P&g 2003


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  • “ Due to cultural differences, misunderstanding or ignorance of different national conditions and because of the fear of many countries of losing their national identity and independence, companies in foreign markets are much more confronted with sociopolitical issues than they are in their home countries". This failure can be avoided, through learning the importance of cultural understanding, the importance of the expatriates in this process and the difficulty that they face; the multinationals companies should select the right people for this tough task and prepare them properly. Interventions include selection and cross-cultural training, expatriation preparation that teaches employees relevant cultural mental models and how to take these into consideration in host country interactions and negotiations, and exposure to foreign travel as part of development or business needs.
  • Cultural characteristics are very important in the formulation of pragmatic business strategies. For e.g. in Italy, if US Company sets up a corn processing plant found that its marketing efforts failed because Italians thought of corn as pig food.
  • It is often necessary to know the process n nature of social n cultural env for successful formulation of business strategies.thus while introducinf new ideas, techs, prods, mrkt segmentation, promotion mix strategies one shld consider extent to which diff cats of consumers adapt to new things or env, gen attitude of ppl towards new ideas n their impact.
  • P&g 2003

    1. 1. Different for Gamble Business Environment Assignment Submitted to: Dr. Vinay Sharma Submitted by: Abhimanyu Yadav (03) Anupam Singh (14) Arpit Agrawal (15) Mayank Jain (39) Milind Ramteke (56) Rishikesh Kaushik (57)
    2. 2. Agenda <ul><li>History of P&G </li></ul><ul><li>Introduction to Case Study </li></ul><ul><li>Issues faced in India </li></ul><ul><li>P&G in China </li></ul><ul><li>Culture and its elements </li></ul><ul><li>Cultural Adaptation </li></ul><ul><li>Cultural Conformity and Cultural Lag </li></ul><ul><li>Cultural Traits </li></ul><ul><li>Other Cultural Factors </li></ul><ul><li>Questions </li></ul>
    3. 3. P&G <ul><li>Fortune 500, American multinational corporation headquartered in Ohio, USA. </li></ul><ul><li>As of 2008, P&G is the 8th largest corporation in the world by market capitalization. </li></ul><ul><li>14th largest US company by profit. </li></ul><ul><li>It is 10th in Fortune's Most Admired Companies list. </li></ul><ul><li>Global sales of P&G was higher than Unilever but its Indian sales was less than half of Unilever in FY ’09. </li></ul>
    4. 4. P&G in India - History <ul><li>Entered in India in 1985 through P&G India. </li></ul><ul><li>Ariel brand was launched through this. </li></ul><ul><li>In 1993, Ariel was transferred to P&G Home Products, a 100% subsidiary of P&G. </li></ul><ul><li>Enters Hair care industry in 1995 with Pantene Pro-V. </li></ul><ul><li>In 2003, launched Pampers. </li></ul><ul><li>Total revenue at $79 billion in 2009. </li></ul>
    5. 5. Introduction to Case Study <ul><li>Stormed the Japanese market with American Products in American Way. </li></ul><ul><li>Entered India as most admired marketing company in early 90s. </li></ul><ul><li>P&G India with 51% stake launched Ariel Brand. Later raised its stake to 65%. </li></ul><ul><li>P&G established P&G Home Products and transferred Ariel to it. </li></ul>
    6. 6. Issues faced by P&G in India <ul><li>HLL , Johnson & Johnson, Nirma – Major Competitors for it. </li></ul><ul><li>Ingredients imported by P&G were costly due to heavy custom duty. </li></ul><ul><li>Rupee devaluation in 1991 further aggravated the problem </li></ul><ul><li>Could not successfully implement the ‘Compact’ technology adopted by KAO in Japan. </li></ul>
    7. 7. P&G in China <ul><li>First MNC to enter in China in 1988. </li></ul><ul><li>Chinese economy was growing rapidly. </li></ul><ul><li>High disposable income of Chinese. </li></ul><ul><li>P&G offered high quality products over shoddy government products. </li></ul><ul><li>Chinese culture was easier to understand. </li></ul>
    8. 8. Culture <ul><li>“ it is that complex whole which includes knowledge, belief, art, morals, law, custom and other capabilities and habits acquired by man as a member of society.”- E.B. Taylor </li></ul><ul><li>“ the total life way of people”- Kluckhohn </li></ul>
    9. 9. Elements of Culture <ul><li>Knowledge and Beliefs </li></ul><ul><ul><li>It refer to a people’s prevailing notions of reality. </li></ul></ul><ul><li>Ideals </li></ul><ul><ul><li>It refer to the societal norms which define what is expected customary right or proper in a given situation. </li></ul></ul><ul><li>Preferences </li></ul><ul><ul><li>It refers to societies definition of those things in life which are attractive or unattractive as objects of desire. </li></ul></ul>
    10. 10. Cultural Adaptation <ul><li>It refers to the manner in which a social system or an individual fits into the physical or social environment. </li></ul><ul><li>The firm and its people will have to adapt to the environment of the different markets. </li></ul><ul><li>Every difference of environment means a difference in our habits, our ways of living. </li></ul>
    11. 11. Cultural Conformity <ul><li>Individuals in a culture tend either to conform to the cultural norms or to deviate from them. </li></ul><ul><li>If a society is characterized by blind conformity, it would be very difficult to market new revolutionary ideas. </li></ul>
    12. 12. Cultural lag <ul><li>It places constraints on the scope of social change through technological development. </li></ul><ul><li>It indicates that different markets may be in a different levels of readiness to accept a new product or idea. </li></ul><ul><li>It would be a blunder to introduce a product to market which is not ready to adopt it. </li></ul>
    13. 13. Cultural Traits <ul><li>Low-Context and High-Context Cultures </li></ul><ul><li>Masculine and Feminine Cultures </li></ul><ul><li>Monochronic and PolyChronic Societies </li></ul><ul><li>Universalism vs. Particularism </li></ul><ul><li>Individualism vs. Communitarism </li></ul><ul><li>Neutral vs. emotional </li></ul><ul><li>Specific vs. Diffuse </li></ul><ul><li>Achievement vs. Ascription </li></ul>
    14. 14. Other Cultural factors <ul><li>Religion </li></ul><ul><ul><li>Different people have their own religious convictions, beliefs, sentiments, customs, rituals, festivals etc. The cost of ignoring certain religious aspects could be very high in business. </li></ul></ul><ul><ul><li>E.g. American fast food chain serving beef in India. </li></ul></ul>
    15. 15. Other Cultural factors contd. <ul><li>Ethnodomination </li></ul><ul><ul><li>It is a situation where an ethnic group occupies a majority position in a channel of distribution with respect to the ownership and control of physical and financial resources. </li></ul></ul><ul><ul><li>E.g. Banks in Kerala </li></ul></ul>
    16. 16. Other Cultural factors contd. <ul><li>Language </li></ul><ul><ul><li>Differences in the language is a very important problem area in business. </li></ul></ul><ul><ul><li>India has 18 officially recognized languages and 1652 mother tongues listed by census of India. </li></ul></ul><ul><ul><li>E.g. The term ‘the project went bomb’ in USA and UK. </li></ul></ul><ul><ul><li>Ford’s world truck ‘fierra’ in Spain. </li></ul></ul>
    17. 17. Other Cultural factors contd. <ul><li>Consumer Preferences ,Habits and Beliefs </li></ul><ul><ul><li>Significant differences in the tastes and preferences may exists within the same country. Eg:- Nescafe share in Mumbai and Bangalore and Chennai. </li></ul></ul><ul><ul><li>Difference in the attitude towards packaging between the American and Japanese. </li></ul></ul><ul><ul><li>Nature of use of products. Eg:- Cola drinks in USA and India. </li></ul></ul>
    18. 18. Questions <ul><li>Discuss the reasons for the initial failure of P&G in Japan. </li></ul><ul><li>Where did P&G go wrong in the evaluation of Indian market and its strategy? </li></ul><ul><li>Discuss the reasons for the differences in the performance of P&G in India and China. </li></ul>