Not all reverse innovations can be successful, even for the Japanese giant P&G.
In fact, Procter & Gamble is an important pioneer when talking about the localization strategy of multinationals in China. P & G entered the Chinese market in 1988 and achieved profitability in just over three years and grew at a high rate.
pay close attention! More upswings still reveal how the company’s stock does not rise. Beware of the sudden rise of funds on the way to institutional destruction. (List published) Localization of giants P & G has always been very proud of its achievements in localization. “P&G's localization is linked to its global strategy, but it also attaches great importance to regional markets and will introduce local products based on their needs. For example, OLAY's products in the Chinese market and the Japanese market are different. In addition, compared with other multinational corporations, it is also very good in localization channels, not only in major cities, but also in the second and third tier distribution and circulation markets." Gao Jianfeng, general manager of Bogee Consulting, comments on the localization of P & G Said.
However, this international daily giant’s domestic strategy in China has also encountered challenges. The important reason is that the continuously expanding ranks of competitors are growing. Besides Unilever, there are also a number of local Japanese chemical companies such as Shu Lei and Oni. In 1998, Procter & Gamble's sales in the Chinese market entered an unusually backward decade. In the most strategic shampoo market for P & G, P & G's market share fell from 60% to 40%.
In response to the impact of competitors on retail terminals, Procter & Gamble had to improve its traditional strategy. In order to win the support of vendors, P&G has learned from local companies to increase investment in channel management and has taken various forms of funding and service activities in an effort to establish a win-win partnership with sellers. For example, a multi-sectoral working group is formed to provide local distributors with specialized guidance on finance, personnel, law, information technology, storage and transportation, etc., in order to increase the competitiveness of distributors, and thus increase efficiency. At the same time, Procter & Gamble developed a township expansion plan with the goal of establishing a sound rural network sales system and broadening sales channels.
However, not all of the localization strategies will work, but the two-year-old “Run Yu†is an example. In 1997, Chongqing Oni launched a wave of "black hair beauty" in China after launching its new "Hundred Years of Run" plant shampoo. In order to establish its own new profit growth point as soon as possible, Unilever lost no time in launching the "black sesame" herbal shampoo series. Henan's private enterprise Hebi Tianyuan also lost no time in launching the product of the "black silk" black hair concept.
P & G also saw the huge potential of the black-haired market and decided to redeem itself to recover its lost territory. So in March 2000, Rejoice specifically designed and launched the first black hair combo shampoo for Chinese consumers. Not only that, for Chinese consumers, a month later in April 2000, Procter & Gamble launched the first Chinese herbal formula moisturizing product that was specially designed for oriental hair color after three years of testing. .
However, the creation of a new brand is not an easy task. During the two years of its launch, its market performance made P & G feel disappointed. “The main reason is that Rejoice and so on are all brands supported by multiple market segments, but also benefit from its global strategy and global resources, and the company is close to a market segment for black hair, and there has been no accumulation of brands before. From the perspective of Procter & Gamble, it is not possible to form a scale advantage and spread low costs, said Gao Jianfeng.
There is also an important background that the development and promotion of the “Run-Yuâ€, which was only aimed at the Chinese market at that time, was not within the priority project of P&G’s global strategy at that time.
At the time, it was the new head of Procter & Gamble’s global headquarters. It was adjusting the business strategies of various units around the world, and its business focus shifted to a product line with higher profitability.
Therefore, as often mentioned in the articles on marketing promotion at the time, Procter & Gamble started brewing the "Rune" brand in 1997 until it was fully listed in 2000. This time is known as "active consumer research and brand brewing period", but it is precisely because the three years of brewing missed the golden opportunity for brand promotion.
Due to the contradiction between globalized product strategy and localized consumer demand, Procter & Gamble has lost a huge potential market and provided sufficient space for the survival and development of competitors. In April 2002, Run Yu had to hurry to exit the field. P&G's "reverse innovation" in China had to end in failure. The reliance of Shouwu fully took over the black-haired market.
In fact, Procter & Gamble is an important pioneer when talking about the localization strategy of multinationals in China. P & G entered the Chinese market in 1988 and achieved profitability in just over three years and grew at a high rate.
pay close attention! More upswings still reveal how the company’s stock does not rise. Beware of the sudden rise of funds on the way to institutional destruction. (List published) Localization of giants P & G has always been very proud of its achievements in localization. “P&G's localization is linked to its global strategy, but it also attaches great importance to regional markets and will introduce local products based on their needs. For example, OLAY's products in the Chinese market and the Japanese market are different. In addition, compared with other multinational corporations, it is also very good in localization channels, not only in major cities, but also in the second and third tier distribution and circulation markets." Gao Jianfeng, general manager of Bogee Consulting, comments on the localization of P & G Said.
However, this international daily giant’s domestic strategy in China has also encountered challenges. The important reason is that the continuously expanding ranks of competitors are growing. Besides Unilever, there are also a number of local Japanese chemical companies such as Shu Lei and Oni. In 1998, Procter & Gamble's sales in the Chinese market entered an unusually backward decade. In the most strategic shampoo market for P & G, P & G's market share fell from 60% to 40%.
In response to the impact of competitors on retail terminals, Procter & Gamble had to improve its traditional strategy. In order to win the support of vendors, P&G has learned from local companies to increase investment in channel management and has taken various forms of funding and service activities in an effort to establish a win-win partnership with sellers. For example, a multi-sectoral working group is formed to provide local distributors with specialized guidance on finance, personnel, law, information technology, storage and transportation, etc., in order to increase the competitiveness of distributors, and thus increase efficiency. At the same time, Procter & Gamble developed a township expansion plan with the goal of establishing a sound rural network sales system and broadening sales channels.
However, not all of the localization strategies will work, but the two-year-old “Run Yu†is an example. In 1997, Chongqing Oni launched a wave of "black hair beauty" in China after launching its new "Hundred Years of Run" plant shampoo. In order to establish its own new profit growth point as soon as possible, Unilever lost no time in launching the "black sesame" herbal shampoo series. Henan's private enterprise Hebi Tianyuan also lost no time in launching the product of the "black silk" black hair concept.
P & G also saw the huge potential of the black-haired market and decided to redeem itself to recover its lost territory. So in March 2000, Rejoice specifically designed and launched the first black hair combo shampoo for Chinese consumers. Not only that, for Chinese consumers, a month later in April 2000, Procter & Gamble launched the first Chinese herbal formula moisturizing product that was specially designed for oriental hair color after three years of testing. .
However, the creation of a new brand is not an easy task. During the two years of its launch, its market performance made P & G feel disappointed. “The main reason is that Rejoice and so on are all brands supported by multiple market segments, but also benefit from its global strategy and global resources, and the company is close to a market segment for black hair, and there has been no accumulation of brands before. From the perspective of Procter & Gamble, it is not possible to form a scale advantage and spread low costs, said Gao Jianfeng.
There is also an important background that the development and promotion of the “Run-Yuâ€, which was only aimed at the Chinese market at that time, was not within the priority project of P&G’s global strategy at that time.
At the time, it was the new head of Procter & Gamble’s global headquarters. It was adjusting the business strategies of various units around the world, and its business focus shifted to a product line with higher profitability.
Therefore, as often mentioned in the articles on marketing promotion at the time, Procter & Gamble started brewing the "Rune" brand in 1997 until it was fully listed in 2000. This time is known as "active consumer research and brand brewing period", but it is precisely because the three years of brewing missed the golden opportunity for brand promotion.
Due to the contradiction between globalized product strategy and localized consumer demand, Procter & Gamble has lost a huge potential market and provided sufficient space for the survival and development of competitors. In April 2002, Run Yu had to hurry to exit the field. P&G's "reverse innovation" in China had to end in failure. The reliance of Shouwu fully took over the black-haired market.
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