Introducing Gain Detergent in China
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“Gain”-ing China Caitlin Cummins, Will Longhini, Eric Palm, Anja Redzepagic, Jenna Toon
Transcript of Introducing Gain Detergent in China
“Gain”-ing China Caitlin Cummins, Will Longhini, Eric Palm,
Anja Redzepagic, Jenna Toon
Overall Market Potential and
Specific Marketing Objective
Chinese Laundry Care Market ¡ 100,500,000 potential users
¡ In 2013, Chinese textile washing products market forecast to have a value of $4.6 billion
¡ 97% of households own a washing machine ¡ Liquid detergent sector fastest growing segment,
and well placed for even further growth
Target Segment
Target ¡ Women
¡ Ages 20-60
¡ Primary domestic caretakers ¡ Own home
¡ Home employed to manage
¡ Primary household item decision makers ¡ Responsible for necessary laundry duties
Buyer Behavior
Consumer Shopping
28%
26%
23%
23%
How China Shops
Brand Loyalists
Deal Makers
Price Seekers
Luxury Innovators
11%
35%
17%
37%
How the United States Shops
Brand Loyalists
Deal Makers
Price Seekers
Luxury Innovators
Buyer Behavior ¡ No large divide among shopper style preferences
favored by Chinese consumer
¡ Nearly all Chinese use cold water when doing laundry
¡ Common among users to hand-wash items first then use the washer to rinse clothing
¡ Liquid detergent has surpassed powder use in Beijing, Shanghai, and Guangzhou
Product Analysis
Gain – Product Analysis ¡ Primary focus – liquid detergent ¡ Must provide powder detergent alternative
¡ Use of the color red ¡ Joy and good fortune
¡ Careful use of powerful scents ¡ Youthful fruit scents; flower power
Key Competitor Analysis
Key Competitors ¡ Domestic ¡ NICE Group
¡ Guangzhou Liby Enterprise Group Co. Ltd.
¡ Global ¡ Unilever China Ltd.
*Account for 40% of the Chinese Laundry Care Industry
Key Competitors Chinese Laundry Care Market
NICE Group
Guangzhou Liby Enterprise Group Co Ltd
Procter & Gamble
Unilever
Guangzhou Liby
¡ Strengths:
¡ Wide product portfolio
¡ 100 products
¡ Active player in innovation
¡ “Concentrated” label
¡ 2008 Beijing Olympic sponsor
¡ Weaknesses:
¡ Low profit margin
NICE Group
• Strengths: – Extensive distribution
channels in rural areas – “Concentrated” label – Entry into Personal Care
products gives new growth area
• Weaknesses: – Large focus on
economy priced products
Unilever China Ltd.
¡ Strengths
¡ Economies of scale
¡ Weaknesses
¡ No nationalism feel
¡ Dilution of brand names
¡ Hurt collective feeling in Chinese culture
Implementation Objective
Implementation ¡ Utilize growing popularity of mass merchandisers
in China ¡ Walmart and Carrefour
¡ Cannot neglect local, independent retailers and convenience stores
Method of Entry
P&G Manufacturing and Distribution ¡ P&G owns 10 plants throughout China ¡ Convert Guangzhou plant to accommodate Gain
production
¡ New, $130 million regional distribution center in Guangzhou
¡ Keep majority of operations in-house and under P&G control
China National Foreign Trade Transportation Corporation ¡ Outsource all logistical functions ¡ Shipping and warehousing
¡ Offer freight forwarding, shipping, storage, marine transportation, and trucking services throughout China
¡ Owned and controlled by Chinese national government ¡ Guaranteed access to market and better protection
Placement Analysis
Placement ¡ Walmart and Carrefour ¡ Over 100 retail outlets each
¡ Hypermarket expansion
¡ Expanding market share through acquiring small, local, retail shops
¡ Walmart’s practice of local sourcing ¡ 20,000 partnerships with Chinese suppliers
¡ 95% of its merchandise from local sources
¡ 99.9% of Chinese associates are Chinese nationals
Price Analysis
Gain Pricing United States
¡ 70 oz. box of Tide
¡ $10.99, $.15/oz.
¡ 63 oz. box of Gain
¡ $8.99, $.14/oz.
China ¡ 77 oz. box of Tide
¡ $3.50, $.05/oz.
¡ Gain - $.05/oz.
$.15/oz.
$.14/oz. $.05/oz.
X X = $.053/oz.
Gain Retail Prices ¡ 1-liter jug of liquid detergent (33.8 oz.) ¡ $1.71/unit, $.0506/oz.
¡ ½-liter jug of liquid detergent (16.9 oz.) ¡ $.90/unit, $.0533/oz.
¡ 1,000g powder detergent (35.2 oz.) ¡ $1.80/unit, $.0511/oz.
¡ 500g powder detergent (17.6 oz.) ¡ $.95/unit, $.054/oz.
*Government interaction and incentives have made it less expensive to produce and sell liquid detergent.
Promotion Analysis
Promotion ¡ Continue to brand Gain as… ¡ “The best smelling laundry out there.”
¡ Equating signature scent with clean laundry ¡ Create a positive experience
¡ Initial promotion efforts in urban areas ¡ Beijing, Shanghai, and Guangzhou
¡ Consumers have adopted liquid detergent use
Television ¡ CCTV – China’s most watched TV channel
¡ 97% of households in target cities own a TV
¡ Commercials most effective
¡ P&G already recognized as China’s number one television advertiser
Print ¡ “If you have something important to say, say it in
print!”
¡ P&G is China’s fourth largest magazine advertiser
¡ Print and magazine advertising ¡ Family, Readers, City Beauty, Women’s Day and
Women’s Friend
Retail ¡ In-store promotions
¡ Product displays
¡ Free trial samples ¡ Trial is crucial in first year of introduction
Advertising
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Financial Analysis
Net Sales
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Transportation Costs
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Earnings Before Interest and Tax
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Pro Forma Income
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NPV
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Recommendation
Procter & Gamble should enter Gain into the Chinese market now. Market is fragmented, but prime for a new, highly specialized, detergent to enter market and command market share.
