PROCTER & GAMBLE (P&G)
Going Local: Procter & Gamble’s Homegrown Success in Japan Key Points • Carries out extensive local market R&D and also uses what is develops elsewhere in the region • Produces and distributes goods locally, tailoring processes to fit Japan’s market • Chose to base itself in Kansai • Remains committed to Japan despite strong competition • Continues to expand into new product lines through strategic M&A Procter & Gamble entered Japan in 1972 when it started a ¥2 billion joint venture with Nippon Sunhome and Itochu Corporation called P&G Sunhome. P&G chose Kansai instead of Kanto and Tokyo as its Asian hub in the belief that the latter is more costeffective, has the necessary infrastructure and a good pool of talent, and provides a high quality of life. P&G later bought out its joint venture partners and used this base to expand. Initially marketing products that were successful in the United States and elsewhere, such as detergent and diapers, the company has since moved into feminine products, cosmetics, and pet food through both organic growth and global acquisitions that had operations in Japan. P&G went through some ups and downs in the early seventies and late eighties but made a strong comeback in the nineties after renewing its efforts and further localizing R&D, marketing, and distribution. P&G’s longstanding commitment to the Japanese market has borne fruit. Some Background Started in 1837 as a seller of soap and candles, Procter & Gamble has grown into a global company that operates in over 160 countries and markets close to 300 different brands. The company initially entered the Japanese market in 1972 with several products that had proven successful in Europe and Latin America, including Cheer laundry detergent powder, Bonus liquid laundry detergent, and Camay soap. In the mid-seventies, P&G successfully test-marketed Pampers disposable diapers in Japan, and proceeded to market them aggressively. Even though Pampers had a...
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