American FMCG giant, Procter & Gamble has reported a 14.6 percent profit in Q4, but saw a double digit decline in its beauty net earnings. The company is currently looking at the overseas market, as part of its long-term growth strategy.
“We intend to move the center of gravity of the company more towards Asia and Africa, where the babies are being born, and households are being formed. That’s where the future is, as we try to get to all the people on the planet,” said Bob McDonald, the Chairman, President and CEO of Proctor & Gamble.
The company now reaches 4.4 billion out of the nearly 7 billion people across the globe. To widen its reach, P&G invested $2 billion on research and development during fiscal 2011. The company also spent $9.3 billion, or 11.3 percent of sales, on advertising during the same period, with its CFO, Jon Moeller, commenting, “As we are fond of saying, promotion wins quarters, innovation wins decades.”
McDonald reiterated that despite their challenges domestically, both Olay and Pantene are growing exponentially outside North America. For instance, in fiscal 2011, P&G introduced Olay to 16 new countries, including Brazil and South Korea, and upgrades to the Pantene haircare line drove sales past $1 billion in Asia. The company is working towards improving the performance of the two brands in the U.S., as Olay’s sales slowed ahead of a reformulation of Olay UV, and Pantene failed to gain traction after a relaunch in April 2010. Pantene responded by introducing additional items, including two-in-one shampoo-and-conditioners and larger-sized items — backed by a new marketing campaign.