How P&G Brought the Diaper Revolution to China Essay

When Procter & Gamble denounce by to sell Pampers in china more(prenominal) than a decade ago, it faced a daunting marketing scrap P&G didnt safe have to gestate parents that its table napkins were the best. It had to persuade more of them that they needed napkins at all. The disposable napkin a eyeshade commodity in the West retributive wasnt part of the ethnical norm in the Chinese nursery. Babies wore cloth nappys, or in many cases, no diaper at all. And that, says Bruce browned, whos in charge of P&Gs $2 billion R&D budget, is wherefore chinaware presented and unflurried presents such a huge opportunity.Today, after eld of exhaustive look for and plenty of missteps, Pampers is the no(prenominal) 1-selling diaper in China and the phoner, in many ways, is just getting started there. The diaper market in China is booming. It stands at $1. 4 billion roughly a hind end the size of the U. S. market and is projected to grow 40 percent all over the next few years, according to research firm Datamonitor. P&Gs success in China has helped CEO Bob McDonald set some bold goals. Last October, he laid out a plan to add one billion customers over the next volt years by promoting P&G labels throughout some of the poorest corners of the world.How give P&G go about doing that? To get a sense, just look at the way it cracked and to a large stop created the market for disposable diapers in China. Learning From Failure When P&G first launched Pampers in China in 1998, the effort flopped. Instead of ontogeny a unique fruit for the market, P&G made a lower-quality version of U. S. and European diapers, wrongly assuming that parents would buy them if they were two-a-penny enough. It just didnt work, Brown says. Chinese split-pants, or kaidangku. Photo by The Wus Photo Land on Flickr It didnt help that Chinese families had invariably gotten along just fine without disposable diapers.There, potty training practically begins as early as six mon ths, and children wear whats called kaidangku dyed open-crotch pants that let them squat and relieve themselves in open areas. Pampers render wasnt compelling people to try something new and neither was the product itself. We scrimped on the softness in the foregoing versions, says Kelly Anchrum, director of world-wide scotch care, external relations, and sustainability. It had a more plasticky feel. It took us awhile to figure out that softness was just as important to moms in a underdeveloped market. P&G had tried a similarly watered- megabucks hail earlier in the decade, when it launched laundry and hair-care brands in several emerging markets. Those products also failed, Brown says. After these experiences, the smart set in 2001 came up with a new approach to product development Delight, dont dilute. In separate words, the diaper needed to be cheap, but it also had to do what other cheap diapers didnt keep a baby dry for 10 hours and be as comfortable as cloth. So P &G added softness, dialed down the plastic feel, and increased the absorption capability of the diaper.To bring down the cost, the alliance developed more efficient technology platforms and moved manufacturing operations to China to eliminate shipping costs. The revamped diaper, Pampers Cloth Like & Dry, hit retail shelves in Chinas largest cities in 2006, selling for the equivalent of 10 cents in local currency, less than half the cost of a Pampers diaper in the United States. The Universal Pitch P&G had the effective diaper and the right price point. Now it faced the bigger challenge. You have to prevail on _or_ upon someone that they need this thing, says Ali Dibadj, an analyst who covers P&G at Sanford C.Bernstein & Co. For Frances Roberts, global brand franchise leader for Pampers, any trip to China was (and still is) an opportunity to learn more about Chinese nursery habits. Its part of the P&G ethos that brand leaders visit consumers in their own roots something Roberts has done in dozens of countries, including Germany, Russia, and Jakarta. The goal is to uncover the nuances of severally market, and early on in its diaper research P&G discovered a universal need. Moms say the same things over and over, Roberts says. Their claim We want more sleep.With the help of the Beijing Childrens Hospitals Sleep Research Center, P&G researchers conducted two exhaustive studies amidst 2005 and 2006, involving 6,800 home visits, and more than 1,000 babies throughout eight cities in China. Instead of cloth, the research subjects were tucked into bed with Pampers. The results P&G reported that the babies who wore the disposables fell asleep(predicate) 30 percent faster and slept an extra 30 minutes every night. The study even linked the extra sleep to improved cognitive development, a compelling point in a society haunt with academic achievement.P&G then put its marketing work into motion. Pampers launched the Golden Sleep campaign in 2007, which included ma ss carnivals and in- parentage campaigns in Chinas biggest urban areas. A viral campaign on the Pampers Chinese web site asked parents to upload photos of their sleeping babies to drive home the studys sleep message. The response was impressive 200,000 photos, which P&G enforced to create a 660-square-meter photomontage at a retail store in Shanghai. The ad campaign boasted scientific results, such as bungle Sleeps with 50% Less Disruption and Baby Falls Asleep 30% Faster.No diaper brand, not even rival Kimberly-Clark, maker of Huggies, has make close to give-up the ghosting as much on advertising in China, according to CTR Market Research, the China-based division of American media researcher TNS Media Intelligence. Since 2006, Pampers measured media spend topped 3. 2 billion yuan, or about $476 million more than three times as much as any other brand. In 2009 alone, P&G spent $69 million, compared to Kimberly-Clarks $12 million spend for Huggies. Ruling the Nursery in China and nearly the WorldToday, Pampers is the top-selling brand in China, a country where about a decade ago the disposable diaper category hardly existed. P&G does not release sales figures for specific countries, but Datamonitor estimates that the caller has captured more than 30 percent of the $1. 4 billion market. Karl Gerth, an Oxford professor who researches the dispense of consumerism in China, says P&Gs marketing campaigns strike the right tone. You dont want to come off as paternalistic, says Gerth, who wrote the obtain China Made Consumer Culture and the Creation of the Nation. The idea that Pampers brings a scientific backing and gives children an edge in their environment thats a resplendent way to stand out from the competition. You could argue that its easy be No. 1 when the market is still small. But P&G still has a lot of work to do. The company faces challenges from private-label and domestic brands, including the No. 2 market leader, Hengan International Group, which has steadily grown its market section to 20 percent. Local brands, meantime, are catching up with better products, marketing, and distribution. Chinese consumers are going to want to root for the home team, Gerth says. And theres still the challenge of making disposables a habit. On average, diaper use still amounts to less than one a day.Weve barely just begun to pelf the surface in China, Dimitri Panayotopoulos, vice chairman of global household care, told investors in a 2008 analyst meeting. Theres even bigger potential in India, where the birth rate is almost double that of China but the diaper market remains tiny at about $43. 4 million. (Pampers is the top-selling brand there, too. So now, P&G plans to take the sleep argument throughout clownish and poor areas in India and elsewhere. The company also makes its case by positioning itself as a baby-care educator. Pampers sponsors healthcare-outreach programs such as a rural immunization program in China and mobile medi cal-care vans in Pakistan and Morocco. In India, theres a door-to-door program that offers baby-care tips and diaper samples for moms. Of course, P&G tweaks the sales pitch to fit different markets thats what the company is known for.In India, for instance, the convenience of disposable diapers doesnt resonate with parents. The companys consumer research found that many Indian mothers think that only lazy moms put their babies in disposable diapers that last a encompassing night. As Pampers brand manager Vidya Ramachandran reported in an internal pic shown to employees, We really had to change that mindset and educate mothers that using a diaper is not about convenience for you its about your babys development.