P&G's Success Story in China

One of the most prominent SEZs came up near the village of Shenzhen, in Guangdong province. As a result of the SEZs, there was explosive industrial growth in this belt. By 1984, China increased the number of economic zones to 14, and widened the scope of activity. It was during this time that P&G began to focus seriously on China. P&G conducted its first market research in the Chinese market in Beijing and Shanghai in 1985. During that time, foreign trade was still restricted and was channeled through 'friendship stores' where consumers with access to foreign currency could buy a limited range of imported goods. Hence, to understand and develop the Chinese consumer market, P&G sent Berenike Ullmann (Ullmann), a young, Chinese-speaking market researcher...

However, P&G rejected such advice and entered the market with a sound strategy. The company's market research revealed that though there were several shampoo marketers in China, there was no shampoo that could remove dandruff from the scalp. Dandruff was a common hair problem among the Chinese consumers. P&G hence launched Head & Shoulders, a brand that was known for its anti-dandruff properties. Within three years of its launch, Head & Shoulders became China's bestselling shampoo, even though it was priced three times higher than the local brands. P&G aspired for market share leadership in all its core categories including personal and beauty care products, laundry products, pet nutrition products and baby products...