P&G Pampers in China Essay Example

looked ‘plain and factory-made’, P;G added patterns and colourful animals and characters to their diapers. Pampers also places great emphasis on comfort, such as advertising its diapers as being highly absorbent. Moreover, Pampers diapers are designed to be light and to fit snugly onto the child while not being too tight as to become uncomfortable.

When P;G introduced its diapers to the China market, it also revamped its diapers to meet the needs and expectations of Chinese mothers, by modifying their Diapers to become softer with a “less plastic feel and increased the absorption capability”. As Frances Roberts, the brand franchise leader at Pampers, puts so aptly, "The Pampers brand is so committed to caring for the happy and healthy development of all babies around the world" The Pampers brand also emanates a competent persona as a reliable, intelligent and successful brand.

It not only communicates itself as a competent brand, but also projects itself as concerned about its customers’ ability to achieve success. With an understanding of the unique cultural and social factors that affects Chinese consumers, pampers made use of the understanding that Chinese parents were obsessed with academic achievement to its advantage by linking how extra sleep (as provided from using its disposable diapers over cloth ones) improved cognitive development. Pampers also establishes itself as a reliable brand.

Knowing that every parent would want the best for their babies and would thus select better quality diapers, Pampers ensures that its diapers are safe and reliable for their child. Also, unlike many of its competitors, Pampers diapers are available for every size and can be used for 2kg newborns all the way up to children about

40kg, encouraging consumers to stick with Pampers and increasing their Customer Lifetime Value. True to P;G’s mission statement, its emphasis on creating value for customers with its products has been rewarded with success.

Pampers is the top-selling diaper brand in China. It continues to create customer value and cater to more diverse customer needs by expanding its product range to include items such as baby wipes, disposable bibs and their bath product line named Kandoo. Additionally, Pampers promotes its advantage over its competitors from constant innovation, such as the "game-changing benefits" of its DryMax diaper.

Analysis of Pampers – Marketing Information Systems and Marketing Control

P;G has effective marketing information systems. It has budget for R;D of over 2 billion dollars and often carries intensive studies and surveys to gain deeper customer insights and maintain a positive reputation among its customers. P;G never cease keep up with a high degree of marketing control. The firm is aware of its marketing strategies and takes immediate action to correct it when appropriate. In 1998, when Pampers first entered Chinese market, the firm assumed that low-price strategy would be the best. Nevertheless, it turned out that the market did not like Pampers low-cost diapers; it is the quality with appropriate pricing that need be worked on.

The corrective action is to carry out researches in order to understand the market better.

Analysis of Pampers: SWOT Analysis

Strengths: Development – P;G invests 3-4% of their profits into R;D every year. Their research has enabled Pampers to develop a unique technology which ensures that the Pampers are thin but yet absorbent. Strong brand and Leading market position - Over the years, P;G has created $13-billion-dollar brands

such as Gillette Guard, Head ; Shoulders and Duracell. In addition, Pampers is considered P;G’s single biggest global brand with annual sales estimated at $8 billion.

Globally Pampers is considered the leader in the diapers industry with over 50% market share.

Weaknesses: Inadequate knowledge of local market: When Pampers first entered into the China market in 1988, it did not have sufficient local market information, resulting in a wrong usage of marketing strategy.

Opportunities: Developing markets: Economies of China and India are growing at a very fast pace. P;G is currently competing in about 10 of its top 25 categories in many developing countries. This would provide P;G with the opportunity to enhance its market share as well as to expand its presence in categories.

For instance in China, the diaper market was only $200 million in year 2000, but has grown to $2. 8 billion today. Increase demand for a newer version of an old product: Pampers have diversified its diapers into several different versions such as new born, daytime, overnight, etc. This would cater to the different needs of the babies. In addition, they could look into ways to increase the comfort and absorbency of the diapers. Good corporate social responsibility activities to promote the product: Pampers “One Pack Equals One Vaccine” campaign focused on eradicating maternal and neonatal tetanus.

To date, over 50 million vaccines have been raised. Threats: Intense competition: As technology advances and Chinese market grows larger, it entices competitors into the market. Gradually, new firms are starting to seize the market shares such as Pampers international rival, Huggies and other local firms whose diapers are almost half the price of Pampers products. Delayed child

birth as more women started going to work: Global trends have shown that birth rates have declined over the last century. Totally fertility rates have decreased from 3. 4 in the 1990s to 2. 52 in 2010. It has been predicted that this rate will continue to decline even further. One of the causes of this being women entering the workforce. There is a demographic-economic paradox in the inverse correlation found between wealth and fertility within nations. Breaking into Chinese MarketChanging the perceptions, beliefs, and attitudes of Chinese parents. For decades, babies in China only wear kaidangku ? colorful, buttless baby pants that Chinese toddlers begin wearing at six months (Shayon, 2010).

The principle is clear "no-fuss waste disposal". Kaidangku splits down the middle ? in front and back? and provides maximum convenience with minimum coverage (Women of China Agencies, 2004). Wearing disposable diapers was not a part of the cultural norm for Chinese babies. P;G realized that softness is as important as price to mothers in developing markets as it is in developed markets. Therefore, P;G revamped its diapers, making each diaper softer and with a less plastic feel, and increased the absorption capability.

With the right diaper and right pricing, the "science" of a marketing message came when P;G researchers with the help of the Beijing Children’s Hospital’s Sleep Research Center conducted ethnographic research involving 6800 home visits and more than 1000 babies throughout 8 Chinese cities. "Chinese parents were told that wearing Pampers would yield results that benefit child and parents" (Shayon, 2010) as babies who slept in Pampers disposable diapers fell asleep 30% faster, and slept "an extra 30 minutes every night" (Frazier,

2010).

Pampers then used these results to its advantage by making the astute link between comfortable sleep and academic achievement, putting forth an attractive selling proposition that is appealing to an academic success-driven society. The launch of the "Golden Sleep" Campaign, which included mass carnivals and in-store campaigns in China’s biggest urban areas, boasted scientific findings, such as “Baby Sleeps with 50% Less Disruption” and “Baby Falls Asleep 30% Faster. ” (Frazier, 2010) In addition, P;G did not forget its corporate social responsibility.

Not only did P;G engaged in initiatives to help schools and orphanages promote social responsibility and opportunities for children at the grassroots level, they also educated Chinese parents on how to go about taking care of their babies. All of these reasons contributed to a change in perceptions, beliefs, and attitudes of Chinese parents towards disposable diapers in general and Pampers in particular. Breaking into Chinese

Market: The Role Pampers played in developing the disposable diaper market in China

P;G Pampers was the first of the industry to introduce disposable diapers in the China market, creating a substitute product for cloth diapers. Its success in adapting to the Chinese culture and modifying their lifestyle in the abovementioned ways has allowed it to uncover the latent need for disposable diapers among the Chinese. Thus, Pampers’ played the role of creating a new need for disposable diapers among Chinese parents. Its success allowed it to gain a stronghold in the market and establish itself as the market leader in the industry.

Currently, Pampers still holds the greatest market share in China for about 30% of whole the diapers industry. However, Pampers must now face the fierce competition from other huge

multinationals firms and also the local diapers producers which able to produce disposable diapers at lower price. This presents a potential threat to Pampers. It will probably be wise for Pampers to focus on product development rather than to compete on price. China’s rise as a global economic giant will come with a growing middle class as well as rising incomes.

Thus, the emphasis on quality is likely to be more important than that on price. This underscores the need for Pampers to constantly innovate to maintain their comparative advantage in offering superior quality (softness, convenience). This will then set the stage for Pampers to adopt a “more for slightly more” value proposition. The Adoption Process of a Chinese Parent in buying a disposable diaper

Awareness: Chinese parents are aware of the existence of disposable diapers. Stores no longer carry split-pants outfits; instead, it is "shelf after shelf of diapers" (Women of China Agencies, 2004).However, not all see the need to buy them as they either have cloth diapers, or are unaware of the benefits of wearing disposable diapers.

Interest: Most Chinese parents may not seek information about disposable diapers as they are comfortable with the use of cloth diapers. However, the rapid economic development in China has pushed many Chinese parents living in big cities towards seeking information about the use of disposable diapers.

Evaluation: Initially, Chinese parents do not see the need for their children to wear disposable diapers as it has always been the tradition to wear cloth diapers. This perception changed when research studies on the sleeping patterns of the babies wearing such diapers, added value to the evaluation process. Realizing that their children would benefit from

the use of disposable diapers, Chinese parents begin to consider disposable diapers.

Trial: Parents who gave the initial version of disposable diapers a try did not see much value in it as compared to cloth diapers as they were not soft enough. However, after the disposable diapers were revamped, Chinese parents' estimates of its value grew.

Adoption: Eventually, some Chinese parents decide to make full and regular use of the disposable diapers.

How Pampers’ innovation was diffused in the market

P&G Diapers were able to penetrate into the Chinese market despite the initial challenge of the existing similar product, traditional diapers. Thus, P&G created a relative advantage for its products by focusing on the quality whereby the new diapers were less plastic feel and absorbed much better, resulting in better comfort for babies. Since then, the product became more acceptable amongst the consumers.

P&G made sure that its products are compatible with the values and experiences of its potential consumers. P&G made use of Chinese parents’ obsession with academic achievement to create such compatibility in the products. The studies were conducted to show that the good night sleeps can cause greater academic achievement for kids and so, relate to the fact that P&G diapers can cause babies to have longer sleep. Complexity in Pampers diapers remains minimal. The product itself is easier to use and disposable, comparing to traditional cloth diapers.

Pampers worked hard on innovating products while maintaining a high degree of divisibility and communicability. Due to a low price of the diapers and a quick outcome of usage, large portion of customers are able to easily enter a product trial. This means that new users are able to try

the product on limited basis. Moreover, with this large portion of first users, they will be able to communicate the quality of this product to other quickly. In addition, Pampers did an extensive research and interactive campaign –the Golden-Sleeps campaign–to attract numerous Chinese consumers of the product.

Recommendations

There are two possible ways that Pampers should implement. Pampers can achieve deeper market penetration by expanding its business to cover suburban or rural areas of China. Even though, Pampers has already managed to grab many consumers in urban areas, the market share for other parts still remains untouched. They could try setting up more retail shops in these new areas along with advertising and organising showcases in the rural areas. All of these are to increase people’s awareness of the product as well as to develop social approval of disposable diapers

Moreover, Pampers could try to develop its product further, this is called product development. One plausible way is by creating an image for Pampers diapers as Chinese products to attract more consumers who are believed to be influence by Chinese conservative culture. For example, Pampers could use Chinese name for its brand or promote Chinese culture on its product advertisement. These will cause a psychological impact on the people to believe that the product is more local and not much related to P&G Pampers.

References

• Anisa, A. (2011). SaChing. In Pampers Diapers – To Give Your Baby the Care He Deserves.
• Retrieved from http://www. saching. com/Articles/Pampers-Diapers-To-Give-Your-Baby-the-Care-He-Deserves-7074. html Backaler, J. (2010). Forbes. In How Procter And Gamble Cultivates Customers In China.
• Retrieved from http://www. forbes. com/sites/china/2010/04/27/how-procter-and-gamble-cultivates-customers-in-china/ Baxter, A. (2009). Financial Times. In Pampers: highest new entrant in top 100.
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from http://www. ft. com/cms/s/0/17e99ffc-3570-11de-a997-00144feabdc0. html Frazier, M. (2010, January 7). CBS News. In How P&G Brought the Diaper Revolution to China.

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