P&G Plans Strategy To Boost Topline Growth

Mumbai, September 11: | Updated: Sep 12 2002, 05:30am hrs
Procter & Gamble Hygiene and Health Care Ltd (P&G) is chalking out a strategy aimed at enhancing its topline growth. It is targeting at increasing its distribution reach on the long-term objective of tapping the one billion consumer potential that exists in India.

Elaborating on these plans in his first media interaction since taking over as P&Gs managing director (India) in June this year, Shantanu Khosla said: There are learnings from my past experiences at other P&G assignments. India is a tough and challenging market. One word that aptly describes my plan for India is, growth. Mr Khosla did not elaborate on growth projections.

P&G has been operating in India for the last 10-12 years, and has been able to build stable equity in brands like Vicks, Ariel, Head & Shoulders, among others. The Cincinnati-based parent operates through two subsidiaries Procter & Gamble Home Products, which is wholly-owned, and Procter & Gamble Hygiene and Health Care, in which it holds 65 per cent. The latter reported a net profit of Rs 77 crore on gross sales of Rs 449.8 crore in the year ended June 2002.

We have already built a strong competitive advantage, and we would definitely look at the one billion consumer potential in India, which is the biggest advantage India has, as in China, said Mr Khosla. After the successful implementation of the Golden Eye distribution model, which was put in place by the companys former managing director Gary Cofer, the next move is to invest in distribution and penetration.

According to Mr Khosla, Golden Eye is the most efficient distribution system in the country. But this is not sufficient. The challenge is to win the hearts and minds of the consumer by being cost efficient. We are putting this in place and hope to accomplish the task in the next 2-3 years.

P&G had earlier pronounced that its strategy would largely revolve around the urban consumer, given the huge growth potential therein. Commenting on broad-basing of the strategy now, Mr Khosla said: Personally, Im not too much into this urban-rural divide. Availability is the key to meet consumers expectations. It is not an end, but it is an enabler.

Mr Khosla said that distribution is the key driver, and to increase its distribution reach is the challenging task, considering the countrys spread and the spread of the consumer, but it essentially is a necessity to enable products to get into the hands of the consumer.

Towards the end, Mr Khosla stated that understanding the consumer needs is of utmost importance. This requires us to put together a number of things, such as product performance, the right value proposition and building brand equity, he said, while adding, one needs to win to get there.

P&G already has reached a critical mass in penetration with its healthcare brand, Vicks, present in eight lakh outlets. The way we are going about this is not just targeting reach, but quality of service and efficiency in cost structure with which we are able to work with our retail customers, he added.

P&G operates in four focused categories in India, viz. healthcare, hygiene, hair care and laundry. P&G draws 70 per cent of its turnover from healthcare and feminine hygiene care businesses.

Mr Khosla did not dwell upon future plans on introducing related categories to the Indian market.