growth rate of the balance of P&G’s brand portfolio. Some are Rejoice, Dolce
&Gabbana.

P&G acquisition of Gillete:

The Procter & Gamble Co. is embarking on its largest acquisition to date — a $57
billion deal for Gillette Co. and its shaving products and copper-top batteries that would
form the world's largest consumer-products company. After the deal, P&G added
Duracell batteries, Right Guard deodorant and Gillette razors to its more than 300
consumer brands, including Ivory Soap, Head and Shoulders shampoo,Crest toothpaste
and Bounty paper towels. The acquisition would vault P&G's sales to more than $60
billion annually.

"This combination of two best-in-class consumer products companies, at a time when

they are both operating from a position of strength, is a unique opportunity," P&G chief
executive A.G. Lafley.

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Gillette also has reported strong earnings since Kilts joined the company in 2001. It has
moved to buoy its premium-line shaving and dental care products and sales of Duracell
batteries.
In its most recent quarter, Gillette reported income of $475 million, up from $416
million, as more consumers traded up to its pricier M3Power razor and the series of
hurricanes in the South boosted battery sales. Gillette also sells Oral B dental care
products

Financial Highlights:

P&G has grown sales from $39 billion to $83 billion in the past seven years. It has more
than doubled the number of brands that generate $1 billion or more in annual sales and
more than quadrupled the number of brands that generate at least $500 million.

The Company reported net earnings of $12.1 billion for the fiscal year ended June 30,
2008, an increase of 17 percent compared to $10.3 billion in 2007. Diluted net earnings
per share were $3.64 in 2008, compared to $3.04 in 2007. Net sales were $83.5 billion
in 2008, up 9 percent from last year. First discretionary use of cash is dividend
payments. Common share dividends grew 13 percent to $1.45 per share in 2008,
representing the 52nd consecutive fi scal year of increased common share dividends.
Total dividend payments, to both common and preferred shareholders, were $4.7 billion,
$4.2 billion and $3.7 billion in fiscal 2008, 2007 and 2006, respectively.

Supplier diversity is a fundamental business strategy at P&G. In 2009, P&G spent more
than $2 billion with minority- and women-owned businesses. Since 2005, P&G has been
a member of the Billion Dollar Roundtable, a forum of 16 corporations that spend more
than $1 billion annually with diverse suppliers.

2009 NET SALES

(% of total business segments)

33
%
4 (
2
6
%

21
%
 Peer Group Comparison

Name of CMP Market EPS P/E P/Bv Dividen

the (Rs.) Cap. (Rs.) (x) (x) d (%)
company (Rs.mn.)
Procter
&Gamble 1740.0 56480.4 55.1 31.5 12.8 225.00
0 0 8 4
HUL Ltd
284.70 619811.2 9.09 31.2 30.0 750.00
7 7
Nestle
India 2586.6 249388.9 68.7 37.6 52.6 425.00
0 8 1 9
ITC Ltd
267.00 1010240. 9.52 28.0 7.38 370.00
9 5
(Source: First call India Equity Advisors Pvt. Ltd )

Dividend History
P&G has paid dividends without interruption since its incorporation in 1890 and has
increased dividends each year for the past 53 fiscal years. P&G’s compound annual
dividend growth rate is 9.5% over the last 53 years.

(in dollars, split adjusted) 1956 1970 1984 1998 2009

Dividends per Share $0.01 $0.04 $0.15 $0.51 $1.64

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P&G serves about four billion people in the world today. And P&G people work to
make sure the Company’s brands live up to their promise to make everyday just a little
bit better, now and for generations to come.

Purpose

P&G will provide branded products and services of superior quality and value that
improve the lives of the world’s consumers, now and for generations to come. As a
result, consumers will reward us with leadership sales, profit and value creation,
allowing our people, our shareholders, and the communities in which we live and work
to prosper.

Principles

P&G show respect for all individuals. The interests of the Company and the individual
are inseparable. We are strategically focused in our work. Innovation is the cornerstone
of our success. We are externally focused. We value personal mastery. We seek to be
the best. Mutual interdependency is a way of life.

Values

P&G Brands and P&G People are the foundation of P&G’s success. P&G People bring
the values to life as we focus on improving the lives of the world’s consumers.

Organizational Structure

P&G organizational structure is comprised of three Global Business Units (GBUs) and a
Global Operations group. The Global Operations group consists of the Market
Development Organization (MDO) and Global Business Services (GBS).

Global Business Units

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P%G’s three GBUs are Beauty, Health and Well-Being, and Household Care. The
primary responsibility of the GBUs is to develop the overall strategy for our brands.
They identify common consumer needs, develop new product innovations and upgrades,
and build P&G brands through effective commercial innovations, marketing and sales.

Global Operations

Market Development Organization

MDO is responsible for developing go-to-market plans at the local level. The MDO
includes dedicated retail customer, trade channel and country-specific teams. It is
organized along seven geographic regions: North America, Western Europe, Northeast
Asia, Central & Eastern Europe/Middle East/Africa, Latin America,
ASEAN/Australia/India and Greater China. P&G define developing markets as the
aggregate of Central & Eastern Europe/Middle East/ Africa, Latin America,
ASEAN/Australia/India and Greater China. Developed markets are comprised of North
America, Western Europe and Northeast Asia.

Global Business Services

GBS provides technology, processes and standard data tools to enable the GBUs and the
MDO to better understand the business and better serve consumers and customers. The
GBS organization is responsible for providing world-class solutions at a low cost and
with minimal capital investment.

Environmental Credentials:
➢ All P&G products are held to P&G's high standards for environmental and human
safety, we do not differentiate between which products meet these standards and
which do not - they all do.

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 ➢ P&G has been leading the industry with innovations like concentrated products,
recycled plastic bottles and refill packages to the industry.
➢ P&G's Central Product Safety Environment Group was established to develop new
methods for evaluating the environmental safety of consumer products. P&G was one
of the first companies to establish such an organization.
➢ P&G has hundreds of scientists and engineers responsible for assessing the
environmental safety of our products and operations.
➢ P&G's environmental organization has published more than 700 articles over the
past 45 years; almost 500 of those since 1990.
➢ In 1992, P&G received the World Environment Centre Gold Medal for International
Corporate Environmental Achievement.
➢ P&G has been listed by FTSE4 Good ethical investment index since its inception.

➢ 95.93% of all materials entering P&G factories worldwide leave as finished product
(waste is 4.07% of which more than 50% is recycled).

CSR by P&G India:

There are various CSR activities carried out by P&G with genuine intention
of giving back to the society.

➢ PROJECT SHIKSHA – SECURE YOUR CHILD’S FUTURE (2003)

➢ REBUILDING LIVES IN EARTHQUAKE HIT BHUJ (2001/2002)
➢ PROJECT POSHAN – FIGHTING MALNUTRITION IN INDIA (2000)
➢ PROJECT OPEN MINDS – EDUCATING INDIAS WORKING YOUTH (1999)
➢ PROJECT DRISHTI – THE FIRST EVER SIGHT RESTORATION PROGRM IN
INDIA(1999)
➢ PROJECT FUTURE FOCUS - THE FIRST EVER ROUND WRITE IN CAREER
GUIDANCE SERVICE (1998)
➢ PROJECT PEACE - ENVIRONMENTAL EDUCATION PROGRAMME (1996)

Environmental Scanning of Indian FMCG Sector:

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Increase in per capita income and heightened awareness of personal appearances, have
fuelled the demand for personal care products in India and today this sector has emerged as
one of the fastest growing markets in the country.

The personal care market in India is estimated to be worth $4-bn. Personal hygiene products
(including bath and shower products, deodorants etc.), hair care, skin care, colour cosmetics
and fragrances are the key segments of the personal care market.

Each of these segments exhibits unique trends and growth patterns. For example, the largest
segment of personal hygiene products, largely dominated by bar soaps, has grown at 5% p.a.
over the last five years. In comparison, the second largest segment of hair care products has
seen a much higher growth of 9-10% p.a. during the same period. The skin care market is
relatively smaller and is growing at a high rate while moving away from basic creams and
moisturizers to specialized products such as anti-wrinkle and dark circle removing creams.
For example, the anti-ageing segment, though only 2% of the skin care market, has been
growing at a rate greater than 90% p.a. over the last few years.

The oral care industry, especially toothpastes, remains under penetrated in India with
penetration rates below 45 per cent. With rise in per capita incomes and awareness of oral
hygiene, the growth potential is huge. Lower price and smaller packs are also likely to drive
potential uptrading. In the personal care segment, according to forecasts made by the Centre
for Industrial and Economic Research (CIER), detergent demand is likely to rise to 4,180,
000 metric tonnes by 2011-12 with an annual growth rate of 7 per cent between 2006 and
2012. The demand for toilet soap is expected to grow at an annual rate of 4 per cent between
2006-12 to 870,000 metric tonnes by 2011-12. Rapid urbanisation is expected to propel the
demand for cosmetics to 100,000 metric tonnes by 2011-12, with an annual growth rate of
10 per cent. (Source: Publication by Indian Brand Equity Foundation “IBEF”)

The Indian personal care industry has taken rapid strides in the last few years, moving
towards premium products incorporating specialty ingredients in their formulation.
However, a comparison with per capita consumption in China reflects the largely untapped
nature of the Indian market. Favourable demographic factors and increasing beauty
consciousness indicate high future demand for personal care products and specifically for
active ingredients.

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Industry participants need to build greater awareness and distribution reach and develop
products tailored for the Indian market. Key trends, including nanotechnology and green
chemistry besides others, will influence their strategies. The eventual winners would be
those who ensure better value offerings to meet the needs of the Indian consumer.

(Source: chemical weekly October 6, 2009)

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WHY INDIA
Large domestic market:
India is one of the largest emerging markets, with a population of over one billion. India is
one of the largest economies in the world in terms of purchasing power and has a strong
middle class base of 300 million.

Urban Rural

Population 2001-02 (mn household 53 135

Population 2009-10 (mn household) 69 153

Market (Towns/Villages) 3768 627,000

Universe of Outlets (mn) 1 3.3

(Source: Statistical Outline of India, NCAER)

India - a large consumer goods spender

An average Indian spends around 40 per cent of his income on grocery and 8 per cent on
personal care products. The large share of fast moving consumer goods (FMCG) in total
individual spending along with the large population base is another factor that makes India
one of the largest FMCG markets. Even on an international scale, total consumer
expenditure on food in India at US$ 120 billion is amongst the largest in the emerging
markets, next only to China.

Consumer expenditure on food (US$ billion)

Change in the Indian consumer profile:

Rapid urbanisation, increased literacy and rising per capita income, have all caused rapid
growth and change in demand patterns, leading to an explosion of new opportunities.
Around 45 per cent of the population in India is below 20 years of age and the young
population is set to rise further. Aspiration levels in this age group have been fuelled by
greater media exposure, unleashing a latent demand with more money and a new mindset.

Way ahead for personal care industry in India:

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What do all these trends mean for the Indian personal care industry, in general and
individual companies, in particular? The outlook of more stringent regulation governing
usage of active ingredients in personal care products implies the need to strengthen testing
capabilities to ensure adequate product safety. Also the industry needs to self regulate to
ensure performance claims made in product advertisements are commensurate with benefits
delivered to consumers. The surging demand for green products calls for better product and
application R&D capabilities to use natural ingredients more effectively. Multinational
players with international brands have a strong presence in the Indian formulation segment.
Local brands too are gaining a foothold in the market by innovatively developing value
offerings to meet the unique needs of the Indian consumer. Going ahead, it will be
important to develop R&D capabilities to further customize products for Indian consumers,
create greater awareness among the burgeoning middle class and ensure effective
distribution reach to service them. The companies that are able to develop a judicious mix of
the above will be the eventual winners. The time is ripe to review one’s strategy and come
up with innovative approaches to help realise the full potential of the Indian personal care
sector, where the ingredients market is likely to double in the next four years.

INDIA COMPETITIVENESS AND COMPARISON WITH THE WORLD MARKETS

Materials availability:
India has a diverse agro-climatic condition due to which there exists a wide-ranging and
large raw material base suitable for food processing industries. India is the largest producer
of livestock, milk, sugarcane, coconut, spices and cashew and is the second largest producer
of rice, wheat and fruits & vegetables. India also has an ample supply of caustic soda and
soda ash, the raw materials in the production of soaps and detergents – India produced 1.6
million tonnes of caustic soda in 2003-04. Tata Chemicals, one of the largest producers of
synthetic soda ash in the world is located in India. The availability of these raw materials
gives India the locational advantage.

Domestic FMCG market to treble:

According to estimates based on China's current per capita consumption, the Indian FMCG
market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015.

(Source: HH Panel Data)

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 The dominance of Indian markets by unbranded products, change in eating habits and the
increased affordability of the growing Indian population presents an opportunity to makers
of branded products, who can convert consumers to branded products.

Cost competitiveness:
Labour cost comparison:

(Source: DIPP)
Apart from the advantage in terms of ample raw material availability, existence of low-cost
labour force also works in favour of India. Labour cost in India is amongst the lowest in
Asian countries. Easy raw material availability and low labour costs have resulted in a lower
cost of production. Many multi-nationals have set up large low cost production bases in
India to outsource for domestic as well as export markets.

Presence across value chain:

Indian firms also have a presence across the entire value chain of the FMCG industry from
supply of raw material to final processed and packaged goods, both in the personal care
products and in the food processing sector. For instance, Indian firm Amul's product
portfolio includes supply of milk as well as the supply of processed dairy products like
cheese and butter. This makes the firms located in India more cost competitive.

POLICY
India has enacted policies aimed at attaining international competitiveness through lifting of
the quantitative restrictions, reduced excise duties, automatic foreign investment and food
laws resulting in an environment that fosters growth. 100 per cent export oriented units can
be set up by government approval and use of foreign brand names is now freely permitted.

FDI Policy:
Automatic investment approval (including foreign technology agreements within specified
norms), up to 100 per cent foreign equity or 100 per cent for NRI and Overseas Corporate
Bodies (OCBs) investment, is allowed for most of the food processing sector except malted
food, alcoholic beverages and those reserved for small scale industries (SSI). 24 per cent
foreign equity is permitted in the small-scale sector. Temporary approvals for imports for

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test marketing can also be obtained from the Director General of Foreign Trade. The
evolution of a more liberal FDI policy environment in India is clearly supported by the
successful operation of some of the global majors like PepsiCo in India.

Removal of Quantitative Restrictions and Reservation Policy:

The Indian government has abolished licensing for almost all food and agro-processing
industries except for some items like alcohol, cane sugar, hydrogenated animal fats and oils
etc., and items reserved for the exclusive manufacture in the small scale industry (SSI)
sector. Quantitative restrictions were removed in 2001 and Union Budget 2004-05 further
identified 85 items that would be taken out of the reserved list. This has resulted in a boom
in the FMCG market through market expansion and greater product opportunities.
Central and state initiatives:
Various states governments like Himachal Pradesh, Uttaranchal and Jammu & Kashmir
have encouraged companies to set up manufacturing facilities in their regions through a
package of fiscal incentives. Jammu and Kashmir offers incentives such as allotment of land
at concessional rates, 100 per cent subsidy on project reports and 30 per cent capital
investment subsidy on fixed capital investment upto US$ 63,000. The Himachal Pradesh
government offers sales tax and power concessions, capital subsidies and other incentives
for setting up a plant in its tax free zones. Five-year tax holiday for new food processing
units in fruits and vegetable processing have also been extended in the Union Budget 2004-
05. Wide-ranging fiscal policy changes have been introduced progressively. Excise and
import duty rates have been reduced substantially. Many processed food items are totally
exempt from excise duty. Customs duties have been substantially reduced on plant and
equipment, as well as on raw materials and intermediates, especially for export production.
Capital goods are also freely importable, including second hand ones in the Food processing
sector
Growth Prospect of Indian FMCG sector

Large Market

India has a population of more than 1.150 Billions which is just behind China. According to
the estimates, by 2030 India population will be around 1.450 Billion and will surpass China
to become the World largest in terms of population. FMCG Industry which is directly
related to the population is expected to maintain a robust growth rate.

(Source: UN Population Division: Medium variant)

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Spending Pattern

An increase is spending pattern has been witnessed in Indian FMCG market. There is an
upward trend in urban as well as rural market and also an increase in spending in organ-ized
retail sector. An increase in disposable income, of household mainly because of in-crease in
nuclear family where both the husband and wife are earning, will lead to growth rate in
FMCG goods.

Changing Profile and Mind Set of Consumer

People are becoming conscious about health and hygiene. There is a change in the mind set
of the Consumer and they are now looking at “Money for Value” rather than “Value for
Money”. We have seen willingness in consumers to move to evolved products/ brands,
because of changing lifestyles, rising disposable income etc. Consumers are switching from
economy to premium product just as we have witnessed a sharp increase in the sales of
packaged water and water purifier. Findings according to a recent survey by A. C. Nielsen
shows about 71 percent of Indian take notice of packaged goods labels containing
nutritional information compared to two years ago which was only 59 per cent..

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 Marketing Mix Strategy
Product Strategy:
Four billion times a day, P&G brands touch the lives of people around the world. The
company has one of the strongest portfolios of trusted, quality, leadership brands, including
Pantene®, Olay®, Head & Shoulders®, Rejoice® in Indian personal care industry.

Products and Their STP:

STP Process:

The growing use of the STP process has occurred as a direct result of the prevalence of
mature markets, the greater diversity in customer needs, and the ability to reach specialized or
niche segments. As such marketers are increasingly segmenting markets and identifying
attractive segments (i.e. who to focus on and why?), in order to identify new product
opportunities, develop suitable positioning and communications strategies (i.e. what message
to communicate), and effectively allocate resources to key marketing activities (i.e. how
much should we spend and where?). Organizations will often commission segmentation
research when they want to re-scope their marketing strategy, investigate a declining brand,
launch a new product, or restructure their pricing policy. Organizations operating in highly
dynamic environments seek to conduct segmentation research at regular intervals, to keep in
touch with changes in the marketplace.

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STP in personal care products:

Personal care products has been segmented as Hair Care, Skin Care, Oral Care, Colour
cosmetics, Bath and shower and Shampoos. P&G operates in some of the segments of
personal care industry in India.

Skin Care Products:

In skin care market sector in India P&G has two products and are:
➢ Olay Total effects
➢ Olay Natural white

1) Olay Total Effects:

Olay Total Effects is a breakthrough anti-ageing moisturizer containing the patented
Vitaniacin formulation - an exclusive anti-ageing combination of niacinamide (Vitamin B3),
Vitamin E and Pro-Vitamin B5 (panthenol), in addition to sunscreen protection, making it
ideal for Indian skin.

The beauty breakthrough was launched by India’s leading beauty icons who have tried Olay
Total Effects and seen a visible difference in their skin – Olay ambassador Sushmita Sen,

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celebrity hair stylists and beauty experts Dilshad Pastakia & Coleen Khan Affonso, TV
Anchor & actor Tisca Chopra, health and wellness expert Shikha Sharma, Economist &
Head, Future Trends (Future Group) Roopa Purshottaman, and fashion designer Anita
Dongre.
In addition, Olay Total Effect’s VitaNiacin technology was endorsed by India’s Leading
Dermatologists at a conference where the results of a recent Clinical Study on Ageing-Skin
were shared.
Consumer research conducted by P&G revealed that women tend to perceive only ‘fine lines
& wrinkles’ as a sign of Skin ageing, when the fact is that there are 7 such signs including
appearance of pores, age spots and uneven skin tone amongst others. The research also
disclosed that very few women knew that the skin ageing process in fact starts in their mid-
20s, and not late 30s as most perceive it. And 7 signs of skin ageing are: (i) Fine Lines and
Wrinkles; (ii) Sagging Skin; (iii) Uneven Skin Tone; (iv) Age Spots; (v) Appearance of
Pores; (vi) Dull Skin; and (vii) Dryness.

Regular usage of Olay Total Effects with the breakthrough VitaNiacin complex ensures just
one product helps
fight the seven signs of ageing, as it…

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1. Visibly reduces lines & wrinkles
2. Gives soft and smooth skin
3. Visibly reduces dark spots
4. Provides sun protection for even skin tone
5. Gives firm looking skin
6. Provides radiant, glowing skin
7. Visibly reduces the pore size

Segmentation For Olay Total Effects:

Geographic Segmentation: As the olay total effects launch in the metro cities of India with
having some beauty experts, Actresses, T.V. anchor, Fashion designers in its promotional
campaign which shows that its segmentation for geographic is as:
Density: Urban

Demographic Segmentation:

Gender: Female

Age: Mid 20s-50s ( As Brand Ambassadors are Kajol and Sushmita sen )

Social Class: Upper middle, lower upper

Psychographic Segmentation:

P&G operates in the premium segment of the income group. So it segmented the market into
two groups according to the psychology of the customers in innovator segment (High
resources person).

Thinkers: mature, satisfied and reflective people who are motivated by ideals and value
knowledge favour Durability, functionality, and value in products

Achievers: favour premium products that demonstrates success to their peers.

Behavioral Segmentation:

Behavioral Occasions: Regular Occasion

Benefits: Quality and Speed

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Readiness stage: Informed, interested and desirous

Targeting:

Olay total effects is an anti-ageing cream and P&G aimed the Lower upper and upper middle
social class for the product. The target population for the product is women of age between
mid 20s to 50s in these social classes who are eager to look young and have desire to try
something to look young and fight their ageing signs.

Positioning:

P&G positioned its product quite nicely. For Olay total effects P&G did followings to make
clear the positioning of the product:-

➢ Firstly informed the market about the signs of ageing and age of starting these signs to
educate the customers. So that they can understand if they needed any anti ageing cream or
not, and what is the age to start using these kind of products.
➢ Explained product quality that it fights those 7 signs of ageing.
➢ Appointed Kajol and Sushmita sen as brand ambassadors for the product to make clear
that what exactly and how the product works by showing their comments and usage
experience.
➢ Positioned olay for those who have a higher concern to look young and don’t want to show
their age signs.
➢ Positioned very clearly that olay is for premium class by using experts comments of usage
experience that is likes of celebrity hair stylists and beauty experts Dilshad Pastakia &
Coleen Khan Affonso, TV Anchor & actor Tisca Chopra, health and wellness expert
Shikha Sharma, Economist & Head, Future Trends (Future Group) Roopa Purshottaman,
and fashion designer Anita Dongre

So, P&G positioned olay quite nicely according to their target market and benefits sought by
the product.

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1) Olay Natural white:
Olay natural white is a healthy fairness day cream with triple nourishing vitamins (vitamin
B3, E and PRO B-5).. it refers to the niacinamide in the formation.

It works from within to give a lady reduced dark spots, lighter skin tone and a glowing skin.

Segmentation of OLAY natural white:

Geographic Segmentation: As the Olay total natural white launched in the metro cities of
India.
Density: Urban

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Demographic Segmentation:

Gender: Female

Age: Mid 18-mid 40s ( Specially youth as brand ambassador is Katrina Kaif )

Social Class: Upper middle, lower upper

Psychographic Segmentation:

P&G operates in the premium segment of the income group. So it segmented the market into
two groups according to the psychology of the customers in innovator segment (High
resources person).

Experiencers: Young, enthusiastic ladies who seek for variety and excitement, also spend a
comparatively high proportion of income on fashion.

Achievers: favour premium products that demonstrates success to their peers.

Behavioral Segmentation:

Behavioral Occasions: Regular Occasion

Benefits: Quality, and Speed

Readiness stage: Informed, interested and desirous

Targeting:

Ladies specially youth who

➢ Are in upper middle or lower upper segment of social class.

➢ Spend a high proportion of income on fashion and beauty grooming
➢ Very conscious about their skin and want to make it glow.
➢ Are ready to try out something new for their skin to glow.

Positioning:

1
As Olay natural has been introduced in India in 2009. P&G till yet has very short time to
position their Olay natural white in the consumers mind. But P&G has done a fairly good job
to position it and has positioned as:

➢ A product for the youth (ladies) by appointing Katrina Kaif as the brand ambassador for
the product.
➢ A product that glow your skin from inside not the outer side by using the comment
“Secret of my glowing skin is inside” of Katrina Kaif.
➢ A premium product as only launched in metro cities of India and priced at premium
rates.

Shampoos:

An interesting insight into the marketing strategy of Proctor & Gamble (P&G)….P&G plays
only in the premium segment of the market in India. They have concentrated only on 3 brands
of shampoo in the Indian market - Pantene,Head & Shoulders, both of them in the premium
segment. Rejoice is the only P&G brand that is present in the economy segment. Given that
India is such a price-sensitive market, P&G’s strategy has been to wait for HUL & other
FMCG companies to develop the premium segment in India, before they launch their own
brand in the segment, so that there is already a market for premium products & the chances of
their brand facing rejection are low.
Shampoos are segmented as
➢ Botanical/Herbal
➢ Vitamin/Mineral Fortified
➢ Premium
➢ Organic
➢ Ethnical

:
Pantene Pro-V has become one of P&G's most recognized billion-dollar brands. In 1995,
Procter & Gamble Home Products entered the Shampoo Category with the launch of Pantene

1
Pro-V. In India. Pantene has been diversified time to time according to the need of the
customer and expand the target market.

In June 2000, Procter & Gamble Home Products Limited launched Pantene Lively Clean its
unique Pro-Vitamin formula cleans oil-build up, dirt and grime in just one wash, delivering
lively, free-flowing and sparkling-clean hair.

In September 2001, Procter & Gamble Home Products launched New Pantene Pro-V range of
five shampoos in India which gave consumers the look they want Smooth & Silky for
straighter hair, Volume & Fullness for thicker hair, Balanced Clean for shinier hair, Lively
Clean for livelier hair and Anti-Dandruff for dandruff-free hair.

In August 2002, Pantene unveiled the launch of the Shine Morning to Night campaign that
helps consumers get long lasting hair shine with regular use of Pantene.

In July 2003, Procter & Gamble Home Products Limited launched Pantene Long Black, the
ultimate solution for achieving the Long and Black hair look, and Head & Shoulders Silky
Black - the only shampoo in India to offer the dual benefits of 100% dandruff-free as well as
silky black hair.

In April 2004, Procter & Gamble Home Products Limited announced the launch of Pantene
Hair Fall Control, which is designed to free women of their hair fall concerns by reducing
hair fall due to breakage by up to 50% within just two months, thus giving them stronger,
thicker looking and beautiful hair.

In October 2004, Procter & Gamble Home Products Limited launched New Pantene Amino
Pro-V Complex shampoos, which makes hair ten times stronger.

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 (Source: www.pantene.com)

Earlier Sushmita sen was the brand ambassador of pantene but Katrina kaif has replaced
Sushmita as the brand ambassador for pantene pro-v.
Segmentation:

Geographic Segmentation:

As earlier pantene was launched in metro cities of India but slowly slowly also went to the
class I towns and semi urban areas of India.
Density: Urban, Semi-Urban, Class I towns

Demographic Segmentation:

Gender: Female

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Age: Mid 18-mid 40s ( Specially youth as brand ambassador is Katrina Kaif )

Social Class: Upper middle, lower upper , middle (business class)

Psychographic Segmentation:

P&G operates in the premium segment of the income group and segmented people as

➢ Want silky and shiny hair,

➢ Strong and Long hair,
➢ Use Shampoo to get desired hair Style,
➢ Use shampoos for preserving colour in Color-treated hair,
➢ Use shampoos that correct the damages of styling equipment
➢ Shampoo to avoid Dandruff and dryness

Behavioral Segmentation:

Behavioral Occasions: Regular Occasion

Benefits: Quality, and Speed

Readiness stage: Interested and desirous

User status: Regular use

Target Market:
P&G targeted ladies specially young for pantene over the period of time. It targeted the the
psychographic group of ladies who wants silky and shiny hair and those who wants strong
hairs.
P&G in each diversified product of pantene has concentrated on both the groups. Pantene
expanded its target market market from upper and upper middle class and metroes to class I
towns and semi-urban areas by launching the 7.5 ml sachet of shampoo but at the same price.
Later expanded a little more by reducing one rupee on sachet from 4 rs to 3 rs. expandation
has been in terms of social class but demographics and psychographic segment has been same
over the period of time.

Positioning:

1
P&G positioned Pantene as a vitamin fortified shampoo in the premium segment of the
shampoos.

➢ A product for the youth of India as brand ambassador is Katrina Kaif (earlier Sushmita Sen
was brand ambassador)
➢ A product for the psychographic group of people who wants either silky shiny hair or
strong hair or both of them by using slogans like “For Hair So Healthy It Shines”, “new
nourished shine”, “Makes your hair 10 times stronger”, “Control hair fall by 50% in 2
months”, “when performance comes from within you shine by Katrina kaif”. etc over the
period of time.
➢ A premium brand Shampoo (high priced and endorsed by the youth icon of the time).

Head & Shoulders:

In 1997 Procter & Gamble Home Products launches Head & Shoulders shampoo in India.
Head & Shoulders was introduced into the Indian market immediately after HUL came out
with it’s Clinic All Clear range of shampoos (not to be confused with Clinic Plus that
straddles the mid-value & economy segments)

In November 2000, Procter & Gamble Home Products also re-launched the international
range of Head & Shoulders, best-ever Anti-dandruff shampoo with an improved formula,
new pack-design and logo, in three variants - Clean & Balanced, Smooth & Silky and
Refreshing Menthol.

In August 2004, Procter & Gamble Home Products Limited signed Preity Zinta –
Bollywood's #1 Actress, as Brand Ambassador for its Head & Shoulders anti-dandruff
shampoo that gives 100% dandruff-free soft beautiful hair.

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(Source: www.pg.com/brands/head & Shoulders)
Research conducted by P&G experts reveals that almost 50 per cent of Indian dandruff
sufferers are troubled by the five signs of dandruff – flakes, irritation, itchiness, dryness and
oiliness daily, aggravated by external and internal factors such as hectic lifestyle, pollution,
etc. Having discovered this key finding, P&G's expert scientists developed Head & Shoulders
with VitaZinc.

Zinta says, "Head & Shoulders with VitaZinc has helped me look and feel my best 24 x 7.
There's more to dandruff than meets the eye - it actually has five dreadful signs; firstly, the
flakes in your hair and on your clothes, dryness of the scalp, a resultant itchiness, oiliness in
the hair and an overall gnawing irritation that affects your appearance and mood both. Based
on my excellent experience with the product, I urge all my fans to use Head & Shoulders with
VitaZinc to enjoy total freedom from the five signs of dandruff"

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1
Segmentation:

Demographic Segmentation:

Gender: Female and Male as well (As Famous cricketer Ajay Jadeja has endorsed it in past )

Age: Mid 18-mid 40s

Social Class: Upper middle, lower upper , middle (business class)

Psychographic Segmentation:

P&G operates in the premium segment of the income group and segmented people as

➢ Want silky and shiny hair,

➢ Strong and Long hair,
➢ Use Shampoo to get desired hair Style,
➢ Use shampoos for preserving colour in Color-treated hair,
➢ Use shampoos that correct the damages of styling equipment
➢ Shampoo to avoid Dandruff and dryness

Behavioral Segmentation:

Behavioral Occasions: Regular Occasion

Benefits: Quality, and Speed

Readiness stage: Interested and desirous

User status: Regular use

Targeting:

P&G targeted ladies and gents as well specially young for Head & Shoulders over the period
of time. It targeted the psychographic group of people who wants silky and shiny hair and
those who wants a shampoo to avoid dandruff and dryness.
P&G in each diversified product of Head & Shoulders has concentrated on both the groups.
IT expanded its target market from upper and upper middle class and metroes to class I towns
and semi-urban areas by launching the 7.5 ml sachet of shampoo but at the same price. Later
expanded a little more by reducing one rupee on sachet from 4 rs to 3 rs. expandation has
been in terms of social class but demographics and psychographic segment has been same
over the period of time.

1
Positioning:

P&G positioned Head & Shoulders as also a vitamin fortified shampoo in the premium
segment of the shampoos but for a different psychographic group than pantene.

➢ A product for the youth of India(male and female) as endorsed by Preity Zinta and Ajay
Jadeja.
➢ A product for the psychographic group of people who wants either silky shiny hair or a
shampoo to avoid dandruff and dryness with no side effect and or both of them by using
expert comment and advise by preity by highlighting its benefits in the ads.
➢ A perfect anti-dandruff Shampoo by highlighting the points hoe it fights dandruff.
➢ A premium brand Shampoo (high priced and endorsed by the youth icon of the time).

Rejoice:

In January 2004, Procter & Gamble Home Products Limited announced the launch of Rejoice
– Asia’s No. 1 shampoo, in India. Rejoice’s patented Micro-Silicone conditioning technology
gives twice as smooth, and easy to comb hair versus ordinary shampoos, at affordable prices
in 100 ml bottles and 7.5 ml sachets.

Only product of P&G that operates in economy class of India.

(Source: www.google.com)

Segmentation:

Demographic Segmentation:

Gender: Female and Male as well

Age: Mid 18-mid 40s

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Social Class: Economy Class

Psychographic Segmentation:

P&G segmented economy class of the income as

➢ Want silky and shiny hair,

➢ Strong and Long hair,
➢ Use Shampoo to get desired hair Style,
➢ Shampoo to avoid Dandruff and dryness

Behavioral Segmentation:

Behavioral Occasions: Regular Occasion

Benefits: Quality, and Speed

User status: Regular use

Targeting:

P&G targeted ladies and gents as well specially young in the economy class for Rejoice. It
targeted the psychographic group of people who wants silky and shiny hair.

Positioning:

P&G positioned Head & Shoulders as also a vitamin fortified shampoo in the economy
segment of the shampoo.

➢ A product for the youth of India (male and female) ads by young not so famous
personalities.
➢ A product for the psychographic group of people who wants silky shiny hair..

A economy segment Shampoo (highlighted price as saying affordable and not endorsed by
any superstar or icon or famous personality just concentrated to show the benefits and price
of the shampoo.).

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Pricing Strategies of P&G in India:
P&G has used different pricing strategies for different products depending upon the target
market. It has used geographical pricing strategy as it operates in many countries so prices of
same products are different in different countries. This is a very good strategic method as it
captures the local conditions as well as purchasing power of the local population. With
geographical pricing P&G has adopted different many different strategies and are explained
further (product wise).

1) Olay Total Effects

Olay Total Effects, is a unique anti-ageing moisturizer that comes in a convenient, easy-to-
squeeze pump jar, perfectly sized for every woman’s handbag, and is available in two
variants - Normal (UV and Non-UV), and Gentle (UV and Non-UV); with a light, fresh
scent, or fragrance-free. All Olay Total Effects moisturizers are priced at Rs. 599/- for a 50gm
pump jar.

As it targets the upper middle and lower social class of India, Olay stands in the category of
premium brands. P&G wanted a high perceived value in terms of product performance,
customer support, product quality, trustworthiness and esteem which P&G has propositioned
in the ads of Olay.

So, P&G adopted the perceived value pricing strategy and priced the Olay at a high price so
that consumers will perceive it as a premium brand and can perceive the values that P&G has
propositioned.

1) Olay Natural White Cream:

Olay natural white is a healthy fairness day cream with triple nourishing vitamins (vitamin
B3, E and PRO B-5). It also has been priced highly as 99 Rs for 20gm tube.

P&G adopted the same pricing strategy that of total effects and that is perceived value
pricing strategy and priced the Olay at a high price so that consumers will perceive it as a
premium brand and can perceive the values that P&G has propositioned.

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2) Pantene:

Pantene, one of the billion dollar brand of P&G, was introduced in Indian market in 1995 in
the premium segment of the shampoo market. P&G has basically adopted Geographical
pricing strategy for Pantene. They have set different prices for Pantene in different countries.

When Pantene was launched in India, it was priced highly to position it as a premium product
in shampoo market. In 1995, P&G adopted perceived value pricing strategy for Pantene to
position it the way they wanted to be perceived.

In January 2003 P&G reduced price of Pantene 7.5 ml sachet from Rs 4 to Rs 3. Also in April
2004 P&G reduced prices of Pantene by 16% on 100ml and 200 ml bottles with no change in
its superior product-quality or packaging, improving affordability to a large number of Indian
consumers.

So, When Pantene was introduced P&G adopted perceived value pricing strategy and later
in order to maintain their current customer and expand their target market P&G adopted
Value pricing strategy that is the same quality product at a lower prices to make your current
customer loyal and expand their target market.

3) Head & Shoulders:

In 1997, P&G introduced Head & Shoulders in shampoo market in the premium segment as a
anti-dandruff shampoo. Pricing strategy is of P&G for Head & Shoulders remained the same
as it was for Pantene.

The first price was high and almost targeted a niche segment of market and then later on cut
down prices to gain more market share and capture more segments of markets.

P&G reduced prices of Head & Shoulders as the same way of Pantene that is reduced prices
of 7.5 ml sachets from 4 Rs to 3 Rs, and 16% on 100 ml and 2000 ml bottles.

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So P&G adopted the same strategy for pricing of Head & Shoulders as of Pantene that is
Perceived value pricing strategy and later on in April 2004 Value pricing strategy to gain
more market share and capture more segments of markets.

4) Rejoice:

Rejoice is the only product of P&G in India that was launched in economy segment of market
in January 2004. Rejoice was priced lower and targeted a different market segments than
Pantene and Head & Shoulders. Rejoice was positioned as it gives twice as smooth, and easy
to comb hair versus ordinary shampoos, at affordable prices in 100 ml bottles and 7.5 ml
sachets.

So, Rejoice was priced at a competitive price. A going rate pricing strategy was adopted by
P&G for Rejoice that is pricing a product at the same or less price than your competitor.
Chik, clinic plus and many shampoos were there in that segment of market and P&G priced
Rejoice less than these competitors.

Promotion by P&G:
P&G has used many promotional strategies that has been very successful to project and create
a right product image in the consumers mind. For different product strategies used has been
different over a period of time. P&G is one of the highest advertising expense company.
Olay:
Since the Olay has been launched in India, alot of advertising and promotion is going on.
P&G is using all the media that is Print media (newspaper and magazines) , Broadcast media
(radio and television ), Network media (cable , satellite , wireless), Electronic media
(webpage) and Display media (bill boards , signs , posters).
They endorsed Kajol and Sushmita Sen their brand ambassador for OLAY total effects
and Katrina Kaif for Olay Natural White Cream to make clear the target audience and
position and benefits of the products.
Message for OLAY total effects has been that it makes your skin much younger and P&G has
been quite successful and has positioned it well as the perfect anti-ageing cream.

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And for Olay Natural White Cream message is that it glows your skin and removes dark spots
to look your skin glow and is on way to success as to position a cream for younger woman.

Pantene:
P&G has promoted Pantene very nicely since it has launched in 1995. P&G usedall the media
that is Print media (newspaper and magazines) , Broadcast media (radio and television ),
Network media (cable , satellite , wireless), Electronic media (webpage) and Display media
(bill boards , signs , posters).
Several events werwe organised to promote its hair care products as:
In November 2000, Procter & Gamble Home Products Limited presented India in the first
International Hair Styling and Beauty Expert Contest- Hair Asia Pacific 2000 in collaboration
with Sri Lankan Association of Hairdressers and Beautician.

In June 2001, Procter & Gamble in partnership with the Association of Beauty Therapy &
Cosmetology (ABTC), India hosted the Pantene Artist 2001 a national stylist competition,
which included categories such as Bridal Dressing, Hair Cutting and Body Painting. Present
at the event was world-renowned hairdresser and stylist Jun L. Encarnecion, who
demonstrated the hottest international haircuts and styles in vogue via an interesting
hairhsow. Mr. Encarnecion has trained students in leading hairdressing schools like Robert
Fielding School of Hair Dressing (U.K), Pierre Alexander International Academy (U.K),
Vidal Sassoon Academy, (U.S.A) among others and also enjoys the reputation of being the
official hairdresser for the 1993 Miss Universe pageant.
In December 2001, Procter & Gamble in partnership with the Southern India Beauty
Specialists & Hairdressers Association (SIBHA) hosted the Pantene-SIBHA Look N Learn
Seminar where Raman Bhardwaj hairdresser to former Miss India, Celina Jaitley
demonstrated the Latest and Trendiest Hair Cuts (Modern & Classic) to beauticians and
hairdressers in Chennai.
Additionally, Pantene also hosted Pantene World Teen Queen contest in Goa. Contestants
from UK, USA, South Africa, Kenya, Tanzania, Mauritius, Middle East and Hong Kong
participated to win the coveted World Teen Queen crown.
Endorse many celebrities as brand ambassador for Pantene that is Sushmita sen and many
more. Currently Katrina kaif, the youth icon, is the brand ambassador for tPantene.
Many promotional offers were there as Price cut of pantene by 16% and reducedprice on 7.5
ml sachet, introduced new 5 ml sachet at 1.50 rs.

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And the tagline has been changed time to time according to the modification in product.
Some are as: gives you 10 times stronger hair, keep you shine from morning till night from
shine campaign, hair fall control in 10 days and etc.

Head & Shoulders:

H&S was launched in 1997 and has been a great successs for P&G as became India’s no-1
anti dandruff sgampoo. Like Pantene same media and promotion offers of price cut has been
used to promote Head & Shoulders.
In November 2000, Procter & Gamble Home Products Limited presented India in the first
International Hair Styling and Beauty Expert Contest- Hair Asia Pacific 2000 in collaboration
with Sri Lankan Association of Hairdressers and Beautician. During this period, Procter &
Gamble Home Products also re-launched the international range of Head & Shoulders, best-
ever Anti-dandruff shampoo with an improved formula, new pack-design and logo, in three
variants - Clean & Balanced, Smooth & Silky and Refreshing Menthol, which offers the fine
combination of anti-dandruff efficacy and hair conditioning
Additionally, Procter & Gamble Home Products announced the Beat The Summer Dandruff
offer on which 200ml Head & Shoulders bottle was available for Rs.99/- only, thus giving a
benefit of a Rs.23/- discount to consumers.
In August 2004, Procter & Gamble Home Products Limited signed Preity Zinta –
Bollywood's #1 Actress, as Brand Ambassador for its Head & Shoulders anti-dandruff
shampoo that gives 100% dandruff-free soft beautiful hair and in past they have used Ajay
Jadeja, A famous cricketer, and Kareena Kapoor as their brand ambassador.

Rejoice:
Only product of P&G in India that operates in economy segments. All medias has been used
for the promotion of this brand with emphasizing on the price of Rejoice. No such famous
celebrity has endorsed it but some models has been used in their advertising xampaighn. No
price cut or events hass been used. So to promote Rejoice P&G has been completely
dependent on media dvertising.

Mechanics of Distribution Channels:

The supply chain of products in the FMCG market in India is one of the longest supply chains
an
industry could really have. There are as many as 5 levels of intermediaries involved in the
entire supply chain through which a product passes before reaching the end consumer. What

1
has been observed is that even though these FMCG companies are big multinationals and
Indian but face a major challenge of making their products available in the market in the right
quantities and in the right time. This is simply because these companies don’t really have a
wide network of sales agents and other force which is required and is ideal for catering their
products to the markets. This aspect is taken over by distributors, wholesalers and retailer
whose margins on these products actually double the price of these products when a final
consumer buys it. The margins kept by these intermediaries range from 2% to 5%.

The products in this industry are transported from manufacturing units via c & f agencies or
warehouse to distributors who further sell the same to wholesalers or stockiest who finally
sell it to the retailers in the market. These products are transported either via roadways or
railways within the domestic markets and normally don’t take more than a week to reach the
retailers. FMCG products are normally a high volume ball game and products have to
essentially be available in the market at all given points of time and at all given points of
purchase and therefore the distribution activities are highly volatile and dynamic. The supply
of products takes place virtually on a daily basis in fixed quotas or otherwise, to retailers as
per their requisitions and the anticipation of demand and the performance of products in the
recent past. All such criteria are taken into consideration before the quantum of products
being dispatched to the next level of intermediary. Since it’s a volume game, manufacturers
make all possible efforts to boost sales and promote their distributors to earn more and more
orders from the retailers and wholesalers. A close check is maintained on the flow of the
products on a daily, weekly, fortnightly and monthly basis to determine the trend in the
business and flow of products and consumption. This activity also helps to find out
drawbacks of the distribution system, if any, and rectify them within time.

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Packaging:
P&G has been very good in packaging its product to provide a right image in the consumers
mind and also very convenient to Handle. As packaging is important aspect of product.
Product wise packaging by P&G:
Olay Total Effects:
Packaging of Olay is very good looking and convenient to use. Use of nice colors provide it a
look of premium product.

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Packaging in 50 gm and 20 gm is available in Indian Market.

Olay Natural White Cream:

Packaging of Olay natural White has been quite a good looking and to be perceived as a
premium product. 50gm and 20 gm packs are there in India with different packs and sobor
colored packed.

3
Pantene, Head & Shoulders And Rejoice:
All are products in shampoo market but has been packed and use of colour in each is different
according to the colour of sgampoo as Rejoice comes in Green, Head & Shoulders in White
and Pantene in White, Orange and pink. So packaging of each has been in a way to project
the product in the way they wanted consumers to perceive.

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(Source: www.google.com)

Research Methodology:
The research is diagnostic in nature with some qualitative research and some input from
quantitative technique. And data will be primary and secondary.

Research Objectives:
➢ To identify the factors that has led to the success of P&G over a long period of time to
stay ahead in the market place.

➢ To analyze the marketing and positioning strategies adopted by P&G.

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➢ To analyze the advertisement and corporate social responsibility budgets of P&G to

make (sustain) brand image

Sampling:
Non probability sampling with a mix of
➢ Judgement sampling
➢ Convenience sampling
➢ Purposive sampling

Universe: Delhi NCR

Time frame: 3 months

Data collection Tools:

➢ Texts (Research papers, Websites and articles published on P&G)

➢ Media (advertisements and promotion)
➢ Events
➢ P&G annual report for investors
➢ People (interviews)

Sample size:

➢ 100 consumers

Hypothesis:
Hypothesis to be checked in the study are:
➢ Pricing model of P&G is delivering value to the consumers
➢ Advertising expenses are direct related to the revenue of the company.
➢ CSR creates brand image in the minds of consumers.
➢ P&G has a brand image of quality and innovation in the minds of consumers.
Various statistical tools like t-test, correlation, chi-square test will be used to check the
hypothesis.

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Formulation of Research Instrument (Questionnaire):

Questionnaire was formulated keeping these points in mind;

1) Hypothesis of the project,

2) Inducing the respondent to be honest and help to answer the all questions,
3) Giving respondent a clear understanding of the questions,

Limitations:

1) Limited time period,

2) Less number of respondents as compared to population,
3) Respondent may be biased,
4) Less people were interested to answer all the question

Data Analysis and Interpretation:

As per the data gathered by the primary research (Quetionnaire). The

analysis and interpretation of data is as:

1) Gender:

Interpretation: Among the respondent to the questionnaire 58% were men and 42% were
women.

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2) Age:

Descriptive Statistics

N Minimum Maximum Mean Std. Deviation

VAR Age 100 21.00 48.00 31.1200 6.68978

Valid N
100
(listwise)

Interpretation: Minimum age of the respondents is 21 years while maximum is 48 years

and average age of correspondents is 31 years approx.

3) Occupation:

Interpretation: Out of total respondents 47% were businessmen, 28% private job, 18%
government job and rest 7% any other occupation.

4) Do you use personal care products:

Interpretation: All woman that is 100% use personal care products. While 11% man
don’t use personal care products rest 89% use the products of personal care.

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5) Company wise Usage of personal care products:

Interpretation: 36% people use HUL, 28% P&G, 11% Merico. 7% Colgate and rest 18%
Daburs product in personal care products.

6) Price of Products of P&G are:

Interpretation: 11% people things that the prices of P&G product are very high while
57% things them high and a low percentage that is 19% and 13% people perceive its price
as moderate and reasonable respectively. Not even a single person things that prices are
low.

7) Rating on value provided by its product price:

Interpretation: Out of total users of P&G approx 84.5% people ranked is as no 1 in value
provided by its pricing, 11% as rank 2, and 3.5% as rank 3. And no one ranked as 4 or 5.
Out of non users of P&G no one ranked as no one. 56% ranked as no 2 and 25 % as
ranked 3 and 12.5 % as rank 4 and rest as rank 5.

Average Ranking if rank 1 has 1 mark, rank2 has 2 and so on... then
Average Ranking = total marks/ total respondents = (24+84+54+36+35)/100 = 2.33
So average ranking of all respondent is 2.33.

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8) Quality with Innovation in Products:

Interpretation: Among Users 75% rank as no 1 in the product quality with innovation
22% as rank 2 and 3% as rank 3. Among non users no one rank as no 1 and 33% as rank
2 and 41% as rank 3 and 15 % as rank 4 and rest as rank 5.

Average Rank = Total marks/ total respondents = (21+58+90+56+30)/100 = 2.54

So average rank for the product of P&G being quality with innovation is 2.54

9) Fulfilling Social Responsibility:

Interpretation: 34% people things that P&G is Rank 1 in Fulfilling the corporate social
responsibility, 26 % as rank 2, 20 % as rank 3 and 15 % and 5% as rank 4 and 5
respectively.

Average Rank = Total marks/ total respondents = (34+52+60+60+25)/100 = 2.31

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So average rank of P&G for fulfilling the social responsibility is 2.31.

10) A company Should be Social Responsible:

Interpretation: 31% people strongly agree that a company should be corporate social
responsible and 48% as agree and a less percentage on disagree side just a mere of 11%
(both strongly disagree and disagree)
.

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 11) CSR has an impact on the image of the company:

Disagre
Interpretation: 51% prople strongly agree and 28% people agree that CSR has an impact
on brand image. And a very mere percentage of people only 11% don’t agree or strongly
disagree.

Agree

Hypothesis Testing:
➢ Hypothesis #1:- Pricing model of P&G is delivering value to the consumers

3
 Hypothesis is accepted as by the result of data gathered by questionnaire shows that the
out of users of P&G approx 85% rank it as no 1 in value provided by its pricing. So
pricing model of P&G providing value to its customers.

➢ Hypothesis #2:- Advertising expenses are direct related to the revenue of the company.

Correlations

Revenu Advertisinexp
e ense

Revenue Pearson
1 .981**
Correlation

Sig. (2-tailed) .001

N 6 6

Advertisinexpen Pearson
.981** 1
se Correlation

Sig. (2-tailed) .001

N 6 6

**. Correlation is significant at the 0.01 level (2-tailed).

As the value of Coefficient of correlation comes out to be o.981. that is a strong

correlation. So hypothesis is accepted.

➢ Hypothesis #3:- CSR creates brand image in the minds of consumers.

Hypothesis is accepted as 70% people agree or Strongly Agree that CSR has an impact on
image of the company

➢ Hypothesis #4:- P&G has a brand image of quality and innovation in the minds of
consumers.

Hypothesis is accepted in case of the customers of the P&G as 75% of them thing that it
provides quality with innovation.
Findings and Conclusion:

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1) P&G has very well created its desired image of premium product company.
2) P&G almost 80% of P&G customers are satisfied with the quality and value provided
to them in the pricing model of P&G .
3) P&G has maintained its growth rate and position in the market from a period of decade
by rightly choosing and implementing the marketing mix strategies.
4) P&G believes in fulfilling CSR and to get a reputation of a CSR company over a
period of time.
5) P&G is a premium class company with its product are only in premium segments
except one Rejoice in India.
6) P&G has nicely adapted to the environment of the different countries and is profitable
wordwide.

Recommendations:
1) As Indian market is dominated by the middle class and workers class, P&G should
come up with some products in that segment with such marketing strategies that does
not effect the image of premium products.
2) P&G should come up with more brands in Indian market as it is worlds 4th largest as it
only has its 7-8 brands in India out of 100 plus brands overseas.
3) P&G should have a different balance sheet in each country to recognize its most
profitable segments as of now it does it overseas.
4) P&G may come up with its own retail outlet to make distribution easy and making sure
that its products are available easily to its target market.

1
 Bibliography:
➢ www.pg.com
➢ Best of HBR 1992 onwards
➢ Journal of marketing, vol-65, 2001
➢ www.knol.google.com

➢ Anthony, S.D., Eyring, M., Gibson, L. (2006). Mapping your innovation strategy.
Harvard Business Review.
➢ http://www.businessinnovationinsider.com/2007/01/the_5_principles_of_innovation.
php
➢ Remarks by the corporate director of innovation capability, procter & gamble
(2006).Retrieved June 4, 2008 from
www.serve.com/athenaalliance/pdf/JWL%20remarks.pdf
➢ www.newscom.com/cgi-bin/prnh/20090115/CLTH035LOGO-a )
➢ www.pantene.com
➢ www.headandshoulders.com