P&G uses outside help in emerging markets

19 February 2010

MUMBAI: Procter & Gamble, the FMCG giant, plans to boost its "innovation-led" growth in developing markets by drawing in ideas from a wide variety of external sources.

Shantanu Khosla, P&G's managing director in India, said the firm's "global scale" means it can develop brands tailored for similar consumer cohorts living in different countries, rather than producing strategies on a nation-by-nation basis.

"Today, consumers in Mumbai have more in common with consumers in Shanghai, Tokyo and New York than with consumers in rural India. Consumers in rural India are very similar to consumers in rural China and Mexico," Khosla argued.

"This scale allows P&G to invest in innovation for these consumer clusters. It helps us bring expertise from one part of the globe to another where similar problems exist."

One example of this approach came after the firm noted that taboos over feminine hygiene in rural India were similar to those in parts of Africa.

This led to the transfer a public-private partnership outreach programme that had been pioneered with African governments to India, with a pilot project in Rajasthan highlighting the benefits of brands such as Always to female adolescents.

Khosla also hailed the impact on the firm's Connect and Develop strategy – which promotes the collaboration of in-house experts with external scientists, engineers and other companies – saying its impact had meant a majority of P&G innovation now involves an external partner of some kind.

"We believe it is critical to have innovation in technology, systems, products and people to drive growth," he said.

"In fact, we engage consumers in a way that they act as our partners in innovation."

P&G has found considerable success in India, with its separate health and hygiene and home products divisions making it the nation's second-largest FMCG company, with turnover of 3,000 crore rupees ($648.9bn €477.1bn).

Data sourced from Economic Times/P&G; additional content by Warc staff