Wednesday, July 11, 2012

It is Official – U. S. Won the Korean War and the Vietnam War – and Proctor and Gamble Thrives

Were the Victories Worth the Costs?  -  That’s Another Issue

Historians regard the Korean War as a stalemate and the War in Vietnam as a loss for the United States.   In 1950 after the North Koreans invaded South Korea the U. S. armed forces struck back, and ultimately the war ended with the positions of the parties as they began.  But South Korea went on to become an economic power in the Pacific, and ultimately a democratic one.  Given the level of the economy of that country and its relatively free and open democracy there is no question that the U. S. ‘won’ the war.

In Vietnam the issue is a little more muddled.  The fight to prevent the North Vietnamese from taking over the entire country of Vietnam failed.  And the Communist inspired government still rules the country without allowing basic freedoms.  But a funny thing happened on the way to Communist domination of Southeast Asia.  The funny thing, it didn’t happen.

There is no greater illustration how the war in Vietnam turned out differently than what was expected in 1975 when the U. S. left than the experience of the giant American consumer goods company, Proctor and Gamble.  As Businessweek reports, P & G is in a battle with European giant Unilever to win not the hearts and minds of the Vietnamese, but market share.
In Vietnam, P&G Woos Hearts, Minds, and Schools 
For decades, U.S. companies couldn’t operate in Vietnam because of an American trade embargo imposed after the fall of Saigon in 1975. A year after the embargo was lifted in 1994, P&G entered the country, as did Unilever. But today P&G, the No. 1 provider of detergent, toothpaste, paper towels, and razors in the U.S., finds itself in the uncharacteristic position of playing catch-up. Unilever has grabbed more market share in home-care and personal-care products. P&G trails Huggies maker Kimberly-Clark in diapers, and in skin care it’s behind Beiersdorf, maker of Nivea. It’s No. 1 only in razors with its Gillette brand. “Vietnam is the next upcoming market, and there’s fierce competition,” says Oru Mohiuddin of consumer researcher Euromonitor International.

And what P&G may be doing what the American military could not do, actually improving the lives of the Vietnamese people (instead of killing and maiming them).

On June 1 a new kindergarten opened in Minh Phuong, a hardscrabble village about 50 miles from Hanoi. It looks like many schools in developing countries, with mustard-painted cinder block walls and tile floors. There’s something unique about the classrooms, however. Each has a silver-colored plaque near its door emblazoned with names rarely found in a textbook: “Gillette Be Your Best,” “Pampers Golden Sleep,” and “Pantene Shine.”

These are all references to brands sold in Vietnam by Procter & Gamble (PG), whose employees helped raise almost 80 percent of the school’s $100,000 cost. The world’s largest consumer-products company is using everything from good deeds to television advertising to hand-washing demonstrations to win Vietnamese customers.

Vietnam has been an economic growth success,albeit from a very low base, and its relationship with China over the South China Sea means it is a very risky place to do business.  But if strong economic growth continues, and if that growth ultimately means political freedoms in Vietnam then yes, in future years the country will have become what the U. S. envisioned it should become.  It just will not have gotten there the way the U. S. envisioned.

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