Procter and Gamble

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What started out as a two man partnership in Cincinnati, Ohio has grown into the world’s largest manufacturer of consumer packaged goods with operations in 80 countries and markets 300 brands in 180 countries around the world. In 1837 William Procter and James Gamble formed Procter & Gamble (P&G) to manufacture and sell candles and soap. Being that Cincinnati was booming from its hog butchering trade the suggestion for the partnership apparently came from their mutual father-in-law, Alexander Norris, who pointed out that Gamble's trade, soap making, and Procter's trade, candle making, both required use of lye, which was made from animal fat and wood ashes. P&G began operations out of a small storeroom with Procter running the store and Gamble ran the manufacturing which consisted of a wooden kettle with a cast iron bottom that was set up behind the shop. In the early years candles where their most important product, but the enterprising partners soon expanded their operations through innovation and acquisitions of other small companies. The first fifty years laid the foundation for the longevity of the company. With their forward looking approach to the business, during a time of financial panic in the U.S. the company continued to prosper as shipments were moving up and down the river and across the country by rail. During the 1850’s the company grew rapidly and moved operations to a bigger factory. During this time the company created its first trademark logo, the moon and stars, which became a symbol of quality to Procter and Gamble’s base of loyal customers. By 1859 P&G had reached sales of $1 million dollars and employed 80 people. As the Civil War approached they began to stockpile as much raw materials as they could. When wartime shortages forced competitors to cut production P&G factory was busy day and night. The forward looking approach led to several contracts in 1862 to supply the Union Armies with soap and candles. The company hired a full time chemist in 1875 and in 1879 they had created Ivory soap “the floating soap” which catapulted P&G to the forefront of the industry. Shortly after success of the new product the company began their first risky adventure in advertising and allocated an $11,000 annual budget. Then in 1886 with the success of advertising and rapid growth the company began productions in its new plant which incorporated the latest technological advances and pleasant work environment for its employees. From 1890 through 1945 the company began innovative employee benefits as well as to continue building on its innovative processes. As labor unrest grew at many American companies during the late 1880’s P&G sought to avert labor problems before they became significant. They began to implement new employee benefits such as profit sharing with semiannual dividends and an employee stock-purchase program. In 1915 the company introduced a revolutionary sickness-disability program and implemented an eight hour workday in 1918. Procter and Gamble has been recognized as a leader in employee benefit programs ever since. In 1890 the partners incorporate the business to raise additional capital for expansion and sets up an analytical lab which was one of the earliest research labs in America. By this time P&G was selling more than thirty different types of soap. To meet the increasing demands, fueled by full color print ads in national magazines, the company expanded operations outside of Cincinnati. They opened new plants in Kansas City and Ontario Canada. The research labs were as busy as the plants and innovative new products rolled out one after another. P&G began experimenting with the hydrogenation process, patented the procedure and introduced Crisco to the public in 1911. The flurry of new products continued through the 1920’s with a new line of cleaning products and soap flakes for industrial washing machines. During this time the...
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