Kao Case

Industry Analysis:
• 46 billion yen in 1984.
• Expectation of 300 billion yen within 10 years.
• Two local and one international player in the market.
• Pampers (P&G) was the monopolist between 1977 and 1980.
• Kao entered in 1980 and Uni-Charm entered in 1981.
• Negative consumer behavior towards diapers.
• Low penetration and excess capacity.
• Consumer preferences changing rapidly.
• Few market penetration but high expectation.
• Cultural and social entry barriers.
Buying Behavior of Japanese Consumers:
People are living mostly in rural areas and in small houses. Mothers are housewives. Cultural and psychological factors negatively affect mothers buying decision of disposable diapers and impede market penetration. Mothers tend to use the cloth diapers that were hand sewn and had worn previously helped cement the bond between themselves and their children. They want to spend as much time as possible with doing so...