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Procter & Gamble's Introduction of All-Temperature Cheer Laundry Detergent in Japan

question 64

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Procter & Gamble's introduction of All-Temperature Cheer laundry detergent in Japan was a flop at first.The problem was that Japanese women wash clothes in cold water-either tap water or leftover bath water-so they don't care about all-temperature washing (which is a big selling point in the United States) .Also,Cheer was first introduced in Japan at a time when the market for fabric softeners in Japan was rapidly expanding.However,when Japanese housewives added lots of fabric softener to the water,Cheer didn't produce many suds (Americans don't use as much fabric softener) .P&G reformulated the product so it wouldn't be affected by fabric softeners,and ads for Cheer in Japan pledged superior cleaning in cold water,not all temperatures.Which of the following might have helped P&G avoid the initial problems with Cheer?


Definitions:

Net Income

The profit of a company after all expenses and taxes have been deducted from revenue.

Stockholders' Equity

The residual assets of a company that belong to the shareholders, calculated as the total assets minus total liabilities.

Total Asset Turnover Ratio

A financial ratio that measures a company's ability to generate sales from its assets by comparing net sales to average total assets.

Net Profit Margin Ratio

A financial metric that shows the percentage of a company's revenue that remains as profit after all operating expenses, interest, taxes, and preferred stock dividends have been deducted.

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