GOING SOCIAL: DUREX IN CHINA Harvard Case Solution & Analysis

Going Social: Durex in China Case Study Solutuion

Introduction

Reckitt Benckiser also known as RB is one of the top multinational companies which deal in health and hygiene products such as Dettol, Finish, Scholl and many others. It was established in the United Kingdom and sells its products in almost all countries of the world. RB acquired one of the companies known as SSL International in 2010 and its product Durex condom which is currently the top product of the world. RB entered the Chinese market in the year 1995 and introduced Durex condom in 2010 in the Chinese market.

With effective marketing strategy, the company was able to capture the condom market in China through online and offline distribution. For further expanding its business in China, the company currently faces a dilemma in which it has been presented with two options. The first option which has been presented to the company isto continue investing in offline distribution while also increasing its efforts on social media. The second option isto stop investing in the offline distribution and instead focus all the efforts on improving the social media platform.

Decision

After analyzing the case and viewing the current position of Reckitt Benckiser’s product Durex in the Chinese market, the best position for the company would be the Option # 2 which is reducing its investments in the offline distribution and focus all its efforts in improving the social media advertising. This strategy would benefit the company in the long-term whereas, in the short term, RB would suffer in the brick and mortar stores as it would face problems keeping up with its competitors.

GOING SOCIAL DUREX IN CHINA Harvard Case Solution & Analysis

The strategy of RB to improve its marketing activity would include partnering up with many e-commerce platforms such as Alibaba, Sina Weibo, and other Chinese platforms. The company will need bring changes to its organizational structure in which the brand manager would be encouraged to focus on forming relationships with e-retailers such as Alibaba for buying its products and further selling it to customers. It would also require the customer’s information such as their names, phone numbers, address and etc. for targeting the users on WeChat for delivering the personalized messages and also encouraging them to buy the company’s product.

Objective of focusing on social media platforms

The reason as to why focusing more on online distribution instead of offline distribution is afor the company to sell its product through offline distribution which requires heavy investment on a television advertisement, billboards, pamphlets and another source of advertisement. In the survey, it was found out that the Chinese advertisements are far much expensive than any other place in the world. The CCTV (China Central Television) which is main television network which provides news, entertainment, sports and other programs.

For television advertisement, the company is required to bid on prime time slots around which 280 Chinese and foreign companies also try to acquire that prime time slot. It is also difficult for convincing the Chinese people in buying product since many of them are price -conscious as they prefer to buy a product which does the job instead of looking for better quality product. Also for convincing the people needs hiring of Key opinion leaders (KOL) for conducting promotions which also increases the costs. The reasons as to why option 2 is a better choice is because of the following:

• It is less costly compared to focusing on offline distribution as this requires heavy advertisements for promotions
• This would help the company in long-term for attracting and gaining for customers, however, the company would face difficulty in short-term for not focusing on offline distribution
• The internet purchases and e-shopping have been on a significant rise in China and it is estimated that the market would grow more in the future.
• Through partnering and encouraging the e-retailers for forming a relationship and buying the product, it would improve the company’s distribution
• By creating up an account with Sina Weibo, the company was able to counter Chinese language barrier.
• Through the internet, RB would be able to educate about the safety of condoms since talking about sex in China is taboo.

Through the selection of option # 2, this strategy would help the company in performing better in the long-term whereas, in short term, it would face difficulty and might probably lose market share in China.................

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