Consumer goods are goods that are sold directly to consumers. They can be used for personal, recreational, or corporate use, and are classified in three different ways. The first category is services, which include things like haircuts and car washes. The second is the durable goods sector, which includes products that don't necessarily have a shelf life—think of things like books, appliances, and cars. Then there are nondurable goods or the products meant to be consumed—usually with an expiration date—like toothpaste and razor blades.
The consumer goods market is very competitive. That's because consumer needs and tastes vary from country to country, from gender to gender, and by age. In order to get on top of the market, a company needs to be innovative and diverse with its product lines and brand names, and also needs a great marketing strategy.
One of the world's largest consumer goods companies is Procter & Gamble, which operates in almost every country in the world with a variety of popular brand names. But it's not the only company that's trying to race to the top of the consumer goods industry. Read on to learn more about the company as well as its main competitors.
- Procter & Gamble is a very well-known consumer products company, owning major brands like Crest, Gillette, Pampers, and Tide.
- The company has paid a dividend for nearly 130 years and has increased dividends for 63 consecutive years.
- Major competitors for P&G include Colgate-Palmolive, Church and Dwight, and Unilever.
- Nearly two-thirds of P&G’s revenues are generated from developed markets, while Unilever gets the majority of its revenues from faster-growing emerging markets.
Procter & Gamble: An Overview
Procter & Gamble (PG) is a multinational corporation headquartered in Cincinnati, Ohio. The company, founded in 1837, employs over 97,000 workers across the world except for Cuba and North Korea. The company is headed by chair, president, and chief executive officer (CEO) David S. Taylor, and vice-chair, chief operating officer (COO), and chief financial officer (CFO) Jon. R. Moeller.
P&G reported net sales of $67.7 billion for the fiscal year 2019. The company pays investors a dividend every quarter. As of April 2019, the company's quarterly payout was 75 cents per share. Shares traded around the $115-mark and the company's market capitalization hovered around $283.1 billion as of April 10, 2020.
Segments and Brand Names
The company has six business segments organized centered around its product lines. These include baby, feminine care, and family care, beauty, fabric and home care, grooming, and healthcare.
The company has a number of iconic, well-known brand names from laundry detergents and cleansers, to grooming and beauty products. Some of the most popular and well-recognized names include:
- Tide, Bounce, and Downy
- Bounty and Charmin
- Gillette and Venus
- Head & Shoulders
- Dawn and Febreeze
- Crest and Oral-B
According to the company's annual report, Pampers is P&G's largest brand name.
Global Markets and Competition
Procter & Gamble's market operations are divided into six different geographical segments:
- Greater China
- India, the Middle East, and Africa
- Latin America
- North America
P&G gets nearly 45% of its revenue from North America and some 23% from Europe. Nearly two-thirds of P&G’s total revenue is from developed markets. This is one of P&G's most significant problems—being concentrated in slow-growth markets, while rivals like Unilever are focused on driving growth and sales from emerging or developing markets.
Who Are P&G's Main Competitors?
As a whole, Procter & Gamble is undoubtedly one of the biggest consumer goods names around. But there are a number of different companies that aim to chip away at its segments individually. Notably, along with the big names noted below, Procter & Gamble also competes with countless smaller companies in the international segments in which it reports revenue.
Fabric and Home Care
This is the company's top-selling business segment, representing 33% of its net sales in 2019 with names like Tide, Bounce, Downy, and Febreeze. Procter & Gamble's major competitors in this segment include brand names like Palmolive, Ajax, and Fleecy from Colgate-Palmolive, Surf and Persil from Unilever, and Oxi Clean and the Arm & Hammer product line from Church and Dwight Co.
In the baby, feminine, and family care segment, major competitors include Colgate-Palmolive—with brand names like Tender Care—Unilever's Zwitsal, and Church and Dwight Co.'s Viviscal and Rephresh. This segment accounted for 27% of Procter & Gamble's 2019 net sales with brands like Luvs, Bounty, and Charmin.
P&G's beauty segment represented 19% of the company's net sales for the 2019 fiscal year. Avon is a major competitor to Procter & Gamble and is known as one of the world's largest direct-selling beauty, household, and personal care companies. The company uses salespeople—often referred to as Avon Ladies—brochures, and mailouts to advertise and sell its products.
Other names in the beauty industry that rival P&G include Colgate-Palmolive, Estee Lauder, Revlon, and Unilever.
This segment accounted for 12% of net sales in 2019. You'll probably recognize popular names like Vicks, Pepto Bismol, and Prilosec. But there are plenty of other companies that give P&G a run for its money. Major competitors like Colgate-Palmolive, Church and Dwight Co., Ecolab, Stepan Company, and United-Guardian.
Gillette is the dominant market player in the grooming segment. This segment accounted for 9% of Procter & Gamble's net sales in 2019. But Bic is one of its major competitors with a large international presence. This segment has also seen a rise in startups—notably, in the shaving space with names like Dollar Shave Club (now owned by Unilever). P&G purchased subscription-based grooming company Billie—one of the first for women—in January 2020 for an undisclosed amount.