Financial
1. Suave is a price brand. Any increase in expenses
related to it (e.g. advertising) would require an
increase in price, which will jeopardize its
position as the #1 shampoo in unit volume, and
might also result in its loss of trade support.
2. Unit sales share had declined from 12.2% to 11%
and operating margin %s had fallen.
3. Finesse had accounted for nearly of the
division sales and is expected to surpass Suave in
dollar sales in the next year.
4. Finesse had been introduced with $20 million
advertising and continued to be one of the most
heavily promoted hair-care brands.
Nevertheless, because of the price differential,
Finesse generates nearly twice the dollar per
case as Suave.
5. 60% of the marketing budget was for trade
promotions.
6.
Non-Financial
1. Market competitors are planning to introduce
new lines of low-priced shampoos.
2. Industry experts have predicted that the next 5
years would be characterized by continued slow
growth, since it was felt that the household
penetration (90%) and female frequency of use
(2.83x a week) had peaked.
3. Census Bureau estimated that there would be
54.5M women over 40 yrs. old (in addition to the
18-34 age group who are traditionally the
heaviest shampoo users) within over 10 years.
4. Census Bureau expects that families will become
smaller with 10 years.
6. Competitors had signaled that increase in
advertising expenditures will be used to defend
market share.
7. According to industry experts, the most
important element for achieving success in the
shampoo market was establishing brand
loyalty.
8. Suave had the highest loyalty levels. Suave users
satisfied 37% of their shampoo requirements
with Suave in 19_2 to 19_3 from nearly 50% in
19_1
9. Suave products were used in 16M homes, with
the shampoo alone in 13 to 15M homes.
10. Retail penetration was very good in food stores
and mass-merchandise outlets.
However, drugstores (particularly chain
drugstores), tended to push their own private
labels, carrying a few or no Suave SKUs or
pricing them higher than did other types of
outlets.
11. Suave customers tended to be heavy shampoo
users: female heads of household, age 18-45,
large families with young children, middle
income, blue collared.
12. Suave users tend to be from heavy
German/Dutch neighborhoods in rural, town,
and suburban areas, situated in the West
Central, West North Central, and Mountain
regions.
13. Suave trier rejectors were found to be older
women with higher household incomes, smaller
families, and shorter, dyed hair.