4 Success Drivers There are six drivers of P&G’s success: consumer focus, strategic choices, operational  excellence, financial discipline, organizational structure and brand building capability. excellence, financial discipline, organizational structure and brand-building capability. Consumer focus.  The consumer is boss and we put the consumer at the heart of all we do.  First and foremost, this means getting the consumer value equation right on all our brands.  It also means delivering superior, consumer-meaningful innovation. Competitive pressures  make this a continuing challenge, but we are working hard in every part of our business to  deliver a continual stream of innovation that meets consumer needs in ways that reset  performance expectations and represent superior value. We are also making sure that P&G business leaders – including me – get out of the office  and into stores and homes to talk directly with people who buy and use our products. No  other real-world experience clarifies the choices we must make as much as these  conversations with consumers.  Strategic choices.  We’ve focused on P&G’s core categories, leading brands, and the biggest  retail customers and country markets. And, we’re investing in faster-growing, higher-margin,  more asset-efficient businesses. A good example is the acquisition of Clairol, which  complements the core Hair Care business and helps P&G enter the fast-growing hair colorant  category. Strategic choices like these are paying off. For example, about one-fourth of total  gross margin improvement in fiscal 2002 came from our emphasis on faster-growing, higher- margin businesses such as Beauty Care and Health Care. Operational excellence.  Execution determines success, and we’ve placed heightened  emphasis on operational excellence at P&G. Again, Clairol is a good example. We closed this  deal in less than six months and fully integrated business operations seven months later.  Most important, we accomplished a smooth integration and we’re on track to deliver the  committed synergy savings ahead of schedule. Financial discipline.  We have reinforced P&G’s long-standing commitment to financial  discipline. Our efforts are seen most clearly in the Company’s business results. Even before  the highly publicized accounting failures at several companies, we took a number of specific  Recent P&G innovations include  Pampers Baby Stages of Development  diapers, Crest SpinBrush and White  Strips, Olay Daily Facials and Total  Effects, Tampax Pearl, Tide and Downy  Clean Breeze, Swiffer and many others. Recent P&G innovations include Pampers  Baby Stages of Development diapers,  Crest SpinBrush and Whitestrips,  Olay Daily Facials and Total Effects,  Tampax Pearl, Tide and Downy Clean  Breeze, Swiffer and many others. Iams in North America is another great  example of operational excellence.  Starting with a 25,000 store, 3,000  truck launch – P&G’s largest ever –  Iams has delivered nine consecutive  quarters of market share growth. 