Schwarzkopf Extra Care Shampoo Marketing - Essay Example

? Schwarzkopf Extra care. Straight and glossy shampoo - Situation Analysis/Target Market Identification Report and Collage Table of contents 0 Marketing Mix 3 1.1 Current Product 3 1.2 Current Pricing 4 1.3 Current Distribution 5 1.4 Current Promotion 6 2.0 Segmentation theory 7 2.1 Define and explain segmentation. 7 2.2 Explanation of 3 benefits to the brand from using segmentation 8 3.0 Target Market Identification 8 3.1 Geographic Segmentation 8 3.2 Demographic Segmentation 9 3.3 Psychographic Segmentation 9 3.4 Behavioural Segmentation 10 4.0 Target Market Collage 11 5.0 Completion of Discussion/Rationale of the Target Market Collage Images Chosen Table 12 6.0 Reference List 14 1.0 Marketing Mix Schwarzkopf Extra care straight and glossy shampoo is one of the hair care products of Schwarzkopf. The product reflects the efforts of the firm to respond to the needs of all consumers in terms of hair care. The position and the prospects of the firm in the Australian market are explored through the marketing mix model, which involves in the examination of the product, pricing, distribution and promotion, as elements of the marketing strategy used for the promotion of the product in the above market. 1.1 Current Product When referring to product as an element of the marketing mix model, a series of issues have to be mentioned: apart from the product, as a physical unit, its appearance and the brand name are also important in order to decide the position of the product in its market (Lamb et al. 2008). From a similar point of view, it could be stated that the term ‘product’ as used in the marketing mix model encompasses the ‘goods-and-services combination the company offers to the target market’ (Kotler et al. 2010, 76). Schwarzkopf Extra care straight and glossy shampoo has been created in order to respond to specific consumer needs: the need for straight hair – the company emphasizes on the value of shampoo for the control of fizzy hair which cannot be easily managed. More specifically, as stated in the package of the product, the particular shampoo can offer a 24hours anti-frizzy and glossy effect; in certain cases, this effect can last for up to 48hrs (Schwarzkopf, 2011). Using this product, consumers with frizzy hair can achieve a straight and glossy effect without using the straightening iron (Schwarzkopf, 2011). The product is part of a series of products aiming to help consumers who have frizzy hair; these products (hairspray, mousse and creme) are part of the firm’s ‘Straight & Glossy Styling range’ (Schwarzkopf, 2011). The package of the product is well designed highlighting the key advantages of the product. Schwarzkopf & Henkel is a well-known firm in the global cosmetic industry. The firm’s products are available in the markets of 125 countries worldwide (Schwarzkopf, 2011). The brand name of the firm is quite known, representing products of high quality. In this context, the specific product has many chances to succeed in the Australian market, a market which is strongly related to the specific company – in accordance with the corporate website ‘Schwarzkopf was first available in Australia in 1961’ (Schwarzkopf, 2011). Consumers in Australia are expected to prefer this product from the ones of the competitors because of its brand name-which is synonymous with quality. 1.2 Current Pricing The price of the product is of critical importance for its success within a particular market. In accordance with Baker et al. (2007) the role of price in the success of a product is not standardized. Because of the increased competition in terms of pricing, the prices of products can present a high variation. Moreover, firms worldwide are likely to set different criteria for competing their rivals, for example, the quality of the product or the strategies used for its promotion within the targeted market (Baker et al. 2007). On the other hand, the management of pricing of a product can have many aspects being related to the legal rules related to the particular industry or the conditions of the local or the national market (Curtis 2007); for example, in periods of crisis, like the current one, the pricing of a product should be decided taking into consideration the financial status of the majority of the people in the targeted market – in case that the product addresses the public in general and not part of the population (as for instance, in the case of luxury products). Moreover, the pricing of a product should be evaluated having in mind the prices of similar products. When the competition in a specific sector is extremely strong, then the price of a product should be decreased aiming to face the competitors. In industry sectors with low competition, the price of a product could be kept at an average level; in other words, a high decrease in the price of the produce should be avoided since customers do not have many products available to choose from (Curtis 2007). The price of the specific product has been found to be similar in various retail settings: in Woolworths the specific product costs $7.29, in Coles the price of the product is $7.39; online, the product is offered at a price of $5.95, which is an important offer, taking into consideration the quality of the specific product. The price of the similar products of competitors vary: for example, the Sunsilk Straighten-Up Shampoo costs $4.99, the Back to Basics Bamboo Straightening Shampoo costs $16, while the Shampoo TIGI S-Factor Smoothing Shampoo costs $26.56. It is made clear that the price of the specific product is at an average to low level, securing the competitiveness of the firm towards its rivals. 1.3 Current Distribution Distribution, as an element of the marketing mix model, refers to the following two issues: ‘a) the channels of distribution and b) the physical distribution’ (Cole 2003, p.285). The term ‘channels of distribution’ is used in order to show the marketing tools and techniques used for the marketing of the product within the targeted market (Cole 2003); this part of distribution is similar to the ‘current promotion’, another element of the marketing mix model. The term ‘physical distribution’ is used in order to show the availability of the product across the targeted market, i.e. the places where the product is available. The particular shampoo is available in retail stores, supermarkets and pharmacies in Australia. At the same time, the product is available online, at a lower price, as described above. Of key importance when developing the distribution strategies of product is to made sure that the specific product will be available at a place near to the consumer’s house and for hours that the consumer is most expected to seek for it; the above two characteristics of the distribution strategy are described as ‘place utility and time utility accordingly’ (Havaldar et al. 2007, 8.1). The specific shampoo is available in all supermarkets and in many pharmacies; in this way, consumers have easily access to the product not just in terms of distance but also in terms of time (supermarkets are open from quite early up to late in the evening). There are also supermarkets, which are open 24hrs (for instance, IGA supermarkets and certain stores of Coles supermarkets), which means that consumers in Australia can have access to the product on a 24hrs basis, a fact which offers to the particular product a high advantage compared to other products of similar characteristics, which are not available in supermarkets, as for example the Matrix Sleek Shampoo or the Marc Anthony Instant Straightening shampoo which are mostly available in Salons. 1.4 Current Promotion In accordance with Kurtz et al. (2009, 61) ‘promotion is the communications link between sellers and buyers’. Promotion, as part of the marketing mix, can be developed through various ways; the two main types of promotion are the following ones: ‘the direct promotion, made by salespersons and the indirect promotion developed by the media’ (Kurtz et al. 2009, 62). In order for the promotion to support the performance of a product/ service within a particular market it is necessary to be carefully planned and monitored. Usually, the characteristics of the targeted market, such as the local culture and ethics, the local legislation but also the consumer trends in regard to similar products have to be taken into consideration when deciding the marketing strategies engaged for promoting a product/ service within a particular market. From a similar point of view, Lee et al. (2005) note that the promotions strategy is likely to encompass a series of activities, such as: ‘advertising, personal selling, sales promotion and public relations’ (Lee et al. 2005, 337). However, it is not made clear at which level each of the above activities should be incorporated in a promotion plan. In other words, should equal attention be paid at each one of the above activities, or certain of these activities should be mostly used for promoting a product/ services in the targeted market. Normally, the criteria for including a promotional activity in the marketing plan of a product/ service, would be the following ones: a) the promotion strategies used by the competitors for the marketing of similar products, b) the cost of each such plan and c) the time available for the development of the plan (Lee et al. 2005). In order to evaluate the promotion strategies of the company in regard to the specific product, reference should be made to two of these strategies, as retrieved recently. The first one was an advertisement in the television; the advertisement was well planned, referring to all the key characteristics, benefits of the product. However, the potential advantage of the product compared to other, similar products, was not clear. The second one, was a marketing campaign presented online – in yahoo news website, in the context of the 111 years of the company. The campaign referred to the use of the firm’s products by the actors of the TV series Desperate Housewives. In accordance with the article, among the four actresses, Marcia Cross (see photo 1, below), uses the specific product for achieving straight hair without a straightening iron (Yahoo news, 2001). Photo 1 – Marcia Cross in a company’s campaign The above campaign can be characterized as quite effective, being able to attract the interest of consumers; this target is achieved by referring to the use of the firm’s products, including the product under examination, by the actresses of a well-known TV series. 2.0 Segmentation theory 2.1 Define and explain segmentation. Segmentation can be characterized as ‘the process of partitioning markets into groups of potential customers with similar needs and/or characteristics who are likely to exhibit similar purchase behavior’ (Weinstein 2004, 4). From a similar point of view, Croft (1994) explains that segmentation refers to the activity of dividing a market into areas making sure that consumers in each area have similar characteristics – referring not just to demographic characteristics but also to purchase preferences, as reflected in the market trends of each of these areas (Croft 1994). Moreover, Smith et al. (37) note that segmentation is a critical element of marketing – along with target marketing – helping the identification of areas or groups of people with similar purchase trends. 2.2 Explanation of 3 benefits to the brand from using segmentation From using segmentation, a brand is expected to have the following benefits: a) primarily, the marketing strategies designed for the promotion of a product/ service will be more effective as they will be aligned with the needs and the culture of the targeted group of people (Croft 1994); however, for this target to be achieved it would be necessary that the criteria used for market segmentation are carefully chosen, otherwise, segmentation would be of no value for the particular marketing plan, b) segmentation could help the managers of a firm to identify the areas in which their product/ service would have more chances to be welcomed, i.e. the areas where people would be more willing to spend money on the specific product/ service; in other words, managers would decide the areas on which more emphasis should be paid in terms of marketing limiting the risk of a loss of money with no perspectives for payback – referring to the cost of a marketing campaign (Smith et al. 2004); in the above case, segmentation, as combined with targeting marketing, could help to reduce the cost of a marketing plan and avoid engaging important company resources – which could be used in other business projects, c) also, segmentation could help reducing the time required for the development of a marketing plan; even if time is needed for the preparation and the development of the process, the time saved because of segmentation can be significant; in case that segmentation is not used at all, a marketing campaign has many chances to fail, a fact that would result to the repeat of the process by the beginning, which means, a significant loss of time and cost involved (Weinstein 2004). 3.0 Target Market Identification 3.1 Geographic Segmentation Understanding the geographic characteristics of the targeted market is quite important in order to develop an effective marketing strategy (Kurtz et al. 2009). Among the elements of geographic segmentation, the climate is considered to be of critical importance for a marketing scheme, indicating the ‘resident needs and purchasing behavior’ (Lamb et al. 2008, 234). Australia is a country structured in such way that the development of many cities is highly supported. The market of each of these cities is significant; this fact has been resulted mostly because of the high density that characterizes each of the country’s cities. The increased level of density favours the growth of consumption. Moreover, products which are of an average price are most likely to be preferred by consumers; in cities, where people of different educational, financial and cultural background live, the consumption of products of an average price is expected to be high. On the other hand, the climate of Australia is characterized by significant differences among the country’s regions, a fact that leads to the increased needs of cosmetic products, for offering to the body the necessary protection. 3.2 Demographic Segmentation Demographic segmentation plays a key role in the development of a marketing strategy mostly because of the following reasons: a) the data related to demographic segmentation can be easily interpreted; thus the segmentation of the market under examination is developed with no problem, b) the particular data are likely to reflect at high level the purchase behavior of people within the targeted market (Gilligan et al. 2009, 352). For this reason, demographic data have been characterized as the most valuable material for identifying the behavior of consumers within the targeted market (Botha et al. 2005, p.66). Australia is characterized by gender inequality, even if this inequality is not clear. In accordance with a series of statistics of the Australian government, in Australia ‘women working full-time are likely to be compensated at 18% less of their male counterparts’ (Australian Government 2009). Regarding the level of the country’s education system, this could be characterized as quite satisfactory, a fact related to the funding the relevant projects by the Australian government – which has spent $62,330 million in 2008-2009 for educational schemes (Australian Bureau of statistics, 2009). 3.3 Psychographic Segmentation People in Australia are of an average to high socioeconomic status; their activities are differentiated in accordance with their place of residence. In urban areas of the country, people are likely to focus on social, cultural and sport events. In the rural areas, the style of life is simpler, not highly depended on consumption, such as in cities. However, the population of the country – in its high majority – lives in cities and their suburbs. On the other hand, Australian are open to new ideas and schemes; they highly support innovation in all products/ services without being strongly depended on technology. Rather, they rather give emphasis on social activities and events. Moreover, they highly respect brands, preferring products/ services, which are already known in the marketing aiming to minimize the risks of a potential damage – referring to the damage caused by faulty products or services which are provided with high delay. 3.4 Behavioural Segmentation In Australia, the brand name of products and services has a key role in the consumers’ behavior towards a specific product/ service. On the other hand, people in Australia are characterized by increased loyalty, which is reflected in the difficulty of new products/ services to enter the market. This means that it would not be easy for their buying behavior to be changed. However, the firm under examination is linked with the Australian market, thus any potential barriers towards the promotion of the product in the above market could be easily confronted. Under these terms, the overall attitude of local people towards the brand would be based on the fact that this strategy is important for the promotion of the particular product in the Australian market. As a result, the promotion of the particular product in the Australian market is likely to be successful responding to the relevant needs of local population. 4.0 Target market collage Geographic 1 State 2 City 3 Climate 4 Density 5 Age (Demographic) Demographic 6 Gender 7 Income level 8 Education Behavioural 9 Socioeconomic status 10 Personality 11 Activities 12 Lifestyle VALS type Psychographic 13 Use of brand 14 Loyalty status 15 Readiness 16 Attitudes towards the brand 5.0 Completion of Discussion/Rationale of the Target Market Collage Images Chosen Table Target Market segmentation Number of image in the target market collage image How the collage images visually reflect the primary target market - explanations Geographic State 1 Australia has many cities; each of them has an important market in terms of size; the firm’s product has many perspectives in terms of its potential sales in the country’s cities. City 2 Cities in Australia are well developed; people of different cultural and educational background constitute the cities’ population. Cities in Australia reflect the co-existence of urban and rural elements. Climate 3 Climate in Australia is not standardized. The use of various cosmetics is often necessarily not only for reasons of beauty but also for health – for instance, to be protected from sun. Density 4 Density in urban areas of Australia is high. This means that the consumption needs of population will be high. Also, this means that the market of each city is extended increasing the chances for high sales of the specific product. Demographic Age 5 In Australia, people of all ages are likely to participate in various social activities contributing in this way in the development of the local market; the firm’s product addresses people of a wide range of age, from children up to elderly. Gender 6 In Australia, genders have equal rights in work – at least at a high level. Women in workplace need to take care of their look; in other social activities also, women would need the specific product in case they would have to face a problem of frizzy hair. Income level 7 Men and women in Australia can have a satisfied income level – having equal chances to enter the workplace. Therefore, their financial status is such that they can afford certain cosmetic products; women – but also men – who face problem of frizzy hair would afford to buy the firm’s product since it is of an average price – as explained above. Education 8 The level of education in Australia is high being highly supported by the state. However, the consumption of the particular production is not depended on the educational level of consumers; the benefits of the product are clearly explained in its package; people of low education can also understand these benefits, a fact which is an advantage for this product, being able to reach people of various ages, income, gender and educational level. Psychographic Socioeconomic Status 9 People in Australia are likely to be of an average to high socioeconomic status – taking into consideration their access to work and the social/ economic benefits provided by the state. Most of them live in cities where the need for a good look – in various social activities – is increased compared to the rural areas of the country. Personality 10 Australians are open to new ideas; they also like to test new products and give emphasis on quality of products/ services. The locals would welcome the firm’s particular product, which is characterized by high quality and a rather low price. Activities 11 People in Australia are engaged in a series of activities, mainly sports of various types, such as diving. The firm’s product which offers a quick solution for a good look without the use of a straightening iron will offer to people with frizzy a quick and effective solution for managing their hair after being involved in a sport activity. Lifestyle VALS type 12 In Australia, the lifestyle of people is characterized by the following elements: a high range of social events, increased socializing and participation in cultural/ community events. The need for good look, both for men and women, is high – especially in cities. On the other hand, the time available for dealing with personal beauty is often limited. The firm’s specific product can help people with Behavioural Use of brand 13 Consumers in Australia seem to prefer products of brands – a fact reflected in the high level of sales of products/ services of well-known brands. The company under examination is globally known for the quality of its products. Loyalty status 14 The products of the company under examination were made available primary to Australia, as explained above; therefore, a link exists between the company and the Australian market; consumers in Australia who tend to have standard preferences are expected to be loyal to the firm’s products – compared to the products of rivals who do not have any particular connection with the Australian market. Readiness 15 People in Australia like to be ready for facing any potential problem – in family, work or in regard to their daily social/ economic activities. The specific product responds to this need of consumers in Australia. Attitudes towards the brand 16 In Australia, the brand name is significant for deciding to buy a product/ service; the contents/ characteristics of the specific product/ service are also likely to influence the consumer’s decision to acquire this product/ service. This fact is expected to favour the company under examination, which have a significant position in the global cosmetic industry. 6.0 Reference List Australian Government (2009) Gender workplace statistics at a glance. Australian Bureau of Statistics (2009) Education Baker, Michael, Hart, Susan. 2007. The Marketing Book. Oxford: Butterworth-Heinemann Botha, Johan, Strydom, Johan, Brink, Annekie. 2005. Introduction to Marketing. Cape Town: Juta and Company Cole, Gerard. 2003. Management theory and practice. Belmont: Cengage Learning Croft, Michael. 1994. Market segmentation: a step-by-step guide to profitable new business. London: Routledge Curtis, Tony. 2007. Marketing in practice, 2007-2008. Oxford: Butterworth-Heinemann Gilligan, Colin and Wilson, Richard. 2009. Strategic Marketing Planning. Oxford: Butterworth-Heinemann Havaldar, Krishna and Cavale, Vasant. 2007. Sales and Distribution Management: Text and Cases. 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