What is the History of Procter & Gamble?

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Answered by: Clayton, An Expert in the Business and Finance Category
Procter & Gamble is the largest consumer goods company in the world and sells products under more than 50 brand names. The Procter and Gamble Company is today more familiarly known as P&G in most of the English-speaking world, and has grown from its humble roots as a Cincinnati soap maker to one of the 20 largest multinational corporations in the world (based on sales). P&G racked up over $76 billion in total sales in 2009.

P&G was founded in 1837 by William Procter and James Gamble, working-class immigrants from England and Ireland, respectively. William Procter was a candle-maker and businessman by trade, and James Gamble was a soap-maker who also became involved in the candle-making business. Messrs. Procter and Gamble met when they became brother-in-laws as they each married one of the daughters of successful Cincinnati businessman Alexander Norris. Mr Norris noted that both men were competing for the same raw materials (leftover fats from animal packing plants) and suggested that they form a partnership. Taking his advice, the men pooled their resources and the Procter and Gamble Company was formed with total assets of $7192.24.

Procter & Gamble was a highly successful business from its inception. Cincinnati was a regional hub for the animal processing and meat packing industries, so the raw materials for soap products were widely available and inexpensive. P&G developed a reputation for quality products and innovation in marketing in just a few short years, coming up with several new products, including the accidentally invented, but phenomenally successful, Ivory soap.

P&G's sales had reached $1 million by 1859 and the company already had 80 employees. With the invention and naming of Ivory soap by James Norris Gamble and Harley Procter in 1879, P&G's growth exploded even further and soon Procter & Gamble products were found in homes all across the United States. William Alexander Procter, the youngest son of the founder, became the first president of the company in 1890. He managed some remarkable growth during his 17-year tenure and was well regarded for his progressive labor policies (including employee profit sharing). William Cooper Procter took over from his father in 1907 and continued the tradition of progressive, employee-centered leadership. P&G developed Crisco shortening and the safety razor that would later become the world-famous Gillette razor during his tenure as president.

The first non-founding-family leader of the company was Richard R. Deupree, who became president of the company in 1930. P&G became an international company under his watch, purchasing the English company Thomas Hedley & Co., Ltd. P&G also introduced Dreft, the first synthetic detergent for household use, in 1933 under his watch, and soon there were a host of synthetic detergent products like the household cleaner Oxydol or the shampoo Drene available to American consumers. P&G was also among the first companies to sponsor radio shows known as "soap operas" that dramatically increased in popularity just a few years later with the advent of television.

Robert A. MacDonald became the CEO of Procter & Gamble in 2009, and P&G has begun a major rebranding and push into the growing markets of the developing world under his watch. He is assisted in this significant endeavor by an experienced Board of Directors including Meg Whitman (former CEO of eBay) and Kenneth Chenault (former CEO of American Express). It is still relatively early in this multi-year rebranding campaign, but international sales have demonstrating steady quarter-to-quarter growth since mid-2011.

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