The number of companies introducing products and services into emerging markets is increasing. Emerging markets are seen as lucrative spots and with enormous populations in China, India and Indonesia, success means huge profits.
Established fast moving consumer goods company, P&G (Proctor & Gamble) has been in the Indian market for over 20 years. It is now one of the leading companies to have introduced dozens of products that are indispensable to the daily lives of Indian consumers.
Although it is unclear when they first began to “sew seeds” in the market, P&G began to penetrate the Indian market between 1984 and 1985. At the time, their products were relatively high priced and they were only able to hold onto a small share of the market. From around 2000 the company focused on lowering the prices of detergents like Tide and Ariel and introduced new categories and new products. The major product was feminine product, Whisper. While they are learning from their failures, P&G’s continued battle is admirable.*Note: The detergent brand Tide was developed for the North American market and Ariel for the European market. The Tide brand is the focus for the Indian market, however Ariel is also sold in the country. There are differences in shapes and features.
P&G creates brands. For each brand, P&G develops a category that fits with a country and region’s characteristics as well as the preferences and uses of the consumer. In other words, they are very good at making sub brands. In the case of the Japanese market, the number of brands often ends up increasing because there is a belief that brands themselves should be renewed. Brands disappear from store shelves in a flash and new ones appear. For the Japanese, this is not really a problem.
However, P&G’s market size is the entire world. For a global brand strategy, the fewer the number of brands (categories), the easier to it is to manage. And, the company hopes to hear people say, “The detergent I use is Ariel!” across country borders. In order to hear this, management is P&G-like. It’s not an exaggeration to say that P&G and its product brands are being “raised” by people around the world.
P&G’s competition in India is Unilever or Hindustan Unilever, a long established business of over 75 years. With advertising expenditures of close to 100 million dollars, Unilever has not lost its grip on the Indian market. However, it’s price battle with P&G may mean Unilever is loosing some of its hold on the market. This is a topic that is heating up in the American and European media.
P&G faces more than just a market share battle with competitors. A Forbes article in April pointed out that in order for P&G to succeed in emerging markets it will need to increase the number of senior positions from the home countries and markets. Compared with rival Unilever, P&G lacks diversity.
Also, as with other companies, P&G targets the middle-income group with a large number of brands and products. Whether price battles with competitors were intended or not, there is movement toward expanding into the low-income group, an important market from now on. P&G brand products are still expensive for the lower-income consumers who avoid them.