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P&G, best known as the maker of Duracell batteries, Pringles and Pantene shampoo, believes that introducing new products in emerging economies will compensate slow-moving sales in the United States and other developed countries.
At the Barclays Capital Conference held in Boston, Chief Executive Bob McDonald informed investors that Procter and Gamble Co. had increased sales in Brazil, Russia, India and China by expanding product categories, from an average of 8 per country to 20.
According to Bob McDonald this development has been ongoing for 18 months and has “driven strong historical top-line growth even higher.”
P&G predicts that the gutsy move will increase its annual $82.6 billion earnings by 5 percent to 9 percent in the upcoming year, even though growth in Europe, Japan and the United States will decrease significantly. On the contrary, Cincinnati-based Procter and Gamble Co. estimates that revenue in emerging markets will increase considerably, at a double-digit percentage.
The company has launched such household names as Head & Shoulders and Olay in Brazil and Crest and Oral-B teeth care products globally.
Procter and Gamble Co. has teamed up with Jerusalem-based Teva Pharmaceutical Industries Ltd. in order to expand their sales in consumer health care. In a News Release made public by P&G late in March, the company states that “OTC (over the counter) health care medicines offer significant growth potential for both companies in developed and emerging markets.
The companies expect to stimulate faster growth in the nearly $200 billion OTC market as the global population continues to age, consumers increasingly focus on quality of life and wellness and more consumers personally manage their family’s health care choices and rely on trusted brands. In addition, economies in emerging markets continue to grow quickly and consumers are gaining purchasing power.”
The partnership will boost the global reach of OTC medicines, developing P&G’s market share of 6 percent. CEO Bob McDonald considers that “this combination of capabilities is unmatched … and may be unmatchable.”
P&G’s international Olympics Sponsorship will also bolster sales. According to the Associated Press, the “Thank You, Mom” U.S. Marketing Campaign during the 2010 Vancouver Winter Olympics bolstered sales by $100 Million in North America and P&G hopes to strike lucky twice as they prepare for the 2012 London Summer Olympics.
They ascertain to increase returns as they cut costs, become more productive and efficient, as well as produce new products from an innovative pipeline.
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