Practical Work # 1
P&G and SK-II
Paolo de Cesare heads to Japan to make a decision on one of P&G’s most successful and fast growing products – SK-II. SK-II was a high end product that had developed a strong following among Japanese women, who were increasingly conscious about skin care and willing to spend a significant amount of their income. Cesare must decide among three options: continue to focus on the Japanese market, introduce the product in china, or introduce it in Europe. Decision
After careful consideration and analysis, I would recommend that Cesare pursue a strategy that prioritizes a focus on the Japanese market and eventually transitions into China. SK-II is a proven product in a market that is has yet to be fully tapped. With a penchant for numbers and analysis, Japan’s consumers are some of the most sophisticated easiest to target in the world. However, China’s expected prestige-beauty segment growth cannot be ignored. Intense rivalry from companies that have already set up camp in China is to be expected, but core cultural similarities can be extracted from the success of SK-II in the Hong Kong and Taiwanese markets. A table with pros (+) and cons (-) is listed below for each country:
CAGE Analysis of the Decision
A CAGE (cultural, administrative, geographic, and economic) analysis was performed to support this decision. Cultural - As far as cultural distance, staying in Japan poses the least amount of threat as P&G would be staying in a market that they are familiar with and have established a strong understanding of consumer needs through massive amounts of market research. China has close ties to Hong Kong and Taiwan, which are countries where SK-II has also been established strongly, however, the European cosmetics market is still in an infancy stage for P&G. Administrative – P&G is a global company with administrative support available in various regions. The brand in Japan is well established and makes...
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