Procter & Gamble

Procter & Gamble Co. (P&G) {{nyse|PG}} is a global $60 billion (sales per year) consumer goods corporation based in Cincinnati, Ohio that manufactures a wide range of consumer products. The company has approximately 106,000 employees.

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, had settled earlier in Cincinnati and had married sisters. The two men decided to pool their resources to form their own company, formalizing the relationship on October 31, 1837.

Related Topics:
1837 - October 31

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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 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.

Related Topics:
Nineteenth century - 1859 - Civil War - Union army - Soap - Candles

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In the 1880s, Procter & Gamble began to market a new product, an inexpensive, yet high quality, soap. The company called the soap Ivory. In the decades that followed, Procter & Gamble continued to grow and evolve. The company became known for its progressive work environment in the late nineteenth century. William Cooper 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.

Related Topics:
Ivory - Profit-sharing - Workforce - 1887 - Strike

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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.

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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."

Related Topics:
Twentieth century - Crisco - Shortening - Vegetable oils - Animal fats - Market research - Soap operas

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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. 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. 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.

Related Topics:
Tide - Detergent - 1946 - 1950 - 1955 - 1957 - 1960 - Disposable diapers - Johnson & Johnson

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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 1996, Procter & Gamble made headlines when the Food and Drug Administration approved a new product developed by the company, Olestra. Olestra, also known by its brand name Olean, is a substitute for fat in cooking potato chips and other snacks. Procter & Gamble has expanded dramatically throughout its history, but its headquarters still remains in Cincinnati. {Source, Ohio History Central.}

Related Topics:
Folgers Coffee - Food and Drug Administration - Olestra - Potato chips

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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 {{ref|smale}}.

Related Topics:
Brand management - Cannibalizing the sales of another

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