P&G plans for global growth

15 October 2009

CINCINNATI: Procter & Gamble, the US consumer goods giant, is aiming to enhance its presence in a wide range of markets around the world, and to develop more low-cost products, as it seeks to drive growth both during and after the downturn.

Speaking at the company's annual meeting earlier this week, Robert McDonald – who took over as president/ceo from AG Lafley in July – said he wanted to attract one billion new customers to P&G's brands in the next five years.

The FMCG titan plans to exploit both the scale of its operations and the strength of its existing assets in order to achieve this goal, which would take its total customer base to some 5 billion people.

"We will grow leading, global brands and core categories. We will build our business with under-served and unserved consumers and we will continue to develop faster growing, structurally attractive business with global leadership potential," said McDonald.

"More than at any time in our company's 170-plus year history, we have the brands, capabilities, strategies and financial flexibility necessary to expand our product portfolio into more parts of the world."

McDonald added that the typical American consumer currently spends $100 (€67; £62) on items made by Procter & Gamble each year, compared with $20 in Mexico, $3 in China, $1 in India, and a global average of $12.

This means "the potential is absolutely amazing," as if the corporation was able to boost its sales figures in the two Asian nations to the level recorded in Mexico, its total revenues would rise by 50%.

Other initiatives will include further developing its portfolio to ensure it covers all price points relevant to customers, from the premium to the value sector.

"There's no reason any consumer in the world should have to shop anywhere else, or buy any competitive brand. We should have the brand for them at the right value," McDonald stated.

Similarly, the Cincinnati-based firm will implement a range of "horizontal innovations" to its existing products, a strategy previously evidenced by the introduction of Tide Basic and Tide Stain Release.

The world's biggest advertiser has also recently announced its intention to launch its largest ever "green" marketing campaign in the US, and plans to spend billions of dollars on developing and promoting more eco-friendly goods.

Its activity in this area to date has included the addition of Tide Coldwater, which offers consumers the chance to reduce their energy bills and help the environment by doing their washing in unheated water.

Overall, McDonald said his ambition was to streamline Procter & Gamble's structure so that it can respond with the speed and flexibility of a $10 billion company, while increasing its revenues of $100bn.

Data sourced from Business Courier, Reuters, Mediapost; additional content by Warc staff