P&G's Success Story in China

<< Previous

"China is a focus market on two grounds: it is a developing market, and it is big. Our aspiration is market share leadership in all P&G core categories in China, and this is a challenge because of the diversity and scale of the country. The diversity is in the consumers - affluent versus modest, as well as in geography - east versus west China and in the trade channels - global retailers, modern Chinese retailers, traditional trade such as mom-and-pop groceries and kiosks." ¹

- Laurent Philippe, Former President, Procter & Gamble China, in 2004.

"The potential is enormous for us in China. One out of five people in the world lives there, and we have the kinds of products people use day in and day out." ²

- John Pepper, President-Worldwide, Procter & Gamble, in 1996.

Introduction

In November 2005, the US-based fast moving consumer goods (FMCG) manufacturer - Procter & Gamble (P&G) outbid other major companies for prime-time advertising slots on the China Central Television³ (CCTV) investing 394 million yuan⁴ for 2006 advertisement space. P&G had been the biggest bidder for advertisement space for 2005 as well, spending about 385 million yuan. Earlier, in 2004, P&G had invested just 180 million yuan.

This sharp step-up reflected the increased importance P&G attached to advertising its products in the fast growing Chinese economy. P&G President and Chief Executive AG Lafley said investing in China made sense because demand for items such as Crest toothpaste and Tide detergent was rising faster in developing countries than in developed countries. This sharp step-up reflected the increased importance P&G attached to advertising its products in the fast growing Chinese economy. P&G President and Chief Executive AG Lafley said investing in China made sense because demand for items such as Crest toothpaste and Tide detergent was rising faster in developing countries than in developed countries.

The company manufactured and marketed nearly 300 brands to consumers in over 160 countries across the globe. It employed about 102,000 people. P&G had a high market share in several product categories: laundry and cleaning (Tide, Cascade, Dawn), paper goods (Bounty, Charmin, Pampers), beauty care (Pantene, Olay, Cover Girl), food and beverages (Folgers, Pringles, Duncan Hines) and health care (Crest, Scope, Metamucil).

P&G's Success Story in China - Next Page>>

---

Custom Search

---

Economics for Managers Textbook Textbooks Collection	Economics for Managers Workbook ICMR books Collection	Case Studies in Business Strategy Volume VI Case Study Volumes Collection

1] Jacques Penhirin, "Understanding the Chinese Consumer," Special Edition: What Global Executives Think, www.mckinseyquarterly.com, 2004.

2] Rob Daumeyer, "P&G Builds China Sales," www.bizjournals.com, July 12, 1996.

3] China Central Television (CCTV) is China's largest national television network.

4] Yuan is the Chinese unit of currency. As of December 2 2005, 1 US$ equals 8.08 Chinese Yuan Renminbi.

5] The Gillette Company was founded in Boston by King C. Gillette in 1901. The company was widely acknowledged as the pioneer in shaving technology. The first product manufactured was the safety razor. Other popular Gillette brands included Braun, Duracell and Oral-B.