The Procter & Gamble Daily brand: Who will be the next delisting?

In August 2005, Procter & Gamble Global released the annual report for the fiscal year 2004 to 2005 (performance from the previous fiscal year ended June 30 this year, excluding the newly merged Gillette business). The situation is gratifying and sales revenue reached US$ 57.741 billion. Last fiscal year grew by more than 10%; after-tax profits reached $7.257 billion, an increase of nearly 12% from the previous fiscal year; and $1 billion of big brands reached 17.

However, P & G in mainland China, there is not so much good news. After the lapse of less than a month after the publication of the annual report, on September 5, the "Daily Economic News" released a "late" report: It was confirmed that the Procter & Gamble China Jishuang brand had ceased production in July and formally withdrew from the Chinese mainland market. .

Although there is a certain amount of psychological preparation, because the poor sales of cool is obvious to all, but when you hear the news is still somewhat surprised.

After a simple calculation, we were surprised to find that: In 18 years since P & G entered China in 1988, at least seven brands have already withdrawn from the Chinese market or have no influence, and at least one product has failed to extend!

Such data and results occurred in P&G who respectfully called the "brand godfather." How many people are somewhat surprised. We cannot help but ask: In mainland China, who will be the next product of P&G's delisting?

I. Ascend: Three-year pregnancy, two-year-old premature death

First of all, let's take a look at the resume's China resume:

1. In 1997, the market share of Oni with “plants” and “black hair” as the selling point rose to 12.5%, second only to Piaorou. This caused great pressure on P&G. Bristol-Myers Squibb also promoted its Clairol Herbal Essences to China. In order to change the passive situation, P & G decided to introduce the concept of black hair and plants in its products to meet the challenges of competitors and further consolidate its dominance.

2. In the same year, P&G proposed the concept of Chinese herbal shampoo, proposed the requirements for the development of herbal shampoos, and set up a group to start market research.

3. In 1998, the company's "backyard caught fire" and the market share shrank; Sunsilk quickly launched black sesame shampoo and occupied the market at a low price.

4. In September 1999, P&G Runyan entered the product testing stage, rethinking its understanding of product positioning, brand concept, product packaging, and advertising creativity, and partially corrected the original plan.

5. After three years of "active consumer research and brand brewing period", in 2000, sponsored "Mood of Love" to announce the launch of "R&D Water, which focuses on the beauty of Oriental women's black hair" in Hangzhou.

6. In May 2001, Procter & Gamble Global acquired the Icari brand for a price of US$4.95 billion.

7. In October 2001, Procter & Gamble related persons said in an interview with the media that P&G's US headquarters decided to extend the Runyan brand to the Asian market and unveiled it to the world's black hair consumer groups.

8, after a lapse of six months, in April 2002, Runyan shut down completely and withdrew from the market. P & G said that after the withdrawal of Runyan, P & G will focus more resources on rejuvenating Shouwu black hair products.

9. According to statistics, the sales of Runyan products in the two years of listing are about one billion yuan, and the brand's investment accounts for about 10% of them. In the past two years, Runyan has gained a lot of consumer awareness, but according to relevant data, its highest market share is no more than 3%—this figure is only 1/10 of the Rejoice market share.

Runyan’s listing and delisting have given consumers and industry players a lot of shock. Analyzing the factors of Procter & Gamble's "failed" Run Yan, we can find that the following factors are crucial:

1, development delays and delays.

During the three years of research and brewing prior to the listing of Runyan, O'Neil’s “Internal Consumption” gave Runyan an excellent market opportunity. Unfortunately, Runyan did not seize it when it was still focused on market research. Unilever has pioneered the launch of Sunsilk Black Sesame Shampoo.

Excessive infatuation with market research, inadequate attention from global headquarters, and rigorous but tedious procedures are undoubtedly reflected in Runyan, and it also makes Run Yanyi's listing a disadvantage in the competition.

2. The target group is wrong and the demand base is incorrect

The black hair products of Oni and Sunsilk have achieved good results for low-end and middle-class consumers. P&G abandoned the existing market consumer groups and positioned the target group as high-level women aged 18-35.

From the perspective of the group's attributes, this consumer group ranks among the trendsetters in the social class. Their behavioral characteristics are change and innovation. The rise of hair coloring in the world has become more popular in this class. Its hair color and color are constantly changing. Perhaps among the many colors, black is the most conservative one.

3, trying to change spending habits

In Europe and the United States, the hair care and hair care combo accounted for only 20% of the market; but in China, the opposite is true. Perhaps Runyan expects to promote the concept of separate care in the high-end crowd. Unfortunately, Rejoice has spoiled domestic consumers. Changes in the use of habits are not happening overnight. The cost and time for education are many and the market is a long process.

4, brand self-view too high, lack of channel thrust support

During the launch of the Runyan brand, P&G was still at a low sales point due to the impact of Sibao's “terminal win”. Runyan followed the price system of a strong brand such as Rejoy, and the distributors did not have much profit. Therefore, they were also resisted by the distributors. As a result, products could not be quickly placed on the market, and products that did not see advertisements appeared in P&G. From the distributor channel, Runyan lost the opportunity to communicate face-to-face with consumers and naturally cannot be chosen by consumers.

5. P&G headquarters loses confidence and patience

In mid-2001, the launch of the Runyan brand was more than a year away, but its market performance is believed to have caused P & G to show a clear disappointment. In the fourth quarter of P&G's fiscal year 2000-2001, there was a loss of US$320 million, which was also the first time that Procter & Gamble had lost money in the past eight years. In May 2001, Procter & Gamble purchased the Icari brand. On June 8th, AG Lafley took office as CEO and started a big brand strategy of “grasping the big and letting go”. Since Icarus and Runyan have considerable overlap in the concept of hair spray, the strong position of Icarus in the world is also doomed to the fate of Runyan.

(Reference: Zeng Zhaohui "Run Yan: P & G's Pain in China", Li Hailong "Run Yan delisting, P & G "sole" helplessness", Xiao Ruihai "Running Research behind the failure")

As far as the author's research is concerned, there are certainly many places worthy of introspection for Run-Yan delisting. In addition to the above reasons, the most fundamental thing is that the market capacity of “black-haired” is small. From the perspective of Procter & Gamble, it is difficult to support. A brand, but can only support a single product. The market capacity of black hair under Ou Ni's promotion was once "depressed", and with the fall of O'Neill, it returned to a relatively normal market capacity - a smaller market segment. The accompanying hair-dyeing trend has eroded the considerable black-haired market. The importance of "black light" is only ranked 10th after the consumer demand for shampoo. We can also see in AC Nielsen's 2003 retail tracking report that sales of the rejoyed Shouwu black shiny items that are inherited from Runyan's black hair formula are only about 1/6th that of Rejoice's best-selling single-product moisturizing anti-dandruff.