International Marketing

P&G Japan

1. As Paolo DeCesare, what factors do you need to consider before deciding what to recommend in your SK-II presentation to the global leadership team (GLT)? What kind of analysis will you need to do in preparing for that meeting?

In the presentation to the Global Leadership Team the following important aspects of the product in conjunction with the company current structure must be considered to make a prudent decision regarding the expansion of the SKII. As the ultimate goal of the company is to go global with SKII, however it is important to break the world market into segment and then to perform the following analysis based on the regional level and further at country level where product is being launched.

* Porter five forces analysis:

It is important to present the GLT Porter five forces analysis to establish the strength and weakness of each market in the globe. The elements to be considered here are suppliers/distribution of product in the markets, customers, competitors, product substitute present in the market, and threat of new entrants in the market. It is important to further drill down these five elements in ascertain what geographical area is the best to launch the SKII first compared to other.

Competitors: This refers to the competition within the industry and important consideration her is P&G's ability to maintain and sustain the competitive advantage in various global market over its competitors. This factor can also determine the amount of adverting expenses which must be incurred by the P&G in the particular market to achieve the target sales.

Product substitute present in the market: This refers to the presence of the alternative product which are available to customers in the market. Based on the market analysis of the options available to the customers will help P&G to determine the resources required to launch the product in the particular market.

New Entrants: This refers to cost of entering in the market by competitor.

Barging Powers of suppliers and Buyers: As we know SKII is high end product or product the knowledge of buyers are very important to ascertain the volume of the target market in the segment. Also important is to determine the supplier and supply chain of the product in the respective markets to deliver the product to the customers.

* SWOT Analysis

Also very important is the evaluation of SKII launch in terms of Strengths, Weakness, Opportunity and Threat. Again, as we know the objective is see the SKII as global product but for the purpose of analysis it is very imperative that analysis should be first broken down by geographical area and further at the country level. The important considerations which must be mentioned to GLT group are as follows:

STRENTHS

Highly successful Olay brand from P&G,

Successful and established brand in Japan.

China is a known market through Olay launch.

Established distribution channels through Olay brand.

Targeting luxury market.

WEAKNESS

High spending on advertising.

High R&D spending and slow development of new products.

Simultaneous organizational restructuring.

Very high price because of high import duties in China.

No brand awareness in Europe.

OPPURTUNITIES

Rapid growth of skin care market in China.

Growing prestige beauty segment at 30% to 40% annually.

Europe has large number of sophisticated beauty conscious customers.

Need for new products in Japan.

Amiability of production facilities in the particular county.

To launch the product in countries which have higher GDP.

| THREATS

Heavy competition for entry into European market and virtually all the major competitors entered china

* Size of the market to be targeted by the P&G for SKII in particular country.

* Existing products and competition in the county.