Maaya Honda
Nanaho Tsuchihashi
Contents
＊P&G over view
＊Business model
＊How P&G understand Chinese market and consumers?
＊Behavior of Chinese consumer for beauty products
＊P&G in cosmetics market
＊SWOT analysis
＊Problem & next step
WHY?
P&G over view
P&G overview
What is P&G(Procter & Gamble) ???
An American multinational consumer goods company
headquartered in downtown Cincinnati, Ohio U.S
It was Founded in 1837 by William Procter and James Gamble
“Touching lives, improving life”
P&G overview
In 2012, P&G recorded $83.68 billion in sales.
Fortune magazine awarded P&G a top spot on its list of
"Global Top Companies for Leaders“
It ranked the company at fifteenth place of
the "World's Most Admired Companies" list
Ranked #7 among the Top 50 Companies for Diversity
P&G overview
P&G serves about
4.8
billion consumers around the world
75 countries
Its brands are available in more than 180 countries
It operations in about
P&G overview
Background of P&G worldwide
1837
1837~
1890~
• an economic panic in the United States
• P&G was born by joint investment
• P&G gained the consumer’s confidence by far-sighted and calm
management
• the expansion of operating factories and R&D facilities
1945~
• the revolutionary products were launched one after another
• Acceleration of overseas expansion
• the sales reached $10 billion in 1980
1980~
• entry into health care and cosmetic markets
• establishment of global R&D network
P&G overview
Background of P&G in China
Ⅰ
Ⅱ
Ⅲ
Main operating revenue of P&G in China from 1997 to 2003
P&G overview
Ⅰ 1988~1998 Rapid growth
The headquarters is in Guangzhou(合资企业-广州宝洁有限公司)
The first product was “Head & Shoulder”
China's shampoo markets in 1997
29.79
REJOICE
PANTENE
45.97
Head&Shoulder
14.3
others
9.94
1989.6 The hiring of new 20 graduates
10 new product “H&S 2 in 1” was put on sale
12 starting operation of the factory in huangbu(黄埔)
P&G overview
Ⅱ 1998～2001 declining
P&G was attacked by many multinational and local corporation
Because of…
・A fierce competition of each segments
・”high price and high quality” strategy
The local corporations took “low price” strategy
and focused on farming areas as their main target
P&G overview
Ⅲ 2001~ Re-prosperous
<Localization strategy>
・three institutions of P&G (Guangzhou, Taiwan, Hong Kong) were
integrated into one Headquarters, which in Guangzhou
・opening up a new market in farming area
・entry into the price competition
・increase in investments in China
In 2002 and 2003, the sales growth ratio was over
25%
P&G overview
P&G products
It has 23 brands in China
Beauty & Grooming
• Hair-care, Skincare & Cosmetics, Shavers,
Personal care
Health & Well Being
• Feminine care pad, Toothpaste
Household care
• Landry detergent, Diapers, Batteries
P&G overview
＊Beauty & Grooming
<Hair-care>
REJOICE, PANTENE
Head & Shoulder, VS
Herbal Essences, CLAIROL, WELLA,CAMAY
<Skin-care & cosmetics>
SK-Ⅱ, OLAY, Oceana
<Shavers>
Gillette, BRAUN
<Personal care>
Safeguard
P&G overview
＊Health & Well Being
<feminine care pad>
Whisper, naturella
<Toothpaste>
Crest, Oral-B
P&G overview
＊Household care
<Laundry detergent>
Tide, ARIEL
<Diaper>
Pampers
<Battery>
DURACELI
Having No.1 share (45%)
in a China’s disposable diaper market
WHY?
Business model
Business model
Business model elements...
Customer
segment
Value
proposition
Customer
relation
Revenue
stream
Key activity
Key partner
Chanel
Key resource
Cost
Business model
Costomer segment
・Mass market
・Housekeeper
・Women who care about beauty
・Men who care about hair and skin
・Mother who has baby
・Person who has pet
Business model
Value proposotion
・shift stains
・bring beauty
・keep beauty
・comfort
・keep pets healthy
・high quality
・reliance
Business model
Chanel
・super market
・department store
・hair salon
・pet shop
・drug store
・Internet
Business model
Customer relation
・seller and buyer
・value proposer and value
creator
・prosper community
Business model
Revenue stream
・retail price
・innovating technology
・re-use
Business model
Key resource
・factory
・distribution center
・retailer
・patent
Business model
Key activity
・production
・develop and improve products
・distribution
・marketing
・R&D
Business model
Key partner
・battery-powered instrument
maker
・hair salon
・distribution center
・factory
・ad agency
Business model
cost
・producing
・distribution
・marketing
・ad
・R&D
WHY?
How P&G understand
Chinese market and consumer
How P&G understand Chinese market and consumer
Large population
+
Rapid economic development
Market expansion
How P&G understand Chinese market and consumer
Scale of Chinese retail market and growth ra
te(ratio to the same in the previous year)
Tend of cosmetic market
Total amount of retail sales
%
trillion yen
Business model
Growth rate
How P&G understand Chinese market and consumer
Disposable income / person
Tend of cosmetic market
Japan
thousand yen / year
thousand yen / year
Business model
China
How P&G understand Chinese market and consumer
Consumption expenditure of urban Chinese
Tend of cosmetic market
other
Education and am
usement
Communication and
transportation
Medical care
yen
Business model
Household articles
house
cloths
food
WHY?
Behavior of Chinese consumer
for beauty products
How P&G understand Chinese market and consumer
Disposal income of Chinese woman and growth rate(rat
o to the previous year)
Tend of cosmetic market
Disposal income
Growth rate
thousand yen/year
Business model
Behavior of Chinese consumer for beauty products
Do you spend money and time on keeping beauty?
YES!
other
38.9%
absolutly
YES !
18.6%
Behavior of Chinese consumer for beauty products
What kind of skin care goods do you use?
other
sunscreen
facial pack
Business model
milky lotion
essence
lotion
facial cleanser
cleansing cream
0
10
20
30
40
%
50
60
70
80
90
100
Behavior of Chinese consumer for beauty products
What kind of skin care goods do you use?
other
sunscreen
41.8%
facial
C pack
88.5%
Business
milky
lotionmodel
Japan
essence
lotion
facial cleanser
cleansing cream
0
China
10
20
30
40
%
50
60
70
80
90
100
Behavior of Chinese consumer for beauty products
What kind of make-up goods do you use?
other
mascara
lipstick/lipgloss
C
cheak
eyebrow
eyeliner
eye shadow
face powder
foundation
consealer
makeup base
0
10
20
30
40
%
50
60
70
80
90
100
Behavior of Chinese consumer for beauty products
What kind of make-up goods do you use?
other
mascara
lipstick/lipgloss
cheak
eyebrow
Business model
eyeliner
Japan China
eye shadow
face powder
64.8%
foundation
95.1%
consealer
makeup base
0
10
20
30
40
%
50
60
70
80
90
100
WHY?
P&G in cosmetics market
P&G in cosmetics market
Cosmetics market trend worldwide
In the last 20 years Global Beauty Market has grown by 4.5% a year on
average (CAGR), with annual growth rates ranging from around 3% to 5.5%.
Since the turn of the century the cosmetic markets of the BRIC countries
(Brazil, Russia, India, China) have been growing very fast.
The BRIC countries are the main force within the so-called emerging markets.
In 2011 all those countries generated 81% of the global cosmetics sales growth,
more than half of which (54%) was attributed to BRIC.
(The other emerging markets : Mexico, Argentina, Indonesia, Thailand, Turkey)
P&G in cosmetics market
Global Cosmetic Market – Ranking by Country
(2012, USD B)
P&G in cosmetics market
Beauty distribution channels 2000-2010
The market share of the non-store retailing channel is gradually increasing .
This channel includes direct sale and sale over the internet.
P&G in cosmetics market
Global Beauty Retail Sales by Product Category
(1998-2010)
In 2010 skincare was the most significant segment.
Its growth driven primarily by the Asian market.
The global skincare market is divided into facial care
(2/3 of the total sales), hand and body care and sun care.
P&G in cosmetics market
Retail value of cosmetics by wholesale and retail enterprises
above designated size in China: 2008-2012
P&G in cosmetics market
Brand
Brandpositioning
positioningimage
image in
in China’s
China’s cosmetics
cosmetics market
market
Image
Image
Pre-stage
Pre-stage
Western
Western
Japanese
Japanese
Korean, Chinese
Korean, Chinese
(KOSE)
(MENARD)
(KOSE)
(MENARD)
High-end
High-end
Middle-mass
Middle-mass
Low-end
Low-end
In 2012
In 2012
P&G in cosmetics market
Market Share of the Top 10 Brands of Selected Sectors
2010-2011
P&G in cosmetics market
Shampoos, Conditioners and 2-in-1 Conditioning Shampoo:
Share of Total Sales Value 2010-2011
P&G in cosmetics market
Other Hair Care Products (Colorants, Hair Mask & Styling Agents)
Share of Total Sales Value 2010-2011
P&G in cosmetics market
Skin Care Products: Share of Total Sales Value 2010-2011
P&G in cosmetics market
Color Cosmetics: Share of Total Sales Value 2010-2011
P&G in cosmetics market
Fragrances: Share of Total Sales Value 2010-2011
P&G in cosmetics market
Competitors analysis (Foreign companies)
the world's largest cosmetics and beauty company
Founded : 1909
Headquarters : Clichy, Hauts-de-Seine, France
a major hair care and cosmetics company
Founded : 1872
Headquarters : Tokyo, Japan
Their main target is “high-end and middle-mass”
P&G in cosmetics market
Competitor analysis (Local companies)
Beijing Dabao Cosmetics Co., Ltd.
Founded :1999
Later, on July 30, 2008, Dabao was purchased by
the Johnson & Johnson (China) Investment Co., Ltd. and
since that time the company has fully owned the brand.
Shanghai Inoherb Cosmetics Co., Ltd
Founded : 2000
One of the earliest Chinese skin care product
producers that is involved in using herbs
Their main target is “low-end”
WHY?
SWOTanalysis
SWOTanalysis
S
・many strong brands
・large market share
・R&D
・advertisement
O
・emerging & developing market
・e-commerce
・skin care & cosmetics
W
・unmature cosmetic products
・overdependence on mature market
・lack of diversified customer
portfolio
T
・customer demand change
・intense competition
・increasing in cost of raw materials
・regulation
SWOTanalysis
S
trength
・many
strong brands
中国の女性の年代別人口
・large market share
・R&D
・advertisement
SWOTanalysis
R
&D
The company reaches out to over 5 million
consumers in almost 60 different countries
through their over 15,000 research studies
every year.
P&G invests over $350 million annually in
researching consumer understanding. 女性
SWOTanalysis
W
eakness
・luck of variety of cosmetic
products
・most products for only women
・high cost of innovation and R&D
SWOTanalysis
O
pportunity
・emerging & developing
market
・e-commerce
・SNS
・skin care & cosmetics sector
SWOTanalysis
T
hreat
・change of customer demand
・intense competition
・increasing in cost of raw
materials
・regulation
WHY?
Problem & Next step
Problem & Next step
Problem
cosmetics market share of P&G is small
Because of…
・A lot of foreign and local competitors
・The luck of product variety
Problem & Next step
Brand positioning image in China’s cosmetics market
Brand positioning image in China’s cosmetics market
Image
Image
Pre-stage
Pre-stage
Western
Western
Japanese
Japanese
Korean, Chinese
Korean, Chinese
(KOSE)
(MENARD)
(KOSE)
(MENARD)
High-end
High-end
Middle-mass
Middle-mass
Low-end
Low-end
In 2012
In 2012
Problem & Next step
Next step for P&G in China
Ⅰ. To increase the variety of cosmetics product
＊Men‘s skincare
China men’s skincare market witnesses a 34% annual growth in 2011. It also
increased by 24.4% in 2010
＊Anti-aging products
sales of anti-agers has increased 2.4 times over the past five years
＊Children skin care
Children skin care market is a potential market which is now mainly lead by
Johnson’s baby
Problem & Next step
Ⅱ Utilization of Internet
＊E-commerce
Online Transaction Value for China’s Cosmetics, 2008-2015e
Problem & Next step
P&G is experimenting with e-commerce in China
Many of P&G's top brands in the mainland are sold on Taobao.com
Taobao.com is the business-to-consumer arm of Alibaba Corp., the country'
s largest e-commerce retailer
P&G has also turned to digital media in China, creating local-language web
sites for its products and using online media for branded entertainment.
Problem & Next step
＊SNS
・Micro-blogging or Weibo
It engages hundreds of millions of users in China
51.87% of micro-bloggers will search the products on E-commerce sites
49.91% of them will go to the homepage of the brand
・Professional SNS
On the sites you will find many people, mostly girls, quite professional
in cosmetics and their comment and evaluation on the products are very
important and influential to the others