Recently, P&G, especially its product Head & Shoulders confronted with a problem that its product had a link to forest destruction. After this event, P&G was under high public pressure and consumers changed their image of Head & Shoulders. Based on this current situation, by doing some maketing analysis of Head & Shoulders, I provide a marketing plan for Head & Shoulders in the next five years.
Procter & Gamble Co. (P&G, NYSE: PG) is an American multinational corporation headquartered in Cincinnati, Ohio, which manufactures a wide range of daily consumer goods.
The dominate P&G brands have five segments: Beauty, Grooming, Health Care, Fabric Care & Home Care, and Baby Care & Family Home Care. Among hundreds of brands, Head & Shoulders, a power brand from P&G, is world’s NO.1 anti-dandruff shampoo, which made its debut in India in 1997 after nearly a decade of research. According to the latest Nielsen date, Head & Shoulders led the anti-dandruff category at 13% while its closet competitors, Dove and Garnier Fructics were at 7.
8% and 5.9% respectively (Harish, 2007).
In March, 2014, P&G, especially its product Head & Shoulders, confronted with a serious problem. The environmental group, Greenpeace, did a year-long investigation of P&G’s suppliers of palm oil and found that they are engaged in the clearing of endangered animal habitat, illegal forest fires and destruction deforestation in Indonesia. After this news, thousands of people worldwide have demanded P&G to break the link between their products and forest destruction, and some even have appealed to consumers not to use Head & Shoulders because using Head & Shoulders dandruff wash means consumers corporate social responsibility in helping companies to tigers missing from their homes in the forest off (Sheila, 2014).
This event immediately changed the loyal consumers’ image of P&G, which used to be a “clean” marketing image, and what’s more, many consumers changed their cleaning products by using Unilever, L’Oreal, which commit to no deforestation. The event led P&G, including its small part Head & Shoulders, under high public pressure and its stock price were effected to some extend, which revealed unstable and relative low during the March.
Recently, P&G finally took the plunge and decided to clean up its act and wash its supply chain clean of bad palm oil, which means P&G joined a group of other palm oil traders and consumers in committing to no deforestation (Areeba, 2014). Also, Head & Shoulders said it will know the provenance of the palm oil and work with its suppliers and farmers to improve sustainablity, and promised that there will be no deforestation in its palm oil supply chain by 2020 (Paul, 2014). According to Head & Shoulders’ current situation, I think it is necessary for Head & Shoulders to do a marketing plan to change its current public image in consumers’ mind, otherwise, it will lose more market share.
First, it is essential to make a market analysis of Head & Shoulders. Head & Shoulders is a major player in the anti-dandruff niche and it had carried its heritage as worlds largest sellling anti-dandruff shampoo. Now anti-dandruff segment consititute around 15% of the shampoo market and P&G is the global market leader in the retail hair care market with over 20% of the global market share behind Pantene and Head & Shoulders. According to P&G’s annual report, Head & Shoulders is the prominent brand in P&G’s Beauty segment.
P&G are targeting customers having dandruff and dry & damaged hair in all age group and the target market for Head & Shoulders are the higher middle class people who are brand conscious, early adaptors and who care about the overall health of their hair. As can be seen, Head & Shoulders is positioned as a pure anti-dandruff shampoo and now has four targetd formulas, which are designed to treat itching, flaking, dryness and redness. In the future growth, as shampoo market has various kinds of products and its brand loyalty is quite scarce as customers evolve around product innovation, Head & Shoulders should develop its new area to attract more consumers and at the same time, retain the loyalty consumers.
In the Product Mix, Head & Shoulders has increased a certain product line’s depth with more than ten types of shampoo and conditioner, which have different functions and sizes. In the Place Mix, in order to provide product at a place which is more convenient for consumers to access, Head & Shoulders use vairous strategies such as intensive distribution, selective distribution, so it is easy to find the products in every grocery shops, medical shops as well as stationary shops. Also, Head & Shoulders makes good use of the web marketing to sell products online. In Price Mix, at the time of launching, it used price-quality reference strategy while now it use references pricing. In the Promotion Mix, Head & Shoulders uses TV advertisements, print advertisements, sponsorship, sales promotion and social media and it also hired famous star for their promotional activities.
Head & Shoulders, positioned as a world’s No.1 anti-dandruff shampoo, identified multiple segmentation bases on the shampoo product line and still try to expand the market share by amplifying different needs and desires of the different consumer segments. The core segments of Head & Shoulders are shiny hair, anti dandruff and reasonable prices. Head & Shoulders used to focus on the male consumers but rencent year, it changed to introduce itself as a premium brand and uses charming models and start as its new brand ambassador, which to emphasized it not only gets rid of dandruff and flakes, but also gives soft and beautiful hair.
Before Head & Shoulers was launched to the market, the product R&D department did the research for nearly a decade in order to make a professional dandruff shampoo. Head & Shoulders has a unique feature that is it is rich in Pyrithione Zinc (PTZ), the only active ingredient, which is highly effective at fighting and also preventing dandruff symptoms because of its anti-fungal properties (Our formula, 2011). Head & Shoulders used to be a medicated shampoo image to consumers, which discorange the development of the product. After doing some maketing research, the company transfered the image of Head & Shoulders by sponsoringg some TV programs and changing the packaging of the products and finally transfered Head & Shoulders to be a more vibrant brand.
Second, in the next five years, the mission of Head & Shoulders is get rid of palm oil which do harm to forest and animals, develop a new area of shampoo category and increase the anti-dandruff category,
On one hand, in order to break the link between its product and forest destruction, Head & Shoulders should associate with suppliers, farmers and its R&D department to develop other material to replace the fuction of the palm oil. What’s more, Head & Shoulders should do some marketing strategy to refound a good image to the cusumers who change their impressions of Head & Shoulders after this event. The company can use both traditional marketing and web marketing to move away its deforestation product image to a clean and environmental brand that focuses on dandruff and beautiful looking hair.
This shift can be done by promotional activities, such as P&G’s Children’s Safe Drinking Water Program, which provide water purification packets on a not-for-profit basis, or sponsor some environmental organizations, TV program or social media to achieve the goal. As a marketer, our mission is to fade away the negative effect of this event on Head & Shoulders and make good use of this opportunity to catch people ‘s attention and show the brand new, clean and positive impression to the cusumers, which can retain the loyal cusumers and attract more potencial cusumers.
On the other hand, as shampoo market is relative easy to enter, various kinds of shampoo make this finite market share be divided into more parts, thus, if Head & Shoulders wants to occupy more part of the market share, the company should not only increases the quality of the dandruff shampoo, uses the brand effect and provides different sizes to differnt groups of cusumers, but also encourages the R&D department to develop a brand new area of the shampoo. In this market plan, I recommed Head & Shoulders to introduce a green tea shampoo with a natural ingredient, which has dual benefits — hair loss prevention and dandruff removal, and also leaves hair smelling great.
This is because recent year, many brands introduce green tea shampoo and gain the profit among the market, such as Dove, and in most cusumers’ perception, green tea relates to nature and health. What’s more, the company can make a little change on Head & Shoulders’ classic white rectangular shaped bottle design to show the specialty of this new product and also attract more middle age groups who pursue fashion and fresh.The target market of this product is primary people between 18 and 34, the retail price is going to be $0.99 higher than ordinary product nad it will be distributed throughout major retailers as well as online. Third, the financial goal of Head & Shoulders is that the sale-forecast of the product is to increase from 13% to 15% of the market share and generate sales profit 5% higher than last year.
Also, the expense forecast of the product will increase because of the investment of developing new product by the R&D department. In addition, as the marketing budget of P&G for 2014 is to be slightly up on the last year and P&G shifted one third of US advertisement budget to digital media, Head & Shoulders will also shift more from the traditional marketing to the web marketing for the reason that web marketing plays an important role in whole market. In conclusion, as shampoo market is low entrance, many new companies come into the market to share the market with Head & Shoulders. Although Head & Shoulders is the worlds No.1 dandruff shampoo with strong financial position of P&G, it should focus on the three fields below, or its market share will decline in the future.
First, Head & Shoulders need to place high priority on research and product development, and new product innovation activities, which can not only keep the strong brand to set it apart from its competitors, but also retain loyal cusumers and attract more potential cusumers as well. Second, Head & Shoulders should focus more on the product quality and the constituent parts of raw materials, which has a direct influence on the brand image and the product’s market share. Third, Head and Shoulders should continue to improve its online marketing, because web marketing is changing all the time and it plays an important role in society and has an important impact on the product market.