Read the case below and answer the questions that follow.P&G's Joy Makes an Unlikely Splash in Japan Anyone who thinksJapan doesn't offer opportunities for U.S consumer products shouldlook at how quickly Procter & Gamble Co. has cleaned up in thecountry's dish-soap market. Until 1995, P&G, didn't sell dishsoap in Japan at all. A few years later, it had Japans best-sellingbrand, Joy, which commanded a fifth of the nation's $400 milliondish- soap market. That's astounding progress, given that themarket had appeared to be classically \"mature\"-both shrinking anddominated by giant Japanese companies. \"Joy surprised us all,\" saysTatsuo Ishii, dish-soap brand manager for one of those giants, KaoCorp. \"It was brilliant.\" How the Cincinnati company executed itscoup provides lessons that transcend the kitchen sink. One biglesson: \"Mature\" Japanese markets can be surprisingly complacent.P&G offered new technology, something the two incumbents hadn'tbothered to do for years. It developed packaging that let storesmake more money. And it spent heavily on oddball commercials thatcreated a buzz among consumers. Joy offers \"potent lessons\" forforeign companies, says Hiroshi Tanaka, a marketing professor atTokyo's Josai University. \"At the least, Joy should tell you thatJapan's got a lot more good opportunities for foreign companiesthan they might assume,\" he says. \"Those opportunities are oftendisguised as unattractive markets suffering from saturation andoligopoly.\" Just two years ago, two powerful consumer-productconcerns, Kao and Lion Corp., each controlled nearly 40% of thekitchen-soap market with several brands and had essentiallydeclared a truce. The rest of the market was cornered by privatebrands at chain stores. Meanwhile, the Japanese were cooking lessat home and thus buying less dish soap every year. P&G actuallywashed out of the Japanese kitchen detergent market during anearlier attempt. It withdrew in the late 1970s after failing tomake a dent with Orange Joy, a product that it transplanted fromthe U.S. But by 1992, it had succeeded in marketing other products,such as Pampers, in Japan. The home office told its Japanese unitto find new markets for products in which P&G was strongelsewhere in the world. So that year P&G sent out researchersto study Japanese dish-washing rituals. They discovered one oddhabit: Japanese homemakers, one after another, squirted out moredetergent than needed. It was \"a clear sign of frustration\" withexisting Japanese products, says Robert A. McDonald, head ofP&G's Japanese operations. He saw the research as a sign thatan \"unarticulated consumer need\" was more powerful soap. \"We knewwe had something to go after,\" he says.' Some P&G executiveswert: concerned about entering such a mature market, says Mr.McDonald. But P&G's lab in Kobe went to work to create a highlyconcentrated soap formula, based on a new technology developed bythe company's scientists in Europe, specifically for Japan. Thefirst hint that Joy was a hit carne in March 1995 in the regionaround Hiroshima, 400 miles west of Tokyo, where P&G startedtest-marketing it. Four weeks into the test, Joy had become themost popular dish soap in the region with a 30% market share.P&G's marketing pitch was deceptively simple: A little bit ofJoy cleans better, yet it's easier on the hands. The message hit achord, says Ayumi Osaki, a 31-year-old homemaker who rushed off tobuy Joy after seeing pilot commercials. \"Grease on Tupperware,that's the toughest thing to wash off,\" says Ms. Osaki, a mother ofthree in Hiroshima. \"I had to try it.\" Emboldened, P&G finisheda nationwide introduction in March 1996, when Joy had attained a10% market share, Three months later it had a 15% share. A yearlater it had 18%, and now its share is up to 20%, according toindustry statistics, The results astounded even P&G. \"Everybodyin Japan wanted it,\" says P&G's Mr, McDonald. \"Every retailerin Japan wanted to get his hands on Joy.\" Retailers clamored forJoy because P&G had built in \"fat margins,\" explains MasaharuKubo, a buyer for Daiei Inc\" which operates 383 supermarkets inJapan, P&G had exploited a weakness in the Japanese giants'products. Their long-necked bottles wasted space, P&G'scontainers were compact cylinders that took less space in stores,warehouses and delivery trucks, Joy improved the efficiency ofDaiei's distribution by about 40%, Kubo estimates, \"Before Joy,dish soap was a sleepy category; [the containers] were bulky andtook up a lot of shelf space, and their unit prices were fallingevery year,\" he says, \"Joy freed up a lot of space for otherproducts, pushed up prices of dish soaps as a whole, and gave usbigger margins, It was revolutionary.\" P&G's advertising bingealso delighted retailers, Kubo says. To look for ideas, P&Gmarketers had watched more than a hundred commercials from aroundthe world from P&G and its rivals. They settled on adocumentary-style TV ad used in Britain by P&G for a laundrysoap called Daz. P&G's advertising agency, Dentsu Inc. createdcommercials in which a famous comedian dropped in on homemakers,unannounced, with a camera crew to test Joy on the household'sdirty dishes. The camera homed in on a patch of oil in a pan fullIf water, Then, after a drop of Joy, the oil dramaticallydisappeared. Japanese soap makers were alarmed by the campaign.Kao's Mr. Ishii says he ordered up research into Joy and concludedthat more than 70% of Joy users began using it because of thecommercials. \"We had mistakenly assumed Japanese didn’t care muchabout grease-fighting power In dish soaps.” Mr. Ishii says. “Thereality was people are eating more meat and fried food and arefrustrated about grease stains on their plastic dishes and storagecontainers.\" Kao and Lion are now playing catch-up, turning outproducts that unabashedly mimic Joy, from its package and color(green) to its grease-fighting Technology. Successes like Joy havegiven P&G a change of heart about Japan, \"For a long time,P&,G's approach was to dump in Japan what sells in the U.S.,”says a P&G manager who declined to be named. Now, he says,P&G generates ideas in Japan that it uses in other markets. Ithas begun selling Joy, for example, in the Philippines and isconsidering it for other Asian markets, It has also started to usea leak-free cap in the U. S. that it designed for Joy in Japan. TheJapanese consumer is “among the world’s most educated and the mostperceptive and articulate evaluators,: says P&G’s Mr. McDonald.“I’ve worked in a lot of countries but never been anywhere elsewhere I can have a scientific discussion with the consumer like Ican do here about dish soap.

Case Questions

1. What lessons can international marketers learn from Procter& Gamble’s experiences in Japan?

2. Identify and describe the roles of product policy, pricing,promotion and distribution in marketing Joy in Japan.

3. What lessons from Japan might benefit Procter & Gamble inother markets?