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Procter & Gamble Shampoo Case Study
Addressing individualism trends in the haircare market
Reference Code: CSCM0176 Publication Date: June 2008
DATAMONITOR VIEW Catalyst
Procter & Gamble has continued to increase its share of the shampoo market in the US, and now accounts for almost a quarter of sales in this field. This case study looks at the company’s brands and how they have evolved and diversified in order to drive growth in the mature US haircare market.
• Shampoo products are no longer expected to simply clean the hair. More demanding consumers and more individual hairstyles mean that tangible benefits are now sought after in shampoos. While traditionally shampoo products were designed to be suitable for all, consumers are now looking for products suitable for their specific hair type. • Pantene was acquired by Procter & Gamble in 1985, and has been able to grow from its prestige and exclusive routes into one of the most successful mass-market CPG brands in the world. The brand has managed to maintain a premium aspect despite this mass-market appeal. • Head and Shoulders has been sold in the US for over 40 years and has traditionally been known for the antidandruff benefits of its products. Procter & Gamble has been able to successfully reposition Head and Shoulders by introducing several new collections designed to cater for different consumer needs. • The female focused Herbal Essences brand has experienced strong sales growth as the brand continues to stress the benefits of its natural ingredients. Synthetic ingredients have fallen out of favor with some consumers who have become wary of potential damage to health and the environment. • The Aussie range of shampoos was native to Australia, but Procter & Gamble has continued to stress this heritage when selling the brand in the US. This is another brand which has undergone a recent relaunch, with more collections added to cater for specific consumer needs.
Procter & Gamble Shampoo Case Study
© Datamonitor. This brief is a licensed product and is not to be photocopied
CSCM0176/ Published 06/2008 Page 1
An increased emphasis has been placed on personal appearance. and each one of these processes causes damage. shampoos were formulated for three different hair types – normal. moving them away from their historical positioning as toiletries and towards beauty products used as part of a regime.Procter & Gamble Shampoo Case Study ANALYSIS Consumers demand more from haircare products Shampoos have diversified to meet consumer needs Traditionally. Figure 1: The diversification of the haircare market Consumers demand more functional benefits from haircare products . Consumers now associate their personal appearance with health and wellbeing. damaged. the haircare market has diversified significantly to cater for many more hair-types.shampoos are expected to do much more than simply clean the hair Widespread fears over a number of synthetic compounds causing damage to health and the environment have prompted a strong demand for natural ingredients Advancing technology has enabled manufacturers to successfully include ingredients in shampoos which can deliver functional benefits The haircare market has diversified Increased individualism among consumers has lead to the success of products formulated for specific hair types More unique hairstyles are popular with consumers and these styles will inevitably involve more day-to-day maintenance Haircare products are now viewed as beauty products rather than their traditional positioning as toiletries Source: Datamonitor analysis DATAMONITOR Shampoos are often positioned to assist hairstyles and repair damage Perming. straightening and coloring hair are all popular treatments with consumers. with hairstyles being a big part of this. greasy and dry. Specific products for colored. This creates markets for products which can help to slow down and repair this damage as part of an everyday routine. A shampoo which simply cleans is unlikely to find favor with consumers who are demanding functional benefits. Many shampoo brands now offer ranges of products suitable for those who regularly treat their hair in this Procter & Gamble Shampoo Case Study © Datamonitor. curly and straight hair among many others have become the norm in shampoos. In recent years. This brief is a licensed product and is not to be photocopied CSCM0176/ Published 06/2008 Page 2 .
The group has also found success in relaunching a number of its brands in order to raise premium credentials. Rather than try to provide single products which are suitable for everybody. The global megatrend for individualism has also seen consumers demand ever more unique hairstyles. Mass-market shampoo brands have continued to increase sales in the US Despite the shift to more niche-based and premium products. many of which have been relaunched and repackaged. Procter & Gamble acquired Pantene in 1985. The company moved Pantene through the mass market channels and it became the world’s best selling haircare brand in 1995. This position has been maintained and the group has been able to continue increasing sales. with products designed to enhance and protect color. consumers from minority ethnic brands have used mass-market brands due to a lack of choice. The straightening process involves using hot appliances on the hair. The new packaging Procter & Gamble Shampoo Case Study © Datamonitor. straightening hair has become popular with consumers since hair straighteners were made available for mass distribution. Procter & Gamble has adapted to consumer demands Procter & Gamble has continued to see its haircare brands achieve strong sales growth and the group accounted for 24. akin to its previous positioning as a prestige product. along with formulations which maintain curls after the perming process. This brief is a licensed product and is not to be photocopied CSCM0176/ Published 06/2008 Page 3 . when the brand was a true prestige product sold almost exclusively through department stores. The move was designed to give Pantene a more upscale and premium look.4% of all sales in the US shampoo market in 2006. Brands have diversified portfolios in order to provide specific solutions for particular hair types. Procter & Gamble has turned Pantene into one of the most successful CPG brands in the world Pantene looks to retain its premium positioning Pantene is widely recognized as the most successful haircare brand in the world. with the introduction of a new logo and packaging. and shampoo brands have adapted by providing ranges of products for heat-damaged hair. The brand was given a relaunch in 2007. mass-market brands have continued to fare better in this category. Shampoos now also offer assistance in maintaining hairstyles. The company has applied several strategies across its brands. Traditionally. with global sales consistently over $1 billion. The different needs of different hair types have been more widely publicized and ethnic-specific brands are now becoming more commonplace in the market.Procter & Gamble Shampoo Case Study manner. while several massmarket labels have attempted to emphasize premium credentials. which will invariably require more maintenance. In particular. mass-market brands have continued to gain market share in the US. the company’s brands have diversified in an attempt to cater for the growing number of niches in the market. While many ethnic-specific brands have been introduced to the market.
Variants of Pantene now include Hydrating Curls. The “My Black Is Beautiful” initiative was launched by Procter & Gamble in 2007 in order to promote several of its brands to African American women. Color Revival. Procter & Gamble Shampoo Case Study © Datamonitor. a measure designed to bring a more premium aspect to Pantene’s packaging. Pantene is one of the brands involved in this campaign.Procter & Gamble Shampoo Case Study featured updated color schemes. The ongoing campaign features conventional advertising and sponsorship of community events such as the Essence Music Festival. Figure 2: The unveiling of the new Pantene logo Source: Pantene DATAMONITOR Ethnic-specific ranges prove popular in the US Procter & Gamble has also introduced variants of Pantene which are suitable for different ethnic hair types. which encourages black women to trade health beauty tips. The Relaxed & Natural range comprises products designed to provide anti-breakage and moisturizing benefits. according to Datamonitor's salon survey 2007. This brief is a licensed product and is not to be photocopied CSCM0176/ Published 06/2008 Page 4 . The brand has gained success in another niche market through this approach. Each range features a different metallic foil emblem. Extra Straight and Anti-Frizz. with a particular focus on the Relaxed & Natural range. The campaign’s website also includes a social networking aspect. These are the two properties most sought after by African-American and Hispanic consumers in the US. which helped to categorize Pantene’s products more easily.
• The packaging for Head And Shoulders has been given an overhaul designed to give a sleeker look to the brand. • The brand no longer seeks to portray itself as a solution solely for dandruff. The new ranges emphasize the fragrance and functionality of the products. while anti-dandruff benefits are treated as secondary. In terms of dollar share. Procter & Gamble Shampoo Case Study © Datamonitor.Procter & Gamble Shampoo Case Study Head and Shoulders has been repositioned as an everyday shampoo brand Head and Shoulders was originally designed as an anti-dandruff shampoo The Head and Shoulders brand was originally introduced in the US in the 1960s and was almost exclusively designed as an anti-dandruff shampoo. The feature recommends products from the expanded Head and Shoulders range based on hair and scalp conditions. Source: Head And Shoulders DATAMONITOR The Head and Shoulders website offers advice to consumers on which product would be most suitable for specific needs. and began to introduce more functional qualities designed for specific hair-types. The brand only began to introduce a significant range of variants in the late 1990s as it looked to shed its therapeutic and medicinal image. Procter & Gamble recognized that consumers would no longer use a shampoo solely for its anti-dandruff benefits. Many new variants of the brand offer a range of functional benefits for different hair types. This brief is a licensed product and is not to be photocopied CSCM0176/ Published 06/2008 Page 5 . Citrus Breeze and Extra Volume. New variants of Head and Shoulders have helped to move the brand away from its traditional image Collections in the Head and Shoulders range now include Ocean Lift. The diverse range of Head and Shoulders products now claims to do much more than simply fight dandruff. Head and Shoulders Classic Clean was the best selling shampoo product in the US in 2007 (Source: AC Nielsen). Figure 3: The updated Head And Shoulders range of products The Head And Shoulders range has expanded • Head And Shoulders has introduced variants designed for different hair types along with different fragrances. This process is still ongoing as evidenced by the welcome message on the brand’s website which reads “Head and Shoulders has changed”.
and product names include “Drama Clean” and “Color Me Happy”.Procter & Gamble Shampoo Case Study Herbal Essences has become a popular haircare brand with women The brand retains a natural and ethical image despite the inclusion of several chemical ingredients Herbal Essences offers products which rely on active natural ingredients and is Procter & Gamble’s fastest growing shampoo brand. The brand was founded in the 1960s and at the time promoted a natural image in line with the cultural movement of the time. encouraging consumers to grow their hair longer. The natural aspect of the brand has remained intact and Procter & Gamble has continued to stress this as consumers exhibit a growing desire for natural products which don’t compromise on efficacy. Chemical ingredients are increasingly associated with dangers to health and the environment. Women typically spend more time caring for their hair than men. Source: Datamonitor Productscan Database DATAMONITOR Procter & Gamble Shampoo Case Study © Datamonitor. This is in spite of the fact that Herbal Essences also contains many much-maligned chemical ingredients including phthalates and parabens. This brief is a licensed product and is not to be photocopied CSCM0176/ Published 06/2008 Page 6 . Effective natural ingredients are much sought after by consumers who have become distrusting of harsh synthetic compounds in personal care products. nonetheless it is still marketed on the strength of its natural ingredients. resulting in a high consumer demand for natural products. which although cheaper are perceived as being not always as effective. rather than using “two-in-one” products. Products feature strong natural fragrances such as white nectarine and cucumber. Figure 4: Herbal Essences NPD continues to focus on natural ingredients and products suitable for women Herbal Essences Long Term Relationship was introduced to the US market in February 2008 • The new product is said to be infused with red raspberry and satin. and Herbal Essences products capitalize on this fact by generally being divided into separate shampoos and conditioners. The brand has advocated a return to spending more time on haircare. • The shampoo is designed to provide protection against breakage and split ends. Packaging features bright and vibrant colors. Herbal Essences continues to position its products to females The Herbal Essences brand has become popular with women and continues to position its products to the female demographic.
The new products were designed to cater for all types of hair including damaged. dry and chemically treated. Procter & Gamble acquired the brand in 2003. Streamlined bottles were introduced. Aussie was relaunched to cater for more specific hair types The Aussie brand was relaunched by Procter & Gamble in 2007 to include more niche collections and updated packaging. Four new lines were introduced as Aussie looked to provide for “specific. Figure 5: Updated packaging provides more convenience for consumers Aussie created new updated packaging when relaunching the brand. This emphasizes the heritage of Aussie. This brief is a licensed product and is not to be photocopied CSCM0176/ Published 06/2008 Page 7 . designed to take up less space in the cluttered modern bathroom. The brand’s packaging still features a kangaroo and the slogan “Add some ‘roo to your doo”. Procter & Gamble has continued to market Aussie in the US on the basis of its Australian background. by which time sales of Aussie had already been phased out in its native country. The new packaging was designed to provide convenience benefits by incorporating a more slimline design and an easier to open bottle. and ranges have names such as Sydney Smooth and Aussome Volume. This group is also associated with some distinctive hairstyles such as dreadlocks and cornrows. There were 35 million African Americans in the US in 2005 according to the US Census Bureau. but is now focused on the US and UK markets. The brand’s packaging was revamped to create a more modern look. individual hair care needs”. The brand’s website advises that botanical ingredients are obtained from the Australian outback in order to formulate products. as well as highlighting the natural ingredients used in its products. representing a substantial proportion of the population. Source: Datamonitor Productscan Database DATAMONITOR Aussie variants are designed to be suitable for African American consumers African Americans are an important demographic to the haircare market.Procter & Gamble Shampoo Case Study The Aussie brand has gained mass-market success through new formulations Procter & Gamble promotes the heritage of its Aussie brand The Aussie brand of shampoo products was originally marketed in Australia. These styles require a significant degree of Procter & Gamble Shampoo Case Study © Datamonitor.
Aussie specifically recommends certain ranges for African American consumers. By providing a range of products suitable for use by a specific ethnic group. they will chiefly be used for styling. which will tend to be dryer and more prone to breakage than Caucasian hair. In particular. This brief is a licensed product and is not to be photocopied CSCM0176/ Published 06/2008 Page 8 . while making sure that consumers are not alienated and can still use a mass-market brand. while mass-market brands remain popular for everyday products such as shampoo. leading many African Americans to spend more on haircare products.Procter & Gamble Shampoo Case Study maintenance. Procter & Gamble Shampoo Case Study © Datamonitor. While ethnic specific brands are popular with this group. the Moist range is claimed to be suitable for African American hair. the brand is catering for a specific hair type.
This included researching the personal care market on Datamonitor's Interactive Consumer Database and on the Productscan Online Database of new products.com Datamonitor consulting We hope that the data and analysis in this brief will help you make informed and imaginative business decisions. DMCM2469. For more information about Datamonitor’s consulting capabilities. retail. Methodology A variety of research was carried out for this case study. Datamonitor plc. electronic. without the prior permission of the publisher. Each case study provides a concise evaluation of a company that stands out in some area of its strategic operations. If you have further requirements. 5 March 2007) Understanding New Personal Care Behaviors & Occasions (Datamonitor. which explores business practices across a variety of disciplines and business sectors. pharmaceuticals and software. banking and insurance. Secondary sources • • Sector Insight: Shampoos and conditioners . Datamonitor’s consulting team may be able to help you. No part of this publication may be reproduced.com. Brand Republic (August 2007) Hair care sales build on high-end product innovation.Procter & Gamble Shampoo Case Study APPENDIX Case study series This report forms part of Datamonitor's case studies series. alongside an extensive review of secondary literature and other in-house sources of information. Disclaimer All Rights Reserved. please contact us directly at consulting@datamonitor. stored in a retrieval system or transmitted in any form by any means. Procter & Gamble Shampoo Case Study © Datamonitor. 29 December 2006) Ask the analyst The Consumer Knowledge Center Writing team askcm@datamonitor. highlighting the ways in which the company has become one of the best in its field or how it deals with different problems encountered within that sector.Niche appeal brings opportunity. photocopying. DMCM4584. This brief is a licensed product and is not to be photocopied CSCM0176/ Published 06/2008 Page 9 . The series covers a range of markets including food and drink. recording or otherwise. Drug Store News (June 2007) Further reading Natural Personal Care Consumers: Unlocking Future Potential (Datamonitor. mechanical.
whose accuracy we are not always in a position to guarantee. This brief is a licensed product and is not to be photocopied CSCM0176/ Published 06/2008 Page 10 . conclusions and recommendations that Datamonitor delivers will be based on information gathered in good faith from both primary and secondary sources. Please note that the findings. Procter & Gamble Shampoo Case Study © Datamonitor.Procter & Gamble Shampoo Case Study The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. As such Datamonitor can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.
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