SUAVE (C)

Presented By: Group 5

Smita Sinha(249)

Smita Wardhan (147)

Sweta Kumari (150)

•Founded by Gerald Gidwitz and Louis Stein by the name of National Mineral Co.•Created, manufactured and marketed hair-care and other personal care products.

•Four marketing divisions; Suave being a part of the largest division, Consumer Products.

•In fiscal 1984, it generated $10.4 million in net earnings on$330 million in sales.

•Leading marketer in conditioners and second largest in shampoos in U.S.

•By 1996 Purchased by Unilever

HELENE CURTIS INDUSTRIES INC.

•Suave was a men’s hairdressing in the 1950’s & the first shampoo under the name “Suave” was launched in 1962

•Suave products were used in 16 million homes, more than 90% shampoos.

•Finesse was launched with a $ 20million in advertising & was one of the heavily promoted hair care brands in the industry. Finesse had a much higher gross margin due to the price differential & generated twice the dollar profit per case as compared to suave. Hence, Suave had taken a back seat to Finesse.

•Yet, suave had the longest line of shampoos in the industry, with a total of 40 SKU’s & average of 12 in any grocery store. New product variations were constantly introduced to maintain brand’s vitality & to allow suave users to switch within the suave line.

SUAVE

PRODUCTS OFFERED BY THE ORGANIZATION

A wide variety of products such as shampoos, conditioners, deodorants, hand soaps etc are offered under the names of:

Suave Finesse Salon Selectives Thermasilk

•Shampoo market was highly fragmented.

•Sales had been relatively flat in recent years.

•The market was considered mature, industry experts predicted slow growth in coming five years.

•Firms sought untapped consumer segments to sustain growth.

THE SHAMPOO MARKET

•Shampoo market is loaded with new products supported by heavy advertising and promotion.

•New shampoos were introduced catering to the specialized needs of the consumers.

•Five major competitors were to launch new brands with unprecedented marketing support.

•The industry advertising to sales ratio declined from 13.2% to 10.1%.

•The action in the business is taking place in high and low end of the price spectrum, middle being squeezed.

COMPETITIVE ENVIRONMENT

•Old, reliable product of Helene Curtis.

•Advertising budget kept low

•The low budget led to debate over techniques of marketing

SITUATIONAL ANALYSIS

•Provides good quality product to the market

•Introduced new products which led to profits

•Also launched finesse which led to more profitability

MARKET SUMMARY

TARGET MARKET

Women and Housewives from the age of 18-49

•Age:18-49

•Gender: female

•Family size: 3-4

•Family life-cycle: Married, Unmarried

•Income: Over 100,000

•Occupation: White-collar, home-makers, students

•Education: Graduated high school

•Religion: All

•Race: Asian

•Generation: Baby-boomers,GenerationX, GenerationY

•Nationality: Pakistani

MARKET DEMOGRAPHICS

•Provides better solution at a low cost

MARKET NEEDS

MARKET TRENDS

•Distinguishes itself on the basis of price

•Taken out new forms of shampoos

•Plans on increasing budget

SEGMENTATION &TARGETING

•Heavy shampoo users (more than 144 ounce/ year)

•Household women between age 18-45

•Large families with young children ( family of 5+)

•Middle level income earning who have a preference for low price

•On the basis of price compared with its competitors

•Men between age 18-45 also have been segmented with different variety of

products

19%

5%

14%

19%7%

8%

12%

6%

10%

Suave Agree

Flex Head & Shoulders

Jhirmack Pert

Prell Silkience

Vidal Sassoon

SHARE TRENDS OF SELECTED BRANDS OF

SHAMPOO

MARKETING MIX

Target market

Product

Price

Place

Promotion

PRODUCTSuave’s line of products for hair care:

PRICESuave positioning & USP was it low pricing strategy. (per ounce)

9 cent

s

13 cent

s

22 cent

s

32 cent

s

PLACE

Food Stores65%

Drug Stores15%

Mass

Merchand-ise

20%

PROMOTION

Advert-ising28%

Con-sumer Pro-mo-tions5%

Trade

Promo-tions60%

Other Marketing7%

Fiscal 1985 Planned Spending

28%

5%

60%

7% advertising

consumerpromotionstradepromotionsothermarketing

Estimated Audience Delivery

0

2

4

6

8

10

12

14

Homes TotalFemale

Total Male

Prime Time

Day time

STRENGTHS:

• Low priced strategy

• Good quality

• Being part of Helene Curtis

• Availability of retail support

• Leading shampoo and second largest selling conditioner

• High loyalty of buyers

• Strong market research programs

• High market share

SWOT ANALYSIS

WEAKNESSES:

• Tight advertising budget

• Less brand awareness

• Weak Marketing program

• Image of old-fashioned brand

• Suave threatened by Finesse

OPPORTUNITIES:

• Market growth opportunities.

• Strong product positioning

• Focused on low-price attribute

• Higher income level group can be targeted through

quality awareness

• Utilizing cheap advertising options

• Expansion, especially for products fro men

THREATS:

• Competitive firms with higher advertising budgets

• Threats of other low-priced shampoos

• Drug stores pushing private labels forward

• Low budget in comparison to companies like P&G etc.

• Competitive advertising

BCG MATRIX

PRODUCT LIFE CYCLE

PROBLEM RECOGNITION Perceived as old-fashioned Tight advertising budget Non-informative advertisements Retailers push their own brand Intense competition from all the sides Internal contradiction about

marketing techniques

SOLUTIONS Adopt aggressive advertising that focuses on

quality. Higher expenditure on promotional campaign Focusing upon prime time advertising rather then

day-time Maintain healthy relations with retailers Pinpoint the main competitive advantage of suave

and optimize its strengths. Designing an attractive package of marketing mix.

ACTION PLAN Celebrity endorsements Plough profits from other cash cow

products Shift to prime time advertising Offer incentives to retailers Diversify its distribution network Incorporate variety of promotional

strategies

RECOMMENDATION:

Accept Ellen Vallera’s $7.8 million plan & maintain the same ratio of advertising. Prime time has been allotted 43% approx &

day time network has been allotted 47%.

Unit volume should not be affected

More reliance on trade promotion in the past raised doubts about the advertising plan

RECOMMENDATION:

Higher proportion of budget must be allotted to prime time network since this will ensure wider audience reach.

Target the light users by using the product development & m market penetration growth strategy.

THANK YOU