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"Procter & Gamble Co. (P&G, NYSE: PG) is a Fortune 500,
American global corporation based in Cincinnati, Ohio, that
manufactures a wide range of consumer goods. As of 2008, P&G is
the 23rd largest US company by revenue and 14th largest by profit.
It is 10th in Fortune's Most Admired Companies list (as of 2007).]
P&G is credited with many business innovations including brand
management, the soap opera, and "Connect & Develop" innovation.
According to the Nielsen Company, in 2007 P&G spent more on
U.S. advertising than any other company; the $2.62 billion it spent
is almost twice as much as General Motors, the next company on the
Nielsen list.[ P&G was named 2008 Advertiser of the Year by
Cannes International Advertising Festival..
History
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.[6]
Since both their industries used similar resources, the Panic of
1837 caused intense competition between the two and as a result it
led to discord with the family. Alexander Norris, their father-in
law decided to call a meeting where he convinced his new
sons-in-law to become business partners. On October 31, 1837, as a
result of the 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 soap that floats in water. 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 Arnett 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 Bluth 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; this placed their management in the unusual position of
testifying in court that they had entered into transactions 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 substitute for fat in cooking potato
chips and other snacks that during its development stages is known
to have caused anal leakage and gastro-intestinal difficulties in
humans. Procter & Gamble has expanded dramatically throughout
its history, but its headquarters still remains in Cincinnati.
{Source, Ohio History Central.}
In January 2005 P&G announced an acquisition of Gillette,
forming the largest consumer goods company and placing 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 divested Gillette's oral-care toothpaste line,
Rembrandt. The deodorant brands Right Guard, Soft & Dri, and
Dry Idea were sold to Dial Corporation. 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." ~
Wikipedia