P&G India reorganizes operations

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BOMBAY -- Procter & Gamble India, a subsidiary of the U.S. consumer products marketer, has begun restructuring its business to protect its hygiene and health care brands from competition and in line with a global revamp, shareholders were told at the company annual meeting in Bombay.

Chief among the initiatives are the clubbing of Vicks Vaporub, Vicks Action 500 and Vicks Cough Drops into a single brand valued at $44 million; a new focus on the Whisper feminine hygiene brand, which is under onslaught from rival Johnson & Johnson's upscale and cheaper Stayfree and Carefree variants; and a renewed interest in the after-shave lotion segment through the trusty Old Spice brand.

To reflect the new order, which is in line with Cincinnati, Ohio-based Procter & Gamble Co.'s Organization 2005 worldwide revamp effort, Procter & Gamble (India) has changed its name to Procter & Gamble Hygiene and Health Care.

"In the Indian context, the restructuring was relevant because under the new world of Procter & Gamble, the focus will be on planning global, winning local," Bharat Patel, chairman and managing director of the renamed company, told shareholders. "Winning local is where we can contribute and draw benefit from the worldwide reorganization."

P&G India's sales rose 14% to $107 million in the year to June 30, 1998 and after-tax profits were up 32% to $10.5 million. Mr. Patel said the growth was primarily due to increased ad spending during the year.

P&G companies in India spent $21.5 million on TV and in press in 1997, up a whopping 111.8% from $10.1 million in the previous year, according to market researcher ORG-MARG's figures. The marketer is India's No. 2 ad spender.

But the P&G budget pales in comparison with top spender Unilever, whose Indian companies spent $147.1 million in 1997, up 93% from $76.2 million in 1996.

The main concern for P&G is to hold on to its current market share. Though it claims Whisper still holds a 52% share of the feminine hygiene market, the assault from J&J is relentless and the race is neck-and-neck.

The effort for Vicks will focus on increasing local consumption. At one time a near-monopoly in cough and cold relief, the brand today has yet to regain lost ground. A threat from Indian Shaving Products, a subsidiary of Boston-based Gillette Co., has forced P&G to sit up and push its Old Spice brand with extra vigour.

Procter & Gamble (India) some time back transferred ownership of key brands such as the Ariel detergent to Procter & Gamble Home Products, a wholly owned subsidiary of the U.S. parent. The collapse of a local joint venture with Godrej Soaps led to the total market rout of P&G's Camay brand in India, forcing the marketer to rely on Ariel, Whisper, Vicks and successful shampoos such as Pantene and Head & Shoulders.

Copyright September 1998, Crain Communications Inc.

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