Question

Read the case below and answer the questions that follow. P&G's Joy Makes an Unlikely Splash in Japan Anyone who thinks Japan doesn't offer opportunities for U.S consumer products should look at how quickly Procter & Gamble Co. has cleaned up in the country's dish-soap market. Until 1995, P&G, didn't sell dish soap in Japan at all. A few years later, it had Japans best-selling brand, Joy, which commanded a fifth of the nation's $400 million dish- soap market. That's astounding progress, given that the market had appeared to be classically "mature"-both shrinking and dominated by giant Japanese companies. "Joy surprised us all," says Tatsuo Ishii, dish-soap brand manager for one of those giants, Kao Corp. "It was brilliant." How the Cincinnati company executed its coup provides lessons that transcend the kitchen sink. One big lesson: "Mature" Japanese markets can be surprisingly complacent. P&G offered new technology, something the two incumbents hadn't bothered to do for years. It developed packaging that let stores make more money. And it spent heavily on oddball commercials that created a buzz among consumers. Joy offers "potent lessons" for foreign companies, says Hiroshi Tanaka, a marketing professor at Tokyo's Josai University. "At the least, Joy should tell you that Japan's got a lot more good opportunities for foreign companies than they might assume," he says. "Those opportunities are often disguised as unattractive markets suffering from saturation and oligopoly." Just two years ago, two powerful consumer-product concerns, Kao and Lion Corp., each controlled nearly 40% of the kitchen-soap market with several brands and had essentially declared a truce. The rest of the market was cornered by private brands at chain stores. Meanwhile, the Japanese were cooking less at home and thus buying less dish soap every year. P&G actually washed out of the Japanese kitchen detergent market during an earlier attempt. It withdrew in the late 1970s after failing to make a dent with Orange Joy, a product that it transplanted from the U.S. But by 1992, it had succeeded in marketing other products, such as Pampers, in Japan. The home office told its Japanese unit to find new markets for products in which P&G was strong elsewhere in the world. So that year P&G sent out researchers to study Japanese dish-washing rituals. They discovered one odd habit: Japanese homemakers, one after another, squirted out more detergent than needed. It was "a clear sign of frustration" with existing Japanese products, says Robert A. McDonald, head of P&G's Japanese operations. He saw the research as a sign that an "unarticulated consumer need" was more powerful soap. "We knew we had something to go after," he says.' Some P&G executives wert: concerned about entering such a mature market, says Mr. McDonald. But P&G's lab in Kobe went to work to create a highly concentrated soap formula, based on a new technology developed by the company's scientists in Europe, specifically for Japan. The first hint that Joy was a hit carne in March 1995 in the region around Hiroshima, 400 miles west of Tokyo, where P&G started test-marketing it. Four weeks into the test, Joy had become the most popular dish soap in the region with a 30% market share. P&G's marketing pitch was deceptively simple: A little bit of Joy cleans better, yet it's easier on the hands. The message hit a chord, says Ayumi Osaki, a 31-year-old homemaker who rushed off to buy Joy after seeing pilot commercials. "Grease on Tupperware, that's the toughest thing to wash off," says Ms. Osaki, a mother of three in Hiroshima. "I had to try it." Emboldened, P&G finished a nationwide introduction in March 1996, when Joy had attained a 10% market share, Three months later it had a 15% share. A year later it had 18%, and now its share is up to 20%, according to industry statistics, The results astounded even P&G. "Everybody in Japan wanted it," says P&G's Mr, McDonald. "Every retailer in Japan wanted to get his hands on Joy." Retailers clamored for Joy because P&G had built in "fat margins," explains Masaharu Kubo, a buyer for Daiei Inc" which operates 383 supermarkets in Japan, P&G had exploited a weakness in the Japanese giants' products. Their long-necked bottles wasted space, P&G's containers were compact cylinders that took less space in stores, warehouses and delivery trucks, Joy improved the efficiency of Daiei's distribution by about 40%, Kubo estimates, "Before Joy, dish soap was a sleepy category; [the containers] were bulky and took up a lot of shelf space, and their unit prices were falling every year," he says, "Joy freed up a lot of space for other products, pushed up prices of dish soaps as a whole, and gave us bigger margins, It was revolutionary." P&G's advertising binge also delighted retailers, Kubo says. To look for ideas, P&G marketers had watched more than a hundred commercials from around the world from P&G and its rivals. They settled on a documentary-style TV ad used in Britain by P&G for a laundry soap called Daz. P&G's advertising agency, Dentsu Inc. created commercials in which a famous comedian dropped in on homemakers, unannounced, with a camera crew to test Joy on the household's dirty dishes. The camera homed in on a patch of oil in a pan full If water, Then, after a drop of Joy, the oil dramatically disappeared. Japanese soap makers were alarmed by the campaign. Kao's Mr. Ishii says he ordered up research into Joy and concluded that more than 70% of Joy users began using it because of the commercials. "We had mistakenly assumed Japanese didn’t care much about grease-fighting power In dish soaps.” Mr. Ishii says. “The reality was people are eating more meat and fried food and are frustrated about grease stains on their plastic dishes and storage containers." Kao and Lion are now playing catch-up, turning out products that unabashedly mimic Joy, from its package and color (green) to its grease-fighting Technology. Successes like Joy have given P&G a change of heart about Japan, "For a long time, P&,G's approach was to dump in Japan what sells in the U.S.,” says a P&G manager who declined to be named. Now, he says, P&G generates ideas in Japan that it uses in other markets. It has begun selling Joy, for example, in the Philippines and is considering it for other Asian markets, It has also started to use a leak-free cap in the U. S. that it designed for Joy in Japan. The Japanese consumer is “among the world’s most educated and the most perceptive and articulate evaluators,: says P&G’s Mr. McDonald. “I’ve worked in a lot of countries but never been anywhere else where I can have a scientific discussion with the consumer like I can do here about dish soap.

Case Questions

1. What lessons can international marketers learn from Procter & Gamble’s experiences in Japan?

2. Identify and describe the roles of product policy, pricing, promotion and distribution in marketing Joy in Japan.

3. What lessons from Japan might benefit Procter & Gamble in other markets?

Answer 1

Q.1. What lessons can international marketers learn from Procter & Gamble’s experiences in Japan?

Answer- The lessons that international marketers can learn from Procter & Gamble’s experiences in Japan are as follows-

i. International marketers should not make their judgment about the opportunities available in a market before doing proper and thorough market research.

ii. A company can be successful even in “mature and shrinking/saturated and oligopolistic markets” with a proper marketing strategy.

iii. The international marketers should learn from the success story of P&G in Japan that Japan has to offer a lot more to them than it seems to them prima facie.

iv. International marketers should never lose hope and try to find the pain point of the customers and try to solve them. The only way to become successful in a competitive market is to offer value to the customers.

v. International marketers should always make use of updated tools and technologies in their marketing and production strategies.

vi. They should run innovative, unique, simple, and easy to comprehend ad campaigns.

vii. They should not only focus on the big influencing factors but also on little things like the color/style of the product packaging.

viii. They should always ask and incorporate customer feedback in their promotion strategy.

Q.2. Identify and describe the roles of product policy, pricing, promotion, and distribution in marketing Joy in Japan.

Ans.- The role of P&G’s product, pricing, promotion, and distribution policies in the success of its Joy soap in Japan cannot be overlooked. It researched the Japanese soap market, found the pain points of the customers and the existing service gaps which were not covered by its rivals. For example, it found that the Japanese are not happy with the current soaps and are struggling to clean the leftover patches of fat on their plastic plates and accordingly molded its product and became successful in the mature, shrinking, and oligopolistic Japanese soap market. It also invested and reaped the fruits of modern technologies. Its marketing campaign was also very innovative and full of powerful messages. P&G also took care of the retailers by making changes in its product packaging .P&G packed its product in cylinders which was compact and took little shelf space which allowed the retailers to put other products as well and earn more revenue from the selling. So the success story of P&G’s Joy soap in the mature and shrinking Japanese market was because of its innovative product, pricing, promotion, and distribution policies.

Q. 3. What lessons from Japan might benefit Procter & Gamble in other markets?

Ans.-Following are the lessons from Japan for the P&G which can be used to become successful in other markets as well-

i. It can be successful in other mature/shrinking/oligopolistic markets (as it became in Japan) with proper product, pricing, promotion, and distribution policies.

ii. P&G should also adopt the same strategy, which it has applied for the promotion and marketing of Joy and became successful, for the industries/niche markets in Japan.

iii. The P&G should try to find the pain point of the customers (failure of its rivals) and fulfil the needs of the customers. It is the only way to become successful in any market.

iv. The need of every country is different and which should be accordingly dealt with.

v. It should always run a targeted ad campaign with simple, innovative and powerful message for the targeted customer base.

vi. The relationship which exists between the customer psychology and colour and the style of product packaging should be harnessed.

vii. P&G should utilize the valuable feedbacks given by the customers.

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