P&G in Japan

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P&G Japan

Q1. Why was SK-II so successful in Japan?
Statement: By based on research of Japanese market, P&G made clear targeting and positioning, and developed new products which fulfilled customers’ needs, built the effective distribution. As a result, P&G could establish differentiation advantages for the following. • Product: “Foaming massage cloth” , Elegant dispensing box “Foaming massage cloth” increase skin circulation through a massage while boosting skin clarity due to the microfibers’ ability to clean pores and trap dirt. • Price: Premium price • Place: Luxury and nice counter at department store • Promotion: Counseling by Beauty counselor, TV advertising, Beauty magazines

Targeting Positioning Affluent women aged over 30s Prestige skin care Premium price R&D team: Market research → catches up demanding Japanese women, Develop Technology → excels Japanese competitors Sales: Training → beauty counselors, Promotion → Counter design


Q1. contd. What was the business model behind the success?
Statement: SK-II ’s success is not only prestige skin care product or advanced technology but also its marketing approach to build the New brand. P&G succeeded to connect between the core technology or product concept and local market. Through Japanese market among the world’s toughest competitors, P&G developed potential source of innovations. In addition, SKII ’s marketing strategy built a new approach, Market research, Concept, Packaging, Positioning, Communications strategy. It was a big challenge that P&G shifted from Mass marketing, such as Olay brand, to Class marketing. SK-II ’s marketing strategy

Market Research Concept Packaging Positioning Communication strategy Find the customer needs, habits Japanese women’s needs: sensitive with skin condition habits: five or six step cleaning Classify customers, Specify attractive market Affluent women aged over 30s Define the customer value Prestige skin care Product design Build the differentiation Premium price Advertising feature the targeting customers Design counter and installation

R&D Marketing

R&D Marketing Technology Marketing Brand

Sales force Channel Advertising

Q2. How transferable is the model?
• The SK-II’s business model based on through production, advanced technology, marketing research and customer behavior. From this point if P&G Japan want to enter foreign market using this model they should exploit by exporting or by direct investment. Either case business model is transferable. But main concern is the model could be successful as in Japan? SK-II’s success had been achieved in a culture where the customers, distribution channels, and competitors were different from in China and Europe. For example: Japanese customers more educated, average Japanese women spent 4.5 minutes on her face cleansing regime, and most sophisticated users of beauty products in the world. Other hand in China customers due to Olay’s education recently moved from a one-step skin care process to a three-step cleansing and moisturizing process. But unlike China, Europe had a large and sophisticated group of beauty-conscious customers who is already practiced a multistep regimen. As we see it is model is transferable but they have to modify some of models characteristic depending on customers behavior, competitors and market factor. P&G Japans competitive advantage is firm-specific but SK-II’s advantage is country-specific. How to transfer SK-II:

China Advantage The company had led with beauty products when entered this huge market Many 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 well Mass- market Cost of television or print ads in Europe prohibitive. But sales force staff selling...
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