Procter and Gamble in Japan

Procter & Gamble (P&G), the large U.S. consumer products company, has a well-earned reputation as one of the world’s best marketers. P&G manufactures and markets more than 200 products that it sells in 130 countries around the world. Along with Unilever, P&G is a dominant global force in laundry detergents, cleaning products, personal care products, and pet food products. P&G expanded abroad after World War II by exporting its products, brands, and marketing policies to Western Europe, initially with considerable success. Over the next 30 years, this policy of developing new products and marketing strategies in the United States and then transferring them to other countries became entrenched. P&G’s adaptation of marketing policies to accommodate country differences was minimal. In general, products were developed in the United States, manufactured locally, and sold using a marketing message created in Cincinnati.
The first signs that this policy was no longer effective emerged in the 1970’s, when P&G suffered a number of major setbacks in Japan, by 1985, after 13 years in Japan; P&G was still losing $40 million a year. It had introduced disposable diapers in Japan and at one time had commanded an 80 percent share of the market, but by the early 1980’s it held a miserable 8 percent. Three large Japanese consumer products companies were dominating the market. P&G’s diapers, developed in the United States, were too bulky for the tastes of Japanese consumers. Kao, a Japanese company, had developed a line of trim-fit diapers that appealed more to Japanese tastes. Kao introduced its product with a marketing blitz and was quickly rewarded with a 30 percent share of the market. P&G realized it would have to modify its diapers if it was to compete in Japan, It did, and the company how has a 30 percent share of the Japanese market. Plus, P&G’s trim-fit diapers have become a best –seller in the United States.
P&G had a