Procter & Gamble

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Procter & Gamble Company
Type	Public (NYSE: PG)
Founded	1837
Headquarters	One Procter & Gamble Plaza, Cincinnati, Ohio, USA 45202
Key people	A. G. Lafley, Chairman and CEO
Industry	Consumer goods
Revenue	▲ US$76.476[1] billion (2007)
Net income	▲ US$10.340[1] billion (2007)
Employees	138,000
Slogan	Touching Lives, Improving Life.
Website	www.pg.com

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 2007, P&G is the 25th largest US company by revenue, 18th largest by profit, and 10th in Fortune's Most Admired Companies list (as of 2007). ^[2][3]. 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.^[4] P&G was named 2008 Advertiser of the Year by Cannes International Advertising Festival. ^[5]

Contents 1 History 2 Operations 2.1 Management and staff 2.2 Procter & Gamble brands 2.3 Procter and Gamble Functions 2.4 Procter & Gamble Productions 3 Controversies 3.1 Logo controversy 3.2 Toxic shock syndrome and tampons 3.3 Research 3.4 Environmental record 3.5 Animal testing 4 References 5 External links 5.1 Criticism

[edit] 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.^[7] 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.^[8]

[edit] Operations

Effective July 1, 2007, the company's operations are categorized into 3 "Global Business Units" with each Global Business Unit divided into "Business Segments," according to the company's June 2007 earnings release.

• Beauty
  • Beauty segment
  • Grooming segment
• Household Care
  • Baby Care and Family Care segment
  • Fabric Care and Home Care segment
• Health & Well-Being
  • Health Care
  • Snacks, Coffee and Pet Care

[edit] Management and staff

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, Margaret Whitman, and Brian Bowns. Norman Augustine will be retiring from the Board following the Company's October 2007 meeting^[9].

In 2007, the P&G's Canadian division was named one of Canada's Top 100 Employers, as published in Maclean's magazine, the only consumer products company to receive this honor.^[10]

[edit] Procter & Gamble brands

Main article: List of Procter & Gamble brands

23 of P&G's brands have more than a billion dollars in net annual sales and another 18 have sales between $500 million and $1 billion.

Billion dollar brands

• Always is a brand of feminine hygiene products, including maxi pads, pantiliners (sometimes called Alldays), and feminine wipes, produced by Procter & Gamble.--See also Brand homepage; related trademarks: Ultra Thins; Flexi-Wing; Maxis; Alldays; CleanWeave.
• Ariel is a brand of washing powder/liquid, available in numerous forms and scents.
• Actonel A brand of Osteoporosis drug Risedronate.
• Bounty is a brand of paper towel sold in the United States, Canada. P&G sold the brand in the British Isles.
• Braun is a small-appliances manufacturer specializing in electric razors, coffeemakers, toasters, and blenders.
• Charmin is a brand of bathroom tissue and moist towelettes.
• Crest is a brand of toothpaste.
• Dawn is a brand of dishwashing detergent.
• Downy/Lenor is a brand of fabric softener.
• Duracell is a brand of batteries and flashlights.
• Folgers is a brand of coffee.
• Gain is a brand of laundry detergent and fabric softeners.
• Gillette is a safety razor manufacturer.
• Head & Shoulders is a brand of shampoo.
• Iams is a brand of dog and cat foods.
• Olay is a brand of skin lotion.
• Oral-B is a brand of toothbrush.
• Pampers is a brand of disposable diapers or nappies (UK).
• Pantene is a brand of haircare.
• Pringles is a brand of potato crisps in many flavours.
• Tide is a brand of laundry detergent.
• Wella is a brand of cosmetics.

[edit] Procter and Gamble Functions

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Consumer Market Knowledge
Customer Business Development
Finance and Accounting Management
Human Resources
Information and Decision Solutions
Marketing
Product Supply
Purchases
Research and Development

[edit] Procter & Gamble Productions

P&G produced and sponsored the first radio opera soap operas in the 1930s (Procter and Gamble's being known for detergents (soaps) was probably the genesis of the term "soap opera"). 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, are still on the air today and are produced by Procter & Gamble Productions. The serial The Young and the Restless also is regularly sponsored by products from Procter & Gamble, as well as other daytime serials.

List of past serials produced by Procter and Gamble:

• Another World
• Lovers and Friends
• The Brighter Day
• The Edge of Night (The title sequences were shot in Cincinnati which stood in for the locale of the series, Monticello)
• The First Hundred Years
• For Richer, For Poorer
• From These Roots
• Search for Tomorrow
• Somerset
• Texas
• Young Doctor Malone

According to the CLG Wiki, the 1985 logo used during these debuts:^{[citation needed]}

• Another World - February 14, 1985
• As The World Turns - Fall 1985
• Search for Tomorrow - February 26, 1986
• Guiding Light - Fall 1986

A new Procter & Gamble Productions logo with new accompanying music debuted on August 6, 2007 after the serials As the World Turns and Guiding Light. The logo appeared some weeks back on the CBS website after the web-streamed episodes.

Procter & Gamble also was the first company to produce and sponsor a prime-time show, a 1965 spin-off of the daytime soap opera As the World Turns called Our Private World. PGP also produced Shirley, a prime-time NBC series 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 Sony Pictures Television (although P&G was uncredited in the series). It was also produced for the 1993 TV movie Triumph of the Heart co-produced by The Landsburg Company.

In addition to self-produced items, Procter and Gamble also supports many Spanish-language novelas through advertising on Univision, Telemundo, Telefutura, Azteca and many more channels. Procter and Gamble was the one of the first mainstream advertisers on Spanish-language TV during the mid-eighties.^{[citation needed]}

[edit] Controversies

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[edit] 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 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 when viewed from inside the logo, 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. 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 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.^[11]

As stated in one of the resulting lawsuits, the logo originated in 1851 as the symbol for their Star brand of candles. It was later altered to show the man in the moon overlooking 13 stars, which were meant to commemorate the original 13 colonies. Procter and Gamble v. Amway 242 F.3d 539

An example of one such rumor was the fabricated account that the president of P&G had appeared on a Saturday edition of the Phil Donahue show. He 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 never ran on Saturdays. Later variations of this rumor replaced the Donahue show with Geraldo Rivera's show.^[12]

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, and up until 2004, it appeared at the end of each commercial in Japan.

The original logo still appears on Procter and Gamble stock certificates as of this date.

A Dilbert strip pokes fun at this controversy. In the strip, Dilbert asks "Phil, the Prince of Insufficient Light" what he does for money. Phil responds, "Corporate sponsorship. Procter and Gamble pays me to stay away from them."

[edit] Toxic shock syndrome and tampons

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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 and Gamble.^[13] The Rely tampon was so super-absorbent that one by itself could in fact hold one woman's entire menstrual period. Unlike other tampons made of cotton and rayon, Rely used carboxymethylcellulose and compressed beads of polyester for absorption. The materials used in Rely were causing an increase in the thickness of fluid inside the vagina, resulting in more toxins being released.

The slogan Procter and Gamble used for the product is ironic in retrospect, "Rely. It even absorbs the worry."

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 and 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^[14].

[edit] Research

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 (Collated Media Reports), and more recently on a blog Scientific Misconduct Blog

[edit] Environmental record

Researchers at the University of Massachusetts Amherst have identified Procter & Gamble as the 52nd-largest corporate producer of air pollution in the United States, with roughly 350,000 pounds of toxic chemicals released annually into the air.^[15] Major pollutants indicated by the study include manganese compounds, sulfuric acid, epichlorohydrin, and bromine. ^[16]

[edit] Animal testing

P&G sometimes conducts research using animals to demonstrate safety or efficacy of their raw materials and products.^[17] This has led to a world-wide campaign to raise public awareness and to stop P&G being involved in animal testing. The campaign is led by Uncaged Campaigns in the UK and Stop Animal Exploitation Now in the USA.^[18] On the other hand, P&G was recognised by the Humane Society of the United States for "advancing alternatives to animal testing".^[19]

[edit] References

• Soap opera: the inside story of Procter & Gamble, by Alecia Swasy. Publisher: New York : Times Books, c1993. ISBN 0-8129-2060-0. LCC: HD9999
• Lawyers and Settlements 2006 October 26
• National Medal of Technology 1995

[edit] External links

• pg.com: Procter & Gamble Web site
• Science-in-the-Box, a website providing "the science behind P&G products"
• "The truth about Iams" (iamstruth.com, a Procter & Gamble site)
• Procter & Gamble's Environmental Quality Policy and Perspective

[edit] Criticism

This article is missing citations or needs footnotes. Using inline citations helps guard against copyright violations and factual inaccuracies. (December 2007)

• FSU PowerPoint "What Stinks" from a San Francisco State University website
• Uncaged anti-vivisection campaign from uncaged.co.uk
• Boycott Procter & Gamble from boycottpandg.co.uk
• Procter & Gamble in the McSpotlight, from McSpotLight.org
• Our Polluted Environment a Yahoo! group
• Scientific Misconduct from scientific-misconduct.blogspot.com
• Procter and Gamble Animal Tests Exposed from pandgkills.com

v • d • e 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 · Aussie · Bounty · Braun · Camay · Charmin · Cheer · Clairol · CoverGirl · Crest · Downy · Dreft · Duracell · Eukanuba · Fairy · Febreze · Folgers · Gillette · Head & Shoulders · Herbal Essences · Iams · Ivory · Joy · Luvs · Max Factor · Metamucil · Mr. Clean · Noxzema · Olay · Old Spice · Oral-B · Pampers · Pantene · Pringles · Puffs · Pur · SK-II · Swiffer · Tampax · Tide · Vicks · Wella · Zest
Annual Revenue: $76.4 billion USD (▲10% FY 2006) · Employees: 110,000 · Stock Symbol: NYSE: PG · Website: www.pg.com

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