P&G Case Writeup

 

1. Has  P&G  India  managed  to  carve  out  a  distinctive  position  in  the  Indian   Detergents  market?   2. Commnent  on  the  company’s  journey  towards  achieving  milestones  as  per   ‘Project  2-­‐3-­‐4’   3. What  challenges  does  P&G  India  face  in  2011?   4. Assess  P&G  India’s  product  line  strategy.   5. What  recommendations  will  you  make  to  the  P&G  India  team  to  help  them   achieve  the  target  set  forth  in  Project  2-­‐3-­‐4?  

Overview   It  is  clear  that  P&G  was  left  behind  in  captureing  India’s  growth  story  in  the   Detergents  market.  Currently  P&G  has  a  reach  of  1.3m  outlets  (which  is  not  far   behind  HUL  with  1.6m  outlets).  In  terms  of  sales,  India  is  one  of  the  smallest   markets  of  P&G.  To  carve  out  a  distinctive  position  in  the  Indian  detergents   market,  P&G  initiated    project  2-­‐3-­‐4  to  double  the  number  of  indians  using  P&G   products  and  trebling  the  per  capita  spending  by  indians  and  quadrupling  sales   in  its  india  operations  by  2015.  I  feel  P&G  even  though  it  has  captured  market   leadership  in  6  segments  and  a  reach  of  1.3m  outlets  still  lags  behind  HUL   interms  of  overall  product  usage.  According  to  the  data  given,  P&G  will  not  be   able  to  achive  its  goals  by  2015.  

Current  Progress   Although  this  was  successful,  most  of  the  categories  that  P&G  dominated  were   still  small.  In  the  segments  that  mattered  such  as  detergents  and  hair  care  –   which  accounted  a  little  over  half  of  the  home  and  personal  care  segment,  HUL   was  the  leader.    

Challenges   The  real  challenges  faced  by  P&G  for  achieving  the  goals  set  by    Project  2-­‐3-­‐4  are.   • Increase  BOP  consumption  (aka.  Rural  consumption)   • Target  mass  market  (high  price  sensitive  consumers)   • Restructuring  of  brand  portfolio    

Target  Mass   Market   Resturcturing   brand   portfolio  

Increase  BOP   Consumption  

Project   2-­‐3-­‐4     The  challenges  faced  by  P&G  going  forward  includes  playing  catchup  to  HUL  even   though  they  play  in  far  lesses  categories  than  HUL.  P&G  needs  to  decide  whether  it   should  confront  head  on  to  HUL  in  categories  such  as    detergents.  Also,  P&G  needs   to  figure  out  if  it  should  make  efforts  to  increase  consumption  and  develop  fledgling   markets  such  as  skin  care.  Moreover,  P&G  needs  to  assess  why  the  average   percapita  spending  on  P&G  products  is  much  lower  than  the  average  of  P&G’s  top-­‐ 11  asian  markets.  Other  decisions  that  P&G  needs  to  assess  are  whether  it  should   launch  another  brand  to  compete  with  wheel  and  fill  the  void  at  the  bottom  of  the   pyramid.  Or  whether  it  should  launch  more  variants  for  its  existing  brands.  Another   area  that  needs  to  be  taken  care  of  is  advertising.  How  will  advertising  budget   changes  impact  the  brands  awareness.  

 

Recommendations     If  P&G  has  to  achieve  the  targets  set  forth  by  Project  2-­‐3-­‐4,  it  needs  to  compete  with   HUL  at  all  levels  and  all  products,  including  deep  in  the  rural  areas.  P&G’s  goal  should   be  to  win  in  all  the  three  market  classificiations  (India  1,  2  and  3).  Further  growth  can   be  driven  by  outreaching  by  running  community-­‐led  programmes  in  rural  india  to   ensure  awareness  of  their  brands.     P&G  should  refrain  from  getting  into  price  wars.  They  are  poor  pricing  strategies.  It   needs  to  come  up  with  an  effective  long  term  pricing  strategy  and  avoid  short  term   predatory  strategies  as  HUL  will  always  undercut  them  and  make  them  ineffective.