Procter & Gamble’s PUR Purifier of Water: How Global Corporate Philanthropy Builds Shareholder Value

by: Carol Hee, Lisa Jones Christensen

Publication Date: December 2, 2011
Length: 14 pages
Product ID#: 1-429-201

Core Disciplines: Base of the Pyramid, International Business, Social Impact

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Description

Over the last ten years, Procter & Gamble has helped to distribute over 200 million PUR packets, packets that are typically used by people who must draw their water from contaminated and foul water sources. PUR packets have been used to purify more than 2.4 billion liters of water, most often in rural locations in developing nations. However, since P&G had never promoted such a product in such disadvantaged markets (nor had any of its competitors), forecasting market size, gross margins, revenue, and sales for this potentially life-saving product was a difficult task, and P&G experiences several commercial setbacks.The program was successful at moving to a cost-recovery model through which non-profit partners purchase the product at cost ($0.035), then sell or donate it. As the program has grown exponentially, program leaders must now consider how to best communicate with stakeholders about the high value of a non-profit initiative inside P&G—a commercially-oriented, for-profit organization.

Teaching Objectives

After reading and discussing the material, students should:

  • Explain how a not-for-profit philanthropic effort can indirectly create shareholder value.
  • Choose appropriate metrics for evaluating not-for-profit philanthropic efforts, especially with respect to shareholder value.
  • Evaluate the personal and career management struggles that accompanies the decision to promote a contested product or process.
  • Build on their strategy, marketing, and sustainable enterprise skills to craft responses to Allgood’s (and P&G’s) current key challenges and dilemmas.
  • Desscribe the difficulties that firms encounter when they attempt to enter and serve the base of the pyramid or developing markets, particularly when it comes to measurement issues.
  • Evaluate the complex situations in which a large MNC must operate, in particular to discuss the differences in promoting a product versus a product and behavior change.
  • Examine potential conflicts between partner interests and corporate interests and expertise.
  • Discuss the role of commercial failures (from a strategy, marketing, and/or sustainable enterprise point of view--depending upon the class focus) and how they can relate to corporate CSR/ philanthropy strategies—to redefine “failure” and “success.”