Pantene Case study
Eashan Bhattacharyya 675556613 3/27/2017
EXECUTIVE SUMMARY Pantene in early 2000, one the top premium brand in shampoo category with maximum market share were termed high in terms of customer loyalty and were prominent leaders of shampoo industry. But in 2003, Pantene’s market share experienced a small decline taking Pantene from 22.5% to 20%, which worried the parent brand P&G. On the other hand, Garnier increased their market share to 5.1% within an year. In order to analyze the decline factors, P&G decided to hire a marketing research firm to evaluate the marketing mix of Pantene in comparison to competitors. Thus, Procter and Gamble chose and contracted with Nielsen Marketing research firm. P&G set a long-term growth target of five share points. Nielsen is a global market research company and provided solutions to clients marketing problems with its single-minded focus on consumers. Analyzing the case, we could identify brand equity as the most important aspect. From figures 3 and 4, we could derive key drivers were the awareness and the associations in the Shampoo Brand Equity. We could understand the associations includes following four categories: health/shiny, premium quality, and family. Out of these, health/shiny was the most important followed by premium quality and emotive appeal. Upon analyzing we could find that the market share of Pantene shampoo products is facing a decline caused of the heavy promotions by competitors, lack of distribution intensity. Packaging is also an issue where other competitors performed better. Because of which they were not able to capture the younger customers. The Delta moments were also lesser in number when
compared to other competitors. Pantene could look into these issues and take some actions which will help gain back the shares in the market. SITUATION ANALYSIS Pantene has accomplished high rates of customer’s loyalty and perceived as the number one high quality product in the shampoo industry for long, Pantene reputation is build based on the known parent brand P&G which is highly recognized in the domestic and global market. But within a year of Garnier’s launch in 2003 in United States, it gained 5.1% of the market share. During the same period of Pantene who were the market leaders saw their market share declined from 22.5% to 20%. This was a drastic fall which made Procter and Gamble (P&G) concerned. To better understand the decline factors, P&G decided to hire a marketing research firm to evaluate, compare and understand Pantene and its competitors. Procter and Gamble chose and contracted with Nielsen Marketing research firm which is the leader in the market research ranked in the top five research firms with 16% market share and $31 billion global market research industry in 2010. Nielson provided solutions to client’s marketing problems with single minded focus on customers. Nielsen decided to apply one of its comprehensive solutions “Winning Brands,” which scrutinized the brand from various perspective such as category issues, brand challenges comprising of equity, loyalty and personality, marketing mix such as price, promotion, distribution; and consumer behavior. They started by analyzing the shampoo category and found 98% of market penetration. It was found that consumers were highly involved with shampoos and purchased multiple brands experientially.
Upon analyzing the data from figures and tables we could get few insights: 1) From figure 6, we found that Pantene that the index of Garnier and Pantene is very close in the following aspects: range of hair care products; cleans gently for colored hair; Makes you feel pampered. For the “Has attractive packaging” and the “Uses natural ingredients”, the index is quite different. Pantene falls behind the Garnier. 2) From figure 7, we understood the brand equity of the Pantene is far greater than the other brands, that is to say Pantene has the strong competitiveness. Pantene is doing best in this sector. 3) There are various causes for decline in market share of Pantene. Pantene’s current image is that of high quality that leaves hair “soft and silky” which are qualities both rated high on the level of importance to the consumer. The brand personality is described as elegant and professional. From Table 1 and 2, Pantene has better brand equity in the target age group of above 21. Garnier on the other hand concentrated on modern, trendsetting youth which gave better brand equity in the age group of 18-20 when compared to other age groups. Pantene also lacked in the package attractiveness as well. Garnier in this sector stood out, they had flashy design and better packaging when compared to that of Pantene and others. Only three years can have many customers, this age group has an enormous potential market of shampoo. Garnier saw this analysis and thus targeted the specific age group. 4) If we check out the Pantene’s Omega and Delta moments we could see high Omega moments (Table 5) and low Delta moments which makes us to think Pantene did good job
at keeping the customers that already exists but has a definitely a lot of scope of improvement in getting to the notice of new customers. High prices of Pantene when compared to its other competitor is also a cause of its loss in market share. 5) We found from figure 10 that Garnier’s brand personality and symbol represents fun, young, feminine, fashionable, attractive, modern, and trendsetter. But the Pantene just represents the elegant and confident. The brand personality is not as strong as Garnier. 6) A crucial factor which comes is packaging which affects brand marketing. According to the Figure 12, Garnier’s packaging is more modern than the others; the shape of bottle is also very attractive. But Pantene’s packaging is more common, adopting the opaque bottle. 7) From figure 5 we found that Pantene’s price is way above VO5 and Palmolive. We noticed we noticed that the price of Pantene’s product is higher than the price customers are willing to pay. 8) From figure 16, we could analyze Palmolive and VO5 are promotion driven products, because they have already become the cheaper shampoo, the price will attract lowincome people. Whereas Pantene and Garnier are low on promotion in comparison to VO5 and Wella. These were the analysis which requires to be looked upon and help strategize next step. PROBLEM DEFINITION The market share of Pantene shampoo products is facing a decline. Pantene, leader of shampoo industry saw their shares decline by 2.5% which is alarming to the parent brand, P&G. Brands like
Garnier, VO5, Palmolive are competing with them due to which they need to take steps to gain back their market share. Upon analyzing the major concern areas of Pantene are: 1) Heavy promotion by competitors: Pantene have not marketed their product aggressively due to which they are facing trouble connecting with younger generation. 2) Packaging: The problem area of Pantene is also about its opaque bottle which is lackluster when compared to Garnier. They need to address this issue and come up with better design and packaging strategy. 3) They have not focused on family market segment and brands like Palmolive has focused on such segments to gain popularity and market share. 4) Trouble connecting with youth: Pantene focused on the age group above 21. Thus, the category below 21 who comprises of Delta customers have preferred brands other than Pantene. The Garnier mainly concentrated in the 18-30 age group, especially the age of 18 to 20. Only three years can have a large number of customers, this age group is a huge potential market of shampoo. Garnier caught the young customers and constantly increase their market share. 5) They have performed poorly in Delta moments when compared to other brands. 6) Pricing has also been a major factor. Customers have felt that the price of Pantene’s product is higher than the other brands. They are not willing to pay high amount for their daily usage.
Pantene though still are one of the top brands and still has maximum Omega customers but they need to address these issues quickly to revive growth in the market. ALTERNATIVE ACTIONS There are various actions that might help Pantene capture the market and excel: 1) One way to increase the market share is to increase the brand awareness with more rigorous marketing. There are various channels such as television, internet and radio. Celebrities endorsing and appearing in new advertisement and commercials would certainly increase the brand awareness. Pantene is still the most powerful brand in the shampoo industry and preferred by most consumers. Intensive marketing would increase their brand value and might help them capture the lost share of market. 2) Another alternative is to simply stick with what they have done and continue to market as they have been already doing. The decline in the market might be short time issue due to other problems in the market rather than introduction of Garnier. They still owned a good 20% of the shampoo’s market share. The advantages of this alternative are that there are no new costs associated with it. However, the downside to this alternative is the potential to keep losing market share, and potentially, their position as leader of the shampoo industry. 3) Pantene can also increase their market share by changing the packaging of the product. Loyalty can hardly be associated with shampoo with high number of delta moments. Attraction has important aspect as new customers might try the product out of impulse and Pantene has the best chance, out of any brand, to turn that customer into an auto-
pilot consumer. They could change the design of the product to attract the young customers. 4) One of the way to gain market share and prove authority is acquisition of a brand. Here we analyzed with Garnier but there are other companies competing as well. According to the analysis and study of Nielsen, VO5 had a high market share but with a low brand equity. VO5 can be bought, and enhancing the brand equity of VO5 can be looked upon. This acquisition can make up the shortcomings of Pantene, but also keep the original brand personality of Pantene, prevent the original customers losing. The new brand should aim at the low price market, also can put on the for whole family label, to capture the low price market from other brands. 5) The last but not the least is about creating a new brand or sub brand. Creating a new independent brand of P&G or sub brand of Pantene is an alternative that the marketers can look. This new product can be designed and manufactured with better packaging. This new product will not only focus on the healthy and shiny, but also target the age- group from 18-21. This new brand is aiming at competing with Garnier, gain the market share. If it’s a P&G’s independent brand, although not attached Pantene's brand effect, but it has the bigger development space. They can also can take advantage of the new brand switch trigger to open the market. This new brand can aim to disturb the Garnier’s development. The advantage of this method would be that it would attract the young customers but at the same time they have to invest time and resource on research.
FINAL RECOMMENDATION Based on the data provided by the case and the analyzing the alternatives, the best marketing strategies for Pantene to increase market share would be to create a sub brand of Pantene or independent brand of P&G. The new product must have the following features: 1) New packaging and design: The new bottle should be designed to attract the customers in the age group of 18-20. It would separate the whole Pantene product line from other shampoos. Curved design could be adopted which would fit into their current elegant personality trait. They can add young, modern, vibrant colors to the bottle which will be attractive to boys and girls. They can also provide free bonus bottle of conditioner which can trigger more Delta moments when the customers in store. 2) Pricing strategy: According to the price appropriateness chart, Pantene’s price is above the amount the average person is willing to pay for shampoo. Though Pantene is premium brand with high prices, the new brand must ensure a competitive price with that of Garnier and other brands. People have tendency to buy high quality product with low price and a pricing strategy should be made to compete with Garnier. According to figure 5, attractive pack is one of the associations as drivers of equity in the Shampoo category. 3) Youth driven advertisement: It is important that youth could connect to the brand and the advertisement should highlight the fashion, charm and personality of elements linked to young people. Polls and opinions should be done to keep fresh and exciting taglines, ones which would instantly connect to the youth. 4) Focus on Delta customers: Typical Delta consumers have colored, frizzy, thick, and mediocre to poor condition hair, so when marketing to Delta consumers, Pantene should
stress that their products will make hair smoother and less frizzy, repair damaged or breaking hair, will keep colored hair vibrant, and will keep hair strong and healthy. By marketing to Delta consumers, Pantene will automatically be marketing to some of the highest association drivers including “healthy” and “shiny”. This implies that Pantene though has lost only 2.5% of the market share, it still is one of the most popular shampoo brand in the market. So, they need to focus on the delta consumers and try to gain their attention. They can definitely look for young celebrity endorsements and look to attract their young customers. According to marketing management, we can see following details: 1) Customer segmentation: Target the age group 18-20. Advertise for the youth. 2) Market targeting: More focus on youth based advertisement and celebrity advertisement 3) Product positioning: Focus on new elegant design and packaging which distinguishes it from rest of the brands in the market and leaves impact on the consumers. They need to position themselves separately as cheap, quality and attractive shampoo.
