Selective Strategy

21 September 1999

Procter & Gamble Hygiene and Healthcare Ltd. formerly P&G India, has identified healthcare and feminine hygiene as the long-term areas of growth. It has discontinued its arrangement with P&G Home Products, for the manufacture of shampoo in the current year. This is following a change in the product formulation of shampoos by P&G Home Products which required massive additional doses of capital, which it is learnt, the company was not ready to commit.

The termination of the agreement will affect the company’s sales by Rs 14 crore in the second half of 1999-2000.

PG Hygiene and Healthcare is in charge of the Vicks brand of healthcare products, the Whisper brand of feminine hygiene products, Old Spice Men’s toiletries and Clearasil. Until April this year, the brand of medicated shampoo, Mediker, was also in the company’s portfolio when it was sold off to Marico Industries. The company has also entered into a distribution-cum-marketing tie-up with Marico for Clearasil and Old Spice Men’s toiletries.

PG Home Products is in charge of the Ariel brand of detergents--Ariel Compact, Ariel Gain and Ariel washing bar, It also has the Pantene Pro V and Head & Shoulders shampoos and Camay soap.

PG Health and Hygiene has been slowly limiting its focus to just two brands--- Whisper and Vicks---which it feels have the potential to become market leaders. Over the years it has gradually divested out of businesses which it considers non-core areas. It sold its detergents business to P&G Home Products, the wholly-owned subsidiary of Procter &Gamble Co, US, in 1993. This was followed by the transfer of distribution rights for brands such as Clearasil and Old Spice to Marico Industries. The anti-lice shampoo brand, Mediker, was also sold to the same company for Rs 10 crore.

P&G Co. US operates in India through two subsidiaries: PG Hygiene and Healthcare and PG Home Products. While the former is a listed company on the Indian bourse in which the parent company has a 65 per cent equity holding, the latter is unlisted and is a wholly-owned subsidiary of the American company .