Procter & Gamble

From Wikipedia, the free encyclopedia

Jump to: navigation, search
The Procter & Gamble Company
Type Public (NYSE: PG)
Founded 1837
Headquarters Cincinnati, Ohio, United States
Area served Worldwide
Key people Bob McDonald
(President & CEO)
Industry Consumer goods
Products See List of Procter & Gamble brands
Revenue ▲ US$ 79.03 billion (2009)[1]
Operating income ▲ US$ 16.13 billion (2009)[1]
Net income ▲ US$ 13.44 billion (2009)[1]
Total assets ▲ US$ 134.83 billion (2009)[1]
Total equity ▲ US$ 63.099 billion (2009)[1]
Employees 138,000 (2009)
Website PG.com

Procter & Gamble Co. (P&G, NYSE: PG) is a Fortune 500, American multinational corporation headquartered in Downtown Cincinnati, Ohio,[2] that manufactures a wide range of consumer goods. As of 2008, P&G is the 8th largest corporation in the world by market capitalization and 14th largest US company by profit. It is 10th in Fortune's Most Admired Companies list (as of 2007).[3][4] P&G is credited with many business innovations including brand management and the soap opera.

According to the Nielsen Company, in 2007 P&G spent more on U.S. advertising than any other company; the $2.62 billion spent by P&G is almost twice as much as that spent by General Motors, the next company on the Nielsen list.[5] P&G was named 2008 Advertiser of the Year by Cannes International Advertising Festival.[6]

Contents

[edit] History

William Procter, a candlemaker, and James Gamble, a soapmaker, immigrants from England and Ireland, respectively, who had settled earlier in Cincinnati, who met as they married sisters, Olivia and Elizabeth Norris,[7] formed the company initially. Alexander Norris, their father-in law, called a meeting in which he persuaded his new sons-in-law to become business partners. On October 31, 1837, as a result of the suggestion, Procter & Gamble was born.

In 1858-1859, sales reached $1 million. By this point, approximately 80 employees worked for Procter & Gamble. During the American Civil War, the company won contracts to supply the Union Army with soap and candles. In addition to the increased profits experienced during the war, the military contracts introduced soldiers from all over the country to Procter & Gamble's products.

In the 1880s, Procter & Gamble began to market a new product, an inexpensive soap that floats in water. The company called the soap Ivory. William Arnett Procter, William Procter's grandson, began a profit-sharing program for the company's workforce in 1887. By giving the workers a stake in the company, he correctly assumed that they would be less likely to go on strike.

The company began to build factories in other locations in the United States because the demand for products had outgrown the capacity of the Cincinnati facilities. The company's leaders began to diversify its products as well and, in 1911, began producing Crisco, a shortening made of vegetable oils rather than animal fats. As radio became more popular in the 1920s and 1930s, the company sponsored a number of radio programs. As a result, these shows often became commonly known as "soap operas".

Procter & Gamble headquarters in Downtown Cincinnati, Ohio

The company moved into other countries, both in terms of manufacturing and product sales, becoming an international corporation with its 1930 acquisition of the Thomas Hedley Co., based in Newcastle upon Tyne, England. Procter & Gamble maintained a strong link to the North East of England after this acquisition. Numerous new products and brand names were introduced over time, and Procter & Gamble began branching out into new areas. The company introduced "Tide" laundry detergent in 1946 and "Prell" shampoo in 1947. In 1955, Procter & Gamble began selling the first toothpaste to contain fluoride, known as "Crest". Branching out once again in 1957, the company purchased Charmin Paper Mills and began manufacturing toilet paper and other paper products. Once again focusing on laundry, Procter & Gamble began making "Downy" fabric softener in 1960 and "Bounce" fabric softener sheets in 1972. One of the most revolutionary products to come out on the market was the company's "Pampers", first test-marketed in 1961. Prior to this point disposable diapers were not popular, although Johnson & Johnson had developed a product called "Chux". Babies always wore cloth diapers, which were leaky and labor intensive to wash. Pampers provided a convenient alternative, albeit at the environmental cost of more waste requiring landfilling.

Procter & Gamble acquired a number of other companies that diversified its product line and significantly increased profits. These acquisitions included Folgers Coffee, Norwich Eaton Pharmaceuticals (the makers of Pepto-Bismol), Richardson-Vicks, Noxell (Noxzema), Shulton's Old Spice, Max Factor, and the Iams Company, among others. In 1994, the company made headlines for big losses resulting from leveraged positions in interest rate derivatives, and subsequently sued Bankers Trust for fraud; this placed their management in the unusual position of testifying in court that they had entered into transactions that they were not capable of understanding. In 1996, Procter & Gamble again made headlines when the Food and Drug Administration approved a new product developed by the company, Olestra. Also known by its brand name Olean, Olestra is a lower-calorie substitute for fat in cooking potato chips and other snacks that during its development stages is known to have caused anal leakage and gastrointestinal difficulties in humans.

Procter & Gamble has dramatically expanded throughout its history, but its headquarters still remains in Cincinnati.

In January 2005 P&G announced an acquisition of Gillette, forming the largest consumer goods company and placing Unilever into second place. This added brands such as Gillette razors, Duracell, Braun, and Oral-B to their stable. The acquisition was approved by the European Union and the Federal Trade Commission, with conditions to a spinoff of certain overlapping brands. P&G agreed to sell its SpinBrush battery-operated electric toothbrush business to Church & Dwight. It also divested Gillette's oral-care toothpaste line, Rembrandt. The deodorant brands Right Guard, Soft & Dri, and Dry Idea were sold to Dial Corporation.[8] The companies officially merged on October 1, 2005. In 2008, P&G branched into the record business with its sponsorship of Tag Records, as an endorsement for TAG Body Spray.[9]

P&G's dominance in many categories of consumer products makes its brand management decisions worthy of study.[10] For example, P&G's corporate strategists must account for the likelihood of one of their products cannibalizing the sales of another.[11]

On August 24, 2009, the Irish-based pharmaceutical company Warner Chilcott announced they had bought P&G's prescription-drug business for $3.1 billion [12].

[edit] Operations

Effective July 1, 2007, the company's operations are categorized into three "Global Business Units" with each Global Business Unit divided into "Business Segments" according to the company's March 2009 earnings release.

  • Beauty Care
    • Beauty segment
    • Grooming segment
  • Household Care
    • Baby Care and Family Care segment
    • Fabric Care and Home Care segment
  • Health and Well-Being
    • Health Care segment
    • Snacks, Coffee, and Pet Care segment

[edit] Management and staff

The board of directors of Procter & Gamble currently has thirteen members: Alan Lafley, Robert A. McDonald, Charles Lee, Ralph Snyderman, M.D., Margaret Whitman, James McNerney, Lynn Martin, Johnathan Rodgers, Ernesto Zedillo, Scott Cook, Rajat Gupta, Patricia Woertz, and Kenneth Chenault.[13]

In October 2008, P&G was named one of "Canada's Top 100 Employers" by Mediacorp Canada Inc., and was featured in Maclean's newsmagazine. Later that month, P&G was also named one of Greater Toronto's Top Employers, which was announced by the Toronto Star newspaper.[14]

[edit] Procter & Gamble brands

Main article: List of Procter & Gamble brands

24 of P&G's brands have more than a billion dollars in net annual sales,[15] and another 18 have sales between $500 million and $1 billion.

Billion dollar brands

Global Products A to Z

Most of these brands, including Bounty, Crest, Pringles, Puffs, and Tide, are global products available in several continents. Procter & Gamble products are available in North America, Latin America, Europe, the Middle East, Africa, and Asia.

Manufacturing operations are based in the following regions:

  • United States
  • Canada
  • Mexico
  • Latin America
  • Europe
  • China (31 wholly-owned factories) and other parts of Asia
  • Africa
  • Australia

[edit] Productions

The P&G production logo used from early 1986 to 2007.

Procter & Gamble produced and sponsored the first radio soap operas in the 1930s (Procter & Gamble's being known for detergents (soaps) was probably the genesis of the term "soap opera"). When the medium switched to television in the 1950s and 1960s, most of the new serials were sponsored and produced by the company. The serial The Young and the Restless is currently broadcast on CBS and is still partially sponsored by Procter & Gamble. If As The World Turns is not picked up by another network, The Young and the Restless, will be the only soap left that is partially sponsored by Procter & Gamble.

These past serials were produced by Procter & Gamble:

Procter & Gamble also was the first company to produce and sponsor a prime-time show, a 1965 spinoff of the daytime soap opera As the World Turns called Our Private World. PGP also produced Shirley, a prime-time NBC series starring Shirley Jones, in 1979; it lasted thirteen episodes. They also produced TBS' first original comedy series, Down to Earth, which ran from 1984 to 1987 (110 episodes were produced). They also distributed the syndicated comedy series Throb. Procter & Gamble Productions originally co-produced Dawson's Creek with Sony Pictures Television but withdrew before the series premiere due to early press reviews. It also produced the 1991 TV movie A Triumph of the Heart: The Ricky Bell Story, which was co-produced by The Landsburg Company. It also produces the People's Choice Awards.

In addition to self-produced items, Procter & Gamble also supports many Spanish-language novellas through advertising on networks such as Univision, Telemundo, Telefutura, and Azteca America. Procter & Gamble was the one of the first mainstream advertisers on Spanish-language TV during the mid-1980s.[citation needed]

In 2008, P&G expanded into music sponsorship when it joined Island Def Jam to create Tag Records, named after a body spray that P&G acquired from Gillette.[16][17]

[edit] Controversies

[edit] Logo controversy

The former logo originated in 1851 as a crude cross that barge workers on the Ohio River painted on cases of P&G star candles to identify them. P&G later altered this symbol into a trademark that showed the man in the moon overlooking 13 stars, which were meant to commemorate the original 13 colonies.[18]

Former P&G logo

The company received unwanted media publicity in the 1980s when an urban legend spread that the moon-and-stars logo was a satanic symbol. The accusation is allegedly based on a particular passage in the Bible, specifically Revelation 12:1, which states: "And there appeared a great wonder in heaven; a woman clothed with the sun, and the moon under her feet, and upon her head a crown of 12 stars." P&G's logo consists of a man's face on a moon surrounded by 13 stars, yet some claimed that the logo was a mockery of the heavenly symbol alluded to in the aforementioned verse, thus construing the logo to be satanic. Where the flowing beard meets the surrounding circle, three curls were inferred by satan hunters to be a mirror image of the number 666, or the reflected number of the beast. At the top and bottom, the hair curls in on itself and has been seen by such proselytes as two horns such as those of a lamb said to represent the false prophet.

These interpretations have been denied by company officials, and no evidence linking the company to the Church of Satan or any other occult organization has ever been presented. The company has sued and attempted to sue a number of companies such as Amway and individuals who have spread rumors of this type, in some instances because they sell competitive products and have spread such rumors for the purpose of tarnishing P&G's image to increase sales of their own brands.[19] Amway was found not liable as a company because it did not instruct individuals to spread such rumors. An example of one such rumor was the fabricated account that the president of P&G had appeared on a Saturday edition of The Phil Donahue Show, where he purportedly declared that he was a Satanist and that the company's logo was satanic. This rumor continued to circulate, despite the facts that the company's president had never made such a statement in public, had never appeared on Phil Donahue's show, and Donahue's show never ran on Saturdays. Later variations of this rumor replaced the Donahue show with Geraldo Rivera's show.[20]

In recent years P&G is one of many companies that has adopted a simpler, more straightforward logo, theirs now consisting of just the letters P&G. In television commercials in China, the former P&G logo still appears at the end of each commercial, and up until 2004, it appeared at the end of each commercial in Japan.[citation needed]

The original logo still appears on Procter & Gamble stock certificates as of this date, and also at the entrance of some P&G facilities.

A Dilbert comic strip pokes fun at this controversy. In the strip, The Pointy-Haired Boss asks "Phil, the Prince of Insufficient Light" what he does for money. Phil responds, "Corporate sponsorship. Procter and Gamble pays me to stay away from them."

The value of the new Logo "PG" is enhanced by the fact that it is "internet compatible" as the company was able to register February 24, 1992 the matching internet domain pg.com. Only 59 large corporations worldwide are in the Internet Hall of Fame owning a two letter domain name.[21]

[edit] Toxic shock syndrome and tampons

Toxic shock syndrome (TSS) is a disease caused by strains of the bacteria Staphylococcus aureus. Most people have these bacteria living in their bodies as harmless commensals in places such as the nose, skin, and vagina. The disease can strike anyone, not only women, but the disease is often associated with tampons. In 1980, 814 menstrual-related TSS cases were reported; 38 deaths resulted from the disease. The majority of women in these cases were documented as using super-absorbent synthetic tampons, particularly the Rely tampon created by Procter & Gamble.[22] The Rely tampon was so super-absorbent that one by itself could in fact hold one woman's entire menstrual period. Unlike other tampons made of cotton and rayon, Rely used carboxymethylcellulose and compressed beads of polyester for absorption. The materials used in Rely were causing an increase in the thickness of fluid inside the vagina, resulting in more toxins being released.

The slogan used by Procter & Gamble for the product was "Rely. It even absorbs the worry."

In the summer of 1980 the Centers for Disease Control released a report explaining how these bacterial mechanisms were leading to TSS. They also stated that the Rely tampon was associated with TSS more than any other brand of tampon. In September 1980, Procter & Gamble voluntarily recalled its Rely brand of tampons from the market and agreed to provide for a program to notify consumers. Since the 1980s, reported cases of TSS have dramatically decreased.[23]

[edit] Other products

In December 2005 the Pharmaceutical division of P&G was involved in a dispute over research involving its osteoporosis drug Actonel. The case was discussed in the media[24] and more recently on a blog[25] of one of the researchers involved.

In October 2007, a class action lawsuit was filed in the State of Georgia alleging that many users of Crest Pro-Health mouthwash suffered stained teeth and loss of their sense of taste as a result.[26] Procter & Gamble contends that these side effects occur in only three percent of users. The suit seeks to include disclosure warning users of these side effects on product packaging.

[edit] Environmental record

Researchers at the University of Massachusetts Amherst have identified Procter & Gamble as the 52nd-largest corporate producer of air pollution in the United States, with roughly 350,000 pounds of toxic chemicals released annually into the air.[27] Major pollutants indicated by the study were manganese compounds, sulfuric acid, epichlorohydrin, and bromine.[28]

In 2007 Procter & Gamble pledged to reduce their carbon emissions, mainly through reduction in packaging along with decreases in water and energy use. The stated emission reduction goal was ten percent by 2012.[29]

Procter & Gamble is one of the founding members of Carbon Disclosure Project's Supply Chain Leadership Council. Procter & Gamble is one of twelve global companies on the council whose first course of action is to distribute a survey to suppliers on the topic of greenhouse gas emissions and climate change. Since the first phase of the project, more corporations have joined the effort. The council's overall goal is to encourage reductions in emissions down the supply chain.[30]

Procter & Gamble has, for several years, funded a recycling school in the slums of Cairo, Egypt. Many of the people in the village of Manshiyet Nasser collect garbage and have done so for decades. Procter & Gamble along with UNESCO has started the Mokattam Non-Formal Education Project. The project teaches the people of the village about the business and economics of recycling and how to properly recycle plastic.[31]

In December 2008, The US Environmental Protection Agency's Design For Environment program awarded P&G its highest level of recognition, Champion, for P&G's work in developing safer detergents under the Safer Detergents Stewardship Initiative (SDSI).[32]

[edit] References

  1. ^ a b c d e Procter & Gamble annual income sheet via Wikinvest
  2. ^ "Procter & Gamble board meets amid CEO reports." Associated Press at Boston Herald. Tuesday June 9, 2009. Retrieved on November 17, 2009.
  3. ^ CNN Fortune ranking
  4. ^ America's Most Admired Companies 2007: Top 20 - FORTUNE
  5. ^ The Nielsen Company Issues Top Ten U.S. Lists For 2007, from the Nielsen Company website
  6. ^ Cannes
  7. ^ Dyer, Davis; Frederick Dalzell, Rowena Olegario (2004). Rising Tide: Lessons from 165 Years of Brand Building at Procter & Gamble. Harvard Business School Press. ISBN 1591391474. 
  8. ^ Wherrity, Constance (2006-02-21). "Dial Agrees to Buy P&G Deodorant Brands". Pierce Mattie Public Relations New York blog. http://www.piercemattie.com/blogs/2006/02/dial_agrees_to_buy_pg_deodoran.html. Retrieved 2006-09-06. 
  9. ^ "P&G Must Proceed With Caution" Marketing Doctor Blog. July 10, 2008.
  10. ^ (2008-06-06). “How To Learn From GE and P&G When The World Is About To Change,” Marketing Doctor Blog.
  11. ^ Horstman, Barry M (2005-10-11). "John G. Hankus: He rebuilt P&G - and city, too". The Cincinnati Post (E. W. Scripps Company). Archived from the original on 2005-04-05. http://web.archive.org/web/20050405123913/http://www.cincypost.com/living/1999/smale101199.html. 
  12. ^ Warner Chilcott to pay $3.1 for P&G's drug business, WSJ
  13. ^ http://www.pg.com/company/our_commitment/corp_gov/2008_Board_of_Directors.pdf
  14. ^ "Reasons for Selection, 2009 Canada's Top 100 Employers Competition". http://www.eluta.ca/top-employer-procter-%26-gamble. 
  15. ^ 2008 Annual report, letter from A. G. Laffley
  16. ^ (2008-07-07). “It’s American Brandstand: Marketers Underwrite Performers ,” New York Times
  17. ^ (2008-07-10). “P&G Must Proceed With Cautions,” Marketing Doctor Blog.
  18. ^ Procter and Gamble v. Amway 242 F.3d 539
  19. ^ Trademark of the Beast by David Emery, June 10, 1998
  20. ^ Trademark of the Devil by Barbara Mikkelson, snopes
  21. ^ VB.com Internet Hall of Fame - List of Large Companies that own a Two Letter Domain
  22. ^ Mikkelson, Barbara and David. 2005 December 31 http://www.snopes.com/medical/toxins/tampax.asp
  23. ^ Mcpherson, Marianne. 2005 March. http://www.ourbodiesourselves.org/book/companion.asp?id=13&compID=38
  24. ^ Collated Media Reports
  25. ^ Scientific Misconduct Blog
  26. ^ http://web2.customwebexpress.com/bellbrig2/UserFiles/File/Crest%20Complaint.pdf
  27. ^ Political Economy Research Institute Toxic 100 (Study released May 11, 2006) retrieved 15 August 2007
  28. ^ Toxics Release Inventory courtesy rtknet.org
  29. ^ "Business Network" Accessed May 13, 2008
  30. ^ "CDP, Supply Chains, Emissions and Climate Change" "Triple Pundit" May 1, 2008. Accessed May 13, 2008
  31. ^ "In Cairo Slum, the Poor Spark Environmental Change" "NPR" April 27, 2008. Accessed May 13, 2008
  32. ^ http://www.csrwire.com/News/14010.html

[edit] External links

Search Wikimedia Commons Wikimedia Commons has media related to: Procter & Gamble
Companies portal
v • d • e
Procter & Gamble Co.
Corporate Directors:
Brands:
Always · Ariel · Art of Shaving · Aussie · Plenty · Braun · Camay · Charmin · Cheer · Clairol · CoverGirl · Crest · DayQuil · Downy · Dreft · Duracell · Eukanuba · Fairy · Febreze · Gillette · Head & Shoulders · Herbal Essences · Iams · Ivory · Joy · Luvs · Max Factor · Metamucil · Mr. Clean · Nice 'n Easy · NyQuil · Olay · Old Spice · Oral-B · Pampers · Pantene · Pepto-Bismol · Pringles · Puffs · Pur · SK-II · Swiffer · Tampax · Tempo · Tide · Vicks · Wella · Zest
Annual Revenue: $83.5 billion USD (▲10% FY 2008) · Employees: 138,000 · Stock Symbol: NYSE: PG · Website: www.pg.com
Retrieved from "http://en.wikipedia.org/wiki/Procter_%26_Gamble"