罗兰贝格-进入中国市场策略项目建议书

Nirma interim rpt AchievingleadershipinChinadetergentmarket Projectproposal Henkel China InvestmentCo Ltd RolandBerger Partners InternationalManagementConsultantsBarcelona Beijing Berlin Brussels Bucharest Budapest BuenosAires Delhi Detroit D sseldorf Frankfurt Hamburg Kiev KualaLumpur LisbonLondon Madrid Milan Moscow Munich NewYork Paris Prague Riga Rome S oPaulo Shanghai Stuttgart Tokyo Vienna Zurich Nirma interim rpt ContentsPage A Fiercecompetitionfrominternationalanddomesticplayershasimposed3greatchallengeonHenkelB Toachieveturnaround Henkelshouldadoptanaggressiveexpansionstrategy10C RolandBergerwillhelpdeveloptheappropriatestrategy projectoutline12D Projectorganizationandtimeframe22E Valueoftheproject12F RolandBergerisabestpartnerofHenkeltoexploitChinadetergentmarket 12selectedreferenceAnnexA Casestudy Qiqiang32AnnexB Casestudy P G42 A FiercecompetitionfrominternationalanddomesticplayershasimposedgreatchallengeonHenkel Nirma interim rpt Afterfastincreaseinearlier1990th annualgrowthofChinadetergentmarkethassloweddownintheseyears Nationalmarketvolumeoflaundrydetergent inMio tons 1993 1994 1995 1996 1997 2000 Estimation Source ChineselightIndustryYearbook 1999 RolandBerger Partners analysis 1 9 2 2 2 8 2 6 2 7 2 9 3 0 8 2 p a 2 3 p a Nirma interim rpt Overcapacityindetergentindudstryleadstopricereductionandthusreducestheproductprofitability Atpresent thereareabout150manufacturesindetergentindustrywithcapacityof3 8milliontons buttotalmarketvolumeisabout2 7milliontons sotheutilizationrateofcapacityisabout70 Marektentryofdetergentindustryisprettylowandthereliesalotofunregisteredfactories Iftakingtheircapacityintoaccount theutilizaitionratewillbefurthurreducedtoabout50 60 11 1998年 1999年 3 Tide OMO 18 0 16 5 18 8 Whitecat regularpowder 1998年 1999年 Averagepricereductionofthewholeindustryis10 Nirma interim rpt Afterhavingestablishedprominentpositioninhighendmarket P GandUnileverbegintopenetratemiddleandlowendmarket Marketstructureofhighend Price 10RMB Kg Marketstuctureofmiddleend Price 7 10RMB Kg Marketstructureoflowend Price 7RMB Kg Proportionofhighendmarketis11 9 Proportionofmiddleendmarketis31 8 Proportionoflowendmarketis56 3 P G Others Benckiser Unilever P G Benckiser Others Henkel Henkel Unilever Others Resource ACNielsonretailingaudit1999 2000 Nirma interim rpt BrandShareCompanyTide6 0 P GAriel2 2 P GOMO2 4 UnileverPower281 1 BenckiserPersil0 1 Henkel Marketshareofinternationalplayers brandsindifferentsegment BrandShareCompanyGFL2 2 P GPanda1 9 P GWIPP1 0 HenkelTianjin1 8 HenkelDosia1 0 Benckiser Marketstuctureofmiddleend Price 7 10RMB Kg Marketstructureoflowend Price 7RMB Kg BrandShareCompanyFangcao2 5 UnileverYunquan0 8 UnileverSunlight0 2 UnileverSeagull2 9 HenkelTiantian1 5 HenkelGuilin1 2 Henkel Marketstructureofhighend Price 10RMB Kg Resource ACNielsonretailingaudit1999 2000 Nirma interim rpt Nirma interim rpt Althoughalatecomer BenckiserhassuccessfulpenetratednorthmarketwithDosiathroughwell designedentrystrategy ThroughacquiringdistributorsfromP G DosiachoseLiaoningprovinceasitsinitialentryareaInHeilongjiangandJilinprovince competitorsarenotsostrongasthatinotherpartsofChina localbrands suchasTiantian areindominantpositions soDosiachosethesetwoprovinceassubsequentpenetrationareasCompetitionisinchoasinShandong anddistributionnetworkisnotwellregulatedwithlotsofsmalldistributors wholesalerscompetingwitheachother soitiseasyforDosiatopenetratethemarketandcultivateitsqualifieddisbitionchannelInordertoguaranteethesuccess channelpenetrationisalsobackedupbystrongadvertisementchampaign MarektshareofDosiainnorthChina Jan1999 Mar1999 May1999 Jul1999 Sep1999 Nov1999 Jan2000 Resource ACNielsonretailingaudit1999 2000 Nirma interim rpt Somedomesticplayersarealsomakingeffortstoachievefastgrowthandnationalpresence MarketshareofQiqiang MarketshareofLibai Resource ACNielsonretailingaudit1999 2000 Nirma interim rpt Fastgrowthsofdomesticplayersaresupportedbytheirruralfocusstrategy nationwidemanufacturingnetworkanddirectsalesmodel Marketpenetrationstrategytakenbyfastgrowingdomesticplayers Ruralfocusstrategy Nationwidemanufacturingnetwork Directsalesmodel RuralmarketislargebutisdominantedbyweakregionalbrandsInternationalplayershaveweakperformanceinruralarea Logisticcostishighindetergentindustryaccoutingforover10 intotalvalueLongdistancetransportationinChinaisnotoonvient Foranewcomer itisnoteasytogetqualifiedlocaldistirbutors Reason Method Result FirstpenetrateruralmarketandtownAfterachievingstrongperfromanceinruralarea thenpenetratecityandlargecounty Acquiringlocalplayersindifferentareas Qiqiang SigningOEMcontractswithlocalplayersindifferentareas GuangdongLibai Directlysellingproductstolowleveldealersorretailingoutletstrongchannelpromotion AvoidingcompetingwithstrongsplayersGainingmarketsharewithcomparativelylowmarketinginvestment AvoidingcompetingwithlocalplayersReductioninlogisticcost FastmarketpenetrationButthesalesexpenseishighandthesalesforceshouldbeverydiligent Nirma interim rpt Inordertoachieveturnaround Henkelshouldadoptanaggressiveexpansionstrategy Sixregionalbrandswithcomparativeweakmarketperformance Deteriorationofmarketshareforeachbrand defeatedbystronginternationalordomesticbrandsonebyone Aggressiveexpansionstrategy Nochange Turnaroundpoint Leadershipindetergentmarket Nirma interim rpt StrategyformulationshouldbebasedonfullunderstandingofChinadetergentmarketandfullconsiderationofthreestrategicissues Strategyformulation Choiceoffocusbrandandstrategicexpansionroute Establishingreliableandlowcostlogisticnetwork Developingruralentrymodel FullunderstandingofChinadetergentmarket Nirma interim rpt Percapitaconsumptiongraduallydecreasesfromsouthtonorthandfromeasttowest ConsumptionoflaundrydetergentinChina kg percapita Source RolandBerger Partners interview 1 88 2 3kgpercapita 1 7 2kgpercapita 1 7kgpercapita 3kgpercapita 1 88 1 88 1 95 2 1 8 2 1 95 3 35 1 95 1 95 2 35 2 35 3 35 1 68 2 1 68 1 68 2 35 Muchlowarea Nirma interim rpt 2512 Shanghai ThehighpopulationdensityislocatedintheNorthChinaplain Source RolandBerger Partners interview 146 Jilin 343 Hebei 586 Shandong 578 Henan 715 Jiangsu 273 Fujian 308 Hunan 392 Guangdong 108 Yuannan 362 Chongqing 471 Anhui Municipalitypopulationdensity includeingsuburbarea Shanghai2512Beijing738Tianjin866Chongqing362 over500capitapersquarekilogram 276 Liaoning 866 Tianjin 738 Beijing 209 Shanxi 443 Zhejiang 201 Guangxi 326 Hubei 188 Sanxi 177 Sichuan 400 500capitapersquarekilogram 300 400capitapersquarekilogram 200 300capitapersquarekilogram 100 200capitapersquarekilogram less100capitapersquarekilogram Nirma interim rpt Fordifferentregion marketsegmentstructureisalsodifferentbecauseofvariousincomelevelandconsumptionhabit North West East South Lowendmarketaccountforover50 oftotalmarketandisespeciallylargeinthelowdevelopingNorthandWestofChinaMiddle endproducttakeahighershareinEastandSouthofChinaHighendmarketiscomparativelyhigherinsouthmarketbecauseofitshighincomelevelandaccptanceofconcentratepowder 50 9 56 7 57 3 40 9 45 9 30 6 31 8 39 9 9 2 11 5 12 1 13 2 Total 000t High 10RMB kg Middle end 7 10RMB kg Low end 7RMB kg Resource ACNielsonretailingaudit1999 2000 Nirma interim rpt EastChinaisinintensecompetitionandmajorplayersareallnationalbrands 115 7 Jiangsu 307 5 70 3 224 1 Henan Zhejiang Shanghai Anhui 60 4 JiangsuandHenanhavethelargestmarketvolumeineastChinaJiamei Whitecat GiGEandFangcaoaretraditionalbrandswithstrongregionalmarketbasesdistributionnetworkiscomparativelymaturewithsomelargedistributorsindominanceQiqianghassuccessfullypenetrateeastChinaandestablishedleadershipwithstrongsalescampaignLibaiisplaningtopenetrateeastChinaDiaopaiisalsomakingeffortstoenlargeitsmarketsharebyofferinghighmarginincentivetodistributors Total 778 000tons Nirma interim rpt InSouth werecommendHunanandHubeiaretargetmarketformarketentrybecauseLibaialmostcontrolthewholelow endmarketinGuangdong 170 Hunan 190 118 179 Hubei Jiangxi Guangdong Fujian 84 Libaialmostcontrolthewholelow endmarketinGuangdongResunasaregionalbrandholdshalfofHunan slow endmarketOneflowerandQuanlihas30 and20 oflow endsegmentrespectivelyinHubei HunanandHubeiarethetargetmarketduetotheirlargemarketsizeandweakcompetitors Total 745 000tons Nirma interim rpt WestregioncanonlybeNirma spotentialmarketinthesecondstagebecauseofitslimitedmarketsizeandstrongcompetitor 77 Sichuan 154 69 102 Guangxi Yunnan Shanxi Guizhou 69 Qiqiangtakes44 oflow endmarketwiththreemanufacturingsites Sichuan GuizhouandSanxi P Gtakeoveronemajorlocalbrand Nanfeng inchongdutoexpandlow endmarketWhitecathassetupamanufacturingsitewith80 000toncapacityinChongqingLowpopulationdensityandpercapitaconsumption WestregioncanonlybeNirma spotentialmarketinthesecondstage Total 537 000tons Chongqin 65 Nirma interim rpt RegionalandlocalbrandsplaythemajorrolesintheNorthernmarket North2 28 22 3 North1 30 37 Tiantian Others 2 14 30 Qiqiang Yunquan Mulan Jiali Qiqiang Deer Jiali Jianlong Seagull Others Source byHenkel Tiantian andUnilever Yunquan ExceptQiqiangfourlocalbrandsarethemajorplayersinNorth1andNorth2 North1 Liaoning Jiling Heilongjiang 458 210 North2 Shandong Hebei Shanxi BeijingTianjing 14 16 Nirma interim rpt ShandongandHebeiaresuggestedasstrategicfocusinearlyentryperiod 68 Shandong 181 41 5 132 Hebei Shanxi Tianjing Beijing 35 6 InShandong DeerandJialiholds30 and25 ofthelow endmarketrespectively ButweakfinancialsrengthandlesssophisticatedmarketingskillunderminetheircompetitivenessInHebeithedetergentmarketishighlyfragmentedwithQiqiangwinninglessthan20 marketshare therestareinsignificant InShandongandHebeiastronganddominantbrandisnon existentyet Total 458 000tons Nirma interim rpt Profileofmajorproductform Spraydry Drymix Agglomera tion TideWhitecatQiqiang ArielWhitcat OMOGaochao whitecat 90 8 2 7 9 11 4 18 0 HollowLowdensityFoamingHighwatersolubility SolidHighdensityNon foamingExcellentstainremovingefficacy HighfluidityExcellentstainremovingefficacy Wellacceptedinrural Highpriceunderminesaffordabilityandconsumeracceptable Newproduct Spray drytechnologydominatethelaundrypowderindustrysector Source RolandBerger Partnerinterviews Nirma interim rpt Ruralconsumerpreference Priceandmoneyvaluearetwomostimportantfactorsinfluencingruralconsumers purchasingdecision FoamingFragrantWatersolubilityBigpackagesize 400g 750g Primarilythroughgroceryinvillage townMarket fairespeciallyweeklymarket EffectivetooltoinducetrialduringintroductionperiodUsingdailynecessitiesasprizeiswellaccepted Popularacceptablepriceinruralmarket 6 0RMB kg Source RolandBerger Partners interview Nirma interim rpt Qiqiang slowpricestrategyprovestobesuccessfulinthelow endsegment Relativepricecomparisoninlowendsegment 7RMB KG Totallowendsegment 100 0 1 2 3 4 5 6 7 5 2 5 4 6 0 6 2 6 3 6 4 Tiantian Resun Yueyuehong Fangcao Seagull Qiqiang Quanli Mianghua Price RMB kg Volumeshare 3 3 30 6 5 3 3 3 Nirma interim rpt Priceisthefirstdecisionfactorforruralconsumertobuydetergentpower PriceStainremovingEfficacyFoamingFragranceWatersolubilityWhiteningEnzymatic 0 PriceisthemostimportantfactortoaffectconsumerbehaviorinruralmarketTheconsumeralsopayconsiderableattentiontothestainremovingefficacyofdetergentpowderTheruralconsumeroftenevaluatethestainremovingabilitythroughthefoamingeffectofthedetergentpowderMostoftheruralconsumeralsolikethefraqrancebroughtbydeterrentpowderBecauseingeneralfakeproductcan tsolubilizedinwater thefeaturecanhelpconsumerdistinguishrealproductwithfakeproductTheruralconsumerseldomcareforthewhiteningandenzymaticabilityofdetergentproduct Example Decisionfactorsofruralconsumer ThecustomerbehaviorisfitwithNirma slowpricestrategy Source RolandBerger Partners interview Nirma interim rpt Inordertoreducethetransportationcost Qiqiangsetupsevenmainfacturingsitenationalwide Source RolandBerger Partners interview East South West North Guizhou Benxi Sichuan Neimeng Shanxi Anhui Xi an Nomanufac turesite Example Qiqiang smanufacturingsitevs Marketperformance Qiqiang sheadquarter Nirma interim rpt FocusononeregionalmarketandconcentratethemarketingresourcesatthebeginningUsingaccumulatedexperiencetoexpandnewmarket 3Asystematicexpansionstrategyshouldbeapplied Source RolandBerger Partners interviewandanalysis Regionalpenetration Lowprice Frontattack Motivateddealer Benefitedcustomer Recommendedretailpriceisabout5 5 6 0RMB kgHigherpriceinthebeginningtobuildupbrandimage AllocatingstrongsalesteamtoanewmarketbyintensivemarketingandpromotionDelegatethebuiltupmarkettoaqualifieddistributortomanage Developmentaincentivesalespolicytomotivatethedealersalongthedistributionchannel Adoptingwell acceptableapproachtopromoteintheruralmarket Nirma interim rpt BThetargetretailpriceforNirmashouldbelessthan6RMB kg 6 25 Libai 7 1 5 3 6 5 Whitecat Qiqiang Nirma Source RolandBerger Partners surveyandanalysis Resun2 5 5 6 0 1 Libai sheadquaterisinGuangzhouanditismostlyproducedbyResuninHunan2 LocalbrandinHunanprovince 6 0RMB 0 72USD kgisthemostpopularacceptedpriceforruralmarketThesuggestedretailpriceforNirmais5 5 6 0RMB kgThewholesellingpriceisabout80 ofretailprice Theinitialretailpriceshouldbehigherforsettingupbrandimage Nirma interim rpt BQiqiangfastexpansionstemsfromitsappropriatemarketingstrategyandmanufacturingstrategy 12 6 Aug Sep 97 7 2 13 2 8 3 Dec Jan 98 Apr May 98 Aug Spt 98 Lowcost lowprice ThesalarylevelinShanxiisabouthalfofwhitecastinShanghai raw materialadvantageitsNa2So4has35 marketshareinChinaRetailprice 6RMB kg Drreetapproachlow levelwholsaler UsestrongpromotiontopushproductLocalmanufacture localsales SevenmanufacturingsitesnationalwidewithheadquaterinshanxiWellfinanced 390millionRMB 47mioUSD wasfinancedinstockmarketinApril1997 Example SuccessfactorsforQiqiang Nirma interim rpt DevelopcustomersandbuildupsalesnetworkDelegateareliabledistributortomanagethenetworkTheteamisassignedtoanothernewmarketBuildupalong termagentrelationshipwiththedistributor Example NewmarketentryapproachinChongqing Frontattack Useseveralqualifiedagentstosellproductwithlong termcreditterm 3months Sendasalesteamtosupportagenttopromoteaswellasbuildupownknow howTakeoverthesalesnetworkanddirectlyselltowholesellers Jointattack DiaopaiYuxiu Power28 benckiser Weibai Henkel EstablishownsalesbranchlocallyDirectlysellproducttowholesalersandlargeretailer Directattack sell Tide P G OMO OMO Qiqiang Source RolandBerger Partners interview CFrontattackstrategyisrecommendedforNirmatopenetratenewmarket Nirma interim rpt Employdistributoranditsownsalesforce about2000 toexploremarketinthemeantimeDistributorfocusonexistingchannelsandareasWhitecatsalesforcefocusonunexplorednewmarkets BeflexibletodifferentmarketsituationLowrelianceondistributors PossibleconflictbetweendistributorsanditsownsalesforceTherefore distributorsmayloseinteresttoworkwithWhitecatSlowresponsetochangingmarketwithhieratialmanagement e g theapprovalforapromotionplanwilllast3months CWhitecatusesdistributoraswellasitsownsalesforcetojointlyexploremarkets Distributor Wholesaler Strategy CONS Secondarydistributor Retailer Endconsumer Whitecatregionalsalesoffice Endconsumers Retailer Wholesaler Distributor Whitecat Source RolandBerger Partners interview PROS Incapabletoresponsetochangingmarketandconsumers Nirma interim rpt DispatchhugesalesforcetodirectlyapproachwholesalersandretailersSalesRep regularlyvisitwholesalersandretailersProvideefficientlogisticssupportandservice RapidpenetrationintoruralareaBuildfist handmarketanconsumerknowledgeQuicklearning Difficulttomanagehugesalesforce about2000 Delayofmoneycollectionandpoorcredit termmanagementHighsellingexpensesChannelconflict CQiqiang sdistributionsystemgreatlyfacilitatesitsmarketexpansiondespiteofunprofessionalmanagement Regularmarket Fair Endconsumers Wholesaler Secondarywholesaler Retailer Qiqiang ssalesforcepromoteandsellproductinweeklymarketactivityinruralarea Strategy PROS CONS Highriskinthematurephase Qiqiang Source RolandBerger Partners interv