德國公司進(jìn)入中國市場策略項(xiàng)目建議書英文

1、- 1 -Nirmainterim-rptAchieving leadership in China detergent market Project proposal Henkel (China) Investment Co. Ltd. ,Roland Berger & Partners International Management ConsultantsBarcelona Beijing Berlin Brussels Bucharest Budapest Buenos Aires Delhi Detroit Dsseldorf Frankfurt Hamburg Kiev K

2、uala Lumpur LisbonLondon Madrid Milan Moscow Munich New York Paris Prague Riga Rome So Paulo Shanghai Stuttgart Tokyo Vienna Zurich- 2 -Nirmainterim-rptContentsPageA.Fierce competition from international and domestic players has imposed 3 great challenge on HenkelB. To achieve turnaround, Henkel sho

3、uld adopt an aggressive expansion strategy 10C.Roland Berger will help develop the appropriate strategy: project outline12D. Project organization and time frame 22E. Value of the project 12F. Roland Berger is a best partner of Henkel to exploit China detergent market:12 selected referenceAnnex A: Ca

4、se study - Qiqiang32Annex B: Case study - P&G42- 3 -Nirmainterim-rptA. Fierce competition from international and domestic players has imposed great challenge on Henkel- 4 -Nirmainterim-rptAfter fast increase in earlier 1990th, annual growth of China detergent market has slowed down in these year

5、sNational market volume of laundry detergentin Mio. tons199319941995199619972000* EstimationSource: Chinese light Industry Yearbook(1999), Roland Berger & Partners analysis1.92.22.82.62.72.93.0+8.2% p.a.23%p.a.- 5 -Nirmainterim-rptGross profitability of Whitecat regular powderOvercapcity in dete

6、rgent industryPrice reduction of Major brand(RMB/Kg)Overcapacity in detergent indudstry leads to price reduction and thus reduces the product profitability At present, there are about 150 manufactures in detergent industry with capacity of 3.8 million tons, but total market volume is about 2.7 milli

7、on tons, so the utilization rate of capacity is about 70% Marekt entry of detergent industry is pretty low and there lies a lot of unregistered factories, If taking their capacity into account, the utilizaition rate will be furthur reduced to about 50%-60%11%1998年年 1999年年3%TideOMO18.016.518.817.35.5

8、4.8Whitecat(regular powder)1998年1999年Average price reduction of the whole industry is 10%- 6 -Nirmainterim-rptAfter having established prominent position in high end market, P&G and Unilever begin to penetrate middle and low end marketMarket structure of high end(Price：10RMB/Kg)Market stucture o

9、f middle end(Price：710RMB/Kg)Market structure of low end(Price：7RMB/Kg)Proportion of high end market is 11.9% Proportion of middle end market is 31.8% Proportion of low end market is 56.3%20%20%9%9%2%2%69%69%13%13%9%9%3%3%75%75%6.0%6.0%5.6%5.6%88.4%88.4%P&GOthersBenckiserUnilever P&GBenckise

10、rOthersHenkelHenkelUnileverOthersResource: AC Nielson retailing audit 1999-2000- 7 -Nirmainterim-rptBrand Share CompanyTide 6.0% P&GAriel 2.2% P&GOMO 2.4% UnileverPower 28 1.1% BenckiserPersil 0.1% HenkelMarket share of international playersbrands in different segmentBrand Share CompanyGFL 2

11、.2% P&GPanda 1.9% P&GWIPP 1.0% HenkelTianjin 1.8% HenkelDosia 1.0% BenckiserBack-upMarket stucture of middle end(Price：710RMB/Kg)Market structure of low end(Price：10RMB/Kg)Resource: AC Nielson retailing audit 1999-2000- 8 -Nirmainterim-rpt- 9 -Nirmainterim-rptAlthough a late comer, Benckiser

12、 has successful penetrated north market with Dosia through well-designed entry strategy Through acquiring distributors from P&G, Dosia chose Liaoning province as its initial entry areaIn Heilongjiang and Jilin province, competitors are not so strong as that in other parts of China. local brands,

13、 such as Tiantian, are in dominant positions, so Dosia chose these two province as subsequent penetration areasCompetition is in choas in Shandong, and distribution network is not well regulated with lots of small distributors/wholesalers competing with each other, so it is easy for Dosia to penetra

14、te the market and cultivate its qualified disbition channelIn order to guarantee the success, channel penetration is also backed up by strong advertisement champaign Marekt share of Dosia in north China Market entry design 5.5%7.3%8.3%9.6%9.4%9.4%11.7%Jan 1999Mar 1999May 1999Jul 1999Sep 1999Nov 1999

15、Jan 2000Resource: AC Nielson retailing audit 1999-2000- 10 -Nirmainterim-rptSome domestic players are also making efforts to achieve fast growth and national presenceMarket share of QiqiangMarket share of Libai6.0%6.8%8.0%13.7%16.7%199519961997199819990.2%0.2%0.3%0.3%3.8%3.8%5.7%5.7%6.8%6.8%19951996

16、199719981999Resource: AC Nielson retailing audit 1999-2000- 11 -Nirmainterim-rptFast growths of domestic players are supported by their rural focus strategy, nationwide manufacturing network and direct sales model Market penetration strategy taken by fast growing domestic playersRural focus strategy

17、Nationwide manufacturing networkDirect sales modelRural market is large but is dominanted by weak regional brandsInternational players have weak performance in rural areaLogistic cost is high in detergent industry accouting for over 10% in total value Long distance transportation in China is not oon

18、vient For a new comer, it is not easy to get qualified local distirbutorsReason MethodResult First penetrate rural market and townAfter achieving strong perfromance in rural area, then penetrate city and large countyAcquiring local players in different areas (Qiqiang)Signing OEMcontracts with local

19、players in different areas(Guangdong Libai)Directly selling products to low level dealers or retailing outletstrong channel promotionAvoiding competing with strongs playersGaining market share with comparatively low marketing investmentAvoiding competing with local playersReduction in logistic costF

20、ast market penetrationBut the sales expense is high and the sales force should be very diligent- 12 -Nirmainterim-rptIn order to achieve turnaround, Henkel should adopt an aggressive expansion strategySix regional brands with comparative weak market performanceDeterioration of market share for each

21、brand, defeated by strong international or domestic brands one by oneAggressive expansion strategyNo change Turnaround pointLeadership in detergent market- 13 -Nirmainterim-rptStrategy formulation should be based on full understanding of China detergent market and full consideration of three strateg

22、ic issuesStrategy formulationChoice of focus brand and strategic expansion routeEstablishing reliable and low cost logistic networkDeveloping rural entry modelFull understanding of China detergent market- 14 -Nirmainterim-rptPer capita consumption gradually decreases from south to north and from eas

23、t to westConsumption of laundry detergent in Chinakg, per capitaSource: Roland Berger & Partners interview1.8823 kg per capita1.72 kg per capita3 kg per capita1.881.881.9521.821.953.351.951.952.352.353.351.6821.681.682.35Much low area- 15 -Nirmainterim-rpt2512(Shanghai)The high population densit

24、y is located in the North China plainSource: Roland Berger & Partners interview146(Jilin)343(Hebei)586(Shandong)578(Henan)715(Jiangsu)273(Fujian)308(Hunan)392(Guangdong)108(Yuannan)362(Chongqing)471(Anhui)Back upMunicipality population density (includeing suburb area)Shanghai2512Beijing738Tianji

25、n866Chongqing362over 500 capita per square kilogram 276(Liaoning)866(Tianjin)738(Beijing)209(Shanxi)443(Zhejiang)201(Guangxi)326(Hubei)188(Sanxi)177(Sichuan)400500 capita per square kilogram 300400 capita per square kilogram 200300 capita per square kilogram 100200 capita per square kilogram less 10

26、0 capita per square kilogram - 16 -Nirmainterim-rptFor different region, market segment structure is also different because of various income level and consumption habitSegment structure by regionCommentsNorthWestEastSouth Low end market account for over 50% of total market and is especially large i

27、n the low developing North and West of China Middle-end product take a higher share in East and South of China High end market is comparatively higher in south market because of its high income level and accptance of concentrate powder50.9%56.7%57.3%40.9%45.9%30.6%31.8%39.9%9.2%11.5%12.1%13.2%Total,

28、000t778668537745High (10RMB/kg)Middle-end(710RMB/kg)Low-end(7RMB/kg)Resource: AC Nielson retailing audit 1999-2000- 17 -Nirmainterim-rptEast China is in intense competition and major players are all national brandsmarket volume by province 000 tonBrief analysis 115.7Jiangsu 307.570.3224.1HenanZhejia

29、ngShanghaiAnhui60.4 Jiangsu and Henan have the largest market volume in east China Jiamei, Whitecat, GiGE and Fangcao are traditional brands with strong regional market bases distribution network is comparatively mature with some large distributors in dominance Qiqiang has successfully penetrate eas

30、t China and established leadership with strong sales campaign Libai is planing to penetrate east China Diaopai is also making efforts to enlarge its market share by offering high margin incentive to distributorsTotal: 778,000 tonsEast- 18 -Nirmainterim-rptLow-end market size in South China000 TonSou

31、thIn South, we recommend Hunan and Hubei are target market for market entry because Libai almost control the whole low-end market in GuangdongCompetitive landscape 170Hunan190118179HubeiJiangxiGuangdongFujian84 Libai almost control the whole low-end market in Guangdong Resun as a regional brand hold

32、s half of Hunans low-end market One flower and Quanli has 30% and 20% of low-end segment respectively in HubeiHunan and Hubei are the target market due to their large market size and weak competitorsTotal: 745,000 tons- 19 -Nirmainterim-rptWest region can only be Nirmas potential market in the secon

33、d stage because of its limited market size and strong competitorLow-end market size000 ton77Sichuan15469102GuangxiYunnanShanxiGuizhou69 Qiqiang takes 44% of low-end market with three manufacturing sites (Sichuan, Guizhou and Sanxi) P&G take over one major local brand (Nanfeng) in chongdu to expa

34、nd low-end market Whitecat has setup a manufacturing site with 80,000 ton capacity in Chongqing Low population density and per capita consumptionWest region can only be Nirmas potential market in the second stageTotal: 537,000 tonsWestAnalysis of opportunity Chongqin65- 20 -Nirmainterim-rptRegional

35、and local brands play the major roles in the Northern marketLow-end market size in North 1 and North 2000 tonCompetition volume shareNorth 228%22%3%North 130%37%TiantianOthers2%14%30%QiqiangYunquanMulanJialiQiqiangDeerJialiJianlongSeagullOthersSource: by Henkel (Tiantian) and Unilever (Yunquan)Excep

36、t Qiqiang four local brands are the major players in North 1 and North 2North1:Liaoning, Jiling, Heilongjiang458210North2:Shandong, Hebei, Shanxi, BeijingTianjing14%North16%- 21 -Nirmainterim-rptShandong and Hebei are suggested as strategic focus in early entry periodmarket size in North 2 sub-regio

37、n000 tonCompetition68Shandong18141.5132HebeiShanxiTianjingBeijing35.6 In Shandong, Deer and Jiali holds 30% and 25% of the low-end market respectively. But weak financial srength and less sophisticated marketing skill undermine their competitiveness In Hebei the detergent market is highly fragmented

38、 with Qiqiang winning less than 20% market share, the rest are insignificantIn Shandong and Hebei a strong and dominant brand is non-existent yetTotal:458,000 tonsNorth- 22 -Nirmainterim-rptConsumeracceptanceProfile of major product formTrendProduct featureAverage price RMB/kgMarket shareMajor brand

39、ProductiontechnologyRegularConcen-trateUltra-concen-trateSpray dryDry mixAgglomera-tion Tide Whitecat Qiqiang Ariel Whitcat OMO Gaochao(whitecat)90%8%2%7.911.418.0 Hollow Low density Foaming High water solubility Solid High density Non-foaming Excellent stain removing efficacy High fluidity Excellen

40、t stain removing efficacyWell accepted in ruralHigh price undermines affordability and consumer acceptableNew productSpray-dry technology dominate the laundry powder industry sectorSource: Roland Berger & Partner interviews- 23 -Nirmainterim-rptRural consumer preferencePrice and money value are

41、two most important factors influencing rural consumers purchasing decision Foaming Fragrant Water solubility Big package size (400g, 750g)Product Primarily through grocery in village / town Market / fair especially weekly marketPlace Effective tool to induce trial during introduction period Using da

42、ily necessities as prize is well acceptedPromotion Popular acceptable price in rural market: 6.0 RMB/kg Price rangeSource: Roland Berger & Partners interview- 24 -Nirmainterim-rptQiqiangs low price strategy proves to be successful in the low-end segmentRelative price comparison in low end segmen

43、t (7RMB/KG)Total low end segment =100%0 01010202030304040505060607070012345675.25.46.06.26.36.4TiantianResunYueyuehongFangcaoSeagullQiqiangQuanliMianghuaPrice(RMB/kg)Volume share3% 3%30%6%5%3% 3% 3%- 25 -Nirmainterim-rptRural consumer behaviorImportanceKey factorPrice is the first decision factor fo

44、r rural consumer to buy detergent powerPriceStain removing EfficacyFoamingFragranceWater solubilityWhiteningEnzymatic+0-Price is the most important factor to affect consumer behavior in rural marketThe consumer also pay considerable attention to the stain removing efficacy of detergent powderThe rur

45、al consumer often evaluate the stain removing ability through the foaming effect of the detergent powderMost of the rural consumer also like the fraqrance brought by deterrent powderBecause in general fake product cant solubilized in water, the feature can help consumer distinguish real product with

46、 fake productThe rural consumer seldom care for the whitening and enzymatic ability of detergent productExample: Decision factors of rural consumerThe customer behavior is fit with Nirmas low price strategySource: Roland Berger & Partners interviewBack-up- 26 -Nirmainterim-rptLocation of manufac

47、turing site of QiqiangMarket share by region14.0%5.5%22.7%13.7%In order to reduce the transportation cost, Qiqiang set up seven mainfacturing site national wideSource: Roland Berger & Partners interviewEastSouthWestNorthGuizhouBenxiSichuanNeimengShanxiAnhuiXianNo manufac-ture siteExample: Qiqian

48、gs manufacturing site vs. Market performanceQiqiangs headquarterBack up- 27 -Nirmainterim-rpt Focus on one regional market and concentrate the marketing resources at the beginning Using accumulated experience to expand new market3 A systematic expansion strategy should be applied DescriptionSource:

49、Roland Berger & Partners interview and analysisARegional penetrationBLow priceCFront attackDMotivated dealerEBenefited customer Recommended retail price is about 5.56.0 RMB/kg Higher price in the beginning to build up brand image Allocating strong sales team to a new market by intensive marketin

50、g and promotion Delegate the built up market to a qualified distributor to manage Development a incentive sales policy to motivate the dealers along the distribution channel Adopting well-acceptable approach to promote in the rural market- 28 -Nirmainterim-rptRetail price of major brand in Chongqing

51、RMB/kgB The target retail price for Nirma should be less than 6 RMB/kg6.25Libai7.15.36.5WhitecatQiqiangNirmaSource: Roland Berger & Partners survey and analysisResun2)5.56.01) Libais headquater is in Guangzhou and it is mostly produced by Resun in Hunan2) Local brand in Hunan province 6.0RMB (0.

52、72USD)/kg is the most popular accepted price for rural market The suggested retail price for Nirma is 5.5 6.0 RMB/kg The whole selling price is about 80% of retail priceThe initial retail price should be higher for setting up brand imagePrice positioning- 29 -Nirmainterim-rptSuccess factors for Qiqi

53、angMarket share of QiqiangB Qiqiang fast expansion stems from its appropriate marketing strategy and manufacturing strategy12.6%Aug.-Sep. 977.2%13.2%8.3%Dec.-Jan. 98Apr.-May. 98Aug.-Spt. 98 Low cost & low price- The salary level in Shanxi is about half of whitecast in Shanghai- raw-material adva

54、ntage its Na2 So4 has 35% market share in China Retail price: 6 RMB/kg- Drreet approach low-level wholsaler - Use strong promotion to push product Local manufacture & local sales- Seven manufacturing sites national wide with headquater in shanxi Well financed - 390 million RMB (47mio USD) was fi

55、nanced in stock market in April 199780%p.a.Example: Success factors for QiqiangBack up- 30 -Nirmainterim-rptExampleDescription of approach Develop customers and build up sales network Delegate a reliable distributor to manage the network The team is assigned to another new market Build up a long-ter

56、m agent relationship with the distributorExample: New market entry approach in ChongqingFront attack Use several qualified agents to sell product with long-term credit term (3 months) Send a sales team to support agent to promote as well as build up own know-how Take over the sales network and direc

57、tly sell to whole sellersJoint attack Diaopai Yuxiu Power 28 (benckiser) Weibai (Henkel) Establish own sales branch locally Directly sell product to wholesalers and large retailerDirect attack(sell) Tide (P&G) OMO(OMO) QiqiangSource: Roland Berger & Partners? interviewC Front attack strategy

58、 is recommended for Nirma to penetrate new market- 31 -Nirmainterim-rptEmploy distributor and its own sales force (about 2000) to explore market in the meantimeDistributor focus on existing channels and areasWhitecat sales force focus on unexplored new marketsBe flexible to different market situatio

59、nLow reliance on distributors Possible conflict between distributors and its own sales forceTherefore, distributors may lose interest to work with WhitecatSlow response to changing market with hieratial management, e.g. the approval for a promotion plan will last 3 monthsC Whitecat uses distributor

60、as well as its own sales force to jointly explore marketsDistributorWholesalerDescriptionWhitecats distribution channel mappingStrategyCONSSecondary distributorRetailerEnd consumerWhitecat regional sales officeEnd consumersRetailerBack upWholesalerDistributorWhitecatSource: Roland Berger & Partners? interviewPROSIncapable to response to changing market and consumers- 32 -Nirmainterim-rptDesc