SK-II's road to recovery

Cosmetics brand SK-II has been in recovery mode since its product safety scare in September last year.

Its distribution channel remains. All final sales points will be ready to start business after they are refurbished.

And as for the products, SK-II is enhancing its research and development to avoid future problems.

Parent company Proctor & Gamble (P&G) has spent 420 million yuan on primetime advertising on China Central Television, and SK-II is not short of money to rebuild the brand.

But the incident has had a negative impact on the brand, despite P&G's repeated claims that SK-II sales have been stable since it returned to the shelves.

P&G did not show enough concern for local customers during the scare, and appeared arrogant and indifferent throughout.

Although the General Administration of Quality Supervision, Inspection and Quarantine and China's Ministry of Health said traces of the metallic chemicals chromium and neodymium, which inevitably come from raw materials, potentially cause minimal harm to humans when used correctly, customers still had concerns over the safety of SK-II products.

Since P&G did not take the responsibility for the incident that it should have, the credibility of SK-II was questioned.

SK-II has cultivated a group of stable and loyal high-end customers over its several years of operation in China.

Those loyal customers will not simply give up on the brand, but they will take a cautious attitude when choosing SK-II products. In the meantime, the brand will find it much tougher than before to develop new customers. So, innovation is crucial for SK-II at this stage.

SK-II's main task at the moment is to regain its customers' trust. What worries customers the most? The answer is product safety.

The brand should take innovative methods to clear concerns over product safety.

It does not contain any banned substances. After drug maker Contac hit a PPA (phenylpropanolamine) crisis in China, it released ads stressing that the new Contac does not contain PPA. Perhaps SK-II should take the same approach.

Be cautious when making claims about products. This means eliminating statements like "using the products continuously for 28 days can reduce 47 percent of wrinkles" and "skin age can be reduced by 12 years".

Speed up product innovation. Products are the core of the brand.

PR innovation

P&G takes two consistent approaches to its operation in China: never take the initiative to communicate with the media; and never take the initiative to communicate with consumers.

SK-II products are now back on the shelves, but it is apparent that P&G only bothered to ramp up its public relations efforts with the government, virtually ignoring customers and the media.

Eliminating arrogance is important for P&G to rebuild the brand.

Ads innovation

It is clear that P&G will spend big on rebranding SK-II this year. TV commercials have always been a major means of advertising the brand. A large investment in advertising may help the brand recover. But how long the process will take and what cost will be involved remains uncertain.

An increasing number of personal care and cosmetics firms are using the Internet and direct selling to build their profiles. Johnson & Johnson bought ads on portals such as Sohu.com, for example. SK-II should adopt a cross-media approach to its ad campaigns and scale back its TV and magazine ads.

The author has almost 10 years' experience in marketing and works in the cosmetics unit of Acorn International, a TV shopping company.

(China Daily 02/01/2007 page15)