UNIVERSITY OF MALAYA

MASTER IN BUSINESS ADMINISTRATIVE

GRADUATE SCHOOL OF BUSINESS

MARKETING MANAGEMENT
CMGB6102

KAO ATTACK CASE ANALYSIS

PREPARED BY:
ERFAN REZAMAND

(CGA 070095)

NAZANIN KAZEMZADEH

(CGA 070042)

LEILA BANAKAR

(CGA 060093)

MESHARI
LECTURERS: DR. YUSNIZA

(CGA070029)

TABLE OF CONTENTS
GROUP OPERATION - MAJOR AFFILIATES OVERSEAS........................................14

Introduction (History of Detergents):

The soap and detergent industry's origins are obscured in antiquity. Michael C. Crossin,
writing for Soap, Cosmetics, Chemical Specialties, stated "the caveman who fell into the river
with his fur still on quickly learned that water is an excellent aid in the removal of soils and
odors from garments." Crossin calls this find "the single most important discovery in laundry
history."
Water alone, however, was not sufficient for all cleaning needs. The next important breakthrough
was the development of soap. Different accounts place its invention between 2500 B.C. and 300
B.C. The word "soap" may have been derived from Mt. Sapo, near Rome, a place where burnt
offerings were made to the gods. People discovered that the fat and ash residue from the
offerings had cleaning properties.
By definition, soap is a cleansing product created through the chemical process of combining a
fat or natural oil with an alkali (such as wood ashes or lye) under controlled conditions. Soapproducing factories developed in France and Italy, where olive oil was plentiful and used as the
main ingredient, throughout the sixteenth, seventeenth, and eighteenth centuries. In the
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nineteenth century, palm oil began to replace olive oil in formulations. By the turn of the
twentieth century, many people still made soap by boiling fats and lye to produce solid cakes.
In the United States, the soapmaking industry marks 1837 as an important year. In that year,
William Procter and James Gamble established a candle and soapmaking business. Their
company, Procter and Gamble, went on to become one of the foremost soap and detergent
makers in the country. Procter and Gamble's famous "Ivory" soap bar was first introduced in
1882. Lever Brothers, another major soap and detergent company, offered "Lifebouy" and
"Sunlight" soap bars in 1895.

1. Companys Overview:
1.1. Company History
Kao (Malaysia) Sdn.Bhd. (A Private Limited & Local Based Company for marketing
and manufacturing Consumer Products / FMCG) was incorporated in Malaysia at 1973, with
capital investment of Rm8 Million. This company originated from Kao Corporation located in
Japan .Kao Corporation, often called the Procter & Gamble of Japan, is one of Japan's leaders
in personal care products, cosmetics, laundry and cleaning products, hygiene products, and
bath additives. Kao also manufactures and markets fatty chemicals, edible oils, and specialty
chemicals, and is one of the world's leading suppliers of information technology products and
services. The company has operations in 26 countries in Asia, North America, Europe, and
elsewhere.
1.2. Most Famous Kao Brands:
Kao Merit: Beauty Products & Services, Beauty Services Equipment
Whsle & Mfrs: Hair Care Products
Kao Attack: Soaps & House Detergents: Retail
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KAO BIORE: Parts & Supplies, Sanitary Products & Services, Sanitary ware, Skin Care
Centers, Skin Care Products

Most popular products in Malaysias market:

Between 1975 to 1985

Between 1985 to 1995

Kao Feather Shampoo

Laurier Maxi and Nice Day sanitary napkins

Merit shampoo

Magiclean floor cleaner

Laurier sanitary napkins

Sifone shampoo

Kao white soap

Merris disposable diapers

Cherina dish washing detergent

Kao Biore facial wash

Most successful product:
Kao attack: Household powder detergent

2. Strategic Plan:
2.1. Mother Companys Mission (Japan):
Kao's mission is to contribute to the wholehearted satisfaction and the enrichment of the
lives of customers and employees throughout the worlds; they will accomplish this by drawing
on their creative and innovative strengths to develop products of excellent value and outstanding
performance. Fully committed to this mission, all members of the Kao Group are working
together as a single corporate force to win the loyalty and trust of customers.

2.2. Companys Goals:

The main Core Value of Kao (Malaysia) Sdn.Bhd is Producing Products that contributed
towards building a clean, beautiful and healthy society.
Kaos corporate culture is included better product performance, availability of raw materials,
new technologies and constant product improvements.
2.3. Kao (Malaysian) Bhds Vision:
To be one of the most prominent manufacturers and marketers of a wide range of household and
personal care products.

3. Situation Analysis
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3. 1. Competitor Analysis (Detergent Industry):

Table1- Percentage of Market Share in Detergent Industry (Global & Local market)
Market Share

Global market

Local Market

Share(percent)
1994
1995
1996

(Percent)
1996
Market leaders

Market

Procter& Gamble(P&G)

45

Colgate Palmolive

Uniliver

20

Others

35

Unilever

42
28

46
28

44
29

Lam soon
Kao
Others

8
6
16

8
5
13

9
7
11

Chart1: Percentage of Market Share in Detergent Industry (Local market)

Laundry Detergent(1994-1996)

Percentage of Market
Share

50
Colgate Palmolive

40

Unilever

30

Lam soon

20

Kao

10

Others

0
1994

1995

1996

Year

Table2-Colgate-Palmolives and Unilevers Brands by Segment (1996)

Segment

Colgate-Palmolive

Market

Unilever

Market

Kao

Market

Powder

Fab Ultralase

Share
18%

Breeze Colour

Share
11%

Kao Attack

Share
12%

Fab Lemon
Regular
Fab Total Care
Fab Total Ultra
Dynamo Power

Breeze Matic
Breeze Power
Ekonomi Handalan
Drive

Bar

Trojan

14%

Persil

Fab Bar

42%

Breeze Bar
Ekonomi Bar

Trojan bar

Liquid

Dynamo Lime
Dynamo Blue

Super Busa

70%

Mama Dobi

13%

Breeze Ultra

10%

Breeze Color

Dynamo AntiBacteria
Fab Total

3.2. SWOT analysis:

According to the in depth analysis of all part of case including the analysis made by
marketing team at Kao Malaysia(Internal Analysis & Competitive Analysis) and advantages &
disadvantages of this new product, we have concluded below SWOT analysis.

STRENGTH

WEAKNESS

Less quantity of new liquid detergent was Kao had less variety of product & brand
required when washing.
names in the Malaysia market.(only one
product)
More environment friendly of new liquid
detergent because of less waste water Lack of financial resources in Kao
which be discharged to pollute the rivers Malaysia for launching this new liquid
and seas.
detergent.
Willingness of Kao Japan to share its
advanced & innovative technologies in
production and R&D skills with Kao
Malaysia.

The physical appearance of the new

product in terms of content (transparent
appearance) and bottle size (packaging in
only one liter bottles) from the view, taste
& preference of Malaysian consumers.

Ability to tap on Kaos existing local

resources and infrastructure to assist in Having no market share in the liquid
marketing the new product(Kao attack detergent.
compact liquid detergent)

THREATS

The result from the blind-use test of the

Recent success Protector & Gamble
product was positive.
(world leader in the laundry detergent
market) in Japan and fear of launching its
The performance of new product compact liquid detergent in Malaysia.
(softness & mildness being of product).
Last success of company in Kao Attack

OPPORTUNITY
The consumer trend toward the purchase
of concentrated or compact liquid
detergent.
Good growth potentials in liquid
detergent segment.

The two leading competitors in the

detergent industry means ColgatePalmolive & Unilever were established
players in the market many products for
each of the detergent segments. (table 1)
Palmolive

& Unilever also controlled

44% and 30% of the market.
Existence of other players such as Lam
Soon, Southern Lion, UDI and Unza in the
Malaysia market.

Global Market Demand

Type of segment

Marginal Grow Rate:1%-2%

Powder Detergent
Liquid Detergent
Bar Detergent

Sale Value
1996
1997
75%
Decrease
11%
Increase
14%
Negative

3.3. Market Analysis:

Table3-Detergent Demands in 1996(Global Market): US$39Billion

Table4- Detergent Demands in 1996 (Local Markets):RM286Million

Type of segment

Powder Detergent
Liquid Detergent
Bar Detergent

Local Market Demands (Marginal Grow Rate:2%-6% )

Sales Value
Sales Volume
Year of
Rate of Growth

65%
12%
23%

62%
11%
27%

Introductio

1995

1996

n
1970s
1980s
1960s

4%
11%
-2%

6%
12%
-9%

In 1996, the demand for laundry detergent worldwide was about $39billion, of which 75%
of the total sales volume comprised of powder formulations.
According to Table 1, Colgate Palmolive and Unilever were established players in market
offering many products for each of the detergent segments. Different brand names were adopted
for different products, aimed at different segments of the market.
The global detergent market could be divided into the powder and the liquid detergent segment
which has been decreased the popularity of powder detergent during the years, main reason
could be due to the general increased in demand for liquid detergent.
The Malaysian laundry detergent market could be divided into three segments included: powder,
bar and liquid. Bar detergent was first introduced in Malaysia market in 1960s, then Powder
detergent in 1970s.finally followed by liquid detergent around 1980s.

3.4. Consumer Analysis:

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Malaysians spent a high percentage of their household income on food, groceries and personal
care items, ranking third out of the ten major economies in the Asia-Pacific region (excl. Japan).
According to ACNielsen, Malaysians on average spent MYR505 per month on food and
groceries, with just under half of that on fresh food like meat, fruits and vegetables.
3.4.1. Lifestyles / Shopping habits
Malaysias consumer lifestyle has been evolving and changing due in part to rising affluence and
education levels. High profile international retailers and the global mass media have also played
a hand in shaping consumer-buying behavior. Malaysians are becoming more westernized,
sophisticated and cosmopolitan. Malaysians also have an open demand for foreign brands. It is
easy to find products marketed by Procter & Gamble, Unilever and Nestl on the retail scene.
Preference is not only limited to consumer goods, but also to durable goods, such as motor
vehicles. Since the emergence of the foreign-owned hypermarkets, Malaysians who live in
urban areas have become accustomed to shopping for groceries at hypermarkets and
supermarkets. Meanwhile rural people continue to purchase from traditional grocers,
convenience stores and mini-marts.. High and middle-income households spend most of
their money at hypermarkets followed by supermarkets and traditional grocery stores. The high
income group has household income of more than MYR3, 500 per month.

3.4.2. Consumers Response to new product

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According to the preliminary product testing ,the 96% of the users liked the product and in the
term of products attractiveness and the users intention to buy ,55% and 53% of them had
expressed positive reactions.

4. Product Market FOCUS:

4.1. Marketing Objectives:
1. To achieve a market share of 30% in the liquid detergent
market within 12 months of the launch.
2. To achieve a market share of 10% in the total detergent market
within 12 months of the launch (in 1996 its market share was 7%
of the total detergent market).
3. To achieve a sales target of RM10 million within 12 months of
he launch.

4.2. Target Market:

Target market for liquid detergent should be according the survey that has been done,
the users who where mainly the more affluent urban dwellers who were better educated in the
niche market and also the users who wand clean clothes that felt soft and had a colour protection
function .

5. Problem, Solution & Strategies:

5.1Problem Statement:
Should the marketing team of Kao (Malaysian) Sdn. Bhd. Come up with recommendation
and having delay in launching their compact liquid detergent although it should be introduced in
mid -1996 but was postponed or launching this product now because of the fear that major
players make the first move by introducing this compact formula in Malaysias market?

5.2. The options of possible solutions:

First: Introducing new product to Malaysias market at this time. (1997)
Pros
being pioneer in the market for compact liquid
detergent
Increase in Liquid Detergent Demand(Table 3)
Success of Kao in Japan

Cons
lack of information and awareness of
characteristics and environment friendliness
of this new products among Malaysian
consumers
Malaysian consumers behavior about
foreign brands and interest to US brands.

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Second: making delay in launching new product to Malaysias market and come up with
recommendation.
Pros
Having enough time for making awareness
among Malaysian consumers about the
characteristics and environment friendliness of
the new products.

Cons
Probability of losing the chance of being
pioneer in the market for compact liquid
detergent by making the first move by major
players.

5.3. Recommended solution and Strategies:

It is better he marketing team of Kao should select the second option but the delay time shouldnt
be much, just for making a rapid awareness about the benefits of their products in comparison
with the other main competitors specially market leaders and the strategies that it should use are
as below:

5.3.1. Product Strategy:

It should be Recommend for using a package design test and they can show the size of bottle
bigger than the real size according to the tastes and preferences of Malaysian consumers and in
the term of labeling showing proper information about the amount of product usage per wash
load is very important that should be in three Malay, Chinese and English language.

5.3.2. Place Strategy:

Distribution channels can not be the same as powder detergent according to this new products
target market, Supermarket and hypermarket are the best distribution channels and also selling in
laundry recommend.

5.3.3. Price Strategy:

The price strategy that should be used at the first is competitor price instead of premium price
until the time that Malaysian consumers be awarded about the our products value added as we
have strong competitors in market.

5.3.4. Promotion Strategy:

Advertising in TV should be interesting to attract consumers and can transfer the products
information and benefits of it in comparison with competitors products and designing
consumers education programs to convince the public about the quality products.
Trade shows holding in the supermarkets and hypermarkets recommended. Also recommended
for releasing the result of blind use test in the newspapers for making more awareness.

13

Appendix:
Group Operation - Major affiliates overseas

Country
Area
China

Hong Kong
Taiwan
Philippines
Thailand

Vietnam
Malaysia

Singapore
Indonesia
Australia

Company name
Kao (China) Holding Co., Ltd.
Kao Corporation Shanghai
Kao Commercial (Shanghai) Co., Ltd.
Kao (China) Research and Development Center
Co., Ltd.
Kanebo Cosmetics (China) Co., Ltd.
Kao Chemical Corporation Shanghai
Kao (Hong Kong) Ltd.
Kao (Taiwan) Corporation
Taiwan Kanebo Cosmetics Co., Ltd.
Pilipinas Kao, Inc.
Kao Consumer Products (Southeast Asia) Co.,
Ltd.
Kao Industrial (Thailand) Co., Ltd.
Kao Commercial (Thailand) Co., Ltd.
Kanebo Cosmetics (Thailand) Co., Ltd.
Kao Vietnam Co., Ltd.

Consumer
products/
prestige
cosmetics

Chemical l
products

Kao (Malaysia) Sdn. Bhd.

Fatty Chemical (Malaysia) Sdn. Bhd.
Kao Soap (Malaysia) Sdn. Bhd.
Kao Oleochemical (Malaysia) Sdn. Bhd.
Kao Plasticizer (Malaysia) Sdn. Bhd.
Kao (Singapore) Private Ltd.
P.T. Kao Indonesia
P.T. Kao Indonesia Chemicals
Kao (Australia) Marketing Pty. Ltd.

Table2-Colgate-Palmolive Events (from 1806 to 1997):

14

1806
1857
1873
1896
1898
1910
1926
1928
1947
1953
1956
1966
1967
1968
1976
1987
1992
1995

Company is founded by William Colgate in New York to make starch, soap, and candles.
After founder's death, company becomes known as Colgate & Company.
Toothpaste is first marketed
Collapsible tubes for toothpaste are introduced.
B.J. Johnson Soap Company (later renamed Palmolive Company) introduces Palmolive soap.

Colgate moves from original location to Jersey City, New Jersey.

Palmolive merges with Peet Brothers, creating Palmolive-Peet Company
Colgate and Palmolive-Peet merge, forming Colgate-Palmolive-Peet Company.
Fab detergent and Ajax cleanser are introduced.
Company changes its name to Colgate-Palmolive Company.
Corporate headquarters shifts back to New York.
Palmolive dishwashing liquid is introduced.
Sales top $1 billion.
Colgate toothpaste is reformulated with fluoride; Ultra Brite is introduced.
Hill's Pet Products is purchased.
The Softsoap brand of liquid soap is acquired.
The Mennen Company is acquired; Total toothpaste is introduced overseas.
Latin American firm Kolynos Oral Care is acquired; Colgate-Palmolive undergoes major restructuring .

Total toothpaste is launched in the United States; Colgate takes lead in domestic toothpaste market.

15