Procter and Gamble co. also referred as P&G is a consumer goods corporation based United States. It was founded by William Procter and James Gamble the combination of their names forms the name of the corporation. The corporation has majored in various products ranging from cleaning agents, hygienic products and personal care. Previously the corporation also dealt with foods, snacks and beverages until Kellogg Company purchased the Pringles. In 2014 the company recorded an increased sale return of $83.billion which occurred after it has dropped some of products to focus on fewer profitable brands. After dropping some of the products it remained with only 65 brands to focus on. The reason to the process of cutting out some of the product was to maximize on profit since managing few products is less complex to manage and operate. The company expanded its roots in various countries in terms of both manufacturing and product sales making it an international corporation. The company started by majoring in cleaning products and toothpaste but in the late 1960s after a revolutionary product (pampers diapers) was introduced in the market it also engaged in the manufacturing and marketing of the product. Before this time disposable pampers were not popular and babies wore cloth diapers that leaked and were laborious to maintain. Albeit pampers posing an environmental disadvantage of more waste which required landfilling, they provided a very convenient and convenient and alternative option.
To significantly increase the company’s profits, Procter & Gamble acquired several companies that diversified the product line. The company has acquired and adopted manufacturing and marketing of various products such as Gillette razors, Electric operated toothbrush, Duracell and deodorants. The company looks at the most required product and invest largely in it this makes the company maximize in profits. The company dominates in most of the consumer products categories and it also makes its brand management decisions worth of study. The merging of this corporation with other companies has as well contributed largely in its success (Dyer, et al, 2015).
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The company has over the past recent years undergone various structure changes to increase on their profit. It dropped over a hundred brands to focus on only 65 brands in 2014. In 2015 the company sold the U.S liquid inhalant business. In the same year the company announced the sale of its 43 beauty brands as it cited sluggish growth of the beauty division and the sale completed in 2016. In 2016 it transferred Duracell to Berkshire Hathaway through shares exchange (Dyer, et al, 2015).
The trends in macroeconomic variables affect demand and supply of products in various ways. Three of such macroeconomic variables include unemployment, GDP growth, and inflation. The increase in inflation results in more or increase in prices hence lower demand than supply. Higher GDP results into higher income hence greater demands than supply. The increase in unemployment results in low income which results into low demands as compared to supply. Such macroeconomic variables would affect the demand and supply of Pampers, just like other products, in United Sates which experiences fluctuations every year in the three variables.
For the last three years the GDP, unemployment, and inflation have varied as shown in the tables below:
GDP
| GDP | Gross Domestic Product, Billions of Dollars, Quarterly, Seasonally Adjusted Annual Rate |
| Frequency: Quarterly | |
| observation date |
GDP |
|
2014-01-01 |
17025.2 |
|
2014-04-01 |
17285.6 |
|
2014-07-01 |
17569.4 |
|
2014-10-01 |
17692.2 |
|
2015-01-01 |
17783.6 |
|
2015-04-01 |
17998.3 |
|
2015-07-01 |
18141.9 |
|
2015-10-01 |
18222.8 |
|
2016-01-01 |
18281.6 |
|
2016-04-01 |
18450.1 |
|
2016-07-01 |
18675.3 |
|
2016-10-01 |
18869.4 |
(Fred Economic Data: Gross Domestic Product. 2017)
Unemployment
| Series title: | Unemployment Rate |
| Labor force status: | Unemployment rate |
| Type of data: | Percent or rate |
| Age: | 16 years and over |
| Years: | 2014 to 2017 |
|
Year |
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
| 2014 |
6.6 |
6.7 |
6.7 |
6.2 |
6.3 |
6.1 |
6.2 |
6.2 |
5.9 |
5.7 |
5.8 |
5.6 |
| 2015 |
5.7 |
5.5 |
5.4 |
5.4 |
5.5 |
5.3 |
5.2 |
5.1 |
5.0 |
5.0 |
5.0 |
5.0 |
| 2016 |
4.9 |
4.9 |
5.0 |
5.0 |
4.7 |
4.9 |
4.9 |
4.9 |
4.9 |
4.8 |
4.6 |
4.7 |
| 2017 |
4.8 |
4.7 |
4.5 |
4.4 |
(Bureau of Labor Statistics. 2017).
Inflation (Consumer Price Index)
| Series Title: | All items less food and energy in U.S. city average, all urban consumers, not seasonally adjusted |
| Area: | U.S. city average |
| Item: | All items less food and energy |
| Base Period: | 1982-84=100 |
| Years: | 2014 to 2017 |
|
Year |
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
HALF1 |
HALF2 |
| 2014 |
1.6 |
1.6 |
1.7 |
1.8 |
2.0 |
1.9 |
1.9 |
1.7 |
1.7 |
1.8 |
1.7 |
1.6 |
1.8 |
1.7 |
| 2015 |
1.6 |
1.7 |
1.8 |
1.8 |
1.7 |
1.8 |
1.8 |
1.8 |
1.9 |
1.9 |
2.0 |
2.1 |
1.7 |
1.9 |
| 2016 |
2.2 |
2.3 |
2.2 |
2.1 |
2.2 |
2.2 |
2.2 |
2.3 |
2.2 |
2.1 |
2.1 |
2.2 |
2.2 |
2.2 |
| 2017 |
2.3 |
2.2 |
2.0 |
1.9 |
(Bureau of Labor Statistics. 2017).
Three observations and analysis can be deduced from the trends shown in the tables above. The GDP have been on the rise for the last three years has increased from 17052.2 to 18869.4. The unemployment rates have been on the decline from 6.6% in 2014 to 4.4% in 2017. However, the inflation has been on the rise from 1.6% in 2014 to 1.9% in 2017. The increase in GDP results in an increase in employment and the GDP per capita. However, it might as well lead to inflation as indicated because of the need for more money causing the government to print more.
The three macroeconomic variables noted above automatically have an impact on demand and supply of Pampers. The demand for Pampers has increased for the past three years because of the increase in the GDP. The increase in GDP results in increased employment and higher income. An increase in GDP per capita results in the power of purchase of these products. The increase in inflation results in higher consumer prices which lower the demand for Pampers from P&G.
References
Bureau of Labor Statistics . (2017). Retrieved 27 May 2017, from https://data.bls.gov/pdq/SurveyOutputServlet
Dyer, Davis; Dalzell, Frederick; Olegario, Rowena (2016). Rising Tide: Lessons from 165 Years of Brand Building at Procter & Gamble. Harvard Business School Press. ISBN 1-59139-147-4.
Gross Domestic Product . (2017). Fred.stlouisfed.org . Retrieved 27 May 2017, from https://fred.stlouisfed.org/series/GDP
Procter & Gamble Co (PG) . (2017). Reuters . Retrieved 27 May 2017, from http://www.reuters.com/finance/stocks/companyProfile?symbol=PG
