The Hindu Business Line : P&G Hygiene strategy to step up sales

(From left) Mr Ashok Chhabra, Executive Director, Procter & Gamble Hygiene and Health Care Ltd; Mr Barat V. Patel, Chairman, and Mr R.A. Shah, Director, at the company's annual general meeting in Mumbai on Friday. — Shashi Ashiwal

Mumbai , Nov. 25

PROCTER & Gamble Hygiene & Health Care (PGHH) Ltd has adopted a four-pronged approach to spur higher use of its brands.

The company, which has brands such as Vicks and Whisper, has focussed on better understanding of the shopper and retailer, educate them about P&G brands, go in for breakthrough in-store concepts and value and pay attention to innovation.

According to Mr Bharat V. Patel, Chairman, PGHH, the company's growth has been driven by its focus on winning at two consumer moments of truth — the first moment of truth when a consumer selects the P&G brand over competing brands and the second moment of truth when the product is used at home.

The first moment is important because 75 per cent of all purchase decisions are made at the point of purchase, Mr Patel told shareholders at the company's annual general meeting.

"The dominance of the kirana or the mom-and-pop stores pose greater challenges in creating the right consumer interactivity with brands due to lack of counters, aisle space and a leisurely shopping experience," he said. India has seven million stores, second only to China, which has 8.7 million stores.

PGHH has dedicated multi-functional teams consisting of marketing, consumer market knowledge, R&D, IT and packaging design to help sales force understand the consumer as the shopper and the retailer as a partner and win at the first moment of truth, Mr Patel said.

The company has been educating retailers on category trends for both its core categories - health care and feminine hygiene.

"Breakthrough in-store concepts and value drive our sales," Mr Patel said. In terms of innovation too the company has been taking several risks, he said.

According to him, this four-pronged strategy has manifested in strong business "as evidenced in last year's growth in topline at 19 per cent, in bottomline at 35 per cent and brands achieving the number one status in market shares".

However, the company had reported a 13 per cent decline in profit after tax at Rs 25.83 crore for the first quarter ended September 2005 against Rs 29.62 crore in the year-ago period.

This was on account of royalty fees of Rs 5.7 crore on health care products while the year-ago quarter had an exception income of Rs 6.5 crore from one time sale of its Kalwe plant last year.

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