Example Of Essay On Marketing Strategy

Executive Summary:

The shampoo market is expected to be an increase by $25.73 in 2019 (PR Newswire, 2014). Shampoo industry target audience on the basis of lifestyle and need of customers in which the demand of Anti-Dandruff shampoo is 20%. Head & Shoulders is the most leading Anti-Dandruff shampoo. However, it also faces some internal and external factors which can directly or indirectly be having impact on its growth. As it is growing, it is also improving itself by doing line extension. However, with the increasing opportunity, the competition is also getting very high. Head & Shoulders can tackle these competitors by improving more like making a product for those who cover their hair or making Anti-Dandruff oil. Because, the main advantage, which Head & Shoulders has, is its brand name and if it improves more and give more customer value than it can maintain its position as a market leader.

Introduction:

Head & Shoulders is one of the most world leading Anti-Dandruff shampoo that was launched by P&G (Procter and Gamble) in the year 1961 in North America. In the year 1950 P&G realized that people are not pleased with their existing dandruff shampoo. So after ten years of research P&G scientists come with an item Pyrithione Zinc(Procter & Gamble, 2015) which fights against dandruff. At first, it was launched in a white glass jar, a blue-green cream shampoo in it with the tag-line of “Clinically proven to reduce dandruff”. However, as the year passes it has now so many varieties according to the different types of the scalp of people
In the year 1979, Head & Shoulders introduced a conditioning formula shampoo which gives more softness to customer’s hair. In the year 1990, Head & Shoulders launch an intensive treatment shampoo with Selenium Sulfide (an ingredient that relief and itching and flaking in scalp) in it. In 1991, Head & Shoulders launched 2 in1 formula that means shampoo and conditioner together. It was considered as a very rough shampoo which can damage the hair. In 2005, Head & Shoulder made improvement in its product and launched it for sensitive skin as well.In 2006, Head and Shoulders updated its ingredient with HydraZinc and in the same year it introduces Ocean lift shampoo that gives fresh ocean fragrance. In the year 2008, Head &Shoulders becomes the representative shampoo of “National Football League”. In 2011, Head & Shoulders became the representative of “Major League Baseball.” (Procter & Gamble, 2015)
As the year passes, it keeps on launching and improving its shampoo and conditioners by adding something better. Head & Shoulder has done line extension and is now available in 6 new packaging:

Head & Shoulders Smooth and Silky.

Head & Shoulders Refreshing Menthol
Head & Shoulders Clean and Balanced
Head & Shoulders Silky Black
Head & Shoulders Naturally Clean
Head & Shoulders nourishing Aloe Vera
Head & Shoulder Marketing Evaluation:
Head & Shoulders is targeting the audience that uses dandruff removing shampoos. At first it only makes shampoo but as the competition increases it starts making conditions and launching many different varieties of it. The pricing is set in such way that it is reasonable and affordable for almost every class, and it is available in many retail shops. For doing the market evaluation of Head & Shoulders, PESTLE and SWOT analysis has been conducted:

PESTLE Analysis:

PESTLE analysis stands for (Political, Economical, Social, Technological, Environmental, and Legal). It includes all those external factors which can affect the organizations directly or indirectly because these external factors can have an effect on company’s growth and potential. PESTLE analysis is essential for an organization so that an organization can make the right decision and save its company’s shares and brand image from external factors. It helps managers in doing the assessment of the organization and in finding what important steps they can take for saving their company from getting harm by those outside factors. The PESTLE analysis of the Head & Shoulders is as follow:

Political Factor:

Political factors focus on the government rules and policies which have an impact on organization growth. These include taxation, government (bureaucratic or democratic), and how the government will support company in promoting their business and how will they influence the organization.
Market globalization will help Head & Shoulders in increasing its sale but if the worldwide political situation is analyzed, then many countries are not politically stable. Sanction and embargo on Iraq (Gov UK, 2015) stopped the trading of international products in that country, because the political situations are unstable in Iraq. Thus, it could be difficult for Head & Shoulders to increase its sale especially in the South-Asia where the usage of this product is very high as compared to other regions. However, the political situations of South-Asia are very unexpected.

Economical Factor:

The main economical factor, which is being faced by the Head & shoulders, is the increase prices in the fuel in 2014 which also increase the price of logistics. Delivering the goods from US to worldwide may acquire high cost and a huge investment in logistics. Apart from that increase in the value added tax like in UK, worldwide recessions, increased the unemployment rate in the country. In UK, the unemployment rate is 6.0 (Monaghan, and Inman, 2014) and in USA where the ratio of unemployment is 5.6 (BLS, 2014). These factors directly and indirectly influence the organization’s sales.

Socio-cultural Factor:

In social factors company looks the culture norms value traditions of the country that whether how the social norms of the country can have an influence on the organization. It also includes the demographic that what are needs of customers and what type of products or services they want. Increase in the competitors, who are offering the substitute of Head & shoulders, is having an effect on its growth especially in South-Asia where people are switching products more frequently. In many Muslims countries it s banned to use international products (Ajami, Cool, Goddard, &Khambata, 2014) as religion extremist boycott. However, the positive point is that as the population is increasing the consumption of good will also increase and this culture is not strictly followed.

Technological Factor:

In this modern age, technology is playing a vital role in the development of the organizations. However, with the improvement in technology competition is also getting high among organizations. If Head & shoulders make a product using a specific technology, then the competitor is also making the same product by using that technology so it is difficult to maintain the differentiation in the product.

Environmental Factor:

People avoid using chemicals on their skin andHead & Shoulders use a strong chemical in its shampoo for removing the dandruff so that chemical can cause itching on the head. Head & shoulder has a very strong brand name and if it can use more natural products in its shampoo that will help in increasing the sale.

Legal Factor:

Company sees the laws and how it can influence the organization. P&G is a parent company of Head & Shoulders, and both have received many international legal certificates so that it has less threat of legal factors in the international market.

SWOT Analysis

SWOT stands for (Strength, Weakness, Opportunity, Threats). SWOT analysis is done by the organization to identify its strength and weakness within the organization and its opportunities and threats outside the organization. In the strength, company see its potential and focus on what is its USP (unique selling proposition). In weakness company analysis where it lacks as compared to their competitors. It is very important for an organization to look for new opportunities that can help in growing more of its business. When company sees for a new opportunity, it always faces some threats that can refrain the organization in increasing its market share. The SWOT analysis of Head & Shoulder is as follow:

Strengths

It is the most famous Anti-Dandruff shampoo.
It has the strong financial position in the international market.
It is easily available at every retail store.
Strong marketing campaign.
Head & Shoulders has a strong brand image as Anti-Dandruff shampoo. Along with that, it has strong product distribution; that the product is distributed in almost every country and in every retail store which benefits Head & Shoulders in making strong financial position in the international market. Head & Shoulders main key point is that it has done its marketing through strong media campaign and aware the customer that how important their hair scalp is.

Weaknesses

It only focuses on dandruff shampoo.
Initially, it was considered as a harsh shampoo, although it has improved but still some people think that it will damage the hair.

It mostly targets the male audience.

Head & Shoulders is the no.1 Anti-Dandruff shampoo. However, the brand lacks in few things. One of these is that it only focuses on Anti-Dandruff shampoo. Therefore, it can diversify in its product because Anti-Dandruff Shampoos are only used by those who suffers from it. Rest of the people are using normal shampoos. Head & Shoulders can strengthen its strong brand name by diversifying its product and make some normal shampoos as well. Apart from that in the beginning of its launching, it targeted male audience only. This made a perception in customers’ mind that it is a harsh shampoo and only for men. Even today, it is still targeting mostly the male audience in their ads that’s why people start switching to another dandruff removing shampoo that should not harm their hair.

Opportunities:

Introduce a Head & Shoulder Dandruff removing oil.
Introduce a Dandruff removing shampoo for Hijabs.
In this growing modern world, there are so many opportunities that Head & Shoulders can adapt to growing its business. Like it can launch Head & Shoulders Dandruff removing oil and make customer believe through its marketing that if they use Anti-Dandruff Hair oil along with the shampoo then they will get rid of dandruff. In Middle East countries female wears Hijab and in Hijaab hair get so itchy and if they got dandruff then it is difficult for them to cover their hair so if Head & Shoulders instigate Anti-Dandruff shampoo for Hijab wearing female then it will capture a huge market in Middle East countries.

Threats:

Highly competitive market
Decreasing brand loyalty that if head & shoulder is not available then people will but competitor’s product.
if something has a strong point then also has some weaknesses;
However, it is not that much simple for Head & Shoulders to avail these opportunities because of the increasing competition in shampoo industry. There are so many other players in the market who are offering the similar type of product and at very reasonable price. Even though it has a strong brand image but with the increasing competitors people are getting less brand loyal. If they do not find Head & Shoulders in their stores then they are going to buy another Anti-Dandruff shampoo. Therefore Head & Shoulders has to maintain its distribution and make itself available.

Industry Competitive Analysis:

Hair care industry is growing with time. There are so many different brands available in the market claiming to give beautiful and nourished hairs. However, there are only few brands which are and will always be on the top of the list of the hair care market. In hair care industry, many products are available including shampoos, conditioners, serum, hair spray, hair gel etc. If shampoos companies are considered that provide hair care product, then most of them are concerned with the R&D department to bring something unique formula for their product. In the beginning people only want to use those shampoos which have a pleasant fragrance. However, as the time passes people start getting awareness about the importance of hair product for their hair so people start preferring those products that has a good fragrance, but it should be herbal as well.
The shampoo industry is vast, and it has many different segments including shampoo for straight hair, dandruff hair, curly hair, covered hair. The most leading companies of shampoo industries are Procter & Gamble, L’Oreal USA, Unilever, and Revlon. The market share of hair care in US in 2014 reported a growth rate of 57.2%. If the men’s hair care industry is anlayzed then it has agrwoth of almost 64% which is high than the overall growth, After that Rogaine product has around 57% sales. If about Head & Shoulders is considered then it only has 10% sales in US market (Statista, 2014). From this static data, it can be said that only those people use Head & Shoulders who got dandruff problem else others are using products those according to their hair type.

USP:

USP (Unique Selling point) is defined as a variable or factor which is offer by seller that differentiates its product from competitors. For running a successful business in this competitive environment, it is important that company should know its USP. Without having any USP or core competency, it is impossible for a company to convince the audience. A company should prove to its target audience that it is offering something unique from others. A company can make any of its variable its USP either it is price or product or its promotion strategies. For showing USP, the company has to show customers what are the main features of the product and what are the main features of the product and how the product is different from the competitors.
The USP of Head & Shoulders is “You will get rid of dandruff” that make its product different from others. Nowadays, Clear is giving a tough competition to Head & Shoulder but when it comes to buying a Anti-Dandruff shampoo Head & Shoulder is the name that pop-ups on customer’s mind. So it can be said that, Head and shoulders not only have share of market, but also have share of mind! Its core competency is it is offering an Anti-Dandruff shampoo which give beautiful hair at very reasonable price. It also gives value addition to its customer which means satisfaction that a customer gets from that product as compared to their competitors. It may be not a normal shampoo which gives long and beautiful hair, but it gives a perfect solution for people who got dandruff problem.

Market Share:

Most of the world’s population use Head & Shoulders for removing the dandruff and the market share of hair & Shoulders after so many competitors is still high. Started as a brand in North-America, it now becomes a most popular brand. Head & Shoulders is become a market leader as it sales has been increased more every year and many people of the world use Head & shoulders. It captures most of it market share by doing promotions and giving motivation to people so that they can attract their love once.
Head & Shoulders is capturing its market by doing the product development that it is bringing more variants in its product that suits different scalps of customers. Head & shoulders also targets sportsman that is the reason it usually shows cricket or football players in its ads. Recently Head & Shoulders and its swimming champion ambassador launched “Wash in confidence” to motivate the sportsperson (Procter & Gamble, n.d.). In its TV ads and on social media, Head & shoulder is catering market of both male and female

Proposed marketing plan for Head and Shoulder

Analyzing the environment and performance of the brand it can be evaluated that brand is performing well. However, brand holds huge potential for further penetration in unexploited segments. Below presented is comprehensive marketing plan with proposed potential segments for targeting the unexploited segment in UK at beginning.

Segmentation Targeting & Positioning (STP)

Market Segmentation is a marketing strategy in which organization divide a huge market into small subsets in according to the similar needs and wants. For launching any product, a marketer first has to do segmentation that in which area there is a demand for their product. After doing the segmentation, they then target the audience that which class of audience will buy their product. For every product geographic or psychographic segmentation is important but for Head & Shoulders, customer preferences and their need is important therefore Head and Shoulders attained a segment of Anti-Dandruff shampoo.
In the beginning, it first targets the audience of higher middle class who care for their hair scalp. Apart from that Head & Shoulders targets the young boys and girls and business professionals who are conscious about their hair because of their daily interaction. Head & Shoulder does the marketing by showing footballers and cricketers who get itchy hair. So people start considering it as a shampoo for male. So Head and Shoulders starts taking female models in its ads to make aware the female audience that females also can use this shampoo as it will not harm their hair scalp.
Considering the core segmentation component that P&G utilized to target global markets for its brands (Education Carnival, 2015), new potential segments for the brand are proposed below with keeping global market as geographic target.

Targeting potential segments 1 and 2

Analyzing and measuring potential of each segment, segment 1 and 2 is selected for catering as new markets for the reason. The rationale behind the choice of those segments is that head and shoulder keep wide popularity and preference change of rural markets due fast pace technological information dissemination is quiet considering. It is considered that it is the right time to communicate the product benefits for specifically newly emerging rural market.
Segment 2 is chosen due to the potential of the segment by considering growing age, where that market is allowed to take personal decisions as well as keep purchasing powers for personalized commodities. Further, the potential of being future users of the brand is high, if the brand successfully target that market, the loyalty factor will impact on the future purchase behavior of that market.

Positioning for Potential Segments

For segment 1 “Style and comfort, is waiting for you”.
For segment 2 “Care a little early”.
With the proposed tag lines for both the segment, the positioning of the product will target audience psychologically by giving a sense of functionality of the brand. Tagline for segment 1 is aligned with the concept that rural markets are now more towards adopting urban styles and want to move toward luxurious lifestyle. On the other hand, segment two will be communicating via demonstrating benefits of early adoption of the brand that is better for them.

Recommended objectives and goals

The goals of proposed marketing plan are developed on the criteria of SMART tools that refer to specific, measurable, attainable, realistic and timely. Below presented is the description of goals intended to achieve via implementing proposed marketing plan

Increase market penetration

Exploiting new segments via employing effective communication strategy of young ages and focusing on potential women segment via adding specific variations in product line.

Achieve 2% penetration in the new segment for next fiscal quarter with achievement of 10% sales forecasted for first fiscal year.

Increase market share growth of the brand up to 2% by the end of first implementation year of the proposed plan.
Proposed Marketing Mix
This section of the paper covers proposed marketing mix with 4Ps for specified segments with the core idea of keeping the same brand for marketing in the rural areas and employing product-line extensions for catering new segments.

Product

The strategy of product differentiation is utilized to introduce a product again with changes
Price
The product is marketed with competitive pricing with the unique experience of the product. Following is pricing strategy for the product.

Place

Distribution and time of delivery matter a lot in the success of a product launch like in the case of line extensions or communicating new segments

Promotion

As always like Head and Shoulder does, All the 360degree communication will be employed to create awareness for the product.
A comprehensive marketing plan above is presented for selected target segments keeping the facts and potential of the product in the future in consideration.

Conclusion

Head & Shoulders is doing great in the market, but there are some major points through which it can more increase its sales. There is a gap between company and customer perception like company say it is a world’s best Anti-Dandruff shampoo which covers the scalp and stop dandruff from coming back again. On the contrary, customers consider it as a shampoo which is medicated but with good smells apart from that dandruff is something that never vanish as it comes back again. So Head & Shoulders should consider this factor and try to minimize this concern of the customers. It should target the lower class as well or reduce the price of the product to that extent so that it is affordable for them.
Head & shoulders should come with different variety by keeping in mind the demand of targeted new segment customers. It can also improve its product by keeping the price low and target rural and urban areas both. Head & Shoulders should do more advertisement in the summer season especially in the countries that get too hot in summer e.g. Gulf countries. When it comes to local or low competitors like Clear, Himalayas etc; Head & Shoulders can use Down-Market Stretch that means it can attack the competitor by inflowing into the low market.

References

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