P & G u s e s E D L P , w h e r e i t l o w e r s t h e l i s t p r i c e o f o v e r 6 0 % o f i t ' s product line by 10 to 25% while cutting promotional allowances to thetrade.

The price cuts leave the overall cost of the product to retailer about the same as it would have been with the various trade allowancediscounts. P&G argues that EDLP eliminates the problems such as deal buying, l e a d s t o r e g u l a r l o w p r i c e s a t t h e r e t a i l l e v e l , a n d h e l p s b u i l d b r a n d loyalty among consumers.Yet the EDLP strategy has caused great controversy in the trade, whichdepends heavily on promotion to attract consumer. Some retailers took P & G p r o d u c t s o f f t h e s h e l f , o t h e r s c u t t h e i r a d s a n d d i s p l a y o f t h e company's brand. Retailers prefer to operate on a high/low strategy of f r e q u e n t p r i c e s p e c i a l s a n d a r g u e t h a t E D L P p u t s t h e m a t a disadvantage.Despite the criticism. P&G says EDLP is paying off and volume hasgrown faster in it's brands that have switched to the pricing strategy. P&G extended it's use of EDLP to international markets, including theU . K . a n d I t a l y . P & G c o n t i n u e s t o m a k e c h a n g e s i n t h e w a y s a l e s prom otions are being used by packaged goods marketers. The companyhas taken steps in recent years to simplify its promotional programme by 17

c u t t i n g b a c k o n m a n y t y p e o f p r o m o t i o n s i n c l u d i n g b o n u s p a c k s , premiums, coupons, and cent off packs. P&G has long been a bellwether for the packaged goods industry and its changes with regard to the useof consumers and trade promotions are likely to crate a ripple effect among other marketers. Target Costing: Pricing that starts with an ideal selling price, then targets costs that willensure that the price is met. Target costing reverses the usual process of first designing a new product, determining its cost and then deciding onthe price.P&G used target costing to price and develop its highly successful CrestSpin brush electric toothbrush.P&G usually prices its good at a premium. But with Crest Spinbrush, P&G reversed its usual thinking, it started with an attractive low market price, and then found a way to make a profit at that price.T a r e d c o s t i n g p r i c i n g h a s m a d e C r e s t s p i n b r u s h , o n e o f P & G m o s t successful new products ever. It has now become U.S.A 's best sellingtoothbrush. 18

Competition based pricing: Setting prices based on the prices that competitors charge for similar products. .P&G usually pay less attention to its own cost or to demand.The firm might charge the same as, more than, or less than its major rival-the HUL. 2.3 Product Decision: I t m a r k e t s t h e l e a d i n g b r a n d s i n 1 9 o f t h e 3 9 c a t e g o r i e s i n w h i c h i t competes .Its market leadership rest on several principle.

Customer Knowledge: P&G studies its customer -both final consumers and the trade-throughcontinuous marketing research and intelligence gathering, it prints itstoll free 800 number on every product. Long term outlook: It takes the time to analyze each opportunity carefully and prepare the b e s t , t h e n c o m m i t s i t s e l f f o r e t h e l o n g r u n t o m a k e t h i s p r o d u c t a success, it struggled with Pringles potato chips for almost a decade before achieving market success. 19

a strong existing brand names give the mew brand instant recognitionand credibility with much less advertising outlay. Multi brand strategy: It markets several brand in the same product category. It produces eight b r a n d s o f h a n d s o a p a n d six shampoo brands. Each brand meets a different consumer want and competes against specific competitors brands, each brand manager competes for company recourses. Morerecently, P&G has begun to reduce its va st array of products, sizes,flavors, and variety to bring down costs. Manufacturing efficiency and cost cutting: P&G reputation as aggregate marketing company's matched by itse x c e l l e n c e a s a m a n u f a c t u r i n g c o m p a n y , i t s p e n d s l a r g e s u m s developing and i m p r o v i n g p r o d u c t i o n o p e r a t i o n s t o k e e p s i t ' s c o s t among the lowest in the industry. Product Management: P&G has product management organization. Here the product manager d e v e l o p s a n d i m p l e m e n t s t r a t e g y a n d m a r k e t i n g p r o g r a m m e f o r a specific product or brand brand .It first appeared in P&G in 1929. A new 21