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Introducing Dove Antiperspirant Deodorant to the Chinese Market

MKTG!401:501!|!Arijan!Horvat,!Jessica!Monreal,!Ashley!Raley,!and!Hunter!Ranly!

Executive Summary

Already a leader in the men’s deodorant market in China, Unilever now turns its

attention to being a pioneer in growing the small, but promising, women’s deodorant

market. Using one of its already established global brands and products, Dove

Antiperspirant Deodorant, Unilever looks to build off of existing brand awareness and

popularity to gain an early foothold across the country. Already being an established

manufacturer in the country with a manufacturing facility now solely owned by Unilever

greatly simplifies the market entry process and provides quite the competitive advantage.

Staying true to their expansion methodology for other products in the country, the

product will be launched as it is in other markets, adapting only the language on the

packaging. Originally focusing on spray-on and roll-on deodorants that are most popular

amongst Chinese consumers, the colors of the packaging and product scents will remain

the same. The pricing strategy will also be extended, setting women’s deodorant at the

equivalent of $US1 dollar below men’s deodorant.

With the Balanced Optimists and Undaunted Strivers consumers of China in

mind, we will be placing our product in the hypermarkets owned by Sun Art Retail Group

Lt. that serve our targeted tier-one cities. In addition to this physical presence, the product

will also be available online through Amazon, Alibaba, and JD.com.

The main objectives of our advertising to these target consumer groups will be to

raise awareness and encourage trial. In order to do this we will use physical and online

coupons, which can be found online or obtained when male deodorant is purchased. The

main challenge our marketing will face will be overcoming the idea that women think

they do not need deodorant.

As we look beyond the initial launch, we have lofty goals for the future of Dove

Antiperspirant as a product and brand in China. We would like to expand beyond our

initial Sun Group partnership and be present in a greater number of brick-and-mortar

retailers that can grow our geographic footprint. Within the first three years we would

like to have 2% market share and have comparable numbers to established brands. Lastly

and most importantly, we would like to have continued spreading our message to women

of feeling confident and beautiful in their own skin as “the home of real beauty.”

Table of Contents Part One: Product Background • Company Bio 1 • Product Overview 2 • Domestic Marketing Mix 3

Part One: Country Analysis • Cultural Overview 6 • Political Synopsis 8 • Economic Synopsis 9

Part Two: Market Research • Industry Analysis 11 • Market Analysis/Competitive Landscape 14 • Consumer Analysis/Segmentation 16

Part Three: Marketing Strategy • Brand Strategy 20 • Product Decisions 21 • Targeting and Positioning 22 • Market Entry 23 • Supply Chain Management 24 • Marketing Channels and Distribution 25 • Pricing Strategy 28 • Promotions, Sales, and Advertising 28 • Goals and Forecasting 30

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Part!One:!Product!Background!

Company Bio: An Overview Of Unilever

With roots dating all the way back to

the 1880s, the Unilever of today started as

Lever Bros, producing their pioneer product

“Sunlight Soap.” Founder, William Hesketh

Lever, began with a vision of “making

cleanliness commonplace; to lessen work for

women; to foster health and contribute to

personal attractiveness, that life may be more

enjoyable and rewarding for the people who

use our products”(Unilever 2017a). This vision that accompanied his original business in

Victorian England, although slightly changed in verbiage, continues to embody the spirit and

mission of Unilever in today’s market.

Now much, much larger than the simple soap manufacturer of the 1880s, Unilever sells

products under more than 1,000 brand names across the globe. On any given day two billion

people are using a product manufactured and sold under the Unilever corporate umbrella.

Boasting a wide variety of products from personal hygiene to condiments, some notable brands

include: Axe, Lipton, Dove, Ben and Jerry’s, and Suave (Unilever 2017b).

Even with all of that growth, Unilever has not forgotten the vision upon which it was

founded. Today they say that their “purpose as a business is to ‘make sustainable living

commonplace’” (Unilever 2017a). As Unilever looks to the future they turn their focus to

decoupling their growth from their environmental footprint as they recognize growth that harms

people or the environment is wrong and unsustainable. This is embodied in their goal to halve

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their environmental footprint by 2030 and sourcing 100% of their agricultural raw materials

sustainably by 2020 (Unilever 2017c).

Product Overview: What It Means To Be A Dove Product

Before one can understand the product, Dove Antiperspirant Deodorant, you must first

understand what it means to be a part of the Dove brand. From its beginning in 1957 with the

Dove Beauty Bar, the first alternative to soap that was less drying to skin, Dove has been leading

innovation in products that change the way women care for themselves. Self-described as “the

home of real beauty,” all of Dove’s products are designed not only to be practical but make

women feel confident and beautiful (Dove 2017a). After discovering that only 2% of women

found themselves beautiful, the “Campaign for Real Beauty” began in 2004 with the mission of

making women recognize their beauty. This message resonated with women around the globe

and, according to their website, Dove is now the top cleansing brand in the world and can be

found in nearly half of all homes in the US. Stopping not just at women’s products, the brand

branched off into men’s with Dove Men+Care (Unilever 2017d).

Now that the picture is painted and what it

means to be associated with the Dove brand is

apparent, one can then turn their attention to

Dove Antiperspirant Deodorant. Beyond just

being an antiperspirant, Dove desires for their

product to do more than others by caring for

women’s underarm skin. Each of the following

options that will be mentioned is designed with

Dove’s moisturizing cream to care for women’s

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underarm skin.

Understanding that skin care is not a one-size-fits-all problem, they offer their

antiperspirant deodorants in a variety of forms. These forms include sprays, sticks, and products

designed for clinical protection. For even more variety, each of these forms comes in different

scents, ranging from “Cool Essentials” to “Caring Coconut.” The antiperspirants also have

different drying and finishing options, some sprays going on and drying clear while others come

in powder form. The vast amount of variations will be important to keep in mind when deciding

what form of the product to bring to China, as personal preferences on scents and application

method may vary from market to market (Dove 2017b).

Domestic Marketing Mix: Dove In The USA

Product:

Dove USA is a company focused on providing toiletries for consumers. Their product

line includes deodorant, body wash, soap, moisturizer, hair care, and facial care products. The

brand’s main focus is women, but they are expanding their product line to men with men’s

deodorant, hair care, and facial products. The ideology behind the products offered is that they

provide a sense of beauty enhancement for consumers (Dove 2017a).

Place:

Dove’s presence began in the UK and has expanded into the international brand it is

today. The products are offered in approximately 80 different countries (Global 2017). In the

USA specifically, Dove offers its products in various places, from small retailers such as

convenience stores like Shell, to discount stores like Ross, to large supermarkets like Wal-Mart

and HEB. By placing the product in places such as these, it makes acquiring the product more

convenient for the consumer.

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Promotion:

Dove’s success comes as a result of their branding and advertising strategy. Through their

Real Beauty campaign, Dove has adopted a sense of responsibility for representing ‘real women’

(Dove 2017a). By not focusing on a specific shape or body, Dove has engaged many consumers

and gained support from a larger audience. By including ‘every day women’ in their ads Dove

attracts the ‘everyday woman’ in the market. In addition, by promoting body positivity, the brand

becomes relatable to a larger pool of women who wouldn’t be attracted to sporty brands such as

Secret. Dove’s advertisements expand both product and brand awareness through various

channels such as social media and TV advertisements. Dove’s representation of the everyday

woman has allowed Dove to build a connection with the consumer, thus having a positive view

of the brand.

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$3.22! $5.47! $4.82!

Several!Dove!products!and!their!respective!prices,!demonstrating!product!and!price!range.!

Price:

Dove thrives in offering a quality product at a reasonable price. Pricing of deodorants in

the industry range from $1.97 - $11.90 with lower quality products offered on the lower end of

the spectrum and clinical quality products priced on the higher end. Dove products are priced at

an average of $4-5 for Dove Advanced Care Deodorant Stick, $5.50 - $6 for Dove Dry Spray,

and $3-4 for Dove Roll On Powder. Compared to other products offered in the market, Dove is

priced approximately $1.00 higher, but succeeds in pricing strategy due to its position as a

‘beauty enhancer’. For example, on Walmart.com a deodorant stick is offered by Secret is priced

at $3.97 while Dove’s Advanced Care stick is offered at $4.66. However, Dove’s high quality,

luxury image supports its competitive pricing strategy, therefore succeeding with its pricing

standards. Because Dove is seen as ‘high quality’ and a ‘beauty enhancer’, consumers are willing

to pay more for the product (Wal-Mart 2017).

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Part!One:!Country!Analysis!

Cultural Overview: The People Of China

A country rooted in tradition, populated by a people bound to a strict adherence to

hierarchy and driven by a sense of duty to one’s family and country, American companies can

find themselves immersed in a drastically different culture when they first enter the Chinese

market. In order to gain a better understanding of the general culture of China, one can turn to

Hofstede’s cultural dimensions.

The country ranks very high in the areas of power distance at 80, masculinity at 66, and

long-term orientation at 87. First, interpreting their power distance, this means that the Chinese

are accepting of people holding higher positions than themselves and are generally okay with

authority. It is expected that you will have your role and do what is expected of you. This is

contrary to the trend in other countries where businesses are attempting to establish a sense of

hierarchy that allows lower level employees more autonomy and interaction with their superiors.

Next, their high ranking in masculinity indicates that the Chinese are motivated by success and

strive to succeed and win in all things they do, as coming in first is valued. Great importance is

placed on doing what is best in all things, be it work or school. The highest ranking of the three

at 87, long-term orientation is a reflection of their commitment to continuing tradition in what

they do today and in the future. Value is placed on doing things practically and using proven,

time-tested approaches (Hofstede 2017).

On the lower end, China is only a 20 in individualism, a 30 in uncertainty avoidance, and

a 24 in indulgence. Coincidently, these three dimensions are the most important ones to keep in

mind when bringing a new product such as Dove Antiperspirant Deodorant to a new market. In

favor of the new product launch is the country’s low ranking in uncertainty avoidance. This

means that the Chinese are open to trying new experiences and products that might be outside of

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their daily routine, such as women wearing deodorant for the first time. Also important to how

the product should be framed, is the low ranking in indulgence. This means that the product

should be positioned as a new, emerging need, not an extravagant want. Finally, China is an

extremely collectivist society, coming in at only a 20 for individualism. This means that the

opinions of other people carry great weight in the minds of the Chinese, as they define

themselves through the approval or disapproval of society. This low individualism score also

suggests that the product should be positioned as something other people now expect you to

wear, not something for personal gratification (Hofstede 2017).

However, it is important to acknowledge the way that the West has begun to influence

China. “Western culture began trickling into China over 30 years ago when they opened their

borders to foreign trade. Western brands and ideas have exploded in the past decade hand-in-

hand with the economic boom and expanding middle class” (Williams 2016). As Western

products, fashion, foods, media, and entertainment begin to permeate China, businesses will need

to pay attention to the younger generation in China forging their own cultural identity that may

differ from the one described above.

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Political Synopsis: Communism and Complications

Since 1949, China has, for all intent and purposes, been a one-party state ruled by the

Chinese Communist Party who founded today’s People’s Republic of China. While the Chinese

Communist Party (CCP) continues to hold power in the country, its iron first perhaps no longer

has as solid a grip on the political decisions for the country as it once did. Today, alongside the

booming voice of the CCP, the groans of some political opposition can now be heard. The source

of these groans can be traced back to three key players: the strong state government

bureaucracies, the People’s Liberation Army, and the National People’s Congress. Together,

these three players have “helped to blur the communist regime’s lines of authority” (Dumbaugh

& Martin, 2009).

Strangely enough, the desire of the Communist Party to stay in control has forced the

party to adapt to changing world and market conditions in ways that other communists regimes

have failed to do. Seemingly a unilateral process, the aforementioned political presence mixed

with the secretive and complex nature of passing policies in China has fragmented the power in

the government. Perhaps most relevant to this case is the transition of the government's role in

economic policy from enforcing truly communist ideas to being more capitalistic in nature

(Dumbaugh & Martin, 2009).

While there has been some shift, this does not mean that doing business in China has

gotten drastically easier, World Bank ranks China at 78th overall when it comes to ease of doing

business (World Bank 2017). As some areas have opened, other restrictions, such as those

restricting foreign involvement in areas of the Chinese economy, have remained steadfast. With

domestic businesses receiving favor in China from the courts and limits on foreign ownership of

businesses, it is no surprise that licensing and investment via equity stake are popular options for

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market entry. These methods allow companies to establish new partnerships and capitalize on

their partner’s already existing personal relationships that are placed at a premium in the Chinese

business world (Gov.Uk 2017).

Economic Synopsis: A Growing Middle Class With Disposable Income

Beginning in the late 1970s, China has started to move to a market-oriented system and

their economy plays a major global role. China surpassed the United States as the largest

economy in the world in 2016 for the first time in modern history. China is the world’s largest

exporter, beginning in 2010, and the largest trading nation since 2013. Despite these impressive

accomplishments, China’s economic growth started to slow in 2011. Due to the slowing

economy, the government implemented its 13th Five-Year Plan in 2016 to “increase innovation

and boost domestic consumption to make the economy less dependent on government

investments, exports, and heavy industry” (CIA 2017).

China uses the Renminbi Yuan (RMB) as their currency, where 1 US dollar equals

6.6446 RMB. Previously China had a currency tightly linked to the US dollar, but in July of

2005 China decided to move to an exchange rate system and implemented the RNB. The

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country's GDP sat at $21.29 trillion with a 6.7% real growth rate, the lowest growth rate in years.

On the upside, the GDP per capita has increased constantly throughout the last 5 years (Portal

2017).

The GDP composition is broken up with agriculture being 8.6%, industry at 39.8%, and

services at 51.6%. The labor force is at 807.1 million people, and though this is still the highest

number in the world, it significantly falls behind 2016’s number of 1.004 billion. This is due to

the aging population, a direct impact of China’s “one-child-policy”. The unemployment rate is

currently at 4% and is expected to rise due to the aging population (CIA 2017).

It is predicted that between 2017 and 2030, total disposable income will grow at an

average annual rate of 5.4% (Euromonitor 2017c). This will allow Chinese consumers to have

more money to spend on items that they want, opposed to items they need. This is a new thing

for the Chinese consumer because previously government taxes had been so high that the

consumers were raised to save money. This is why majority of the older population likes to save

money instead of spend it.

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Part!Two:!Market!Research!

Industry Analysis: Strong Growth & A Promising Future

Despite the moderate growth of the Chinese economy, the overall cosmetics and personal

care market continues to rise in value. The strong growth is supported by the continued rise of

living standards of the Chinese consumers along with steadily increasing personal hygiene

awareness. In 2017, the revenue in cosmetics and personal care amount to almost US$39,000m,

with skin care dominating the sales with over 1/3 of the market (Duncan 2017). The second-child

policy implemented in 2016 is expected to boost the demand for baby and child-specific products

while “value-added cosmetics and personal care products with specific functionalities are

expected to boost value sales” (Euromonitor 2017a). The continued increase in the number of

middle-class consumers, along with the rise of e-commerce and internet retailing suggests that

there will be a “continuous trading up trend in the forecast period, with a value CAGR of 9% at

constant 2016 prices for premium cosmetics and personal care” (Euromonitor 2017a). Premium

products continue to grow at a more rapid pace than mass products, mainly because most

premium products are large international companies in whom the consumers trust and they are

able to constantly support the demand of consumers in highly penetrated categories. This is

supported by the overall growth trend seen in 2016. Mass products had a 5% growth in current

value terms and premium brands reached 10% growth. Online distribution plays an inevitable

role in this trend. Besides lowering the distribution channels prices, companies have a chance to

provide product information, present new products and continue building their brand image.

International companies have already jumped on the online distribution bandwagon in order to

appeal to the growing middle-class consumers. For example, the sales of cosmetics though

online distribution amounted to almost 125 billion Yuan in 2015, having a growth rate of 25.2%

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A!graph!of!the!leading!companies!in!the!industry.!

compared to 2014, which patrolled with a strong decline in departmental store sales (Duncan

2017). Along with the international companies, we have seen a rise of domestic players as well.

Despite the domestic growth, most consumers lack knowledge and trust of the domestic

companies and prefer using well-established brand names. This overall growth in both

international and domestic markets will likely lead to an intense competitive landscape where

companies will enter into new areas in order to cater to the specific wants of the Chinese

consumers. Chinese consumers have a strong preference towards products with specific!

functionalities,!resulting!in!a!trend!towards!product!segmentation.!Having!an!established!

high!product!quality!along!with!an!established!brand!image,!gives!companies!such!as!

Unilever!a!unique!competitive!advantage!to!

introduce!unique,!specific!products.!

Furthermore,!wellTestablished!research!

and!development!resources!along!with!

successful!marketing!that!the!consumers!

trust!in!support!this!competitive!

advantage.!On!the!following!page!the!

graphs!outline!the!sales!of!beauty!and!

personal!care!by!category!and!the!

projected!revenue!growth!of!the!industry!

as!a!whole.!

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(Euromonitor!2017a)!

(Statista!2017)!

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Market Analysis/Competitive Landscape: Rexona, A Unilever’s Brand, Leads

Unilever China continues to dominate

the deodorant market with a value share

of 25% in 2016 (Euromonitor 2017b).

This is thanks to their varied product

portfolio (Rexona and Lynx) and

focusing on gender specific products in

both roll-on and spray formats, targeting

specific consumers and catering to their

needs. International brands continue to

dominate the market thanks to their high

brand awareness, early market entry and

advanced production technology. The Chinese consumers value functionality when it comes to

deodorants, leaving very little space for domestic brands because they lack consumer trust in

research and development. The above graph shows the leading brands in the Chinese

antiperspirant market.

“The problem is twofold with many Chinese consumers split between two views, one

being that sweating is good for a person’s health and should not be stopped or hindered, and the

other relating to a desire to eliminate sweat-soaked clothes and odor” (Mintel 2012). When it

comes to product supply, many leading deodorant manufacturers lack extensive distribution

channels along with limited advertising for deodorant products, restricting the amount of

consumers they are able to reach.

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Due to the newness of the deodorant market in China, the overall market size

pales in comparison to those of other developed countries. While deodorant was

introduced in 1912 in the United States, China was not exposed until the early 2000s

(Everts 2012). This was due to their lack of ‘need’ and exposure to the product itself.

Mintel’s research shows that over the past 9 years, the deodorant market in China has

grown slowly, but significantly, with the market value increasing 160% from 2013 -

2017 (329.2 in 2008 to 855.9 2017) and a 6% increase from 2016 to 2017 alone. The

market is dominated by roll-ons segment with 73.25%, followed by aerosols with

25.96%. In terms of production, Unilever is the top producer for deodorants in China

followed by a German company, Beiersdof AG. Over the past years, the market

competition has been expanding with more and more labels infiltrating the market.

Despite the market value growth, China’s per capita expenditure of deodorants remains

one of the lowest in the world (Mintel 2012). The first graph below that was used to

find the above calculations and shows the growth of the market and the second graph

outlines the breakdown of the market by application type.

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Consumer Analysis/Segmentation:

We have segmented the consumer psychographically and demographically through sex,

income, and geographic location.

Demographic:

China has a population of roughly

1,379,302,771, with about

668,548,053 being female. The

female median age is 38.1 years

old, and the largest female

population in an age group is 25-

54 years old with 327,660,460

women. China has an all-around

older population and the females are even older than the men that have a median age of 36.2

years (CIA 2017).

Highest income and relevant geographic locations in China are connected. Tiers are

established by three categories: GDP, population, and politics. The Chinese government doesn’t

have an official definition for the tiers, therefore business look at each province separately and

decide the tier for each category. This means, theoretically, a city can be tier 3 in population, tier

2 in politics, and tier 2 in GDP. The average of the three tiers then becomes the overall

recognized tier. Here are common themes in the tiers:

• Tier 1 – all first tier cities have a GDP over US$300 billion and are directly controlled by

central governments. “First-tier cities represent the most developed areas of the country

with the most affluent and sophisticated consumers. They are large, densely populated

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urban metropolises that have huge economic, cultural and political influence in China.

Tier 1 cities attract great attention from foreign enterprises due to income levels that are

much higher than the national average” (Wine Australia 2016).

• Tier 2 – cities with GDP of US$68–299 billion and are provincial capital cities and sub-

provincial capital cities. “Second-tier cities have become increasingly attractive for

investment. They are some of the fastest growing areas. Consumer behaviour is evolving

quickly and, in general, trends are similar to first tier trends. Tier 2 cities have received

increased attention and investment from foreign companies due to lower labour costs,

less competition, lower operating costs for retailers, and rapidly increasing consumer

spending habits. Even within this tier there are substantial differences in the economic,

population and consumer habits in each city” (Wine Australia 2016).

• Tier 3 – cities with a GDP of US$18–67 billion and are prefecture capital cities. “They

generally lag behind first and second tier cities in terms of economic growth and

development, although many are still considered to be very significant economically and

historically. Many of third-tier cities are considered to be convenient and relatively

inexpensive locations for a number of large industries and big companies” (Wine

Australia 2016).

• Tier 4 –a GDP below US$17 billion and are county-level cities. “Often lumped together,

cities in this category represent the majority of China’s urban population and combined

income” (Wine Australia 2016).

“The major regions are directly controlled by China's Administration Centre. Guangzhou,

Shanghai, Chongqing, Beijing and Tianjin, are the only five cities are that qualify as Tier 1

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across all categories” (Hernández 2017). Refer to the final page of this plan to see where these

areas are.

Psychographic:

According to research and segmentation done by Passport, there are five consumer types

that dominate China. The first of which is The Secure Traditionalist, the largest consumer type in

China with 30% of the population, an average of 42 years old, and predominantly male at 55%.

They avoid shopping as much as they can and only make necessary purchases. They are big

money savers and want great value on what they spend their money on. The average income is

$30,496.

The Inspired Adventurer makes up 26% of Chinese consumers, and 47% of them are

female. They enjoy shopping occasionally, and make impulse purchases when they feel like it.

They somewhat care about their personal appearance, and they are very interested in luxury

goods when they consider them to be reasonably priced. They have a strong loyalty to brands

and specific products, and are influenced by green labels and ethical claims. Inspired

Adventurers desire clear and easy to understand. The average age is 36 years old and the average

income is $43,859.

Cautious Planners are 19% of Chinese consumers, are 51% male, and an average age of

48 years old. They want simple lives, but won’t necessarily spend money in order to achieve this.

Planners enjoy planning purchases in advance and avoid shopping. Their highest priority is

saving money. They’re indifferent on how others perceive them, and their average income is

$31,525.

Balanced Optimists make up only 15% of Chinese consumers, but 56% are female. These

consumers love to shop, and would rather spend money than save money. They care greatly

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about their personal image and how others perceive them. They make impulse purchases often,

are heavily influenced by well-known brands, and have high brand loyalty. Their average age is

48, and average income is $59,148.

The Undaunted Striver is the smallest percent of the market with only 11%. They are

majority female, 52%, with an average age of 38 years old. The Striver loves shopping, making

impulse purchases, and they deeply care about how others perceive them. They care greatly

about green issues and are more willing to pay money for green goods. They frequently exercise

to maintain a desired physique and are highly active online. They are extremely interested in

branded goods and enjoy convenient shopping channels. They have an average income of

$62,795 (Euromonitor 2017c).

It is hard to place deodorant preferences on the different psychographics listed above due

to the almost non-existent female deodorant market in China. There is no data regarding why

they choose the deodorant they use aside from speculation, most likely necessity and personal

preference. More research, such as focus groups or intercept interviews, will need to be done

prior to launch in the Chinese market to gain a better understanding of the determining factors.

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A!comparison!of!Dove!products!in!the!US!(left)!versus!their!

Chinese!counterparts!(right),!showing!

minimal!adaptation.!

Part!Three:!Marketing!Strategy!

Brand Strategy: A Global Brand With A Global Identity

Our brand strategy will be one of continuity. A truly a global brand with a consistent

image in all of the markets that it enters, Dove has worked hard to cultivate this perception in the

eyes consumers and to stray would be a mistake. We will take the same approach when

introducing Dove Antiperspirant Deodorant to the Chinese markets.

Dove already has as an established brand presence in China because it is a popular

shower gel. We will use this popularity to launch the new product and attempt to position it in

the eyes of the consumer as having the same quality they have come to expect from the other

Dove products in their stores. The idea is to play off of the consumers’ brand recognition and

loyalty.

We also want to continue using real women without enforcing unachievable beauty

standards in order to promote beauty as a source of confidence rather than anxiety, as it is an

integral part of the Dove brand. Dove intends to promote “real beauty” not just through brand

campaigns but also empowerment programs. Dove’s overarching goal is to make Dove the face

of beauty, self-love, and confidence for women and this goal will be no different in China.

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Product Decisions: A Minimal Adaptation Approach

We plan to implement two types

of Dove deodorant: Dove Roll-On and

Dove Dry Spray. As outlined in the

graph to the right, both deodorant sprays

and roll-ons have been increasing

throughout the last 5 years. Deodorant

sprays have seen a rapid increase with

over 52% in sales since 2011 while

Roll-ons have seen an 18% growth.

Dove currently sells other

products in China. No changes to the packaging were made except for the language. This will be

the same strategy used for the women’s line. We want to continue using the same packaging and

colors (mostly white with gold logo) that promote elegance and simplicity and align with our

message of beauty and confidence. The scent will be the same and after initial feedback from the

customers we will cater to their specific wants, although we do not foresee any necessary

changes to the scent. As outlined in the previous brand strategy section, using an extension

strategy ensures that the brand image is not distorted or lost and the product can still be

recognized as Western by Chinese customers.

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Targeting and Positioning: The Affluent & Image Concerned

We are targeting women between the ages of 25-54 in the Tier one cities, specifically

Hong Kong, Shanghai, and Beijing. As seen in the graph below, Shanghai and Beijing have

higher average household spending than the national average; therefore they are more likely to

spend their money on discretionary goods, services, and leisure goods.

The two types of consumers we are initially trying to hit in China are the Balanced

Optimists and Undaunted Strivers.

Balanced Optimists make up only 15% of Chinese consumers, but 56% are female. These

consumers love to shop, and would rather spend money than save money. They care greatly

about their personal image and how others perceive them. They make impulse purchases often,

are heavily influenced by well-known brands, and have high brand loyalty. Their average age is

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48, and average income is $59,148. This works to our advantage because we want to target those

that have the money, are female, and have brand loyalty since Dove is a strong brand name.

Susceptible to image appeals, the minimal adaptation of the packaging from Western

counterparts should appeal to this segment. While originally drawn to the product for status

reason, the idea is to convert them to brand loyal consumers that begin to see deodorant as part

of their daily hygiene needs.

Possessing seemingly the perfect combination of traits for a new deodorant consumer,

The Undaunted Striver is the consumer type we will try to appeal to the strongest. They care a

great deal about their physical physique, therefore workout more often, leading to more chances

for them to sweat. They love to shop, whether it is at a grocery store or a specialty store and they

care a great deal of how people see them. They’re extremely interested in branded goods, and

enjoy convenient shopping channels. They also have an average income of $62,795, which is

much higher than the national average income. Ideally, the product will appeal to them because it

is closely associated with their active lifestyles and because it is a part of a widely recognized

brand like Dove. The two groups, both concerned with the opinions of others, also serve as

references for other members of their psychographic segment giving the added bonus of word-

of-mouth advertising.

Market Entry Strategy: An Already Established Player

The Unilever plant is wholly owned and operated under its own name, so the company

has complete control over almost every phase of their brand’s manufacturing process (Madden

2008). Unilever got to this wholly owned company in China with first being part of 10 joint

ventures in 1997, and by 2007 it was wholly owned (Braeken 2008). Thus, no new market entry

strategy is necessary for this product, as Unilever is already an established player in China.

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Supply Chain Management: A Joint Venture Turned Wholly Owned

Keeping the manufacturing within the country will help keep costs low since importation

costs will be avoided. In order to distribute products to our desired locations the product will be

transported by rail to current distribution centers. Unilever has an established global supply

chain. Unilever is already a well-established company in China. They own their own factories,

distribution centers, research facilities and many more operations in what they call Unilever

Hefei Industrial Park. The Hefei location is Unilever’s second-largest factory, with Brazil being

the largest. The Unilever plant is wholly owned and operated under its own name, so the

company has complete control over almost every phase of their brand’s manufacturing process

(Madden 2008). This helps the company skip many taxes and shipping costs. "With a global

production base here and an operation centre in Shanghai, China has become an integral link of

Unilever's global supply chain," and now uses the facilities to export product to other countries

nearby (Lu 2005). Unilever got to this wholly owned company in China with first being part of

10 joint ventures in 1997, and by 2007 it was wholly owned (Braeken 2008).

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Unilever opened another Industrial Park in Tianjin in March of 2012, which is equipped

with advanced technology and facilities to help adhere to the Zero Release Standard in order to

present a world-class green production base. The Tianjin Economic-Technological Development

Area is a special economic zone (SEZ) which allows companies to develop their own

infrastructure without approval and receive tax incentives (Investopedia 2015).

Marketing Channels and Distribution: Hypermarkets & Online

We have decided to use a hypermarket as our channel of distribution. A hypermarket is

defined as, “a hybrid retailing format combining the discounter, supermarket and warehouse club

approaches under a single roof” (Keegan & Green 2017). Store-based retailing holds the majority

as the channel distributor for deodorants in China with a 69.2% share. Hypermarkets dominate

the store-based retailing sector with a 26.6% share, which can be seen in the chart below.

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We have chosen to use Sun Art Retail Group Lt. as the hypermarket to distribute the

product. The Group is a joint venture between Taiwanese conglomerate Ruentex Group and

French retailer Groupe Auchan SA (Reuters 2017). Sun Art Retail owns two large supermarkets,

RT-Mart and Auchan. Sun Art Retail Group Ltd. is the second largest hypermarket in China,

which can be seen below (Statista 2012). The dual banner model is a competitive advantage in

China as it increases The Group’s geographical footprint and therefore achieves deeper market

penetration than competitors.

There are over 446 stores owned by the hypermarket in the PRC as of August 2017, and

together they cover approximately twelve million square meters of floor space. The selling floor

area of the hypermarkets range from 6,000 square meters to 17,000 square meters with an

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average of 8,800 square meters. These stores are distributed everywhere throughout urbanized

China in 224 cities across 29 provinces, autonomous regions, and municipalities. They are

located in Tier one cities as well as all other tiers, including fifth-tier cities, and The Group plans

to open more small-scale stores in these lower tiers in the future (Sun Art Retail Group Limited

2017). The stores accept RNB, credit, and gift cards.

We do not want to use the number one hypermarket, China Resource Vanguard Co., Ltd

because the majority of their business comes from Tier 1 cities. The middle class, Tier 3, is on

the rise due to the Chinese economy going away from being a large exporter, and more towards a

consumption-based economy. It is supposed to remain the fastest growing class through 2030,

which puts more demand for discretionary spending (Euromonitor 2017b). Though hypermarkets

are said to be declining, this is only true in Tier 1 and 2 societies. Hypermarkets are growing in

the lower tier cities, with a 3.1% increase in 2016’s 3rd quarter, compared to a 0.6% decrease in

the higher tier cities. The growth in these lower tier cities is directly due to the Sun-Art Group,

which grew 28% in 2016 (Yu 2016).

In addition to selling the product in select hypermarkets, consumers will also be able to

purchase the product online. The first online location will be China’s Dove website. Encouraging

purchases here will be beneficial, allowing them to not only have access to our deodorant, but all

of the information featuring our brand mission and other products. The product will also be

available to purchase through unaffiliated online retailers like Alibaba, JD.com, and Amazon.

We felt it was important to be present on all three of these websites so that the consumer can use

whichever retailer they are already most comfortable with.

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Pricing Strategy: Somewhere In The Middle

In the American market, women’s deodorant is priced approximately $1 less than men’s.

We are going to use an ethnocentric approach and continue to use this same approach in the

Chinese market. The average cost of men’s deodorant is 92.01 Yuan ($13- $14). The idea is to

price women’s deodorant slightly below men’s at 72.90 - 79.53 Chinese Yuan ($11-

$12). According to a survey from the Boston Consulting group, 61% of Chinese shoppers would

pay more for products made in the U.S. The price suggested would allow Dove to profit from the

mark up while still being desired by Chinese consumers.

As this is a relatively new market, we weighed the pros and cons of a market penetration

and market skimming pricing strategy, but ultimately decided against both and settled on the

strategy detailed above. We decided against the low prices of a market penetration strategy

because we did not want to confuse consumers that were already familiar with the Dove brand in

men’s products at a higher price. Lowering the price of the women’s equivalent drastically could

have negative effects on the perception of existing products since they are going to be branded

together. We also decided against a market skimming strategy, as we would like the purchase

frequency and view of this product to be the same as it is in the United States. The higher prices

that accompany this strategy could cause the Chinese consumer to view it as a treat or luxury,

while we would conversely like to establish it as a frequently purchased staple of hygiene, like

toothpaste or soap.

Promotion, Sales, and Advertising: Oh my!

The objective to our advertising is to spread awareness about this new product and

encourage trial. This product will be marketed as one consumers do not know they need, much

like the iPhone. This method of advertising will also aid in overcoming the gene problem

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previously discussed. The Dove deodorant will be aimed at Chinese woman who are very

involved in fitness. This target market allows us to present the product as a potential ‘need’. The

product will be advertised through the following channels: television and social media (CIW

2015). These pieces of the marketing campaign will send the message of ‘elegance and

confidence through empowerment’ and push the idea of a ‘must-have product’.

Balanced Optimists and Undaunted Strivers are both very loyal to branded products, and

are willing to pay more money for them. They both like convenience and researching products

before they go out and buy them (Euromonitor 2017c). This is why we have decided to not alter

packaging on the product; we want to keep the brand the same across the globe. The Dove

website promotes their “green” ways of manufacturing and development, and the product can be

purchased on the same site.

The product will also be available to purchase online through Amazon, Alibaba, and

JD.com, where customers can rate the product and leave reviews. To encourage trial, we will

launch on these websites with a 10% discount on the new products using a discount code for up

to 6 months after the product’s release.

Another home for the product will be on the shelves of RT-Mart, the Sun Group’s

supermarket, next to men’s deodorant. Men’s deodorant is already an established market in

China, and we want to use this to our advantage. When a customer purchases a Dove Men’s

deodorant in RT-Mart, they will receive a coupon to get 25% off purchasing the new product for

women.

As seen from the graph on the following page, 58% of women personally groom in order

to feel good about themselves, and 55% do it to make a good impression on people they meet for

the first time (Statista 2015). In order to appeal to this, our commercial will show a Chinese

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30!

woman in all white clothing, performing different exercises such as running, doing yoga, and

lifting weights, putting the deodorant. These exercises will be done in a majority white room, or

outside in a clean area in order to encourage the idea of elegance and cleanliness. This

commercial will be on the Dove China website and on television.

Goals and Forecasting: Looking To The Future

As the deodorant market in China continues to grow, we would like to see Dove

Antiperspirant Deodorant grow right along with it. There is a great competitive advantage to

being a pioneer on the women’s side, penetrating the market early and establishing strong brand

loyalty that will weather the storm of incoming brands attempting to wrestle away market share.

It is because of this strength that our sales and expansion goals are ambitious.

Beginning with distribution, we would like to see widespread enough success to expand

into other retail avenues. With initial efforts focusing on the select hypermarkets owned by Sun

Art Retail Group Ltd., eventually Dove will need to move into other hypermarkets that service

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different tiers of cities than our original stores. There are also other strong brick-and-mortar

models that we should enter once warranted, namely drugstores and grocery retailers.

As far as projecting sales numbers, we are going to operate under the assumption that the

original launch of Dove captures around 1% of the total market share in its first year. In the

following two years the brand would expand to account for 1.5% and then 2%, growing in

accordance with average rate of Unilever as a whole in the Chinese deodorant market. Using the

graph below, this would place the sales of Dove at US$1.32 million, US$2.07 million, and

US$2.93 million in 2018, 2019, and 2020, respectively (Mintel 2017). At 2% in three years,

Dove would be on par with brands such as Coty Inc. and Mandom, who have been around for

longer but belong to less successful companies (Euromonitor 2017b).

Lastly, another goal would be to obtain widespread brand recognition. Being a brand that

prides itself on its message we are trying to communicate and relies on it to generate loyalty, it is

important that brand message resonates with the consumer. Beyond just sales and expansion, it is

important that Dove carries out its mission of being the home of true beauty and ensuring that

women of all shapes, sizes, and styles feel confident and beautiful in their skin.

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