Proctor & Gamble
The paper analyses the types of international strategies available to an MNC. In particular, there is an attempt to examine the international strategy of Proctor and Gamble. It also throws light on the product, advertising, distribution and packaging strategies adopted in different countries for one of its leading brands, Pantene. The organisational structure of P&G pertinent to its international strategy has also been highlighted. ?
In order to analyse P&G’s international strategy, one should understand the type of global strategies available to an MNC: The continuum of international strategy available to an MNC depends on 2 factors: Degree of local responsiveness and degree of cost reduction. Based on this, four types of strategies are available: Fig 1: Types of International Strategies (Hill & Jones, 2009, p. 261) In transnational strategy, the decision making is a joint one by the parent and the subsidiary company in the foreign location.
This entails a mutually benefitting strategy as the parent can pass on learning and expertise in the product, while the foreign subsidiary will have knowledge on the local customers’ preferences and expectations from the product. A combination of this information will help in developing a product and / or marketing strategy best suited for the local market. P&G have designed their internal organisational structure to suit this kind of transnational strategy.
Their functional departments, the Global Business Units (GBU), Market Development Organisations (MDO), Global Business Services (GBS) and Corporate Finance (CF) all work in tandem to launch, promote and market products in foreign shores (Proctor & Gamble, 2010). In case of their leading personal care brand, Pantene, the GBU will determine the brand equity and ensure that the product launch, marketing and the product specifications are in line with the defined brand equity. MDO will take care of packaging, marketing and advertising in the local markets.
GBS and CF were support departments that catered to the worldwide staff of P&G. In tandem with their global brand equities, their global advertising strategy was also designed for acceptance worldwide. The positioning of the product – “hair so healthy it shines” was same in all nations and the advertising strategy which was launched in Latin America was replicated everywhere. The basic advertising strategy was to get stars or actresses to endorse the product; the only difference was that celebrities used were local stars in the respective country (Jeannet & Hennessey, 2005, p.
280). There were slight variations in the advertising message also, depending on the market’s expectation: The emphasis was on the ‘shine’ in the ad in Taiwan, whereas the ad in France talked about the ‘vitamin capsule ingredient’ (Aef, 2010). Though the basic product specifications (Panthenol) were uniform across all countries, the packaging varied according to the requirements of the local market. In India and Latin America for instance, sachets are a popular packaging medium, whereas in the US and Australia, the focus is on creating large value packs.
In terms of distribution, P&G had varying distribution channels based on the end market it intended to serve. In India, the product was widely distributed across multiple channels like malls, departmental stores and beauty parlours. In US, the distribution was more niche or select and the product was generally available in departmental stores. In terms of types of product offered, the Pantene product categories (for damaged hair, coloured hair, anti-dandruff etc) was customised to suit the hair conditions of the customer in the particular country.
References Advertising educational foundation (2010). Persuasion. Retrieved June 03, 2010 from http://www. aef. com/on_campus/classroom/speaker_pres/data/4001 Hill, C. , Jones, G. , (2009). Strategic Management Theory: An Integrated Approach. USA: Cengage Learning Jeannet, J. P. , Hennessey, H. D. , (2005). Global Marketing Strategies. India: Biztantra Proctor & Gamble (2010). Retrieved June 05, 2010 from www. pg. comSample Essay of Eduzaurus.com