Procter and Gamble Research

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IB Dream Company PROJECT – P&G March 1, 2012
Group 21
1
IB Dream Company PROJECT – P&G March 1, 2012
Group 21
2
A Humble Beginning . . .
roctor & Gamble was born in 1837 by the collaboration or William Proctor, a candle maker and James Gamble, a soap maker. They started this partnership at the suggestion of their common father-in-law Alexander Norris. After 175 years, P&G is one of the consumer goods company in the world. It features in the Fortune 500 list and recorded sales of $82.6 billion dollars in 2011. The year 1837 was quite a difficult time to start any business. Although Cincinnati was a busy market-place, the United States of America was gripped by financial panic. Scores and scores of banks were closing down across the nation. There was widespread concern of national bankruptcy in the United States. Despite the prevailing instability, William and James launched their new enterprise. Rather than the financial panic shaking their country they were more concerned about how to compete, with the 14 other soap and candle makers in their city. Their calmness amidst the economic storm reflected their resilient and forward-looking approach towards business – an approach that became the hallmark of Procter & Gamble. For example, in the 1850s, despite rumours of an impending U.S. civil war, they built up a new plant to sustain their growing business. Later on, they pioneered one of the nation’s maiden profit-sharing programs and were among the first in the American industry to invest in a research laboratory. The fledgling partnership between Procter and Gamble, by 1890, had grown into a multi-million dollar corporation. Nevertheless, P&G had its eyes set on the future. A Company Built on Innovation . . .

y 1890, P&G was selling around 30 different types of soap, including Ivory. Fuelled by full-colour print ads in national magazines, growth in consumer demand for P&G soaps continued. In order to meet this increasing demand, the Company decided to expand its operations outside Cincinnati, by setting up a plant in Kansas City, Kansas, subsequently followed by a plant in Ontario, Canada. With the opening of each new plant, P&G would embark on plans for another. The manufacturing plant outside United States in Canada in 1915 was the maiden global venture of P&G outside United States of America. This plant produced Ivory, one of the first soaps by P&G and Crisco, the first vegetable shortening (a fat that is solid at room temperature). The plant employed 75 employees. P

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IB Dream Company PROJECT – P&G March 1, 2012
Group 21
3
The research labs of P&G were as busy as the plants and their primary innovation center. Innovative new products rolled out one after another – Ivory Flake, a clothes and dish washing soap in flake form; Chipso, the first soap designed for use in washing machines; Dreft, the first synthetic household detergent and Crisco, the first all-vegetable shortening that transformed the way consumers cooked. Quite evidently, it can be said with reasonable surety that P&G followed the UPSALA Model in its early stages of global expansion. Riding on the popularity of its products in the domestic markets and extensive market research it expanded its distribution to foreign markets outside United States. The effectiveness of the marketing research team, positioning of its products in the consumer mind-space and innovative communication techniques of spreading its reach to maximum customers effectively – like soap operas, product sampling and promotional premiums ensured a fast acceptability of its products in the foreign markets. Subsequently, they set up their operations in those markets so that they could serve them more effectively. P&G truly became an international corporation in 1930 when it acquired Thomas Hedley Co. in England, which manufactured Fairy Soap. This was in response to the growing demand of beauty soaps. Another reason for this acquisition was to establish its presence in the European...
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