Procter and Gamble on the China Market | Free Essay Example

Procter and Gamble on the China Market

Words: 597
Topic: Business & Economics
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Tastes and preferences are among the main determinants of consumption trends in any region. Tastes and preferences of consumers highly determine the marketing strategies that can be used by any given company. Procter and Gamble, after research hing consumer habits of China, has realized that Chinese people have variant tastes as opposed to Americans. One reason that can make Americans have uniform tastes is the fact that modernization in America started a long time ago. On the same note, modernization is, to a larger extent, even across all regions of America. As a result, most Americans have learned to associate themselves with what is considered trendy, making their tastes almost similar.

On the other hand, development in China has not taken place evenly. While areas near coastlines are highly developed, other areas far from the coast have not developed (Grewal & Levy, 2011).People in the developed areas have changed their lifestyles to keep up with the wave of modernity. Nevertheless, people in underdeveloped areas still maintain their old cultures. This makes the tastes of people from the developed areas and tastes of people from underdeveloped areas differ. Similarly, China is still divided along with various tribes with different cultures, and each tribe has various tastes.

As it regards the supply of products, Procter and Gamble decided to have its distribution channels instead of a joint venture. This is a market entry strategy known as wholly-owned subsidiary. The strategy is advantageous because it can achieve locational economies. On the same note, this strategy is good when a company wants to have control over operations and technological competence (Grewal & Levy, 2011). Nonetheless, it should be noted that the strategy is expensive since it involves heavy investment in developing distribution channels. Notably, since the tastes of Chinese people vary from one area to another, there was a need for the company to implement a strategy that would cater to the different tastes. In this regard, the other strategy that could work for Procter and Gamble is a joint venture. This means that Procter and Gamble would have partnered with a local company and share distribution channels. The problem with this strategy is that it would not have given the firm control over its market (Grewal & Levy, 2011). Moreover, the probability of conflicts with the local firm could lead to client loss. Consequently, building its distribution system was the best option.

Procter and Gamble give its Chinese consumers what they want. People in the cities are given products that fit their tastes the same to people in rural areas. Moreover, the firm’s distribution channels ensure that it is in direct contact with consumers; thus, it can note any change in consumer’s behavior. This will enable the firm to change its products when the tastes of consumers change. Product differentiation makes consumers feel valued and sends signals that their interests are taken care of. As such, consumers will be more willing to purchase these products. On the same note, Procter and Gamble differentiate products in line with the culture of their target market, unlike its competitors (Grewal & Levy, 2011). This is advantageous because it makes consumers to identify products of Procter and Gamble as their own, which in the end increases demand.

Nonetheless, if I were working at Procter and Gamble, I would have hired local people to be leaders in various distribution sections. This will make local people feel that they have a say in the firm and thus increase market share. Moreover, local people will be able to easily know what consumers want and provide advice accordingly.

Reference

Grewal, D. & Levy, M. (2011). Marketing. New York: Mcgraw-Hill.