WE’RE ALSO CHINESEGlobal Marketing SWU Fall 2010, Prof. Lee Presenter: Tim Wilson 20082901 12-1-10 Seoulhttp://en.wikipedia.org/wiki/File:Procter_and_Gamble_Logo.svg
In the last 50 years MNCs have focused onChina, India, and other currently emerging economies as cheep sources of labor.More recently the MNCs have notices thefast growing number of consumers in thesesame countries, whos spending power israpidly increasing along with their appetite for consumer goods.Focus China and Proctor & Gamble Corporation
How an AmericanCompany fromCincinnati, Ohiofounded in 1837,expanded intoChina and took on aChinese Identity andLocal Product MixFounded by Two Immigrants:William Procter (from England): candlemaker, andJames Gamble (from Ireland): soapmaker http://bglhonline.com/wp-content/uploads/2010/07/Cincinnati-procter-and-gamble-headquarters.jpg, http://en.wikipedia.org/wiki/Proctor_and_Gamble
How to make an International American, European, & Japanese Brand…Proctor & Gamble Into a Chinese BrandProduct Recognition: “Isn’t P & G a Chinese Brand?” http://www.couponingtodisney.com/wp-content/uploads/2010/07/brands.jpg
China has huge income disparities and product expectations between the rural, urban, and semi-urban populations. P & G divided the market segment of China into three areas of income and unit volume: top 15%, middle 30%, and bottom 55% Revenues are divided at 30% premium, 40% mid-priced, and 30% in the low end segment
Low income consumers in China often buy single use packages of shampoo, medicine, and other products. Urban Chinese customers are willing to pay $1 USD for a tube of exotic flavored toothpaste. While rural customers will pay 50cents (1/2 USD) for a tube of Crest Salt White toothpaste, because rural customers believe salt whitens teeth.
“…Create different value offerings superior to those of the local competitors but at an equal or even lower manufacturing cost.” P & G used customer research teams to find out customers needs and product desires, by even living with potential customers for several days.
Domestic Chinese Firms are growing fast and they are well informed about their local market High end Foreign originated consumable products can have little lasting permanent penetration into an emerging market Huge disparity in emerging market people’s income levels can be growth opportunities. Know local product expectations and then use readily available local ingredients to manufacture and produce locally superior quality Chinese friendly Proctor & Gamble products for each population and income segment
How to make an International American, European, & Japanese Brand…Proctor & Gamble Into a Chinese Brand Questions Please? Product Recognition: “Isn’t P & G a Chinese Brand?” http://www.couponingtodisney.com/wp-content/uploads/2010/07/brands.jpg
How does China’s entry into the World Trade Organization (WTO) in 2001 affect multinational firms’ outlook toward China and their future investment in the country? What are the drawbacks of P & G’s strategy for the Chinese market? What other marketing strategy could P & G have adopted for the Chinese market as an alternative to the tier system one?