P&G Japan SK-II Case Study
Up to 1984, P&G’s Japanese operation was a failure due to the following reasons: 1. P&G did not take the time to determine the local needs based on the culture and common practices amongst the Japanese people. The product development was based on Western markets and it was assumed that it would streamline itself to other areas of the world. An example cited in this case study was the use of tap water for laundry washes without implementing a range of temperatures. The P&G detergent “Cheer” did not do well as it was based on different temperatures. 2. Stagnation in innovation is a failure for almost any business. With technology always moving forward at a fast rate, it is
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P&G will need to keep up with technology and continue with new developments if they want to remain a leader in the prestige market in Japan. In terms of short term profitability, the Japanese market is unmatched. Cesare has forecasted an earnings growth potential of 200% in 6 or 7 years based off a $150 million sales level. However, the focus should be on the Chinese market based on the long term potential for growth and profitability. All the other major market players are already present in the market so P&G don’t want to fall too behind with their competitors. Although China has a relatively small subset of their population that can afford the expensive SK-II product, it also has the highest growth rate of skin care use at an astounding 28%. With China’s economy and GDP growing at a fast rate, the potential for more able consumers of the 1.2 billion residents is seemingly limitless. Following is the breakdown of the pro’s and con’s of entering each market.
China | | Pro’s | Con’s | * Prestige beauty segment growing at 30-40% per year * Relatively high level of facial cleansing product use in upper income tier * Cheap labor and marketing costs which will improve profit margins * Already have a presence in the market with Olay products and can implement the current market knowledge * Expected $10-15 mill sales in 3 years * Highest growth rate of sckin care market globally at 28% * 1.2 billion
The problem statement will be analyzed with respect to alternative marketing strategies available to P&G for launching the detergent. Consideration will be given onto whether the Vizir launch should be German-based or a Europe-wide and how this will affect standardization of the product in terms of product formulation, advertising, and promotion. The discussion shall
Neutrogena continues to be recognized for its acne-related products that are ranked second in the world (Euromonitor, 2014). However, experts forecast a slowdown in demand for acne treatments, with the share of such products in the broader skincare market expected to fall to less than 3% by 2018 (Euromonitor, 2014). Given the disproportionate amount of sales these acne treatments account for (Euromonitor, 2014), a fall in the demand for such products may have serious consequences for Neutrogena’s profit margins. Therefore, the very success of its acne line may eventually put Neutrogena at a disadvantage. Neutrogena should make concentrated efforts to diversify its source of earnings. In this paper, I will explore ways in which
25. The main challenge to ebusiness is the lack of growth in some sectors due to product or service _________.
Supplementary Material In each guideline, specific points must be adapted to reflect a company’s products and/or services. The decision as to the appropriateness of specific data and the depth of coverage depends on company objectives, product characteristics, and the country market. Some points in the guidelines are unimportant for some countries or some products and should be ignored. Preceding chapters of this book provide specific content suggestions for the topics in each
3. Why do you think entrepreneurship in a nation decline as its population ages? How could this impact global marketing?
Based on some of the findings from the tables above we also found that in skin care the most profitable area to expand.. Referring to tables 5, 6, 7 and 8 we see that the skin care industry is broken into face, hand and body care. The tables tell us that most sales are contributed by facial care products, and also the growth rate in this area is also one of the highest. This is the reason why facial care is analysed more in detail in the following pages. To illustrate this better refer to the following table.
1. (TCO A) The relationship between speed of innovation and product obsolescence is (Points : 5)
3. The ______ of an economy is its total annual output, measured by final purchase price.
The business that has been chosen in order to define the business environment is the Total face group. It is one of the listed ASX companies. The main area of the business of the company is providing various types of treatment of skin and other hair treatment through laser technology. It has various other competitors in the Australian market. The main customers of the business are the teenagers, men and women who are more concerned about the skin. The company offers various types of treatment of skin and hairs. The men and women between 30-70 age groups are the main customers (Movado and Rodrigo, 2001, p.171). Most of the customers of the company are located online as the company sells its products online to outside countries and to the people of
P&G need to work hard and do more research and development in order to produce higher quality, more innovative, and more unique in products in order to answer consumer’s need and compete with those major world brand competitors.
• 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 acquire 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 will be better, for that they should emphasize on: • Differentiation advantage, • Changing customer behavior, • Product positionning, • Pricing policy, • Advertisement, • Counseler team…
P&G Japan had been a minor contributor to the company’s international growth. By 1984, with the company board thought it was time to exit the market, Then CEO Ed Artzt, convinced the board that Japan was strategically important and that the new country GM could turn things around.
C. Given the nature and demands of technology cycles and innovation streams, identify the two
In the highly competitive Japanese skin-care market, P&G¡¦s new SK-II product has proven its success as a premium and prestige offering. P&G has gained significant knowledge transfers from SK-II development and further, has successfully tapped the fickle Japanese market and has devloped a loyal user-base in Taiwan and Hong Kong. With its phenomenal success, it is only logical that P&G consider rolling-out the SK-II product-line to the international market. However, while there is significant worldwide growth potential within the $9 billion prestige skin-care industry, based on recent organizational changes, new corporate priorities, and thorough market assessment, P&G must base its decision on current resources and capabilities to