Case Study: P&G and Asia's Consumer Boom

by Knowledge@SMU, 23 January 2012

0 comments

Facebook

Digg

Twitter

topics:
Management

tags:
market expansion strategy market research Procter & Gamble

“Create excitement in the market with new products; entice the competitors to play, and together, we can grow the market,” said Medhee Jarumaneeroj, the ‘influencer marketing & external relations leader’ for Procter & Gamble (P&G) Asia’s male grooming line.

Speaking at the Marketing Excellence Speaker Series, a monthly talk organised by the Centre of Marketing Excellence at Singapore Management University, Jarumaneeroj expressed excitement about Asia as a huge growth market for the American multinational.

According to its website, US$82.6-billion-in-annual-sales P&G creates more brands than any other consumer goods company. While the company’s large stable of brands – from Bounty to Braun, Oral B to Old Spice, Tide to Tampax – are near household names in the US, not all of them are as widely known in Asia.

Jarumaneeroj pointed out, for instance, that while all 38 categories of P&G products are sold in America, only 19 of those categories can be found on the shelves of Asia’s shopping malls and supermarkets. But that will likely change, given the company’s strategic shift towards Asia.

President & CEO Bob McDonald has announced an ambitious goal to acquire 1 billion additional customers by 2015, and ultimately, to “convert every person on this planet into a customer.” To achieve this, the company plans on innovating so as to “touch more lives” around the world; and in particular, those in the tiger and dragon economies.

To signal that it is serious about enlarging its regional presence, P&G last year launched its Olay Men Solutions skincare range in Asia, with Jarumaneeroj as one of the key movers in the region.

Oil of Ulan to Olay

Innovation, for P&G, is not limited to the creation of a new product, said Jarumaneeroj. Rather, it refers to “a new way of thinking or execution that creates value for the company.”

This includes broadening the customer base through a wider vertical portfolio of medium to high-end products; reaching out to more customers geographically and deepening that relationship; and fulfilling a wider range of needs through brand expansion.

Citing the example of the long-established ‘Oil of Ulan’ skincare fluid for women, Jarumaneeroj said that the company had to first work around consumer perceptions before they were able to grow the market. Back then, people associated the pink liquid with the older generation, as they saw it as something that their mothers used.

“We had to show that it was not a product for older ladies, but for ladies who do not want to look old,” he said. The company updated the look, removed the ‘Oil’ in the name to remove suggestions that it contained pore-clogging oil, and re-launched the product globally as Olay in 1999.

P&G then proceeded to ‘play the portfolio,’ growing the brand both vertically and horizontally. Products were added to address different customer concerns such as aging, skin dullness, blemish, acne, and sun damage.

Several ranges were also introduced to capture various price points, from ‘prestige’ to ‘mass-tige’ (mass market plus prestige) levels.

For Singapore consumers, the point-of-market entry price (in 2009 and 2010) before moving on to ‘counter brands’ was S$75 (US$58) for the prestige brand and S$60 (US$447) for the mass-tige brand, Jarumaneeroj revealed. Depending on the geographic location, the company would adjust price bands accordingly.

Comment on this article

Accounting and Regulations

CFO innovation Asia Accounting and Regulation the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Accounting Regulation, IFRS, US GAAP, Tax, investor relations, corporate governance, Corporate Law, Financial Regulators, Internal Audit, Audit, Corporate Law.

Auditing, Investor Relations, Law and Compliance, Tax

Finance and Banking

CFO innovation Asia, Finance and Banking the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Corporate Finance, trade finance, treasury and risk management, capital expenditure, Banking, mergers and acquisitions

Cash and Liquidity Management, Corporate Finance, Insurance, Treasury Management

Management

CFO innovation Asia the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Finance Management, Corporate Governance, Human Resource Management, Compensation and Benefits, Mergers and Acquisitions, Professional Development, Corporate Real Estate, Risk Management, Budgeting and Forecasting, Business Process Management, Business Process Reengineering, Outsourcing.

Budgeting and Planning, Business Expense Management, Human Capital Management, Outsourcing and Shared Services, Risk Management

Metrics

Corporates, Financial Services

Technology

CFO innovation Asia Technology the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Finance Systems, Business Intelligence, EPR, Accounting software, CRM, Cloud Computing, Telecommunications, Business Process Outsourcing, Business Process Management Software.

Business Intelligence, Enterprise Software and Systems, Financial Systems, Security

CFO innovation ASIA