Once upon a time, innovation at Procter & Gamble flowed one way: from the United States outward.[1]While the large Cincinnati-based corporation was no stranger to foreign markets, it usually sold their products that were already familiar to most Americans. Many Japanese families, for instance, swaddle their babies in Pampers diapers, and lots of Venezuelans brush their teeth with Crest. And of course (company executives assumed) Americans at home wanted these same familiar, red, white and blue brands. We might buy foreign made cars, or chocolates, or cameras - but how about household cleaners and detergents?
Recently, however, P&G broke with this longstanding tradition. Ariel, a P&G laundry detergent, was born overseas, and is a familiar sight on store shelves in Europe and Latin America. Now bilingual packages of Ariel Ultra, a super-concentrated cleaner, are appearing on supermarket shelves in Los Angeles.
Ariel’s appearance in the United States reflects demographic changes making Hispanics the nation’s fastest growing ethnic group. Ariel is a hit with this population.In fact, many Mexican immigrants living in Southern California have been “importing” Ariel from Tijuana, Mexico. “Hispanics knew this product and want edit,” says P&G spokeswoman Marie Salvado. “We realized that we couldn’t convince them to buy other laundry detergents.” P&G hopes that non-Hispanic consumers will give Ariel a try too.
Ariel’s already strong presence in Europe may provide a springboard for the company to expand to other markets as well. Recently P&G bought Rakona, Czechoslovakia’s top detergent maker.Ariel, currently a top seller in Germany, is likely to be one of the first new brands to appear in Czech supermarkets.[2]And Ariel is not the only foreign idea that the company hopes to transplant back to its home territory. Cinch, an all-purpose spray cleaner similar to popular European products, is currently being test-marketed in California and Arizona. Traditionally Americans have used separate cleaners for different types of surfaces, but market research shows that American preferences are becoming more like those in other countries.
Insiders note that this new reverse flow of innovation reflects more sweeping changes at Procter & Gamble.[3]The firm has hired many new Japanese, German, and Mexican managers who view P&G’s business not as a one-way flow of American ideas, but a two-way exchange with other markets. Says Bonita Austin of the investment firm Wertheim Schroeder, “When you met with P&G’s top managers years ago, you wouldn’t have seen a single foreign face.” Today, “they could even be in the majority.”
As Procter & Gamble has found, the United States is no longer an isolated market.Americans are more open than ever before to buying foreign-made products and to selling U.S.-made products overseas.
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