Does Sk-Ii Have the Potential to Become a Global Brand Within P&g’s Worldwide Operations? Why or Why Not?

1. Does SK-II have the potential to become a global brand within P&G’s worldwide operations? Why or Why not?

SK-II does not have the potential to become a global brand within P&G’s worldwide operations. The product must be targeted at the elite and the people who can afford it, which almost rules out expansion to China with just that point. A three month supply of SK-II costs more than the average one month salary of a woman working in a major city in China. SK-II has no chance of survival in a place where next to nobody can afford it. When you consider the European market, the advertising expenses are too much and without awareness, the product will not sell. Along with this, the elite skincare market is already quite developed in European countries and it would take a lot to convince women loyal to other regimens to switch to a brand they know very little of especially with the high costs of advertising. Without either of those markets, the potential for a global brand for SK-II is very far-fetched.

2. Which market option should Paolo recommend to the GLT? What benefits do you expect? What are the risks?

Paolo should recommend expanding further in the Japanese market. While growth has slowed over the past few years, introducing a new addition to the SK-II product line could cause the product to boom again. In Japan, customers are loyal to SK-II and they continue to purchase and use it. If Paolo recommends adding on to the SK-II regimen and they are successful, they could expect an increase in market share of the incredibly large cosmetic market in Japan. The new Beauty Imaging System (BIS) that was designed would be the perfect add-on to the SK-II line because the more accurately the beauty consultants can advise customers, the more effective the product will be and the more product they will sell. Because of the premium price of SK-II, one loyal customer will spend upwards of $1,000 annually on SK-II which is much more than is made on any other P&G products. If P&G can grow

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