Proctor and Gamble 2003 Annual Report Download - page 21

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P&G’s Market Development Organization (MDO) is a
unique, growing source of competitive advantage. MDO
professionals lead retailer and country business teams to
build P&G brands in the local markets, ranging from North
America to Greater China.
We combine deep brand and consumer knowledge
embedded in P&G’s Global Business Units (GBUs) with
local market knowledge in the MDOs. We bring together
initiatives from every GBU and create business-building
plans for retail partners in more than 160 countries.
As a result, we go to market as one company in every
country to help leverage scale and get the full benefit
of understanding what works and what doesn’t work
across categories.
The Market Development Organization focuses primarily
on winning the first moment of truth – when the consumer
chooses P&G brands at the retail shelf.
We have four key priorities:
Focus on the Big Opportunities. We focus on top P&G
brands in top countries with top retailers that account for
most of P&G’s business. Over the last year, the top 10
countries grew volume four percentage points faster than
the balance, and top 10 customers grew seven percentage
points faster.
Create Value for Consumers. We know we must
provide brands that represent good value for consumers.
Three years ago, too many P&G brands were failing this
test. Their prices were higher than competition, and
not justified by performance advantages that warranted
the premium. We’ve fixed that. Our brand pricing and
promotion strategies have been reviewed, changes made
and progress tracked. While there will always be strong
price competition, the vast majority of top brands in
major markets are now priced competitively, and will stay
priced competitively.
Create Value for Retailers. We’ve deepened P&G’s
extensive database of shopper research to help retailers
better understand the needs of shoppers and provide
shopping experiences that earn loyalty and generate
profitable sales. We’ve customized go to market plans
around the world to reflect the unique needs of retail
customers. For large global, regional and local customers,
we organize around geographic scope; we have individual
programs in place with virtually all our top retailers. For
developing markets, we tailor programs for very small stores
that are part of each retail landscape. As a result, we’re
seeing very positive business results in both developed and
developing markets.
Make Sure P&G Products are Available. We’re improving
availability and replenishment of P&G products on store
shelves. We’ve reduced the number of incomplete orders by
two-thirds. We’re developing in-store programs to reduce
out-of-stock products. Our vision is to create a retail
customer supply chain driven by consumer purchases rather
than factory production schedules.
P&G’s Market Development Organization is gaining
momentum. We have learned a great deal since designing
this unique organization in 1999. This knowledge is resulting
in better business plans, tighter customer relationships and
stronger, sustainable growth for P&G. We’re confident
we’ve only scratched the surface of what this organization
is capable of delivering.
We combine deep brand and consumer
knowledge with local market knowledge. We’re
confident we have only scratched the surface of
what this organization is capable of delivering.
R. Kerry Clark
President