SK-II: Damage Control in China
In 2006, SK-II, a skin care brand, was close to becoming a billion-dollar brand for Procter and Gamble ("P&G') and China was seen as a key source of future growth and is soon to be the largest market in the world. On 14 September 2006, Chinese authorities banned the sale of some of P&G's skin care products in the SK-II line. P&G feared that public protests against these products could spread and infect the brand equity of its other products in the country. Everything that P&G tried to resolve the scandal failed, leaving the media, consumers and government feeling enraged. P&G pronounced confidence in its SK-II products in China, saying it would work with government agencies to resolve the problems, but repeatedly botched public relations and was accused of "arrogance" toward consumers. Although P&G had experience in defending its SK-II products in court due to a lawsuit the previous year, the company seemed to have learned nothing about preparing for a future crisis. P&G, one of the most trusted corporate brands in the world, was close to losing Chinese consumers' faith in SK-II and perhaps in P&G as well just by the poor way it handled the crisis. Many analysts claim that doing business in China is significantly different from doing business in developed markets. When it comes to public relations, how can the rules be so different that even experienced country managers repeatedly get it wrong? The case allows for discussion on how to respond to a public relations crisis, salvage brand equity after a disastrous incident, react to a situation and pre-empt damaging information in the media.