Case study The P&G Fiasco

1. Presented By:
Pooja Prakash
Megha Chacko Peter
Jaison Jackson
Antony Tom
Institute Name:
Mar Athanasios CollegeFor Advanced Studies
Tiruvalla, Kerala

2.  The P&G – Godrej Alliance seemed to hold great promises but it failed miserably.
 P&G’s global strategy was that they would target all customers with a similar
product which was going to be huge failure as India’s customer base was
homogeneous and thus P&G neglected Godrej brands & their global strategy.
Therefore brands like Evita, Fresca, Trilo bar faced a decline in their market share to
an extreme low. Rising cost of production was putting a burden on the pricing of
the products.

3. The reason cited by the management for the breakdown of this alliance was that it
would enable both the companies to pursue the business opportunities thrown
open by liberalisation. P&GG was going to become a fully owned subsidiary of
P&G with Godrej selling it’s 49% share to P&G and it would retain most of the
sales force acquired from godrej soaps, while the soap brands which were licensed
to P&G would revert to Godrej soaps.

5. The factors that favoured P&G and Godrej alliance were as follows :
 Godrej was able to utilise its excess capacity which it had installed in
wake of higher demand for its good, while on the other hand P&G
was able to enter into Indian markets using the distribution channel
of Godrej.
 Godrej required financial and marketing restructuring which was
provided by this P&G - Godrej alliance. P&G also benefitted by
keeping it’s financial commitments low.

7. Reasons for breakdown of alliance :
( 1 ) Godrej brand were not properly promoted by P&G
( 2 ) Fall in the sales which lead to underutilisation of excess
capacity installed by godrej.
( 3 ) Godrej’s processing cost was very high as compared to
other brands.