Marketing 7

Running head: PROCTOR AND GAMBLE CO. 1

PROCTOR AND GAMBLE CO. 1

Proctor and Gamble Co.

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Proctor and Gamble Co.

Executive Summary

Proctor and Gamble is an American-based company known for its production of household items. They are known for approximately 250 brands in six categories. P&G is associated with its continued concern for improving lifestyle and quality in people's lives. The company proposes to meet consumer demands and needs accordingly (Procter and Gamble, n.d.). It adopts different strategies given the dynamic nature of its competitive environment and has continuously gained a competitive market position. As such, it continually devises new ways of coping with change and maximizing its profitability.

Situational Analysis

Founded in 1837 in Ohio, the company incorporates three significant segments: household product segmentation, healthcare segmentation, and beauty segmentation. Their business is famous worldwide, with their objective focusing mostly on social and environmental sustainability (Procter and Gamble, n.d.). The company purposed to sell approximately $46 billion of sustainable modern products to improve its environmental profile. The focus is on producing a product that is environmentally friendly and emits less carbon IV oxide.

Market Analysis

The company is divided into six geographical segments, including North America, Latin America, Europe, India, the Middle East, and Africa, Greater China, and Asia-Pacific. Out of these six segments, 23% of the company's revenue comes from Europe, while 45% comes from Northern America. Two-thirds of the company's total revenue comes from developed markets (Rehamn et al., n.d.). However, the company faces increased competition from Unilever rivals, who have penetrated the market and focused on driving sales and growth in developing markets.

Situational Analysis

A situational analysis involves evaluating the company's internal and external factors that are likely to affect its overall performance. This would apply an analysis of the company's strengths, weaknesses, opportunities, and threats.

SWOT Analysis

Strengths

The company's market value was ranked at $192 million as of 2014. It has a significant market share worldwide with over 300 brands. Additionally, the company has well-trained staff who are well versed in customer relations. Its gross profit margin is higher than the set industry average, making it significantly better (Duddy et al., 2018). It was listed in Forbes magazine as one of the most innovative companies in the state. The company heavily invests in research and development, setting aside approximately $2 billion.

Weaknesses

Among its weaknesses, the company faces immense competition that affects its market share. With the world advancing each day technologically, online marketing has become popular, but it has continuously lagged in this sector (Duddy et al., 2018). Given that the target audience for most of their products is women, they do not meet the increased demands of their male customers, losing out on this.

Opportunity

The company has an opportunity to venture into brands that appeal to male audiences, establishing a social relationship. Such a venture is likely to impact their consumer relations and enhance positive outcomes. The company also has an opportunity to expand into new territories like China and India.

Threats

The company faces threats from the increased competition each day. Most products are available at lower prices from different companies, causing a cause for concern. The cost of the raw materials used in P&G products has also increased, affecting its price at a considerable rate.

Competition

The company has six business segments centralized around its product lines, including healthcare, grooming, fabric and home care, beauty, baby, feminine, and family care. It is recognized for iconic and renowned brand names ranging from laundry detergents to grooming and beauty products such as Pampers, Oral-B, Olay, Gillette and Venus, Tide, Bounce and Downy, and Vicks, among others (Procter and Gamble, n.d.). Pampers is P&G's largest brand worldwide.

The company battles with different competitors from smaller and other multinational companies in each of its segments. In the fabric and home care segment, the company recorded 33% net sales from Downy and Bounce products. However, the company's major rivals in this segment include brands like Ajax, Palmolive, and Fleecy from Colgate-Palmolive, Surf and Persil from Unilever, and the Arm and Hammer product line from Church and Dwight Co. In family care, the company's major competitors include Colgate-Palmolive, Unilever, and Church and Dwight Co. As of 2019, this segment accounted for 27% of its net sales (Rehamn et al., n.d.). The company recorded 19% of its net sales with Avon being its primary competitor in the beauty segment. Other competitors include Estee Lauder, Unilever, and Revlon. The company accounted for 12% of net sales in the healthcare segment as of 2019 with popular brands like Vicks and Prilosec. Its primary competitors include Colgate-Palmolive and Ecolab, among others. The company's dominant player is Gillette, accounting for approximately 9% of net sales in grooming. Bic is the company's primary competitor on a global scale. There have also been some new entries in this segment, such as Dollar Shave Club by Unilever.

Most of these companies use lucrative tactics such as promotions, famous brand ambassadors, price reductions, and a range of products. For example, in Africa, Unilever focuses its marketing campaigns on various products they have and their affordable price ranges. The same strategy applies to the Middle East. In Europe, the competition thrives on the variety of options they offer their consumers and digital marketing.

Product Offerings

Some of the most iconic features include the Gillette Heated Raze, which is valued at $2000 and appeals to the male audience as convenient, considering that it has a stainless-steel warning bar and a battery-powered handle. The company also has Joy razors for women, retailing at $8.97 each for women who prefer the Venus razors. Whole the Joy razors appeal to a younger generation; the Venus razors appeal to women of all ages (Procter and Gamble, n.d.). The third iconic feature is the Oral-B Genius X, an electric toothbrush that retails at $220 and displays artificial intelligence to inform users where they have brushed. It detects pressure, brushing time, and brush orientation and location. This data is sent to an Oral-B app that identifies where users are brushing.

Distribution Channel

The company has an effective distribution channel for running its operations, including manufacturers, distributors, retailers, and consumers. These channels make it possible to sell the products at an efficient and cost-effective price. The products are available at discount stores, convenience stores, and even supermarkets (Haddad, 2017). The products are locally available and are low-cost items that stimulate sales. The company has an extensive distribution channel to record profit margins in its sales. Their products are also conveniently packaged and easy to transport and require no sales force since it embraces direct advertising.

References

Duddy, C., Rawlins, M., Pepe, S., & Gottlieb, V. (2018). Background and introduction. Retrieved from http://shannonpepe.com/wp-content/uploads/2019/02/Marketing-Project-Part-I.pdf

Haddad, M. (2017). FMCG Distribution Challenges & Workable Solutions. Lulu. com. Retrieved from https://books.google.com/books?hl=en&lr=&id=x1o-DwAAQBAJ&oi=fnd&pg=PA10&dq=proctor+and+gamble+distribution+channel%3B&ots=MqKM924nqP&sig=Hn3MuRzkhYv1Uo9kUuefMq3pZvU&redir_esc=y#v=onepage&q=proctor%20and%20gamble%20distribution%20channel%3B&f=false

Procter and Gamble. P&G brands and products. Us.pg.com. Retrieved 20 October 2020, from https://us.pg.com/brands/.

Rehamn, F. U., Din, H. U., & Parveen, S. Analysis of the Consumer's Preferences about Goods Produced by Procter & Gamble and Unilever Pakistan: Case of Peshawar. Retrieved from https://core.ac.uk/download/pdf/234694134.pdf