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Procter & Gamble Targets Emerging Markets

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on 12 November 2013

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Transcript of Procter & Gamble Targets Emerging Markets

4302583 Kwan Pui Kee
4302958 Nishantainidevi Chandrasekaran

P&G in Russia
Another market of P&G
The way of entering Russia was through acquisition of the Gillette Company
Russia was a problematic market as the Russian ruble depreciated during the financial crisis
Results in closing down several factories and employees lay off
It is a multinational company
One of the largest consumer goods company, specializing in household products & personal care
focused higher income group
changed after new CEO took position, now are also targeting the developing countries and transitional economies

China is P&G's 2nd largest market

AND

P&G is China's largest consumer goods company

focuses on both urban and rural consumers
wide range of products & brands and prices
Competitor
Group Case Studies Presentation
Case Study 1:
Procter & Gamble Targets Emerging Markets
P&G
Spend 30% of funds for R&D for the needs of lower-income markets
make things cheaper
visit the homes in developing countries to better understand consumer needs
P&G in China
P&G has experienced a major product crisis------>
SK-II
[sales and trust was adversely affected]
1. Is this good or bad for P&G? Why?


Question 3:
What is the mode of entry implemented by P&G to enter Russia?

Answer:
Mergers & Acquisitions
*Unilever*
is a strong competitor
has longer history
provides broader product line
offering different brands at different price points
successfully targeting both the poor and rich
Question 4
How can P&G compete with Unilever?
Answer:
P&G should take adaptation strategy in order to meet the needs of wider group of consumers and in order to obtain bigger market share.
For instance, strenthg of mint may differ in toothpaste. Urban Chinese prefer toothpaste in exotic flavors, but, rural Chinese prefer salt added toothpaste.

CARS FOR EMERGING MARKETS
INDIAN CAR MARKET
Initially protected from foreign competition.
Hindustani motors and Tata motors
After 40yrs, government liberalized the market.
15 car manufacturers entered
Ford: Wholley owned subsidiaries
Product strategy

Model invention strategy/ adaptive approach :
more headroom
doors opened wider
AC was adjusted
air-intake valves were adjusted
Adaptive Product Strategy
Advantages
meet the consumer needs
especially when going international, because cultures and needs vary!
Disadvantages:
More costs incured on the company
General Motors in Russia
GM joint ventured with Avtovaz
NIVA

Joint Venture
Advantages:
Lower costs
Lower risk
Local knowledge
Expand networks
Penetrate markets

Disadvantages:
Partner conflicts
Shared profits
Slower decision making process
Lose control
Is this situation good or bad for P&G? Why?
Bad:
Reputation and sales was adversely affected
lost trust from consumers

Good:
Company gains experience
able to prevent similar mistakes
Full transcript