Procter & Gamble

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Procter & Gamble Company
Type Public
Traded as NYSE: PG
Dow Jones Industrial Average component
S&P 500 component
Industry Consumer goods
Founded 1837
Founder(s) William Procter
James Gamble
Headquarters Cincinnati, Ohio, USA
Area served Worldwide
Key people A.G. Lafley
Chairman, President and CEO
Products Foods, beverages, cleaning agents and personal care products
See P&G brands
Revenue Increase US$ 83.68 billion (2012)[1]
Operating income Decrease US$ 13.29 billion (2012)[1]
Net income Decrease US$ 10.75 billion (2012)[1]
Total assets Decrease US$ 132.2 billion (2012)[1]
Total equity Decrease US$ 63.43 billion (2012)[1]
Employees 126,000 (2012)[1]
Website www.pg.com

The Procter & Gamble Company, also known as P&G, is an American multinational consumer goods company headquartered in downtown Cincinnati, Ohio, USA. Its products include pet foods, cleaning agents and personal care products. Prior to the sale of Pringles to Kellogg Company, its product line included foods and beverages.[2]

In 2012, P&G recorded $83.68 billion dollars in sales. Fortune magazine awarded P&G a top spot on its list of "Global Top Companies for Leaders", and ranked the company at fifth place of the "World's Most Admired Companies" list.[3] Chief Executive Magazine named P&G the best overall company for leadership development in its list of the "40 Best Companies for Leaders".

Contents

History [edit]

William Procter, a candlemaker, and James Gamble, a soapmaker, emigrated from England and Ireland respectively. They settled in Cincinnati initially and met when they married sisters, Olivia and Elizabeth Norris.[4] 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 created.

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. After this acquisition, Procter & Gamble had their UK Headquarters at 'Hedley House' in Newcastle upon Tyne, until quite recently. 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.

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.[5] The companies officially merged on October 1, 2005. Liquid Paper, and Gillette's stationery division, Paper Mate were sold to Newell Rubbermaid. In 2008, P&G branched into the record business with its sponsorship of Tag Records, as an endorsement for TAG Body Spray.[6]

P&G's dominance in many categories of consumer products makes its brand management decisions worthy of study.[7] For example, P&G's corporate strategists must account for the likelihood of one of their products cannibalizing the sales of another.[8]

On August 25, 2009, the Ireland-based pharmaceutical company Warner Chilcott announced they had bought P&G's prescription-drug business for $3.1 billion.[9]

P&G exited the food business in 2012 when it sold its Pringles snack food business to Kellogg's for $2.75bn after the $2.35bn deal with former suitor Diamond Foods fell short.[10] The company had previously sold Jif peanut butter and Folgers coffee in separate transactions to Smucker's.

Procter & Gamble was a tier one sponsor of London's 2012 Olympic Games and sponsored 150 Athletes.[11]

Operations [edit]

As of July 1, 2011, the company structure is categorized into two "Global Business Units" with each one further divided into "Business Segments" according to the company's 2011 Annual Report. Dimitri Panayotopoulos is Vice Chairman of Global Business Units[12]

  • Beauty segment
  • Grooming segment
  • Health Care segment
  • Snacks & Pet Care segment
  • Fabric Care & Home Care segment
  • Baby Care & Family Home Care segment

Management and staff [edit]

The board of directors of Procter & Gamble currently has eleven members:

In March 2011 Rajat Gupta resigned from the board after a SEC accusation of Galleon Group insider trading.[14]

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.[15]

In May 2011 Fortune editor-at-large Patricia Sellers praised P&G's board diversity, as five of the company's eleven current directors are female and have all been on Fortune's annual Most Powerful Women list.[16]

In May 2013, Robert McDonald announced his retirement and was replaced by A.G. Lafley who returned as Chairman, President, and CEO. [17]

Procter & Gamble is a member of the U.S. Global Leadership Coalition, a Washington, D.C.-based coalition of over 400 major companies and NGOs that advocates for a larger International Affairs Budget, which funds American diplomatic and development efforts abroad.[18]

Brands [edit]

Main article: List of Procter & Gamble brands

26 of P&G's brands have more than a billion dollars in net annual sales, according to the 2011 Annual Report and P&G Corporate Newsroom.

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

Manufacturing operations are based in the following regions:

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

Productions [edit]

The P&G production logo used from early 1985 to 2007

Procter & Gamble produced and sponsored the first radio soap operas in the 1930s (Procter & Gamble's being known for detergents—soaps—was the genesis of the term "soap opera")[citation needed]. 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. When As the World Turns left the air on September 17, 2010, The Young and the Restless, became 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. In 1979, PGP produced Shirley, a prime-time NBC series starring Shirley Jones which 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 one of the first mainstream advertisers on Spanish-language TV during the mid-1980s.[citation needed]

Procter & Gamble Entertainment (PGE) logo, 2013

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. In April 2010, after the cancellation of As the World Turns, PGP announced they were officially phasing out of the soap industry, and expanding into more family appropriate programming.[19][20]

Procter & Gamble also gave a $100,000 contract to the winners of Cycle 1 through 3 of Canada's Next Top Model, wherein Andrea Muizelaar, Rebecca Hardy and Meaghan Waller won the prize.

As of 2013, PGP has rebranded itself as Procter & Gamble Entertainment (PGE) with a new logo and an emphasis on multi-platform entertainment production.

Online marketing [edit]

The company has actively developed or sponsored numerous online communities,[21] i.e. BeingGirl.com (launched in 2000),[22] Women.com.[21] As of 2000, the company had 72 "highly stylized destination sites".[23]

Controversies [edit]

Price fixing [edit]

In April 2011, P&G was fined 211.2m euros by the European Commission for establishing a price-fixing cartel in Europe along with Unilever, who was fined 104m euros, and Henkel (not fined). Though the fine was set higher at first, it was discounted by 10% after P&G and Unilever admitted running the cartel. As the provider of the tip-off leading to investigations, Henkel was not fined.[24]

Toxic shock syndrome and tampons [edit]

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.[25] The Rely tampon was so super-absorbent that one by itself could in fact hold one woman's entire menstrual period flow. Unlike other tampons made of cotton and rayon, Rely used carboxymethylcellulose and compressed beads of polyester for absorption.

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.[26]

Animal testing [edit]

On June 30, 1999, Procter & Gamble announced that it would limit its animal testing practices to its food and drug products which represents roughly 80% of its product portfolio.[27] The company invested more than $275 million in the development of alternative testing methods.[28]

Procter & Gamble has received criticism from animal advocacy group PETA for the practice of testing on animals.[29]

Other products [edit]

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.[30]

In October 2007, a class action lawsuit was filed in the State of Georgia alleging that many users of Crest Pro-Health mouthwash, with the active ingredient Cetylpyridinium chloride, suffered stained teeth and loss of their sense of taste as a result.[31] Procter & Gamble contends that these side effects occur in only three percent of users.[31] The suit seeks to include disclosure warning users of these side effects on product packaging.

Logo controversy [edit]

Former P&G logo

P&G's 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 changed this symbol into a trademark that showed a man in the moon overlooking 13 stars, said to commemorate the original 13 colonies.[32]

The company received unwanted media publicity in the 1980s when rumors spread that the moon-and-stars logo was a satanic symbol. The accusation was 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 consisted of a man's face on the moon surrounded by 13 stars, and 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 said 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 was said to be the two horns like those of a ram.

The moon-and-stars logo was discontinued in 1985 because of the controversy.[33]

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 unsuccessfully sued Amway from 1995 to 2003 over rumors forwarded through a company voicemail system in 1995. In 2011, the company successfully sued individual Amway distributors for reviving and propagating the false rumors.[34]

The Church of Satan denies being supported by Procter & Gamble.[35]


Notes [edit]

  1. ^ a b c d e f "2012 Earnings Report, The Procter & Gamble Company". The Procter & Gamble Company. Retrieved May 6, 2012. 
  2. ^ "Procter & Gamble board meets amid CEO reports". Boston Herald. Associated Press. June 9, 2009. Retrieved May 5, 2012. 
  3. ^ "P&G Ranks 5th Overall, 1st in Our Industry and a "Green Star" Among Fortune Magazine's World's Most Admired Companies" (Press release). Procter & Gamble. March 3, 2011. Retrieved May 5, 2012. 
  4. ^ Dyer, Davis; Dalzell, Frederick; Olegario, Rowena (2004). Rising Tide: Lessons from 165 Years of Brand Building at Procter & Gamble. Harvard Business School Press. ISBN 1-59139-147-4. 
  5. ^ Wherrity, Constance (February 21, 2006). "Dial Agrees to Buy P&G Deodorant Brands". Pierce Mattie Public Relations New York blog. Retrieved May 5, 2012. 
  6. ^ "P&G Must Proceed With Caution". Marketing Doctor Blog. July 10, 2008. Retrieved May 5, 2012. 
  7. ^ "How To Learn From GE and P&G When The World Is About To Change". Marketing Doctor Blog. June 6, 2008. Retrieved May 5, 2012. 
  8. ^ Horstman, Barry M (October 11, 2005). "John G. Hankus: He rebuilt P&G – and city, too". The Cincinnati Post. Archived from the original on April 5, 2005. 
  9. ^ Cordieiro, Anjali; Loftus, Peter (August 25, 2009). "Warner Chilcott to pay $3.1 for P&G's drug business". The Wall Street Journal. Retrieved May 5, 2012. 
  10. ^ Watson, Elaine (February 15, 2012). "P&G sells Pringles to Kellog after Diamond deal loses its luster". The Food Navigator. Retrieved May 6, 2013. 
  11. ^ "P&G sells Pringles to Kellog after Diamond deal loses its luster". Procter & Gamble. July 29, 2012. Retrieved May 6, 2013.  Unknown parameter |Corporation= ignored (help)
  12. ^ "Dimitri Panayotopoulos: Vice chairman". Pg.com. Retrieved February 15, 2012. 
  13. ^ "Board Composition: business leaders, law, American Express". Pg.com. Retrieved February 15, 2012. 
  14. ^ "P&G Views | P&G News | Events, Multimedia, Public Relations" (Press release). Pg.com. December 31, 2011. Retrieved February 15, 2012. 
  15. ^ "Reasons for Selection, 2009 Canada's Top 100 Employers Competition". 
  16. ^ Sellers, Patricia (May 5, 2011). "P&G rates an "A" for board diversity". CNN Money. Retrieved May 5, 2012. 
  17. ^ "A.G. Lafley Rejoins Procter & Gamble as Chairman, President and Chief Executive Officer" (Press release). Pg.com. May 23, 2013. Retrieved May 23, 2013. 
  18. ^ "U.S. Global Leadership Coalition, Global Trust members". Usglc.org. Retrieved May 5, 2012. 
  19. ^ Levine, Robert (July 7, 2008). "It’s American Brandstand: Marketers Underwrite Performers". New York Times. Retrieved May 5, 2012. 
  20. ^ "P&G Must Proceed With Caution". Marketing Doctor Blog. July 10, 2008. Retrieved May 5, 2012. 
  21. ^ a b Michael J. Shaw (31 October 2002). E-Business Management: Integration of Web Technologies with Business Models. Springer. p. 112. ISBN 978-1-4020-7178-2. Retrieved 24 January 2013. 
  22. ^ "Dancing tampons". Wired. July 26, 2000. Retrieved May 5, 2012. 
  23. ^ Business 2.0. Imagine Media. November 2000. p. 34. Retrieved 24 January 2013. 
  24. ^ "Unilever and Procter & Gamble in price fixing fine". BBC News. April 13, 2011. 
  25. ^ Mikkelson, Barbara; Mikkelson, David (December 31, 2005 December 31). "Tampax Pearl". Snopes.com. Retrieved May 5, 2012. 
  26. ^ Mcpherson, Marianne (March 2005). "Sexual Anatomy, Reproduction, and the Menstrual Cycle". Boston Women's Health Book Collective. Retrieved May 5, 2012. 
  27. ^ Canedy, Dana (July 1, 1999). "P.& G. to End Animal Tests For Most Consumer Goods". The New York Times. Retrieved May 5, 2012. 
  28. ^ "Animal Welfare and Alternatives". Procter & Gamble. Retrieved May 5, 2012. 
  29. ^ Liddick, Don (2006). Eco-terrorism: radical environmental and animal liberation movements. Praeger Publishers. ISBN 978-0-275-98535-6. Retrieved May 5, 2012. 
  30. ^ "Collated Media Reports". Thejabberwock.org. July 7, 2011. Retrieved May 5, 2012. 
  31. ^ a b "In The Superior Court Of Richmond County" (PDF). Retrieved February 15, 2012. 
  32. ^ "Procter and Gamble v. Amway 242 F.3d 539". U.S. Court of Appeals, 5th Circuit. February 14, 2001. Retrieved May 5, 2012. 
  33. ^ Witt, Howard (April 25, 1985). "Corporate news: Procter symbol succumbs to devilish rumor". Chicago Tribune. 
  34. ^ "Procter & Gamble Wins Satanic Civil Suit". CBS Money Watch. February 11, 2009. Retrieved May 5, 2012. 
  35. ^ Church of Satan FAQ 16. CONSPIRACIES

External links [edit]

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  • Annual revenue Increase US$83.68 billion (2012)
  • Employees 126,000
  • Stock symbol NYSE: PG
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