P&G in Japan

Why was SK-II so triumphful in Japan? assertion By based on seek of Japanese market, P&G made clear targeting and positioning, and true fresh wargons which fulfilled guests involve, built the effectual scattering. As a result, P&G could establish differentiation favours for the fol pitifuling. crossing Foaming corrade cloth , Elegant dispensing box Foaming massage cloth increase come up circulation through a massage period boosting skin clarity due to the microfibers ability to clean pores and trap dirt. determine Premium price Place Luxury and nice counter at part store Promotion Counseling by Beauty counselor, TV advertising, Beauty magazines exposition Targeting Positioning Affluent women aged over 30s prestigiousness skin cathexis Premium price R&D aggroup grocery store research catches up demanding Japanese women, Develop Technology excels Japanese competitors Sales Training lulu counselors, Promotion Counter institution might Q1. contd. What was the business clay sculpture behind the success? Statement SK-II s success is non only prestige skin care ingathering or advanced applied science but also its marketing approach to signifier the New brand.P&G succeeded to connect between the core technology or product concept and local anesthetic market. Through Japanese market among the homos toughest competitors, P&G developed potential source of intentions. In addition, SKII s marketing scheme built a new approach, Market research, Concept, Packaging, Positioning, Communications schema. It was a big challenge that P&G shifted from plenitude marketing, such as Olay brand, to Class marketing. SK-II s marketing strategy Description Market Research Concept Packaging Positioning Communication strategy Find the customer ineluctably, habits Japanese womens needs sensitive with skin condition abits five or six step cleaning fall apart customers, Specify attractive market Affluent women aged over 30s adjust the customer value Pr estige skin care growth design Build the differentiation Premium price Advertising feature the targeting customers role counter and installation Resource R&D Marketing R&D Marketing Technology Marketing Brand Sales soak up Channel Advertising Q2. How transferable is the model? The SK-IIs business model based on through production, advanced technology, marketing research and customer behavior.From this point if P&G Japan want to enter overseas market using this model they should exploit by exporting or by direct investment. Either case business model is transferable. tho main concern is the model could be successful as in Japan? SK-IIs success had been achieved in a culture where the customers, distribution channels, and competitors were different from in china and europium. For example Japanese customers to a greater extent educate, amount Japanese women spent 4. 5 minutes on her face cleaning regime, and most sophisticated users of beauty products in the world.Other hand in chinaware customers due to Olays education recently moved from a trip the light fantastic toe skin care process to a three-step cleansing and moisturizing process. But strange mainland mainland China, Europe had a large and sophisticated group of beauty-conscious customers who is already safe a multistep regimen. As we see it is model is transferable but they give birth to modify some of models characteristic depending on customers behavior, competitors and market factor. P&G Japans competitive advantage is firm-specific but SK-IIs advantage is country-specific. How to transfer SK-IIChina Advantage The company had led with beauty products when entered this huge market galore(postnominal) woman took their fashion cues from Tokyo Wealthy China concentrated in Shanghai, Beijing, and Guangzhou Prestige beauty-counselor, TV advertisement Europe European customers are educated and already using multistep regimen. Also fine-fragrance business was beginning to do rise Mass- marke t Cost of television or print ads in Europe prohibitive. But sales force staff selling instanter to department stores. Target Promotion Q3. What should P&G s expansion strategy be in rolling out SK-II? We recommand P&G to directly invest in this market by focusing only on Marketing and Distribution to roll out SK-II (a special product) in a foreign market. It should not be an advantage for P&G to compass subsidiaries, or to license or to franchise because resources and capabilities of SK-II are located in Japan. It would be difficult to find same raw materiels to produce SK-II in another country. Exporting SK-II in a foreign market leave behind be better, for that they should emphasize on Differentiation advantage, Changing customer behavior, product positionning, Pricing policy, Advertisement, Counseler teamQ3. Contd. Which country should be the priority? Porter field diamond analysis Supporting Industries Superior in-store infrastructure Counseling counters decorativ e R&D centre MDO, Max factor Strategy, Structure and contest exalted number of house servant competitors with high innovation. Tough competition charge of prestigious foreign brand Intense, established, well respected , high hold out and famous competitors Limited competitors in high-cosmetic market which can lead to low innovation and learning make betterment as well as an opportunity to easily reach a huge market for P&G Country Factor ConditionDemand Conditions Japan High R&D technology and innovative. Skin care workd labor force Home- magnanimous resources comparative advantage Sophisticated and wealth customers Slow market growth trend High potential in other skin care solution irritable to the quality of the product Sophisticated customers New kind of advertisement Educate costumers to help them know what is SK-II, and how to use it 30-40% cosmetic industry growth Chinas P&G skin care sale showed 28% growth rate High return on investment pricy positioning and targetin g to reach wealth costumers Differentiation advantage Home grown skin care technicians.High labor cost Europe High retail merchant network MDO China Beauty assistance for superiorcounter cosmetic New product that will involve changes in costumers behavior (innovative product) High growth in retailing such as increasing number of department stores. to a greater extent counters and and beauty counselors MDO CHINA should be P&Gs priority. A biggest market near to P&G Japan and opportunity to lard P&G extensive technological ressources Beijing and shanghai are best location to reach an elite consumer but counterfeit is a huge problem Rigidity of the system is a characteristic of Chinese governement, high import duties 35 to 40 %China China MDO cover by GBU A Target to acces to prestigious customers and a new research field concerning SK-II (unmet need) , a second security base in Asia regarding the instability of Japanese market Differentiation advantage , SK-II is considered as a p remium product Sales may be $ 10 to $15 zillion over first 3 years against $1 to $1. 5 jillion of losses over 3 years Q4. What is your assessment of Jagers strategic opening? Why did he emphasize worldwide innovation? How does the initiative address barriers to worldwide innovation and learning?The strategic initiative denominated administration 2005 aimed to rarify P&G worldwide presence. By separating the organization in business units, service functions and market segments (MDOs) the company achieved ability to focus on exploring market potentials. Innovation was a major point of the initiative and helped P&G to obtain a rapid development of new products globally. With this initiative, P&G could develop competitive advantage by identifying emerging needs in different places while responding to them through internal capabilities and diffusing the way out to the rest of the business.Several management changes in the company supported the initiative agriculture Changes (cult ural revolution within P&G) Company culture was slow, conformist and danger adverse, making P&G vulnerable to competition. By changing norms and practices, Jager created a culture which encourages risk taking, faster decisions and innovation. This change was fundamental to achieve a fast worldwide innovation mechanism within P&G. Processes Changes Employees hire became focused on performance, reinforcing risk taking culture.Also, by extending the reach of the derivation option plan to all employees, a positive sense of self-possession was created among P&G workers. Organization Structure Changes spherical Business Units (GBUs) fictional responsibility for profit, product development and marketing of their respective categories worldwide. Through this modification, P&G was able to delegate responsibilities for developing and rolling out new products. Standardization in manufacturing was achieved, bureaucracy was eliminated and accountability increased. Nevertheless, the change created a entangled organization structure were relationships were not clear.Managers had to adjust to this change. In general, the initiative allowed P&G to adapt core technologies or product concept to local markets, facilitating easier market penetration. Q4. Contd. What is your assessment of Jagers strategic initiative? Why did he emphasize worldwide innovation? How does the initiative address barriers to worldwide innovation and learning? The emphasis in worldwide innovation was held because Jager identified that without a major- in country product development capability, P&G could not respond to the Japanese customers demands and competitors. proceeds development was needed, not only in Asias markets but even worldwide, to avoid the Japanese experience in new markets. He wanted to address newer consumer trends new technologies that may be developed in various parts of the world. Worldwide innovation and learning barriers were intercommunicate with integrated business pla nning process, organization structural change to improve communication, and learning sharing through GBUs and MDOs.Identifying and recognizing different customers needs and addressing them through new product development processes has become an objective of P&G after restructuration, addressing innovation through learning. Q5. As Paolo DeCesare, what would you recommend to the Global Leadership Team in your SK-II presentation? What is the set of factors you would consider in developing your recommendation? We would like to recommend P&G GLT to expand in China for SKII product line.Factors influencing the recommendation Potential Market sizing Determine the market size, growth potential in future mathematical product Fit How the product fits into the market, define our unique selling point Product Competitiveness know the competitors, Bargaining power of customers, suppliers, threat of any product substitute Entry Strategy find barriers to entry, know Country rules and regulations, bother to distribution channels measure of entry product climate for beauty related products Cultural differences Different consumer behaviors / workplace practices Administrative constraints Local content, preferences for domestic competitors in the form of subsidies and favoritism in regulation and government procurance Economic differences Consumer incomes, cost and quality of natural resources, cost and quality of gentleman resources Q5. contd. What would be your supporting reasoning for the recommendation?Potential Market size of it Japan Market Growth is becoming saturated, so globalizing SK-II in a growing market is advantageous China 1. 2 billion population, the largest open market, Annual growth rate high 30 40% Product Fit SK-II is able to supersede Olay as the premium skin care choice in China, and counter the entry of non-mainland retailers carrying Olay as a tax write-off product Product competitiveness SK-II will be in a less competitive market in China than it faces in Japan, or might encounter in Europe Entry strategy The China entry strategy of test counters in Shanghai is promising Timing Good timing as China economy is growing and more awareness among affluent society for beauty related products