Procter and Gamble Perspectives in Indian Hair Care Market - Report Example

Procter and Gamble AFFILIATION: Table of Contents Executive Summary 3 Introduction 4 Global Presence 4 Local Strategies 4 Indian Hair Care Market 5 Market Size 5 Consumer Behaviour 6 Pantene 6 Market Segmentation 7 Existing Market Situation 7 Objectives 7 Existing Positioning 8 Marketing Strategies 8 Advertising Strategies 9 SWOT Analysis 10 PEST Analysis 11 Future Trends 12 Conclusion & Recommendation 12 References 14 Appendices 16 Executive Summary Pantene is one of the strongest hair care brand of P&G. In the Europe it is the market leader whereas in India, it comes second. Pantene has a long legacy of offering consumers with supreme quality products that have epitomized hair care and a practical approach of achieving beautiful, healthy hair. In all its markets, Pantene has kept the same message of empowering the women to decide the best product for their hair. The difference is in the marketing because the style of marketing and the strategies used are unique to the countries. The shampoo market in India evolved after the 1960s when shampoos became a life style product. The Indian market is sold on mainly two attributes: Brand Image and Hair Care. Pantene has positioned itself on these two attributes by launching various damage repair solutions. It is positioned as the best shampoo for young women (between 18-35 years) who want to have beautiful and silky hair with less hair-fall. Pantene has recognized this social and cultural change in India and has upgraded its brand. It knows how sensitive and emotional the market is for beauty products. External factors like political instability and economic changes can have adverse impacts since the company operates globally. Pantene has a large un-tapped market which can be penetrated. It can launch Pantene variants according to the taste and needs of rural people. Pantene is recommended to penetrate into new markets such as shampoo for men and the rural segment. Introduction P&G brands are used by people around the world four billion times a day. The company markets its products in approximately 80 countries touching lives of 4.7 billion people out of the seven billion people in the entire planet (P&G, 2014). For this report, Pantene Shampoo is chosen because it belongs to the Global Beauty segment of P&G. The international market selected for this study is India. The brand has a sixty years long legacy of offering consumers with supreme quality products that have epitomized hair care and a practical approach of achieving beautiful, healthy hair. With the expansion in Asian markets, Pantene has become a global brand (P&G, 2014). This strategic report contains in depth analysis of Pantene’s domestic (United Kingdom) and international (India) marketing strategies, market segmentation and innovative marketing campaigns led by the brand. Global Presence P&G’s sales are divided into four parts: North America, Western Europe, North East Asia and Developing Markets. Outside America, the developing markets constitute up to 30% sales in the year 2009 which equaled $ 23.7 billion. According to the Annual Report of P&G (2013), Pantene and Head and Shoulders alone made the company a global hair care leader with 20% market share. In 2010, Pantene launched its hair structure repair formula from where began the era of ‘Structure Revolution.’ Since then Pantene has launched various damage protection formulae around the world because hair damage is the most pressing problem for females. Local Strategies Pantene products launched in the UK are quite advanced as compared to the emerging markets. There is a vast difference in the products and there are fifteen more variants as compared to India. Some of the variants not available in India, but are present in UK’s markets are: Ice Shine Shampoo, Clarifying Shampoo, Aqua Light, Total Fullness and many others (Pantene UK, 2014). In addition, the brand has an Expert Collection launched which focuses co-created with hair experts and focuses on hair ageing. This product line is not available in the India right now. According to Franch (2000) Pantene is the European market leader as compared to its position as number two in the India market. The launch of Pro-Vitamin B5 formula in the year 1993 urged many companies to revise their formula – Pantene however was in the lead. Their constant research and development keeps them ahead of the competition in Europe. The reason behind this is that the consumers are more educated and understand the science of hair care. In all its markets, Pantene has kept the same message of empowering the women to decide the best product for their hair. The difference is in the marketing because the style of marketing and the strategies used are unique to the countries. The tagline used in UK is ‘Try it Love it’ whereas in India the tagline used is ‘You Try You Decide’ (Refer to Appendix A). The basic message is same there is only a slight change. In UK, more advanced methods of social media marketing are used. For example, Pantene launched a very popular Twitter campaign #WantThatHair just before the Oscars in the year 2013 and achieved an engagement rate of 4.7% (Penn, 2013). Facebook and YouTube are also extensively used for marketing. Pantene’s position strategy is standard in all countries. In every market it has created a perception of 100% damage repair and challenges the consumer to try and decide it herself. Target market is same in all the countries, i.e confident, and beauty conscious females between the age 18-35 years.. Indian Hair Care Market Market Size The FMCG sector of India is ranked fourth largest and provides jobs for millions of people. The Hair care sector constitutes up to 9% of the total FMCG market. Hair is considered to be the most important part of the body which enhances the beauty of a woman. In the India market numerous products are present for hair: shampoos, conditioners, oils, hair gels and dyes. The shampoo market in India evolved after the 1960s when shampoos became a life style product. The market size of shampoos between the year April 2010- March 2011 was Rs. 2632.9 crores (Rahman, Kazi & Sourav, 2012) - Refer to Appendix B. According to Sharma & Mehta (2012) P&G and Unilever are the two most dominant players in the shampoo market. Pantene is a star brand for the hair market according to BCG Matrix (Rahman, Kazi & Sourav, 2012). Consumer Behaviour In India, brand loyalty for shampoos is not very strong. It is observed that consumers switch to different brands looking for a change, specifically in fragrance of the shampoos. They expect major improvements in the texture of the shampoo, the ability to add softness to hair, volume and damage repair The penetration level of shampoos is very high i.e. 51% (Rahman, Kazi & Sourav, 2012). The same authors claim that P&G has 24% market share in India and Pantene has a market share of 16%. Refer to Appendix B. Pantene There are six categories of Pantene shampoo in India: 1. Long Black Shampoo 2. Anti-Hair Fall Shampoo 3. Anti-Dandruff 4. Silky Smooth Care Shampoo 5. Smooth & Strong Shampoo 6. Nature Fusions Market Segmentation Demographic: Pantene shampoo is targeted towards females belonging to the age bracket of 18-35 years. These females are either working somewhere or are housewives (Sharma & Mehta, 2012). Geographic: Pantene is available in all major cities and towns of India. It covers both rural and urban regions and has various product sizes customized for different markets. Behavioural: Pantene is targeted towards women who use shampoos for cleaning hair on regular basis if not daily. Psychographic: Pantene is directed towards socially active, beauty conscious females who want to be the centre of attraction. These women want damage free hair and are concerned about the health of their hair. The ideal consumer wants perfection and for that she chooses Pantene. Existing Market Situation Objectives The brand objective of Pantene is: ‘To serve each woman in the continual pursuit of her individual beauty potential.’ The Communication/marketing objectives of this shampoo are as follows: To increase Pantene’s Share of Voice. To highlight its focus on Individual Beauty Potential. To highlight its relevance to the Continuous Improvement Seekers - feeling confident, beautiful and the best.  To Highlight & Reinforce the following elements: Blind Test Oil Replacement Hair Damage Repair (Refer to Appendix C) To Become No.1 choice for Hair health and advice. Existing Positioning Pantene was launched with the claim of ‘black,’ ‘smooth’ and ‘long hair.’ These three attributes of hair are very close to the India women and they try to achieve each of them (Mohanty, 2012). The Indian market is sold on mainly two attributes: Brand Image and Hair Care. Pantene has positioned itself on these two attributes by launching various damage repair solutions. The brand has created a high perceived value by continuously pressing the science formula. Marketing Strategies Strong positioning and creating a positive perception is the first step in India marketing strategies- it is the most crucial as well. A rural Indian consumer is always looking for value for money and would easily switch to a competitor brand for quality (Data Monitor, 2010). Moreover, it is extremely important that the company uses simple modes of communication so that the consumer can understand the brand’s message. According to Ahmed (2013) consumers are price sensitive and are ready to pay premium price in exchange of premium quality. Pantene has recognized this social and cultural change in India and has upgraded its brand. It knows how sensitive and emotional the market is for beauty products. The three positioning options chosen by Pantene are: Positioning by Fear : Increased Hairfall and Split Ends – Unhealthy Hair Positioning by Benefits: Healthy and Silky Hair with Remarkably Less Hairfall Positioning by Attributes: Keratin Damage Blockers and qualities of Oil known as Pro-V Science for ensuring beautiful and lively hair. Promotional activities are also quite popular for example ‘Buy 1 Get 1 Free.’ Pantene has also offered bundling promotions because it knows that people are attracted towards more volume as compared to price (Titheesawad & Kijboonchoo, n.d). Yannopoulos (2011) claims that Pantene uses ‘Cover All Bases’ strategy which is a form of defensive marketing strategy. According to this strategy, the brand is introduced in multiple versions to cover gaps or to ensure full product line. In addition, using this strategy Pantene ensures the blockage of new entrants and to keep the competitors out of the market. Pantene keeps on updating its product line- for example, oil replacement variant, nourishing variant, keratin bloackage variant and many more. Advertising Strategies P&G believes in mass media advertising and has been using it since inception in India. Television, radio and soap operas are the widely used mediums for advertising (IBS, n.d).The most effective and usual form of advertising used by the brand is Celebrity endorsement Ahmed (2013). Pantene is currently positioned as the best shampoo for young women who want to have beautiful and silky hair with less hair-fall just within 14 days and they’ve used the celebrity endorsements of shining Bollywood actors such as Shilpa Shetty, Parineeti Chopra and Katrina Kaif. Moreover, it has brought out the new element of claiming that the 89% of women all over the world have tried and tested in a blind test and this target market is inspired by the wonders created by the usage of Pantene and is actually in the favour of using Pantene for having healthy hair. Pantene has continuously reinforced the Damage protection quality of its shampoo and has launched a new formula known as Keratin Damage Blockers. Their current tagline says “You Try, You Decide” to create and re-enforcement in the minds of the consumers in order to generate the trial of the re-launched version of Pantene. The new Pantene Pro-V offers the unique selling proposition of possessing the qualities of an Oil along with other attributes which would make them even more confident, beautiful and feeling their best.  According to a study conducted by Sharman & Mehta (2012), the most effective medium of advertising is television commercials followed by print advertisements in newspapers. Out of home techniques such as billboards and pamphlets were less effective. Therefore, Pantene launches various advertisements which have local celebrities and try to connect to the people through these endorsements. Since India is the hub of movies, every celebrity has huge fan following and so, the company capitalizes on this technique. SWOT Analysis Strength Pantene is a global and star brand belonging to a strong parent company. The introduction of oil and keratin damage blockers as the ingredients is a strong point because the mentality of Indian women is that oil enhances the beauty of hair like no other product Weakness There are no visible weaknesses of Pantene because it completely depends upon the consumer whether or not to like a brand. Some shampoos are suitable for some type of hair and others for other type of hair. However, one weakness that can be pointed out in the campaign is that very few Indian women understand the importance and meaning of Pro V science as compared to terms like ‘strong hair’, ‘healthy hair’ which are common and understandable (Rahman, Kazi & Sourav, 2012). In addition, the shampoo market is so saturated- filled with competition, that it becomes difficult for a brand to cope up. Pantene also finds it difficult to compete with the high paced advertising done by competitors. According to EuroMonitor International (2010) P&G’s beauty segment is underdeveloped in India as compared to its rivals even though this market is considered to be the power engine of beauty and personal care. Opportunities Pantene should reconsider its target market and start focusing on younger age groups like teenage girls. Like its competitor, Pantene also has the opportunity of targeting this un-tapped market. There is another opportunity of launching a shampoo for the male category as they are equally conscious about their looks nowadays Threats There is a threat of high number of advertising campaigns undertaken by competitors as compared to Pantene, which launches few campaigns and then run them for a year or so. Pantene is currently relying only on celebrity endorsement and might face threat from low-cost segment (EuroMonitor International, 2010). In addition, labour disruptions, acts of war, and impairment of manufacturing plants are some of the external factors that are not in control of the company (Annual Report, 2013). The Annual Report further states that the brand uses raw materials that are price volatile; therefore prices of the finished products may vary. PEST Analysis The macro-environment analysis of Pantene India is as follows: Political Environment: Changes in governmental regulations, political vitality, disruptions created by labour and changes in infrastructure can create hindrances for the brand (Annual Report, 2013). This is especially more in emerging markets as compared to developed nations like the UK. Economic Environment: Fluctuating currency values, inflation, taxes and other economic uncertainties have a direct impact on the sales of Pantene. Moreover, India is a country with high poverty levels, therefore, unstable purchasing power of people also impact brand loyalty. Social: Cultural and social changes like preference for herbal shampoos by the Indian consumers can really affect sales. In addition, in recessionary periods, people lower their spending and stop buying premium brands like Pantene. In such case, there are risks of poor sales. Technological: Pantene keeps itself up to date with technological advances that take place in the industry. It has also obtained trademarks and patents of its Pro-V science formula so that it has a competitive edge over this science technology. The company relies heavily upon technological systems that are extensively used for supply chain management, logistics, vendor management and other communication. (Annual Report, 2013) Future Trends The Indian market should focus more on the rural sector because it is developing rapidly. Many people from the rural area are changing their lifestyle and are choosing good quality brands. In addition, studies show that the market share of rural population is more than urban therefore; Pantene has a large un-tapped market which can be penetrated. It can launch Pantene variants according to the taste and needs of rural people. According to Ahmed (2013) a small increase in income of rural people leads to an exponential increase in buying power, thus Pantene has a long way to go in the rural sector of India. Conclusion & Recommendation A large proportion of earning comes from the Asian markets, India being one of the most important ones. Pantene’s marketing strategies are quite standardized but they are tailored according to local needs. For example, the television commercials have the same theme but local celebrities are used. Pantene is recommended to penetrate into new markets such as shampoo for men and the rural segment. Indian men are also becoming aware of their beauty and a lot of products for men have gained success- for example, fairness creams for men. References Ahmed. A, 2013, ‘Rural Marketing Strategies for Selling Products & Services: Issues & Challenges,’ Journal of Business Management & Social Sciences Research, Volume 2, No.1. Annual Report, 2013, ‘P&G,’ Accessed on 28th May, 2014, Data Monitor, 2010, ‘Pantene Case Study,’ Accessed on 28th May, 2014, < http://acervo-digital.espm.br/cases/306396.pdf> EuroMonitor International, 2010, ‘Procter & Gamble in Beauty and Personal Care – World,’ Accessed on 28th May, 2014, < http://www.warc.com/Samples/90906.pdf> Franch. J, 2000, ‘Case Study: L’Oréal (A): Fighting the Shampoo Battle,’ CEMS, Accessed on 28th May, 2014, < http://loreal.esade.edu/download/loreal_case_a.pdf> IBS, n.d, ‘List of Case Studies on Marketing,’ Accessed on 28th May, 2014, < http://www.ibscdc.org/case-catalogues/Marketing_Case_Studies_Catalogues.pdf> Mohanty. S, 2012, ‘Indian Shampoo Brand Positioning: Multi Dimensional Scaling Approach,’ Internal Journal of Computing and Corporate Research, Volume 2, Issue 5. P&G, 2014, ‘P&G India,’ Accessed on 28th May, 2014, Pantene UK, 2014, ‘Products,’ Accessed on 28th May, 2014, Penn.R, 2013, ‘P&Gs Careful Planning Led to Pantenes Powerful Twitter Program,’ e-marketer, on 28th May, 2014,< http://www.emarketer.com/Article/PGs-Careful-Planning-Led-Pantenes-Powerful-Twitter-Program/1010021> Rahman. K, Kazi. R and Sourav. S, 2012, ‘Analysis Of Hair Care Products With Reference To Shampoo Market In India,’ Volume No.1, Issue No.11. Sharma. H& Mehta.S, 2012, ‘Customer Attitude Towards The Use Of Shampoos: A Case Study Of Sirsa City’ IJRFM, Volume 2, Issue 2. Titheesawad. I & Kijboonchoo. T, n.d, ‘The Effects Of Bundle Composition, Price, Framing And Familiarity On Consumers Purchase Intention,’ Accessed on 28th May, 2014, Yannopoulos. P, 2011, ‘Defensive and Offensive Strategies for Market Success,’ International Journal of Business and Social Science Vol. 2 No. 13,. Appendices Appendix A- Local & International Taglines Local International Appendix B: Market Size of Hair Care Products in India Source: Rahman, Kazi & Sourav (2012) Appendix C- Marketing Campaigns Read More