SK-II: Damage Control China

Katherine Allred Ashley Aronson Rachel Starr Yana Nemecek Andrea Blythe

November 2, 2011

1 Table of Contents

Background 3

Situation Analysis 3

Core Problem and Opportunity 4

Goals and Objectives 4

Key Public 4

Primary and Secondary Messages 7

Strategies and Tactics 9

Budget 14

Calendar 16

Communication Confirmation Table 28

Evaluation 28

Sources 29

2 Background

Proctor and Gamble (P&G) entered the Chinese marketplace in 1988 through the Guangzhou province. With the cosmetics industry on the rise, China racked up US $8.6 billion in cosmetic sales alone in 2005.

P&G has four large headquarters around the world and it serves customers in more than 180 countries. As an international company, P&G must constantly stay up to date with cultural dynamics for each country it has a business presence.

A product line called SK-II was created in 1980 by Max Factor Japan. This product was made by the fermentation process of sake in attempt to rejuvenate skin. SK-II was primarily sold in Japan, until P&G decided to bring it into the Chinese market in 1999.

On Sept. 14 2006, Chinese authorities banned nine products from the SK-II line in the Chinese sales market. These products contained trace amounts of chromium and neodymium, which were a byproduct of the production. These chemicals had been banned by AQSIQ regulations. Chinese government officials reported numerous incidences of allergic reactions. That same day, P&G denied accusations that SK-II was harmful.

P&G offered refunds to customers of SK-II products. To obtain a refund, the customers needed to: bring back the product that was two-thirds full, provide a doctor’s note proving an allergic reaction to the product and sign a contract relieving P&G’s liability. After completing this criteria, customers were informed they would not receive a refund for at least another month. P&G opened its doors to refunds and saw little movement. With a low response rate, the company loosened the guidelines for customer returns. The change in guidelines resulted in an influx of returns, the sales personnel could no longer handle the amount of returns.

Due to security concerns, P&G held its returns in a hotel banquet hall. Angry mobs of customers rushed through the doors, causing hectic chaos. As a result, P&G was left with a mass amount of displeased customers who were no longer satisfied with the SK-II product line.

Now, SK-II has no presence on the Chinese market because SK-II product’s have been pulled and its sales counters have closed. The company needs to work on relationships with the Chinese government and customers while rebuilding SK-II’s brand reputation and demonstrating its qualitative importance.

Situation Analysis

Due to the SK-II line, P&G has lost the trust of its customers, Chinese government officials and shareholders. P&G faces a challenge of keeping the SK-II line in the cosmetics market, while under suspension. Not only does P&G feel pressure from its customers to restore its relationship by providing better alternatives for refunds, but P&G also needs to reassure shareholders that the product is still profitable and beneficial to the company. P&G must

3 restore its relationship with its key publics to continue participating in the Chinese cosmetic industry.

In order to relaunch SK-II into the Chinese marketplace, P&G must get the approval of Chinese government officials. Rebuilding the relationship with previous customers will also be a challenge. In order to stay competitive within the Chinese cosmetic market, P&G needs innovative and creative ways to rebuild the SK-II product line.

Core Problem and Opportunity

To rebuild P&G’s reputation and relationship with customers and Chinese government officials in order to successfully relaunch the SK-II line in China.

Goals and Objectives

Goal: For SK-II’s image, reputation and relationship to be repaired with customers and Chinese government officials by rebranding SK-II and following laws and guidelines set by the government.

Objectives: 1. To increase SK-II sales in China from 7 percent to 10 percent by Jan. 1, 2009. 2. To increase long-term customer relations by 25 percent by Jan. 1, 2009. 3. To maintain a 90 percent employee retention rate by the relaunch day, Sept. 11, 2007. 4. To build and maintain relationships with Chinese government workers by May 1, 2007. 5. To inform shareholders that P&G is removing the product from the Chinese market for one year by October 6, 2006.

Overview: Our team recognizes the crisis of SK-II’s current situation. We suggest that P&G remove SK-II products from the Chinese market for a year. During this time period, we suggest a rebranding of the products, which would adhere to Chinese law and regulations.

Key Public

SK-II Counter Personnel By 2005, P&G’s sales represented 18 percent of China’s cosmetics and toiletries market. By 2006, SK-II had 97 sales counters in China with more than 400 sales personnel in all one tier, and most two tier cities in China. Counter personnel are females between the ages of 18 and 35 years old. SK-II became the number two premium skin care brand and sales in China accounted for approximately 7 percent of the brand’s global sales.

4 After SK-II was pulled from the market, every SK-II sales counter shut down after the company stopped taking returns, leaving some personnel without jobs. Counter personnel are worried about the status of their employment. P&G needs to focus on maintaining positive relationships with the SK-II counter personnel and guarantee that after the SK-II re-launch, the employees will return without any negative feelings toward P&G. Counter personnel serve as ambassadors between the SK-II product and the consumers. P&G will need to educate the personnel about SK-II products because they are dealing with the customer first hand and will need to know all the safety measures and product ingredients to inform the customer. Taking these measures will benefit the company because it will keep the personnel happy and ready to return to work after the relaunch.

Current Relationship: The relationship with SK-II counter personnel is very poor right now. SK-II has been banned in the Chinese market putting stress on SK-II counter personnel who may lose their jobs due to lack of customers at SK-II counters. P&G continually changed the return policies, which created hardships for the counter personnel. P&G also shut down the SK-II counters, which left 400 personnel without jobs. The counter personnel do not trust P&G and they are unhappy about potentially losing their jobs.

Self-Interest: Personnel are worried about their jobs, especially with the downfall of the SK-II brand. 400 personnel employees could lose their jobs, and they are worried that the relationship between their employer and their country is in jeopardy.

Influential: Chinese customers, P&G, Chinese government, competitors, friends, family and peers.

Shareholders Shareholders are a large piece of what helps P&G succeed. Employees and investors are interested in the future of the company and the each products success is detrimental to the entire company. A product’s failure in the Chinese market might create a panic in the minds of investors. Shareholders are mainly in the United States but employees are also shareholders, who are worldwide and Chinese employees are in the middle of the crisis. The well being of the product is a concern for both job security and potential dividends.

Current Relationship: Shareholders are worried about the product and possibly resulting in a loss of money, equaling in fewer dividends. The image of the brand and possibility of the brand not relaunching would result in a loss of money for shareholders. Because finances are involved shareholders would possibly become overbearing and trying to become involved with the situation. P&G would need to inform the public of the future of the product. Since the crisis has begun, stock prices have not dropped significant amounts, small changes within one dollar.

Self-Interest: The motivation for shareholders would be dividends that they receive from the brand.

Influential: P&G, Stock Market, Chinese Government and customers.

P&G Consumers SK-II customers are working females, age 20-50, who care about their personal appearance and have the disposable income to afford foreign cosmetics. This group represents five percent to seven percent of the population, bringing 65 to 90 million potential customers. These ladies

5 can afford luxury foreign items and tend to purchase such products for social and personal reasons. The second target audience for consumers are educated females, including spouses of white collar workers, those who have travelled outside of China, or business executives. After losing such a high percentage of this select population, it is necessary to not only rebuild beneficial relationships with SK-II customers, but to maintain these relationships so purchasers will return for more products which will ultimately increase sales.

Current Relationship: The relationship between customers and SK-II is very weak. Customers have lost trust with the product SK-II and do not believe the brand is reliable anymore. Consumers are also livid with customer relations within the company from past experiences with the return policy and therefore are now hesitant about purchasing the product.

Self-Interest: Consumer will not readily purchase SK-II skin products because of the recall. This target audience wants the best AQSIQ-approved product in the market that is also linked to a reliable brand. These two points are crucial because these consumers have the tendency to make only a one initial tester purchase and do not build long term relationships with products. Most importantly, this audience wants a product that looks chic but is scientifically proven to work effectively and flawlessly.

Influential: Chinese Government, friends, media, advertisements, AQSIQ, and competitors such as Shiseido, Revlon, Dior, Estée Lauder and Maybelline.

Chinese Government The Chinese Government is very important for any business venture in China. China is under Communist rule and, therefore, the government is involved in every aspect of Chinese economics, media and culture. After testing the SK-II products, the Chinese government became worried when many of the products contained banned chemicals and they ultimately shut down the SK-II counters. P&G must repair the strained relationship with the government in order to rejoin the cosmetics market once again.

The Chinese economy is the third largest in the world after the US and Japan. China has the largest population in the world with around 1.336 billion people and therefore has a huge domestic market. The government’s approval is critical for P&G because without it they are not allowed to enter the consumer market.

Current Relationship Poor. The relationship between P&G and Chinese Government continued to decline after AQSIQ found illegal chemicals, neodymium and chromium, in the SK-II products.

Self- Interest To ensure that SK-II is adhering to laws and regulations in the Republic of China and ensure the safety of the Chinese people.

Influential

6 P&G, other cosmetics companies and Chinese citizens.

Primary Messages

SK-II Counter Personnel

Primary Message 1. SK-II is a safe product to be representing and selling.

Secondary Messages ●SK-II products were retested after initial reports were taken by the AQSIQ. Testing continued in Japan, Hong Kong, Singapore, Taiwan and South Korea, both by P&G and by national quality assurance departments. ●Different regions have different standards to abide by. On September 26, the Health Sciences Authority of Singapore announced that SK-II products did not pose any safety concerns. ●The Hygienic Standard for Cosmetics of the National Standard of the Peoples Republic of China and the Cosmetic Directive of the European Commission said:

“The directive provides that the presence of traces of chromium or neodymium is allowed provided that such substances are technically unavoidable in the goods manufacturing process. The cosmetic product concerned must not cause damage to human health under normal use.”

●Original testing in China and secondary testing in Hong Kong had acceptable levels of chromium and neodymium. Trained health officials and laboratory technicians would conclude that--under normal usage--there was a low to no health hazard from SK-II products.

Primary Message 2. P&G values its personnel and will strive to maintain positive relations with China and work to rebuild the image of SK-II to ensure that it stays on the market and personnel will keep their jobs.

Secondary Messages ●P&G offered to fully cooperate with the AQSIQ to enable SK-II to be allowed back on the shelves for sale. ●P&G discontinued returns of SK-II caused riots and picketing by consumers. By rewriting return policies, P&G employees will no longer be a target of animosity.

Primary Message

7 3. P&G ensures job security for SK-II counter personnel.

Secondary Messages ●SK-II was unexpectedly pulled from the market; therefore, jobs were unexpectedly lost. ●P&G values personnel loyalty and wants to provide job security for its personnel. ●P&G will do whatever is in its power to ensure jobs for currently unemployed personnel.

Shareholders

Primary Message 1. P&G is planning to remove SK-II from the market for one year.

Secondary Message ●P&G will inform its investors that its pulling the product from the market. ●Pulling the product should not dramatically influence stock price, as the company has many other products in the market. P&G Customers

Primary Message 1. The SK-II product line is a scientifically tested and AQSIQ approved product line that works effectively and flawlessly on skin.

Secondary Messages ●P&G will research Chinese law and work with the government to reformulate a product that is healthy for its citizens. ●The SK-II product line has amazing items that can purify, renew, brighten and nourish skin to prevent it from aging. ●P&G is not trying to forget or ignore its past mishaps, but to embrace, learn and move on from it for the benefits of the customers.

Primary Message 2. P&G cares about the well being of its consumers.

Secondary Messages ●P&G values the support of their loyal customers. ●P&G wants to build and maintain long-term beneficial relationships with their consumers. ●P&G wants to hear customer feedback, comments and opinions in order to sell the best product to fit their wants and needs. ●P&G will create a return policy that benefits consumers’ needs.

Chinese Government

Primary Message

8 1. P&G values its relationship with the Chinese government and will follow and respect the regulations set up by them.

Secondary Messages ●P&G wants to build a relationship with the Chinese government. ●P&G can’t sell their product if they don’t pass through the government-run testing centers. ●The Chinese took this opportunity to show the Japanese government that their laws and standards are respected, therefore, it’s important to show the government the respect they want.

Primary Message 2. P&G needs to alter its staff and review cultural customs before starting to repair its relationship with Chinese government.

Secondary Message ●The Chinese government has many important customs and it’s necessary that the P&G team learn these customs to make a good impression. ●The Chinese hold seniority and hierarchy to a higher level. It’s important than for P&G to fill its staff with older, experienced team members.

Strategies and Tactics

SK-II Counter Personnel Strategy 1: Rebuild positive relationships between counter personnel and customers to re-establish customer loyalty to SK-II products.

Tactics: ●Create the new return policy that will keep SK-II counters open for two months to take returns on any SK-II product without any stipulations or clauses. ○SK-II will be taken off the market in October 2006, but the counters will remain open until December 2006 to take returns only; they will not sell any products. Products will re-enter the market in September 2007 after P&G rebrands SK-II products. ○The return policy will take any SK-II product back for a full refund. ○Customers will not sign any documents deferring blame. ●All 400 personnel will remain in work for two months while personnel counters remain open to take returns.

Strategy 2: Educate SK-II counter personnel about the SK-II product so they will become experts on the products they are selling.

Tactics:

9 ●Fly 400 counter personnel to the Japanese factory to tour the factory and learn about the SK-II product. Trip will include: ○Fly 10 personnel out at one time twice a week beginning the first week of January 2007 to the middle of May 2007. ■The trips will be Monday to Wednesday and Wednesday to Friday. ○All expense-paid flight from China to Japan. ○All expense-paid two night stay. ○All expense-paid meals during two night stay. ●Provide a training session for counter personnel to learn important messages and information about SK-II products. ○SK-II toxicologists will speak to counter personnel about health and safety measures concerning SK-II products. ○Teach proper application process of products. ○Teach safety concerns and risks. ○Teach proper instructions. ○Inform counter personnel of ingredients in SK-II products. ●Provide counter personnel with free samples and communicate with them about the key messages of each product.

Strategy 3: Build employee relations and create benefits. ●China’s minimum monthly wage is $160 US per month. Give counter personnel severance pay for temporary unemployment at 75 percent minimum wage for nine months[1]. ●When SK-II re-launches and sales counters are reopened, give former employees first priority in hiring. ●Provide counter personnel with $500 worth of SK-II products when counters reopen as a “thank you” for personnel loyalty.

Shareholders

Strategy 1: To inform shareholders immediately that P&G is pulling SK-II from the market.

Tactics: ●Create 8K which will inform shareholders that P&G is removing the product from the shelves. ●Create news release which will be sent to all financial media outlets. ○Contact: Dow Jones, Bloomberg, Associated Press, Market Watch and Reuters. ○News release should inform: What happened, why it happened and what is the company going to do going forward. Strategy 2: To create talking points filtered through the legal department. ●Talking points should be set for investor relations department, executives and employees to answer any media questions.

10 P&G Customers Strategy 1: Rebuild long-term beneficial customer relations to create and maintain brand loyalty.

Tactics: ●Set up a 24-hour international live chat on the SK-II website Aug.6, 2007, a month before the relaunch, where customer’s can receive premium service by talking to a SK-II consultant for questions or concerns. ○Consultants will also have an email account to give to each participant after each live chat session to continue building a long-term relationship with consumers. ●Send out an information kit on August 1, 2007, to all past consumer’s that include: ○A relaunch of the SK-II product announcement. ○An explanation of past incidents and how SK-II has worked with AQSIQ guidelines to improve its product and make it more effective and better overall. ○An explanation of the new live chat feature on the website, where customers can talk to a SK-II personnel members for any inquiries about the product. ○An explanation of the return policy. ○A “thank you” to customers for their support. ■ Highlight P&G’s high priority with customer relations and the importance of customer feedback. ○A 20 percent off coupon for the customer’s first purchase of SK-II products. ○An informative pamphlet to educate consumers about the new SK-II product line. ○An invitation to sign up for the exclusive customer rewards program. ●The customer rewards program will include: ○An annual birthday coupon for 50 percent off any SK-II product. ○An exclusive card to calculate purchases, where every $500 spent results in $50 dollars off with next purchase. ○As a customer rewards member, every purchase includes 10 percent off of the sale. ■ Every purchase made by a customer in the rewards program will be sent a thank you card for their purchase.

Strategy 2: Educate consumers about the new SK-II product line.

Tactics: ●Send out a press release Sept. 3, 2007, seven days before the product relaunch, to inform all potential consumers that the new SK-II product line adheres to AQSIQ regulations. ○Note that the new line has amazing items that can purify, renew, brighten and nourish skin and explain how it prevents it from aging. ○Mention new customer rewards program. ●With every purchase, include an informative pamphlet about the SK-II product line. ○This pamphlet will also feature information on SK-II’s 24-hour international live chat. ●Use Social Media to spread the word about the new SK-II product line. ○Make an informative SK-II profile on RenRen, 51 and Chinaren on Sept. 10, 2007. ■Note that RenRen and 51 are social networks for college students, and Chinaren is a social networking site for college alumni[2].

11 Strategy 3: Make customers feel connected to the brand SK-II, while still maintaining a foreign elegance.

Tactics: ●Change Sk-II’s color scheme from red, white and silver to the Chinese color qing (青花瓷) [3], and gold. ○Maintain the porcelain look of qing in layout, with accents of gold[4]. ●Change spokes model for SK-II to a new famous endorser. ○A female, age 25-40, who is classy, well-liked in the Chinese culture, down to earth and can relate to our customers on a personal level. ●Set up an international customer story page on the SK-II website where all customers can submit their success stories with the SK-II product line for other consumers to view.

Chinese Government

Strategy 1: Create positive government relations to ensure that SK-II can re-enter the cosmetics market in China.

Tactics: ●Research a different way of processing the SK-II products, to minimize the amount of chromium and neodymium that results in the fermentation process, make sure they adhere to the government regulations. ○Extensive research into common allergies within China in order to prevent any allergic reactions from SK-II products. ○Aim for the SK-II products to be as planet based as possible.

●Transport government officials to factories and show them the production of SK-II. ○Fly out two people from divisions of the AQSIQ including the Department of Quality Management, Department of Supervision on Inspection, Department of Supervision on Product Quality, Department of International Co-operation[5]. ○Work closely with the government research facilities to come to a product compromise.

Strategy 2: Establish a Guanxi.

Tactics: ●Research Chinese companies in the cosmetics market and establish a joint venture. ○Plan monthly business lunch with top Chinese companies on first Wednesday of every month beginning in January. ○Lunch meetings will adhere to Chinese customs ■Present business cards during first meeting ■Only discuss business face-to-face

12 ■Older P&G employees will be present to discuss business ■Plan and execute monthly banquets with Chinese businesses including food and ballroom rental.

Strategy 3: Build a reliable American SK-II team based in China to adhere to Chinese customs.

Tactics: ●Place senior P&G employees at the head of the SK-II team. ●Hire new employees fluent in both Chinese and English to lessen the translation gap between the government and P&G. ●Produce new business cards with English and Chinese.

13 Budget

Per Item Total Sponsored Actual Budget Detail Cost Projected Credit Projected Key Public SK-II Counter Personnel Rebuild positive relationship between personnel Strategy and customers Create new return policy and take all SK-II Approximately 10,000 customers Tactics products at full refund estimated to return $125 $1,250,000 $0 $1,250,000 Counter personnel will man counters for two months Minimum wage for 400 personnel $160 $64,000 $0 $64,000 STRATEGY SUBTOTAL $285 $1,314,000 $0 $1,314,000 Educate SK-II counter personnel about Strategy products Tactics Fly counter personnel to Japanese factory All-expense paid round-trip flight $300 $12,000 $0 $12,000 Pay for two night stay All-expense paid accommodations $400 $16,000 $0 $16,000 Pay for meals All-expense paid accommodations $400 $16,000 $0 $16,000 Provide educational training sessions at factory No cost $0 $0 $0 $0 Provide SK-II free samples to employees Small sample kits $100 $4,000 $0 $4,000 STRATEGY SUBTOTAL $12,000 $48,000 $0 $48,000 Create employee relations to ensure 90 percent Strategy employee retention rate Tactics Provide severance for months of unemployment 75 percent of minimum wage $1,080 $432,000 $0 $432,000 Provide counter employees with first priority to rehire No cost $0 $0 $0 $0 Provide "thank you" gifts for counter personnel loyalty Set cost $500 $20,000 $0 $20,000 STRATEGY SUBTOTAL $1,580 $452,000 $0 $452,000 PUBLIC SUBTOTAL $13,865 $1,814,000 $0 $1,814,000

Key Public Shareholders Strategy Inform investors of recall of SKII Tactics Create 8K Set Price $100,000 $100,000 $0 $100,000 Create Press release No cost $0 $0 $0 $0 No cost $0 $0 $0 $0 STRATEGY SUBTOTAL $100,000 $100,000 $0 $100,000 To create talking points through legal Strategy department Inform investor relations department of talking Tactics points No cost $0 $0 $0 $0 No cost $0 STRATEGY SUBTOTAL $0 $0 $0 $0 PUBLIC SUBTOTAL $0 $0 $0 $0

Key Public P&G Customers Strategy Rebuild long-term customer relations Approximate costs to write and Tactics Send out letters to all past consumers send out letters $25,000 $25,000 $25,000 Provide gift for customers first purchase 20% off first gift $500,000 $500,000 $0 $500,000 Approximate costs to create Informative pamphlet in product boxes pamphlets $1 $50,000 $0 $50,000 Invitation to sign up for rewards program Set cost $20,000 $20,000 $0 $20,000 Annual birthday coupon 50% off SK-II product $750,000 $750,000 $0 $750,000 Discount off purchases 10% off products $130,000 $130,000 $0 $130,000 Send thank you cards for customers who make purchases Approximately $0.50 per card $5,000 $5,000 $0 $5,000 Create 24-help line for customers Set cost $480,000 $480,000 $0 $480,000 $1,910,00 STRATEGY SUBTOTAL 1 $1,960,000 $0 $1,960,000 Strategy Educate SK-II customers Tactics Send out press release about SK-II re-launch No cost $0 $0 $0 $0 Include informative pamphlet with every purchase $25,000 $25,000 $0 $25,000 Use social media to spread word about SK-II re- launch Set cost $10,000 $10,000 $0 $10,000 STRATEGY SUBTOTAL $35,000 $35,000 $0 $35,000 Strategy Connect customers with SK-II brand Tactics Change color scheme of SK-II for re-branding Set cost $600,000 $600,000 $0 $600,000 $1,000,00 Change spokesperson for SK-II products Set cost 0 $1,000,000 $0 $1,000,000 Set up international customer story page Set cost $50,000 $50,000 $0 $50,000 $1,650,00 STRATEGY SUBTOTAL 0 $1,650,000 $0 $1,650,000

14 $3,595,00 PUBLIC SUBTOTAL 1 $3,645,000 $0 $3,645,000

Key Public Chinese Government Strategy Create relationship with Chinese government Tactics Research Chinese laws and regulations Set cost $100,000 $100,000 $0 $100,000 Fly Chinese officials tour of Japanese factory All-expense paid trip $300 $2,400 $0 $2,400 Pay for food accommodations All-expense paid trip $400 $2,400 $0 $2,400 Pay for accommodations All-expense paid trip $400 $3,200 $0 $3,200 Research Chinese cosmetic market Set cost $100,000 $100,000 $0 $100,000 Plan monthly business meetings Cost for food $500 $500 $0 $500 Plan monthly banquets for Chinese business Set Cost $10,000 $10,000 $0 $10,000 STRATEGY SUBTOTAL $101,100 $108,000 $0 $108,000 STRATEGY SUBTOTAL $110,000 $110,000 $0 $110,000 Strategy Build a reliable SK-II adhere to Chinese customs No cost for swapping out Tactics Place older employees in charge of team employees $0 $0 $0 $0 Hire employees both fluent in Chinese and English Salaries $60,000 $240,000 $0 $240,000 Produce new business cards Set cost for printing $2,000 $2,000 $0 $2,000 STRATEGY SUBTOTAL $64,000 $244,000 $0 $244,000 PUBLIC SUBTOTAL $275,100 $462,000 $0 $462,000 $3,924,86 CAMPAIGN TOTAL 6 $5,937,000 $0 $5,937,000

15 Calendar October 2006

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 4 5 6 7 Create Press Release Send Press Release in Edit Press Release Send Press Release out for approval to the media Being deciding detail for return policy Finalize Details for return policy Discuss Sales Associates new wages Finalize Sales Associates new wages.

Send 8K to all investors. Along with News release to all financial media outlets.

8 9 10 11 12 13 14 Inform Sales Open new return Create online message Associates of details of policy for customers board return policy

MEETING: Sales Associates-new wages

15 16 17 18 19 20 21

Start researching Set up meeting with possible Guanxi possible top 3 Guanxi

22 23 24 25 26 27 28 Meeting with Meeting with Guanxi Meeting with Guanxi Update Online Message Guanxi#1 #2 #3 Board

Banquet/party with chosen Guanxi

29 30 31

16 November 2006

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 4 Update Online Message Board

5 6 7 8 9 10 11 Starting Hire new Update Online interviewing for bilingual staff Message Board new bilingual staff 12 13 14 15 16 17 18 Chinese customs Update Online workshops for all Message Board employees on the SK-II team #1 19 20 21 22 23 24 25 Chinese customs Update Online workshops for all Message Board employees on the SK-II team #2 Prepare Shareholder letter

26 27 28 29 30

17 December 2006

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 Update Online Message Board

3 4 5 6 7 8 9 Update Online Message Board

10 11 12 13 14 15 16 Close counters Update Online for return policy Message Board

17 18 19 20 21 22 23 Update Online Message Board

24 25 26 27 28 29 30 Update Online Message Board

31

18 January 2007

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 4 5 6 Begin talks with Lunch with Update Online Chinese Chinese business Message Board government about improvement s Fly out Counter made to SK-II Personnel to Japan Fly out Counter Personnel to Japan 7 8 9 10 11 12 13 Fly out Counter Fly out Counter Update Online Personnel to Personnel to Message Board Japan Japan Meeting with Guanxi 14 15 16 17 18 19 20 Fly out Counter Fly out Counter Update Online Personnel to Personnel to Message Board Japan Japan

21 22 23 24 25 26 27 Fly out Counter Fly out Counter Update Online Personnel to Personnel to Message Board Japan Japan

28 29 30 31 Fly out Counter Fly out Counter Personnel to Personnel to Japan Japan

19 February 2007

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 Update Online Message Board

4 5 6 7 8 9 10 Fly out Chinese Fly out Counter Dinner and Lunch with Update Online Government Personnel to banquet Chinese business Message Board Officials to Japan Japan celebrating the personnel and Fly out Counter government’s Personnel to visit Japan 11 12 13 14 15 16 17 Fly out Counter Fly out Counter Update Online Personnel to Personnel to Message Board Japan Japan

18 19 20 21 22 23 24 Fly out Counter Fly out Counter Update Online Personnel to Personnel to Message Board Japan Japan

25 26 27 28 Fly out Counter Fly out Counter Personnel to Personnel to Japan Japan

20 March 2007

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 Update Online Message Board

4 5 6 7 8 9 10 Fly out Counter Lunch with Update Online Personnel to Chinese business Message Board Japan Fly out Counter Meeting with Personnel to Guanxi Japan 11 12 13 14 15 16 17 Fly out Counter Fly out Counter Update Online Personnel to Personnel to Message Board Japan Japan

18 19 20 21 22 23 24 Fly out Counter Fly out Fly in Update Online Personnel to Government Government Message Board Japan officials to officials to factories factories

Fly out Counter Personnel to Japan 25 26 27 28 29 30 31 Fly out Counter Fly out Counter Update Online Personnel to Personnel to Message Board Japan Japan

21 April 2007

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 4 5 6 7 Fly out Counter Lunch with Update Online Personnel to Chinese business Message Board Japan Fly out Counter Personnel to Japan 8 9 10 11 12 13 14 Fly out Counter Fly out Counter Update Online Personnel to Personnel to Message Board Japan Japan

15 16 17 18 19 20 21 Fly out Counter Fly out Counter Update Online Personnel to Personnel to Message Board Japan Japan

22 23 24 25 26 27 28 Fly out Counter Fly out Counter Update Online Personnel to Personnel to Message Board Japan Japan

29 30 Fly out Counter Personnel to Japan

22 May 2007

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 4 5 Lunch with Update Online Chinese business Message Board

Fly out Counter Personnel to Japan 6 7 8 9 10 11 12 Fly out Counter Fly out Counter Update Online Personnel to Personnel to Message Board Japan Japan Meeting with Guanxi 13 14 15 16 17 18 19 Fly out Fly in Update Online Government Government Message Board officials to officials to factories factories

Fly out Counter Fly out Counter Personnel to Personnel to Japan Japan 20 21 22 23 24 25 26 Update Online Message Board

27 28 29 30 31

23 June 2007

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 Update Online Message Board

3 4 5 6 7 8 9 Lunch with Update Online Chinese business Message Board

10 11 12 13 14 15 16 Update Online Message Board

17 18 19 20 21 22 23 Update Online Message Board

24 25 26 27 28 29 30 Update Online Message Board

31

24 July 2007

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 4 5 6 7 Lunch with Update Online Chinese business Message Board

8 9 10 11 12 13 14 Update Online Message Board

Meeting with Guanxi 15 16 17 18 19 20 21 Update Online Message Board

22 23 24 25 26 27 28 ] ] Update Online Message Board

29 30 31

25 August 2007

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 4 Lunch with Update Online Chinese business Message Board

Send out Info Kit 5 6 7 8 9 10 11 Launch Sk-II Update Online International Live Message Board Chat

12 13 14 15 16 17 18 Fly out Fly in Update Online Government Government Message Board officials to officials to factories factories 19 20 21 22 23 24 25 Update Online Message Board

26 27 28 29 30 31 Update Online Message Board

26 September 2007

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1

2 3 4 5 6 7 9 Send out Re- Buy Employee Meeting with Update Online launce Press Gifts Guanxi Message Board Release

Make Costumer Rewards Program, informational brochures and coupons available

Meeting with Guanxi 10 11 12 13 14 15 16 Make informative OFFICIAL Update Online SK-II Profile RELAUNCH Message Board DATE

Give employees gifts 17 18 19 20 21 22 23 Update Online Message Board

24 25 26 27 28 30 Update Online Message Board

27 Communication & Evalution Table

Key Public Self-Interests Primary Influential Objectives Strategies Tactics Messages Counter Possible job loss, 1.SK-II is a safe Chinese Maintain a 90 1.Rebuild positive • Create new Personnel relationship about product to be customers, P&G, percent employee relationships return policy. employer and representing and Chinese retention rate by between • Personnel country. selling. government, relaunch date. personnel and will remain 2. P&G values its competitors, customers. working personnel and will friends, family, 2.Educate • Fly personnel strive to maintain peers. personnel about for factory positive product to help tour. relationships. sell. Shareholders Possible dividend 1.P&G is planning P&G, Chinese To inform 1.Inform • Create an 8k loss. to remove product Government, shareholders that shareholders of • Create from Chinese employees and P&G is going to future of product. talking market. customers. recall SK-II from 2.Create talking points. Chinese market. points through the legal department. Chinese To re-establish its 1.Establish a P&G, other Increase 1.Create positive • Transport Government power over the good relationship cosmetic relationship with government government companies and with the Chinese companies, and Chinese relations to ensure officials to enforce its impact government. Japanese government. that SK-II can tour factory on the Chinese 2.Alter its staff government. reenter the in Japan. people. and review market. • Place senior cultural customs 2. Build a reliable P&G before repairing SK-II team to employees at relationship with adhere to Chinese the head of Chinese customs. the SK-II government. team. • Hire new employees fluent in Chinese and English. Consumers Worried about 1.SK-II is tested Chinese Increase long- 1.Rebuild long- • Send out health aspects of and approved by government, term customer term beneficial letters: re- SK-II, not AQSIQ. advertisements, relations by 25 customer relations launch receiving refunds 2.P&G cares AQSIQ, and percent by 2005. to maintain brand announceme for faulty product. about the well competitors. loyalty. nt. being of its 2.Educate • Send out consumers. consumers about press new SK-II product release. line.

Evaluation Criteria and Tools

Objective 1 Criteria Increase SK-II sales in China from 7 percent to 10 percent by Jan. 1, 2009.

Tools Sales will be calculated from revenue made in China from the SK-II product line. These calculations will begin Sept 11, 2007 and will end after business hours on December 31, 2008.

Objective 2

28 Criteria To increase long-term customer relations by 25 percent by Jan. 1, 2009.

Tools We will measure the usage of coupons redeemed that were given to repeat customers. We will also track the sales of each product with repeat customers.

Objective 3 Criteria Maintain a 90 percent employee retention rate by the relaunch day, Sept 11, 2007.

Tools On Sept. 11, 2007, calculate the amount of returning employees and compare this number to total employees working with the SK-II line on Sept. 10, 2007.

Objective 4 Criteria To build and maintain relationships with ten Chinese government officials by May 1, 2007.

Tools P&G will meet with 10 Chinese government members every month to build friendly relationships and gain approval for the SK-II product line, until 6 months after the product is relaunched.

Objective 5 Criteria To inform shareholders that P&G is removing SK-II from the market for one year by Oct. 5, 2006.

Tools P&G will watch stock market prices for the year and will measure how much the stock price has dropped since releasing information about the recall of the product.

Sources

[1] http://www.chinapost.com.tw/business/asia/asia-china/2011/01/27/289231/China-ups.htm [2] http://www.china-online-marketing.com/blog/internet-resources/top-chinese-social- networking-sitessns/ [3] http://tinyurl.com/3s9l486 [4] http://www.illuminantpartners.com/2011/01/17/color/ [5] http://www.standardsportal.org/usa_en/prc_standards_system/key_organizations.aspx#AQSIQ

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