Pantene as a brand is available at affordable rates for the majority of Chinese citizens. P& G’ s strategy has been to ensure that lower end segments are targeted through the use of innovative and creative strategies (Pacific Research Consulting, 200). Pantene is available for various consumer segments depending upon their tastes and preferences. Consumers have helped to transform the brand into a personal necessity. Political conditions in China are currently favorable because the government seeks to expand its economic clout and authority. It retains tight political control but desires to open the economy for investors.
This means that P& G will continue to enjoy tax exemptions and reduced tariffs for its products (Pacific Research Consulting, 2004: Pg 1). However, the Chinese government is also moving towards the promotion and protection of local shampoo companies like Bawang Shampoo and Clear Shampoo. These organizations are receiving government stimulus in order to cater to the domestic industry. Such a situation could pose a serious threat to the domination and influence of companies like P& G. The economic factors play a major role in assessing the macro environment of any organization.
These factors seek to determine the state of the business environment that impacts the productivity and output of business organizations (Clover & Balsley, 2006: Pg 134). The Chinese economy is considered to be the third largest in the world in terms of purchasing power parity. For the past decade, it has been growing at a constant rate of 10% with the rapid rise of the middle class. This middle class is considered to be around 300-400 million strong and it is annually growing at a rate of 8%.
The economic recession has severely impacted the ability of organizations to perform in a competitive environment. Inflation, unemployment, and reduced consumer spending pose a threat to the promotion and marketing of Pantene. P& G will need to develop a cost-effective strategy to maintain its market edge in the Chinese shampoo market.
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