Macroeconomic variables affecting Head and Shoulders shampoo demand

Macroeconomic Variables of Interest to Proctor & Gamble's Head & Shoulders Shampoo

Founded in the 1830s by William Procter and James Gamble, Proctor & Gamble (P&G) has become a global leader in the consumer products industry today (P&G history, 2016). One of this company's best-selling and well-known products is its anti-dandruff shampoo, Head and Shoulders. This paper reviews the relevant literature to identify three macroeconomic variables, the consumer price index (CPI), the gross domestic Ppoduct (GDP) and unemployment levels in the United States that impact the supply and/or demand of this product for the past 3 years to date. An evaluation concerning how these trends will likely impact the supply and demand of Head and Shoulders shampoo as well as the financial performance of P&G is followed by a summary of the research and important findings concerning these issues in the conclusion.

Consumer Price Index

The U.S. CPI for the period from 2013 through 2015 is set forth in Table 1 below.

Table 1

U.S. CPI -- 2013-2015

Year

CPI Average

2013

2014

2015

Source: Bureau of Labor Statistics (2016) at http://data.bls.gov/

As can be seen from the data in Table 1 above, the CPI has increased by 40.96 points during the period from 2013 through 2015.

Gross Domestic Product

The U.S. GDP for the period 2013 through 2015 is set forth in Table 2 below.

Table 2

U.S. GDP -- 2013-2015

Year

GDP (in billions, U.S. current dollars)

2013

16,663.2

2014

17,348.1

2015

17,350.0

Source: The Statistics Portal (2016) at http://www.statista.com/statistics/188105/annual-gdp-of-the-united-states-since-1990 / (2013 and 2014) and CIA World Factbook (2016) at https://www. cia.gov/library/publications/the-world-factbook/geos/us.html (2015)

As can be seen from the data in Table 2 above, the U.S. GDP grew by $686.8 billion during the period from 2013 through 2015, representing a modest .96% increase.

Unemployment

Finally, the U.S. unemployment rate for the period 2013 through 2015 is set forth in Table 3 below.

Table 3

U.S unemployment rate -- 2013-2015

Year

U.S. Unemployment rate (year-end)

2013

6.7%

2014

5.6%

2015

5.0%