Case Study Analysis - Suave Essay
Marketing case study analysis – Suave (C) Introduction of Suave brand • Suave belongs to Helene Curtis Industries, Old, reliable hairdressing product of Helene Curtis • Mother company has 4 marketing divisons, Suave $100 million brand in fiscal 1984 • Suave is famous for hair care product (leading shampoo brand in unit sales) • Suave is an absolute low-price brand with low margin and profit
The Shampoo Market • Shampoo market was highly fragmented • Most shampoo marketers targeted the 18-34 year old age group (heaviest users) • Sales had been relatively flat in recent years • Forecast growth predicted slow, steady rate of population despite of the fact that female frequency of use had peaked (2,83 times/week) • Based on share trends (exhibit 1) Suave has the highest market share
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Competition overview • Shampoo market is loaded with new products supported by heavy advertising and promotion • Five major competitors were to launch new brands with unprecedented marketing support - Case Study Analysis - Suave Essay introduction. (new low-price shampoo) • The industry advertising to sales ratio declined from 13. 2% to 10. 1% • Historically nine out of ten new shampoos failed Issue: (What would be the ideal marketing cost allocation to be more effective at sales side? ) • Advertising cost pressure and there two options to spend it. , increase adv. Budget by 30% and $7,1million would be spent on Tv commercial and $0,7 on print. 2, all television spending in prime time and total budget is $10,2 million • Vice Preisdent was considering about two plans Market/Suave sales mix • Retail support was critical in the shampoo market 50% of the sales were through food stores, 30% through drug stores and 20% mass merchandise outlets (Suave sales : 65%! /15%/20%) • Retail margin: 30%, shelf position is very important, Retailers push their own brand
Brand loyalty • Achieving success in shampoo market was establishing brand loyalty • The industry was notorius for fickle consumers and it’s mainly influence by TV advertesing • Good news is that Suave has the highest loyalty level however it has dropped down from 50% to 37% Consumer behavior/research survey results – Suave • Suave consumers tended to be heavy shampoo users • Female heads of households 18-45, large famillies with young children, middle income • Blue collar occupation, tended to be more German/Dutch neighborhoods in rural, town • App. 0% of women who used shampoo had never tried Suave and 28% of thad tried Suave were not current users • Older women with higher income felt that Suave was inexpensive and not good enough for their hair and old fashioned Targeting & Segmentation • Heavy shampoo users • 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
Helen Curtis marketing strategy • Helene Curtis intended to kepp Suave as a low-priced brand • They want to heavily promote Suave brand despite of cost pressure • Change marketing mix to stimulate growth „What should the company do to increase sales, brand awereness and revenue? Update Suave brand image to attract new target group to maintain market share Recommendations: Communication: 1. Communcation strategy should focus increasing trial among new target segment. 2.
Advertising should demonstare Suave updated brand image (facelift) be careful not to lose existing customers (keep core brand value) Use wide range of media mix to increase reach in the target segment (TV, print, radio, Billboard common with retailers) Through prime time in tv commercial more current ( to bulid brand loyalty) and potential consumers could be reached ( to increase awereness) Free product trials in some magazines to demonstrate product quality especially in non user women segment Adopt aggressive advertising that focuses on quality and product relability . 4. 5. 6. Product: 7. Take competitive advantage against competitors ,optimize it’s strengths (well known good quality brand, good brand loyalty, leading shampoo brand etc.. ) 8. Product development: Expansion, especially for products for men Sales channel/ especially retail 9. Due to high retail share in sales they need put more effort and get in touch closely with retailers (insentive program, special promo at retail shops, product demo) 10. Diversify its distribution network