Kao Glocalization in Taiwan Nov. 21, 2002 Toshiaki Naito Kao (Taiwan) Corporation

Kao (Taiwan)Kao (Taiwan)

Kao Glocalization Kao Glocalization in Taiwanin Taiwan

Nov. 21, 2002Nov. 21, 2002

Toshiaki NaitoToshiaki NaitoKao (Taiwan) CorporationKao (Taiwan) Corporation

Kao (Taiwan)Kao (Taiwan)

Preface

Kao Overseas Business and

Kao Taiwan’s Positioning

Kao (Taiwan)Kao (Taiwan)

ChinaChinaTaiwanTaiwanHong KongHong KongPhilippinesPhilippinesIndonesiaIndonesiaAustraliaAustralia

ThailandThailandMalaysiaMalaysiaSingaporeSingaporeVietnamVietnam

KAO(Taiwan) in KAO Worldwide

Sales120 billion yen

Sales120 billion yen Sales

650 billion yen

Sales650 billion yen

Sales 95 billion yen

Sales 95 billion yen

Fiscal year:2001

AsiaJapan

EU & US

Outside Japan

Kao (Taiwan)Kao (Taiwan)

•Established in 1966

•Capital 597(mil. NT$)

•Employees 570

Company Sales : 6,500 million NT$Business Operation

Household Domestics : 4,400 million NT$Household Products : 200 SKU

*Net sales baseFiscal year: Jan. to Dec. 2000

KAO(Taiwan) Outlook

------- 2001 --------

Cosmetics6%

Household75%

Chemical19%

Kao (Taiwan)Kao (Taiwan)

Products

SifoneSifoneBioreBiore

AttackAttack

Kao (Taiwan)Kao (Taiwan)

Key Players in Taiwan C&T Market

0

20

40

60

80

100

120

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Company A

KAO

Company B

(Billion NT$)

Data source: TOP5000 ranking in “The Largest Corporation In Taiwan”

Kao (Taiwan)Kao (Taiwan)

Kao’s Glocalization

• Merits on Glocalization• Precondition of Glocalization• Glocalization by Marketing Mix• Obstacles

Kao (Taiwan)Kao (Taiwan)

Why we need Global Brands?

• Business Scale efficient

• Return from Investment speedy

• Competitiveness high

• Brand Management simple

• Best Practice Sharing effective

Kao (Taiwan)Kao (Taiwan)

What are Global Brands?

• Deliver benefits to consumers with the same positioning and image

• Balanced synergistic merits in global with competitive advantages in local

• Be managed through effective global management system and organization

Kao (Taiwan)Kao (Taiwan)

Marketing Mix

NamingNaming

ProductsProducts

PositioningPositioning

PromotionPromotion

AdsAds

PackagePackage

Stick to GlobalizationGlobalization as possible

Take 3 alternatives Globalization as possible

Localization

Localization

Products: assortment and/or formulation

Kao (Taiwan)Kao (Taiwan)

What are obstacles to Global Brands?

• Not Invented Here

• Mindset of Marketers

Kao (Taiwan)Kao (Taiwan)

Case Study

• “Attack” Laundry Detergent

• “Biore” Make-up Remover Series

• “Sifone” Hair Styling Agent Series

Kao (Taiwan)Kao (Taiwan)

1Case Study : Attack

Kao (Taiwan)Kao (Taiwan)

Market Segment Trends

1987 1988 1991 1993 1995 1997 2002Kao Attack product liquid

0%

20%

40%

60%

80%

100%

120%

1987 1988 1991 1993 1995 1997 2002

Conventional Concentrated Liquid

Kao (Taiwan)Kao (Taiwan)

Market Share of Attack in Concentrated Detergents

1988 ~ 1997 ~ 2002Regular launch Color launch The No.1 position

0%

10%

20%

30%

40%

50%

60%

70%

1988 1997 2002

Regular Color Total

60%

Kao (Taiwan)Kao (Taiwan)

Glocalization of Attack on MK-mix

Taiwan Japan

Positioning

Formulation

Package

Ads

Promotion

Concentrated powder detergent ○○

一匙霊

△△ ～○ ～○

△△

Naming

Remark

アタック

○○

○○

Bio-lite

△△

○○: almost the same : almost the same : Different△: Different△

Kao (Taiwan)Kao (Taiwan)

- To educate consumers it’s “concentrated” powder and change their behavior - In order to communicate with local consumers, create a new Chinese name is necessary under the brand name”Attack”

- 一匙 means “ one spoon”

- 靈 means “ effective “

Naming of “Attack”

Kao (Taiwan)Kao (Taiwan)

‘Attack’ Global Brand Communication

Cleansingmechanism

Cleansingmechanism End BenefitsEnd Benefits MessengerMessenger

Clean up clothesat fiber depth

Clean shirts＜＜ Choice criteriaChoice criteria ＞＞･･ High awarenessHigh awareness･･ High popularityHigh popularity･･ Good imageGood image

Unification of visual tools

Sharing the Brand Vision (Core Value) Sharing the Brand Vision (Core Value)

Kao (Taiwan)Kao (Taiwan)

Promotion strategy

The difference between Taiwan and Japan

1. Trade system

Japan distribute to stores directly, Taiwan has the

wholesaler distributor to push the sales to stores for Kao

2.Culture / Consumer custom:

Gift of Non-food is one custom in Japan. In Taiwan,food

gift is more usual than non-food consumption products

Kao (Taiwan)Kao (Taiwan)

Local consumers’ needs Attack color type

•Consumers own more color clothes

•So, they have the needs to

prevent dark and discoloration

•No product sold can satisfy this

needs at that time

•In the beginning,Japan suggest

to educate consumers use “wide bleach” to solve this problem

•But,the use rate in TW is low

•So,to develop a new product is

necessary

•The use intention is 81%

when show consumers the

concept of color type product

•Consumers can realize the benefit

by use test

Consumers’ U&A*Survey ---Needs

Consumers’ U&A*Survey ---Needs DevelopmentDevelopmentDirection StudyDirection Study

* U&A: Usage and Attitude

Kao (Taiwan)Kao (Taiwan)

Attack Color type development background

Brand Vision

Local Consumers’ need

Product line extension

Regular Color

Launch time 1988 1997

Core value

Symbol

Base of authority Bio-lite Acti-techs

Functional benefit Whitening clean Brightening clean

Positioning Regular Value-added

○○ ○○

Kao (Taiwan)Kao (Taiwan)

2:Case Study Biore

Kao (Taiwan)Kao (Taiwan)

Biore Make-up Remover

• Japan

• Taiwan

Kao (Taiwan)Kao (Taiwan)

Biore Make-up Remover

1-233 variantsAssortment

BioreBioreBioreNaming (English)

Basically sameFormula

○○○Positioning

Individual, but use others’ conceptPromotion

Individual, but use others’ conceptAds

2 different ones

3 under 1 series

3 different ones

Package

OthersTaiwanJapan

Kao (Taiwan)Kao (Taiwan)

Biore Make-up Remover• To globalize

– Same positioning allows • to select or develop suitable products to

consumer needs quickly.• to make the use of KSF* in other countries.

• To localize– Taiwan market was not mature/ big to

invest one by one.– Synergistic management allow us to build

the platform to continue investing.

* KSF: Key Success Factors

Kao (Taiwan)Kao (Taiwan)

Biore Make-up Remover• Localized Marketing Mix

– Package• Unify 3 products under MUR* series.

– Ads• Maximize synergy effects between

products referring to Japan’s effective communication concept.

– Promotion• Unified store display and consumer

promotion to maximize synergy effects.* MUR: Make UP Remover

Kao (Taiwan)Kao (Taiwan)

Biore Make-up Remover• Performance in the market

00' 01' Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02 Jul-02

BIORE 51.2 57.8 49.1 49.7 54.1 58.1 52.0 49.9 49.8J&J pH5.5 23.0 29.3 18.4 15.9 14.6 15.2 15.1 18.0 15.8POND'S 10.2 12.1 7.4 7.4 5.5 5.9 5.7 6.6 8.3Olay 11.2 0.0 18.4 17.9 15.5 13.2 15.5 12.3 10.6

-No. 1 share MUR brand in market

-Good store execution in shop front

Kao (Taiwan)Kao (Taiwan)

3:Case Study Sifone

Kao (Taiwan)Kao (Taiwan)

Sifone Hair Styling Agent

• Japan

• Taiwan

Kao (Taiwan)Kao (Taiwan)

Sifone Hair Styling Agent

Japan Taiwan Others

Positioning

○ ○ ○

Naming (English)

Liese Sifone Sifone

Assortment

15 8 2-4

Formula Basically same

Package Liese-like Sifone-like

Sifone-Like

Ads Individual, but use others’ concept

Promotion

Individual, but use others’ concept

Kao (Taiwan)Kao (Taiwan)

Sifone Hair Styling Agent

• To globalize– Same positioning allow

• to select or develop suitable products to consumer needs quickly based on same R&D resources.

• to make the use of KSF* in other countries.

• To localize– Leverage “Sifone” brand assets

already developed in Taiwan consumer’s mind

– Answer to Taiwan consumer’s needs or hair trend appropriately. * KSF: Key Success Factors

Kao (Taiwan)Kao (Taiwan)

Sifone Hair Styling Agent• Localized Marketing Mix

– Naming• Utilize “Sifone” instead of “Liese” used in Japan.

– Product Assortment• Select or develop products according to Taiwan con

sumers needs.– Package

• Leverage “Sifone” brand image.– Ads

• Build “Sifone” brand image referring to Japan’s successful communication.

– Promotion• Display with “Sifone” shampoo and conditioner.

Kao (Taiwan)Kao (Taiwan)

Sifone Hair Styling Agent

• Performance in the market•Leading position in Taiwan market

Market Share :28.2% (TN SOFRES 2002 YTD)

SIFONE STYLING SHARE00' 01'

Totally Totally Q1 Q2 Q317.3 23.7 19.2 24.3 28.2

02'

Kao (Taiwan)Kao (Taiwan)

“Glocalization” has been defined as developing global brands. In the process to develop global brands, we consider opposing viewpoints when it comes to marketing mix and the effects of deviating from the predetermined company standpoint.

Conclusions