Term Paper on "Procter and Gamble"

Term Paper 15 pages (4762 words) Sources: 1+

[EXCERPT] . . . .

Procter and Gamble (P & G), one of the largest creators of consumer products in the world is constantly seeking to improve its market share and consumer base. With global markets getting more integrated and with countries increasingly opening their markets, P & G. is constantly looking for new strategies that can engender for it a competitive edge. This study identifies some of the challenges as well as the opportunities that are available to the company. The Boston Consulting Group (BCG) model helps identify P & G's products that are cash cows and others that have not performed as well in the market.

Understanding the factors that affect the issues of product sales and market-capture can help P & G. identify the best road map in managing the different product line. Consumer goods sales are also dependent on the level of marketing and advertisements that are used. The fierce competition that exists for similar products in the market make product-substitution easy if the customer is not satisfied with the product. Establishing brand image and reputation in the market takes time; recognizing that a happy customer will be a repeat customer for life is critical. Many 'cash cow' products such as Tide, Bounty and Charmin, enjoy loyal support in almost every market in which these products are available.

G has competitors in all markets in which it operates. Many competitors support similar product lines; and, product differentiation ultimately defines the advantage that the company can enjoy. P & G. can control the internal factors that exist in the organization and modify them to best serve the market and the customer. Managing the external factors in the environment in which the company operates can however, be more challenging. In the age of globalization and multinational corporations, local cultures, beliefs and norms play an important role in establishing the image of the company within any given market.

Introduction

Procter and Gamble, the biggest consumer company is the world is considered for analysis in this report. P & G. is renowned for its ability to market products while building recognition at the same time. The company has been able to build brand names that gain recognition in any of the markets that the products are used in. Currently, P & G. markets over 300 branded products in more than 160 countries all over the world. The company is the number one U.S. consumer manufacturer and it ranked among the top three consumer producers anywhere in the world. The company has three major categories of products that are manufactured -- global beauty care; global health, baby, and family care; and global household care. Some of the major products of the company that are billion dollar brands are -- Actonel, Always/Whisper, Ariel, Bounty, Charmin, Crest, Downy/Lenor, Folgers, Head & Shoulders, Iams, Olay, Pampers, Pantene, Pringles, Tide, and Wella. In 2001, P & G. purchased Clairol. In 2005, the company is poised to acquire Gillette, a former rival and significant player in the consumer product industry. (Yahoo.com, 2005)

Discussion

G has adopted a new trend that is revolutionizing the consumer product industry. By "leading a P & G. strategy to jazz up those humdrum brands by placing them inside nifty new delivery devices," the company has been able to improve the brand image while at the same time it has been able to boost pricing on the products that are being sold. (Berner and Symonds, 2005) S.C. Johnson & Sons, Kimberly-Clark Corp, UniLever Group and Colgate-Palmolive are some of the industry rivals to P & G. P & G. competes with these companies in almost all the markets that it operates in. P & G. is committed to researching and developing new products in order to maintain its position as market leader.

Most P & G. products traditionally targeted women (home products, cleaning supplies, beauty products). By purchasing Gillette however, the company now also has an extensive range of products that are targeted to the male consumer. By diversifying into new products and markets, the company constantly ensures that it has the necessary product range to attract new customers. Any consumer-product company is greatly affected by the macro and the microenvironments that affect the industry and the market in which it operates. There are many factors and variables, both dependent and independent, which affect the strategies, and consequently, the sales of any product in the market. (Kotler and Armstrong, 2001) Many external factors may be common to all markets, while a few may be specific to a local or regional market. The ability of any company to understand these external factors and use the information distilled to attain success in marketing product is important in the current market.

In recent times, most companies have grown as a result of mergers and acquisition of either related or unrelated organizations. Chandler observed this trend of growth by mergers and acquisitions as far back as the turn of the 20th century in organizations such as Sears and Dupont. (Pearce and Robinson, 2003)

Advertisement and marketing also play an important role in establishing a consumer product in the market. Product knowledge and the terminology used have a significant impact on the success of the marketing and advertisement strategy. (Tellis, 2004)

Buying trends have also changed. Many customers comparison-shop. This is due to the relatively recent advent of the Internet. Buying habits also change with the use of this medium. (Court and Dayal, 2002) Potential customers have the option to buyer their requirements from a wide variety of sellers who are able to offer a wide variety of products at competitive rates. Buyers in this new environment can collect tremendous knowledge and can use this knowledge during the buying stage for any product. In the past, this knowledge-transfer was only possible through visiting of various sellers and being offered the information about the product.

Companies that have successful advertisement campaigns are able to "invent" a problem or "identify" an existing problem. Listerine (the mouth washing liquid, sold by Pfizer), for example, invented the "disease" called "halitosis" -- commonly known as bad breath. Lifebuoy (the bathing soap, a product of Unilever) identified the negative effects of body odor. Head and Shoulders (antidandruff shampoo) pointed out the obvious problems of wearing dark clothes when one suffered from dandruff. (Levinson, 1994) the ability of these companies to identify a target market and population (people with bad breath, dandruff and body odor) and associate a stigma with this fact -- a fact that the existing society might have lived with for years without considering it as a major problem.

Highly trained personnel are one of primary advantages enjoyed by a corporation. The ability to identify and create new products from ideas can help the establish product lines and markets for the company. Consumers are also the driving force behind any organization. The origin of dissatisfaction of a product in the market can be frequently traced to false perception. Consumer products that are not properly researched and developed and are managed through poor marketing and sales strategies can cause significant public relations issues for the company. From its inception, the company has kept its finger on the pulse of the market and creates products that are well received in the market. It has reacted quickly enough to trends and changes in the market. By understanding how brands get integrated into their products, packaging ideas has also helped the company stay ahead of the competition. The company has successful been able to develop brand loyalty among its customers. Constant use of new and innovative technology to achieve the desired results is observed in the organization.

The company is a multinational corporation that has branches worldwide (160 countries), and this can pose a problem. Controlling and monitoring the company can become complex. Centralized control structure and different laws and regulations for different markets can complicate the manner in which brands are advertised, marketed or sold. Product lines and brand names can also demand close attention especially when competition for the same product is intense. Not many new products are generated for marketing and sales; rather, many of the older products are just repacked into new containers and sold in the market. In recent years, P & G. is also aggressively acquiring different companies that it feels will help complement its range of products for different markets and demographics. The constant changes in the organization produced by mergers and acquisitions have created a workforce that is diversified and the constantly changing cultures can pose a problem for the organization.

Opportunities for the company are tremendous. The company deals with products that enjoy a great consumer market and this has helped the company maintain a good profit margins. The products over the period of time have also lived up to the market expectations and this is proving to be profitable for the company. Threats facing the company are also real. There are many competitors in the consumer product market and this has created a market where profit margins are low. All… READ MORE

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