Ambitious course is charted by P&G. (Procter and Gamble Co.)

CINCINNATI - Procter & Gamble Co. (P&G) chairman and chief executive officer John Pepper and president and chief operating officer Durk Jager have set three ambitious growth goals for the consumer goods supplier. They want to double unit volume in 10 years, achieve share growth in most of P&G's categories and deliver shareholder returns that rank the company over time in the top third of its peer group.

"We know the leadership of our brands will continue to be the principal driver of P&G's growth in the years ahead," the executives state in the company's most recent annual report. While acknowledging the goals they have set are challenging, they note those challenges come with "extraordinary opportunities for growth - opportunities that we believe P&G is uniquely positioned to capture. Why? Because the winners of the 21st century will be the companies that are best at building leadership brands, and building brands consumers love is what we do best."

A key tactic in the firm's plan to achieve its goals will be a renewed emphasis on its ability to deliver breakthrough product innovations. There will be a far greater premium on leading-edge technology, the executives state. Brands that fall into the trap of merely shifting value with "me- too" line extensions will quickly fall behind the market leaders that create value with fundamentally better new products. "In fact, a hallmark of tomorrow's leading brands will be their ability not just to improve existing products but to create entirely new product categories with innovative technologies," Pepper and Jager contend.

Procter & Gamble has a long history of being a pacesetter in product development and today has more than 250 proprietary technologies on the market. It has been accelerating its pace of innovation, filing for tens of thousands of patents worldwide over the past several years.

Another critical component of P&G's forward-looking strategy involves working more closely with retailers to build consumer loyalty. "This is truly a breakthrough opportunity," says a company spokeswoman. "Until recently, manufacturers and retailers rarely saw one another as business partners. In many cases we saw one another as adversaries. As a result we created inefficiencies in the supply chain that increased consumer prices and eroded loyalty to brands and stores alike."

P&G's most far-reaching effort in that regard is its involvement in efficient consumer response (ECR). It is working closely with retailers and wholesalers to bring fundamental change to the way consumer products are introduced, marketed, shipped and sold. It anticipates that ECR will generate more than $30 billion in industrywide annual savings in North America. "By investing these savings to increase consumer value, we will build consumer loyalty and make our brands even stronger," the spokeswoman notes.

Always active on the new products front, P&G's most ...