Procter and Gamble Distribution Company Limited Customer Business Development
EXECUTIVE SUMMARY Procter and Gamble (P&G) operates in India through three entities, one of which is the P&G Distribution Company, fully owned and managed by the other two entities, P&G Health & Hygiene and P&G Home Products. P&G’s distribution system was initially similar to other FMCG companies. However, a change of business strategy from being a mass marketer to a niche and premium marketer, led to the evolution of a new distribution model known as the Golden Eye (GE) model emerged. ... The focus of these distributors was on 20% of those retailers and wholesalers which bring in 80% of the revenues for the company. ... The objectives of the company are three fold: developing a robust distribution network, timely replenishment of stocks, and demand creation at the retailers. The major strength of the company lies with the huge efficiencies gained due to this system, which also means that their biggest weakness is a much smaller reach and coverage of retailers and thus end-consumers. Maximizing reach, while maintaining high service quality levels forms the largest opportunity for the company. The future strategy of P&G Distribution Company needs closely align itself with the marketing and brand strategies of PGHH and PGHP: of which new product introductions, larger number of products using the same system, penetration into smaller towns and rural markets are some key strategies. ... P&G DISTRIBUTION COMPANY 3 2. ... 2 P&G’S DISTRIBUTION NETWORK 3 2.3 CONVENTIONAL FMCG DISTRIBUTION NETWORK 4 2.4 HISTORICAL EVOLUTION OF P&G’S DISTRIBUTION SYSTEM 4 2.5 GE DISTRIBUTION MODEL 5 3. ... SWOT ANALYSIS OF P&G DISTRIBUTION COMPANY 8 6. ORGANIZATION STRUCTURE/ DEPARTMENTS 9 FIGURE 1: ORGANIZATIONAL STRUCTURE OF THE CUSTOMER BUSINESS DEVELOPMENT (CBD) FUNCTION AT P&G DISTRIBUTION COMPANY 9 FIGURE 2: ORGANIZATIONAL STRUCTURE OF A P&G DISTRIBUTOR 9 7. CONCLUSION 10 EXHIBITS 11 EXHIBIT 1: SHARE HOLDING PATTERN OF PGHH AS ON 31ST DECEMBER, 2002 11 EXHIBIT 2: FINANCIAL PARAMETERS OF PGHH 11 EXHIBIT 3: PERFORMANCE OF P&G BRANDS ACROSS DIFFERENT MARKET SEGMENTS IN FMCG SECTOR 12 EXHIBIT 4: SALES AND DISTRIBUTION CHANNEL OF P&G 12 EXHIBIT 5: CLASSIFICATION OF P&G’S RETAILERS AND SOME CHARACTERISTICS 13 EXHIBIT 6: TYPICAL DISTRIBUTION NETWORK IN THE FMCG INDUSTRY (HLL) 13 EXHIBIT 7: DISTRIBUTION REACH OF LEADING FMCG COMPANIES 14 EXHIBIT 8: THE FOUR FOCUS AREAS OF P&G IN INDIA 14 EXHIBIT 9: TERMS OF TRADE EMPLOYED BY P&G IN THEIR DISTRIBUTION CHAIN 14 BIBLIOGRAPHY 15 1. INTRODUCTION TO P&G IN INDIA Procter & Gamble (P&G) is one of Indias fastest growing Fast Moving Consumer Goods Companies with a wide range of products in the Healthcare, Hair care, Laundry (Detergents), Feminine Protection and Personal Care categories. ... The company started operations in India in 1989 when P&G worldwide acquired Richardson Vicks Inc. ... P&G Hygiene and Health Care (PGHH): The name changed from Proctor & Gamble India Ltd. in 1999, 35% Indian shareholders, 65% Shareholding of the Procter & Gamble Company, USA (refer exhibit 1 for details on shareholding structure). ... P&G Home Products (PGHP): A 100% subsidiary of P&G Company, US. It operates in the Fabric Care and Hair Care product categories, focused on the Detergent (Ariel, Tide), Hair Care (Pantene, Head & Shoulders), Baby care (Pampers), Snack Food (Pringles) business. ... P&G Distribution Company: Distribution of products is carried out by this subsidiary, which is jointly owned by PGHH and PGHP.