P&G's Success Story in China

The Chinese FMCG market was expected to grow by 5-6% in 2006. As of May 2005, sales of P&G in mainland China, Hong Kong and Taiwan totaled US$ 2 billion, with a cumulative average annual growth rate of 25 percent between 2002 and 2005. In 2005, P&G China's contribution to the global revenues of P&G was 3.5%. China was also the sixth largest market for the company. In China, P&G had moved away from its 'premium' image to a company that catered to all segments of the population. According to Gilbert Cloyd, the Chief Technology Officer of P&G, "We've changed our standard of innovation so we can serve more of the world's consumers. So it's now a better brand experience for the target consumer and a lower product cost structure than the competition can deliver."⁶

By 1859, P&G achieved sales of US$ 1 million. The company introduced Ivory, a floating soap, in 1879. P&G was incorporated in the year 1890 to raise funds for further expansion and by 1904 P&G began focusing on building a business outside of Cincinnati to cater to a wider consumer base. In 1911, Crisco, the first all-vegetable shortening was launched. In 1915, P&G built its first manufacturing facility outside the US, in Canada. This facility employed about 75 people and produced Ivory soap and Crisco. In 1930, P&G set up its first overseas subsidiary in the UK with the purchase of Thomas Hedley & Sons Company Limited, which owned the popular Fairy soap. In 1931, under the leadership of Neil McElroy, P&G's promotion department manager, the brand management system was initiated...