---
title: "P&G, Unilever, Johnson & Johnson Are Making a Serious Mistake"
description: "They once taught Chinese counterparts, who were just beginning to learn about market economy, a valuable lesson. P&G was once a myth in the Chinese market. Its first three shampoo brands—Head & Shoulders, Rejoice, and Pantene—simultaneously aired TV ads, competing with each other, leaving Chinese companies astounded. With precise positioning strategies, high-quality ads, and massive spending, P&G gave a masterclass to Chinese peers. Multi-branding, USP, positioning—advanced concepts flooded in, showcasing world-class management. Even P&G's shelf displays, brand naming, and ad creativity became classic cases for Chinese companies to study. However, this 179-year-old company has faced major troubles globally, including in China, with declining performance. Last year, P&G's CEO emphasized cutting half its brands to survive. Despite various self-rescue measures, performance hasn't improved. In populous China, P&G's market share has been declining."
author: "凉月"
publisher: "New Distribution"
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published: "2016-04-29"
language: "en"
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# P&G, Unilever, Johnson & Johnson Are Making a Serious Mistake

> They once taught Chinese counterparts, who were just beginning to learn about market economy, a valuable lesson. P&G was once a myth in the Chinese market. Its first three shampoo brands—Head & Shoulders, Rejoice, and Pantene—simultaneously aired TV ads, competing with each other, leaving Chinese companies astounded. With precise positioning strategies, high-quality ads, and massive spending, P&G gave a masterclass to Chinese peers. Multi-branding, USP, positioning—advanced concepts flooded in, showcasing world-class management. Even P&G's shelf displays, brand naming, and ad creativity became classic cases for Chinese companies to study. However, this 179-year-old company has faced major troubles globally, including in China, with declining performance. Last year, P&G's CEO emphasized cutting half its brands to survive. Despite various self-rescue measures, performance hasn't improved. In populous China, P&G's market share has been declining.

**They once taught Chinese counterparts, who were just beginning to learn about market economy, a valuable lesson**
P&G was once a myth in the Chinese market. The earliest three shampoo brands—Head & Shoulders, Rejoice, and Pantene—simultaneously aired TV ads, competing with each other, leaving Chinese companies astounded. With precise positioning strategies, high-quality ads, and massive spending, P&G gave a masterclass to Chinese peers. Multi-branding, USP (Unique Selling Proposition), positioning—advanced concepts flooded in, showcasing world-class management. Even P&G's shelf displays, brand naming, and ad creativity became classic cases for Chinese companies to study.
This super-centenarian company, with 179 years of history, has encountered major troubles in recent years, including in China, with declining performance. At the end of last year, P&G's CEO emphasized cutting half its brands to survive. Despite various self-rescue measures, performance hasn't improved. In populous China, P&G's market share has been declining.
**Can P&G Turn Around?**
**Environmental Changes**
In the past decades, P&G's core management philosophy was to drive strong growth through advertising, especially celebrity ads, and to dominate shelves and channels. These strategies indeed brought impressive results. P&G is a product of the industrial era's "mass production + mass retail + mass channels + mass brands + mass logistics." However, we are now transitioning from the industrial era to the information age and further to the data age. Small and beautiful brands can reach their audiences through online channels. With the internet, everything is different. P&G's market share is declining not because people no longer like P&G, but because in the industrial era, there was no choice but P&G; now they have infinite choices.
**Brand Management**
As the economy develops, consumer incomes rise, and consumption upgrades, P&G, which targets the mass market, can no longer attract consumers. More and more consumers in Beijing, Shanghai, and Guangzhou are upgrading from Head & Shoulders to L'Occitane, from Rejoice to Kiehl's. With the momentum of e-commerce, consumers switch to high-end shampoos without hesitation.
Meanwhile, more and more "small and beautiful" brands are eroding the territories of FMCG giants like P&G in various niches, while large companies pursuing scale effects find it hard to strike a balance between offense and defense. Admittedly, P&G has launched its own high-end products, but the mistake was placing them under its mass-market brands, such as Rejoice Perich, Pantene Pro-V Repair Elixir, and Olay ProX. These products have high-end formulas but fail to create a clear concept for consumers, which is a major taboo in brand management.
**Digital Marketing**
With the increasing popularity of digital devices, consumers' attention has shifted from TV screens to internet-based social media. However, P&G's marketing methods are mostly traditional channels, ignoring the rapid spread of internet models in China. In the wave of internet media marketing, P&G still relies on traditional TV advertising, lacking interaction and innovation.
**Changes in Consumer Psychology**
In the internet age, consumers mainly obtain product and service information through the internet and learn about brands from peers, rather than just hearing the manufacturer's claims or celebrity endorsements. Real user experience becomes more important, and user experience determines brand value. This is the biggest change in consumer psychology under the internet context.
P&G's declining market share is a strong signal, an important trend, and a harsh reality that everyone must face. Many giant brands, even as powerful as P&G, have encountered disruptive challenges in the mobile internet era, with their performance eroded by increasingly successful "small brands."
This has nothing to do with P&G's management level or whether its employees work hard. Looking ahead, it's likely that similar giants of the same era will follow suit. P&G, Walmart—these industrial-era behemoths—are inevitably declining under the internet trend, though the final outcome is unknown.
In the industrial era, market competition inevitably led to excellent companies like P&G and Walmart defeating competitors through best practices and dominating the market. This outcome was optimal for society, consumers, and even the natural environment. Now, P&G's market share is declining not because people no longer like P&G, but because in the industrial era, there was no choice but P&G; now they have infinite choices.
P&G is inevitably declining, but it need not grieve alone, because looking further ahead, the small and beautiful brands that are now happily eroding P&G's market will also decline, as consumer needs will further differentiate, personalize, and customize. By the time we reach a fully C2B era, the current concept of "brand" may no longer exist.
P&G should currently consider entering markets where the internet and e-commerce are not yet widespread, such as Africa, where quality industrial-era products are still needed; China's township markets and India also have great untapped potential; or, leveraging its strong strength, transform into a holding and capital operation company, specializing in acquiring promising small and beautiful brands, then listing them as a package and exiting profitably; or transform into a platform enterprise to incubate FMCG brands.
**How Unilever Acts**
The shampoo FMCG kingdom dominated by P&G and Unilever is becoming homogeneous in product positioning, channels, and prices. In terms of product positioning, based on consumer needs, both P&G and Unilever provide detailed solutions. Whenever one launches a product with a certain positioning, the other follows suit, but with different effects.
According to public data, P&G's shampoo business held 60% market share in 2006. However, according to monitoring data from third-party institutions cited by industry insiders, P&G's share in China has now dropped to around 50%. In contrast, Unilever's shampoo business has risen from less than 10% years ago to about 20%. Additionally, L'Oréal's shampoo business is also rising, and Liby's Aoni and Diaopai, as well as Baireunf, have seen varying degrees of growth.
Zeng Xiwen, Vice President of Unilever North Asia, said in an interview that Unilever's shampoo business has been continuously growing. For example, Unilever started developing the new brand Clear in China in 2008, opening a new era of gender-specific shampoos in China. This single product, developed by Unilever, now holds a significant market share. After 2010, Unilever's Dove also launched shampoo business in China.
Currently, Dove's sales are high because its low price under a high-end brand directly appeals to consumers. Unilever explains Dove's success as shifting from marketing to target audiences to brand marketing for consumer groups. Under the internet trend, marketing tools have been transformed by digital tools, and marketing concepts and goals should be adjusted accordingly. Similarly, the forms, roles, and skills in marketing organizations should also be modified.
In the Harvard Business Review article "Building the Ultimate Marketing Machine," co-authored by Wade, he expressed similar views: "In the past decade, the way marketers respond to consumers has changed dramatically... but most companies' marketing departments still operate under a brand management model from 40 years ago." Today's marketing organizations must find a balance between scale and agility, completing plans and execution within weeks or months to seize fleeting opportunities.
Last year, Alibaba and Unilever jointly announced strategic cooperation in rural e-commerce, cross-border e-commerce,满天星 (a traceability system), Alipay, and big data applications. Alibaba values Unilever's innovation not only in product R&D but also in sales, logistics, and especially online and offline marketing, which aligns with Alibaba's desire to promote online-offline integration through innovative means.
**How to Do "Internet+" in the FMCG Industry:**
China has incorporated internet development into its constitution, and e-commerce has become an indispensable economic force.
Many traditional FMCG brands have experienced pain in their internet transformation. Whether facing information fragmentation in communication or the impact of e-commerce on channels, traditional FMCG brands need to quickly adopt internet thinking. The core of "Internet+" lies in how to introduce internet thinking and behavioral patterns into brand marketing, from traffic entry points to linking platforms to brand value communication, all interlinked and integrated, making consumers love and consume the brand. To maximize the "+" method, it relies on creativity that breaks barriers and connects everything.
First, break the existing internal power monopoly; if founders can communicate happily with employees, the transformation of traditional enterprises has hope. Second, all decisions must be based on rational thinking with a big-data-driven precision marketing system, with no decisions based on feelings, and these data must be timely and effective. Finally, the most important is the extreme product thinking driven by "user needs," which means achieving "letting users drive you crazy, no KPIs, and whether employees develop products well is determined by users" within the organization.
In today's ever-changing marketing environment and increasingly fierce competition, these new developments impose new strategic requirements on corporate marketing activities. Facing these challenges, companies must make new strategies for the new environment and enhance their innovation spirit and awareness.
It is worth noting that even when facing challenges and innovation, the ultimate goal is to focus on human needs, with integrity as the foundation and methods as the priority.
**Conclusion**
Moreover, it is important to revisit the thoughts and original intentions of several great founders. Lou Gerstner, who saved IBM, revisited old Thomas's simple one-page memo. These are forgotten by many, occasionally remembered by a few, but they are the most important things in the world.
(Author: Liang Yue)
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