Untapped product markets
What this means, says Panayotopoulos, P&G's vice-chairman for household care, the unit that makes up half of the company's annual sales, is introducing products in categories that competitors do not dominate, before taking those rivals on with competing products.
"You go for the low-hanging fruit first before you tackle where there are big walls," he says.
It is not necessarily easy. With sales last year of US$77,3bn, Cincinnati, Ohio-based P&G easily sells more than Anglo-Dutch rival Unilever (last year's sales: €39,8bn).
But P&G is seen as lagging its European rival in emerging markets, where the growth is to be found in the wake of the financial crisis.
Last year, 43% of P&G's sales came from North America and 32% from developing markets. This is a change from 2004, when it was 50% versus 21%.
However, in comparison with Unilever, which makes more than half its sales in emerging markets, it remains weak.
A frequent charge against the maker of Duracell batteries and Oral-B toothpaste is that it is less adept in emerging markets such as Africa and India than its European rival.
This clearly annoys Panayotopoulos.
"That's an old story. That was in the days when Unilever - and they're still playing that song - (and) these companies had the colonies," he says in an interview.
It's not just a Unilever refrain. P&G's "emerging-market sales have lagged peers", Goldman Sachs wrote in a research note last year.
P&G's US website has links to just three corporate African sites, Egypt, Algeria and Morocco (the latter two sharing a site), and no Indian link.
But there is change. Since 2004, P&G's revenue from "developing markets" - one of four geographical categories it breaks its sales into - has doubled from $10,8bn to $25,3bn.
The company said in December 2008 that "almost all" of the 20 new factories it would build over the next four years would be in emerging markets.
One of these is a recently completed $70m factory in Kempton Park that makes Pampers nappies - the brand has a 40% share of SA's market, Mr Panayotopoulos says - and will make other products, too, as the operation expands.
P&G did not enter SA with laundry detergents, an area dominated by Unilever's OMO, Skip and Surf brands. It did so with hair, beauty and hygiene products. With its new local plant, it will expand in the same way.
"There are still categories here where I think our competitors haven't built huge positions yet and where we can have a shot at growing the markets," he says.
But he will not say what. That would be too easy.
Source: Business Day
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