It's no secret that P&G is an ambitious company that sets ambitious goals for itself and a plan for achieving them. CEO A.G. Lafley has notified Wall Street that he is targeting annual corporate revenue growth between 4 and 6% each year, and is aiming to make P&G a $100 billion dollar company by 2010. No small feat for such a mature company.


This begs the question: where is P&G looking for growth opportunities among its many divisions? According to a recent article, P&G's Next Frontier in the Cincinnati Enquirer, P&G's corporate hometown newspaper, the company sees great opportunity in its lowkey Professional division. Apparently, P&G Professional has been something of a "misfit stepchild", getting lost among the corporate giant's many CPG brand behemoths like Tide, Pringles and Pantene.
Something has changed at P&G in regard to its commercial sales division. The Professional unit has been totally reorganized and with renewed focus and energy, it has quietly become one of the fastest growing business units within the company. While it may not seem glamorous, there is a lot of business to be had in selling cleaning products to hotels, restaurants, educational institutions and hospitals.
According to Norm Mayrhofer, the P&G executive who heads up the Professional division, there is great potential to sell many more customers. P&G Professional now sells to about 200,000 customers out of an estimated 1.5 million businesses. While consumer home cleaning products are growing at an estimated 2-3% annual rate, professional cleaning products are growing at 3-5% annually. And many of the service providers and institutions the professional division services are not affected by recession in the general economy.
While P&G has significant competition in the professional cleaning products arena, the company feels that with commitment and focus, it can gain significant market share here. I, for one, would not bet against P&G making that happen. All very attractive reasons to grow the P&G Professional division.
Bill Schmitz, an analyst for Deutsche Bank Securities in New York, follows P&G closely. "It's a huge opportunity. . .If they (P&G) could ever brand that part of their business, it could be huge." Mayrhofer began his career at Procter & Gamble in sales, rather than marketing.
Questions:
1.
What do you think of Schmitz's assertion that this division might grow larger and faster in the hands of P&G's vaunted brand managers? Or, do you think a conventional sales mentality is more in order to sell and grow a B2B division?
2.
Would you be more likely to stay at a specific hotel chain, for example, because you knew they used P&G branded detergents and cleaners? Or is that unimportant to you?
I'd love to hear your thoughts.