This graph shows that Asia has a HUGE prestige market- 25%; thus, entry into China is a must for P&G in order for SK-II to gain global fame.
By 1999, had 1000 beauty counters in China (within department stores)
O2005
6-year company wide reconstruction plan
Increase competitiveness and profitability
Retrenchment of 15,000 jobs
Shut down 10 plants worldwide
4 geographic business units 7 global business units (GBUs) based on product categories
Speed up product cycle
Company’s goal: to be a mainstream Chinese company (SK-II higher end)
More info about WorkSmart: http://www.creativejuicedesigns.com/portfolio_web_worksmart.htm
Taiwan celebrity endorser: used Taiwanese model Lin Chi-ling
HK and China celebrity endorser: Carina Lau
Chromium is a dangerous substance that can actually cause a skin irritation called eczema; and neodymium causes lungs and liver damage if inhaled.
-Picture of angry customers breaking down P&G Shanghai office glass doors
extremely slow and inappropriate.
Although they immediately stopped selling some of their “defected” products, they claimed it was because of security issues between consumers and SK II employees. They refused to admit that they had toxic chemicals in their products.
-They not only had to wait in line for hours and wait another month to receive their cash refund, but also sign a waiver to say that they believed there was nothing wrong with the product.
- When the media wanted to interview P&G executives about the scandal, they declined and refrained from making any public apologies. Instead, P&G kept quiet and waited for the scandal to calm down.
Chemicals naturally formed in products (not hazardous) – also found in competitor’s products and other things from water to vitamins
-REMOVE: P&G executives: spoke at media briefings about the safety of their products; engaged in marketing campaigns that showed SK II was a reliable and safe brand
-RECOVER: invited journalists to dermatological conferences that were held by the China Medical Association to listen about the benefits of SK II.
-REJUVENATE: Various events, like in-store roadshows and SK II’s 25th anniversary celebration with local and global celebrities, caught consumers’ attention and generated media buzz.
-SK II sales gradually climbed and the total sales increased by 89% between the start of the scandal and the end of their three-stage marketing process.
- By the end of 2006, the brand’s prestigious image was restored.
