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Procter & Gamble

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Procter & Gamble Co. (P&G, NYSE: [PG]) is a global corporation based in Cincinnati, Ohio that manufactures a wide range of consumer goods. The company has annual revenue of $55.4 billion and employs 106,000 employees.

Contents

History

Procter & Gamble headquarters in Cincinnati, Ohio.
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Procter & Gamble headquarters in Cincinnati, Ohio.

William Procter, a candlemaker, and James Gamble, a soapmaker, formed the company known as Procter & Gamble in 1837. The two men, immigrants from England and Ireland respectively, who had settled earlier in Cincinnati might never have met had they not married sisters, Olivia and Elizabeth Norris, whose father convinced his new sons-in-law to become business partners. On October 31, 1837, as a result of Alexander Norris' suggestion, a new enterprise was born: Procter & Gamble.

The company prospered during the nineteenth century. In 1859, sales reached one million dollars. By this point, approximately eighty 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. Once the war was over and the men returned home, they continued to purchase the company's products.

In the 1880s, Procter & Gamble began to market a new product, an inexpensive, yet high quality soap. The company called the soap Ivory. In the decades that followed, Procter & Gamble continued to grow and change. The company became known for its progressive work environment in the late nineteenth century. William Cooper Procter, William Procter's grandson, established a profit-sharing program for the company's workforce in 1887. He hoped that by giving the workers a stake in the company, they would be less inclined to go on strike.

Over time, the company began to focus most of its attention on soap, producing more than thirty different types by the 1890s. As electricity became more and more common, there was less need for the candles that Procter & Gamble had made since its inception. Ultimately, the company chose to stop manufacturing candles in 1920.

In the early twentieth century, Procter & Gamble continued to grow. 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. In the early 1900s, Procter & Gamble also became known for its research laboratories, where scientists worked to create new products. Company leadership also pioneered in the area of market research, investigating consumer needs and product appeal. 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."

Throughout the twentieth century, Procter & Gamble continued to prosper. The company moved into other countries, both in terms of manufacturing and product sales, becoming an international corporation with its 1930 acquisition of the Newcastle upon Tyne-based Thomas Hedley Co. Procter & Gamble maintained a strong link to the North East of England after this acquisition. In addition, 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 1950. 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 simplified the diapering process.

Over the second half of the twentieth century, Procter & Gamble acquired a number of other companies that diversified its product line and increased profits significantly. These acquisitions included Folgers Coffee, Norwich Eaton Pharmaceuticals, Richardson-Vicks, Noxell, 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. 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 substitute for fat in cooking potato chips and other snacks. Procter & Gamble has expanded dramatically throughout its history, but its headquarters still remains in Cincinnati.

In January 2005 P&G announced an acquisition of Gillette to form the largest consumer goods company, displacing the Anglo-Dutch 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 has agreed to sell its SpinBrush battery-operated, electric toothbrush business to Church & Dwight. It also plans to divest Gillette's oral-care product line, Rembrandt, and the deodorant brands Right Guard, Soft & Dri, and Dry Idea. The companies officially merged October 1, 2005.

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

Controversies

Animal testing

A number of animal rights organizations, notably People for the Ethical Treatment of Animals, the British Union for the Abolition of Vivisection, and In Defense of Animals, have criticised Procter & Gamble for the animal testing that they carry out for a wide range of their products, including the Iams pet food brand.

Downsizing

Documentary filmmaker Michael Moore made a visit to Procter & Gamble in his documentary The Big One about their downsize of the workforce.

Logo controversy

The company received unwanted media publicity in the 1980s when an urban legend spread that their previous corporate logo was a Satanic symbol. The accusation is apparently 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 twelve stars." Since P&G's logo consists of a man's face on a moon surrounded by thirteen stars, some have claimed that the logo is a mockery of the heavenly symbol alluded to in the aforementioned verse, and hence the logo is satanic. Where the beard meets the surrounding circle, a mirror image of 666 can be seen, and this has been interpreted as the reflected number of the beast, again linked to satanism. Also, there are two horns like a lamb that are said to represent the false prophet. But these interpretations have been discredited 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 has sued and attempted to sue a number of companies and individuals who have spread rumors of this type, in some instances because they sell competitive products and have spread such rumors for the purpose of tarnishing P&G's image to increase sales of their own brands. An example of one such rumor was that the president of P&G had appeared on a Saturday edition of the Phil Donahue show, and declared that he was a Satanist and that the company's logo was Satanic. This rumor circulated despite the facts that the company's president has never made such a statement in public; had never appeared on Phil Donahue's show; and that Donahue's show does not run on Saturdays. However, the continuous media coverage prompted P&G to adopt an entirely new logo consisting of just the letters P&G. In television commercials in Hong Kong and China, the former P&G logo still appears at the end of each commercial. It also still appears on the Company's packaging that it sends to retailers.

Toxic Shock Syndrome

In September 1980, P&G had to recall its Rely brand of tampons after they were linked to Toxic Shock Syndrome.

Operations

Effective June 1, 2006, the company's operations are:

Corporate governance

Current members of the board of directors of Procter & Gamble are: Norman Augustine, Bruce Byrnes, Scott D. Cook, Joseph Gorman, A.G. Lafley, Charles R. Lee, Lynn M. Martin, W. James McNerney, Jr., Johnathan Rodgers, John F. Smith, Jr., Ralph Snyderman, Robert Storey, Margaret Whitman, and Ernesto Zedillo.

Product brands

See also List of Procter & Gamble brands
22 of P&G's brands have more than a billion dollars in sales (some are described in more detail below): Other well-known P&G brands include Bold, Camay, Daz, Fairy, Flash, Hugo Boss, Ivory, Max Factor, Safeguard and Zest.

Current brand details

Historic product brands

Brands owned by Procter & Gamble in the past, but since divested:

Brands owned by Procter & Gamble in the past, but since phased out:

Procter & Gamble Productions

The P&G production ident was first seen in 1985.
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The P&G production ident was first seen in 1985.

P&G produced and sponsored the first radio soap operas in the 1930s. When the medium switched to television in the 1950s and 1960s, most of the new serials were sponsored and produced by the company. Two of their serials, As the World Turns and Guiding Light, still are on the air today and are distributed by Procter & Gamble Productions.

List of past serials produced by P&G:

Procter & Gamble also was the first company to produce and sponsor a prime-time show, Shirley, starring Shirley Jones, in 1979; it lasted 13 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 co-produced Dawson's Creek with Columbia Pictures Television.

External links

Criticism

List serve of HOPE (Help Our Polluted Environment) in Taylor County, FL, US The FSU PowerPoint "What Stinks" that names the P&G/Buckeye mill in Perry Florda in its sequence of pollution disasters caused by pulp mills.

References

Procter & Gamble Co.
Corporate Directors: Norman Augustine | Bruce Byrnes | R. Kerry Clark | Scott D. Cook | Joseph Gorman | A.G. Lafley | Charles R. Lee | Lynn M. Martin | W. James McNerney, Jr. | Johnathan Rodgers | John F. Smith, Jr. | Ralph Snyderman | Robert Storey | Margaret Whitman | Ernesto Zedillo
Brands: Always | Ariel | Bounty | Braun | Charmin | CoverGirl | Crest | Downy | Dreft | Duracell | Fairy | Febreze | Folgers | Gillette | Head & Shoulders | Iams | Ivory | Max Factor | Olay | Old Spice | Oral-B | Pampers | Pantene | Pringles | Swiffer | Tampax | Tide | Torengos | Zest
Annual Revenue: .4 billion USD ( 10% FY 2005) | Employees: 110,000 | Stock Symbol: NYSE: [PG] | Website: [www.pg.com]

 

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