Shanghai Jawa Case

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Definition of the problem The problem is determining what is the best possible positioning for Shangai Jahwa’s Liushen Brand –for a shower cream product-in a market that includes the most powerful players in the industry (Unilever, Procter & Gamble, Shiseido, Kao, and others) Alternatives Entering with Liushen brand positioned for segments with localized tastes + Avoid profit sharking by not competing with powerful competitors + As living standars improve, so will living conditions become apt for shower cream consumption in segments with traditional tastes + Direct competition has low brand equity and building expertise. + Has an important distribution network with 24 regional offices that cater to 1 000 department stores around the country. This gives them better understanding of local customer preferences. + The Liushen brand is already successful with mainstream households associated with traditional attributes (Chinese therapy, freshness and nature) + The Shanghai Jahwa company is better prepared to compete with a low cost structure than multinationals so barriers to enter this segment remain high - Urbanization has a positive trend while growth rates in rural China are slowing - Urban income per capita is also growing faster than rural income per capita - There are more sophisticated consumers that care for globalized attributes Entering as a Joint Venture with multinationals for globalized segments + Better capacity to reduce marketing costs and increase profit margins + Shower cream has been proven by multinational’s market actions in Beijing, Shanghai and Guangzhou. - Multinational have standardized marketing strategies for global tastes that would not fit localized tastes in non-coastal cities - Extending the Liushen brand to cosmopolitan – high end segments would erode brand equity. - This industry has many segments to cater so there

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