Shampoo Market Analysis

Shampoo Market AnalysisThe shampoo market is one of the red-hot moving and sophisticated spheres of the FMCG market. It represents 35 of the EU whisker- attending market and is lead by three main competitors, Procter and Gamble, Unliver and LOral who own corresponding market sh ars 44.9%, 17.7% and 11.4%. The attached report discusses the following points chief(prenominal) market competitorsGrowth, decline, trends and developwork forcets in the shampoo marketStrengths and weaknesses of the main competitorsSeg manpowertation of the market and differences between competitors seg manpowertsCustomer profiling and behaviourShampoo purchasing processIt is recommended that in order to achieve a substantial shargon of the market competitors must cater for as many of the different necessitys of customers as possible. Wella caters for a wider spectrum than the some other(a) competitors various mens haves, various womens needs and even the elderly. It supports this theory as it has the hi ghest market sh ar as a come with. They must in addition take into consideration the disposable income and current family situation of the customer. They must impairment products adequately in order to enable the correct brands to secure their limited product whilst still making value as a business.IntroductionThis report was commissioned to analyse the size, structure and class of the UK shampoo market. Shampoo is a Fast Moving Consumer Good (FMCG) that is the cheapest and fastest moving good within the FMCG industry. Within this we focused on the three main competitors Proctor and Gamble with a 44.9% market sh atomic number 18, Unilever with 17.7% and LOral with 11.4%.We analysed each competitors strengths, weaknesses, methods and processes to purport each segment of its market.Main competitorsGlobally shampoo is the lead story segment of the blur c ar industry holding a 40% sh ar of the market. The leading competitor of this sector is Proctor and Gamble (P G). Similar ly, the alike(p) trend follows within the EU as it is again the most profitable segment of this market with a 35% share of the hair make do market. The same competitor, P G, also leads the EU industry with 24% of the market value.Growth And DeclineSince the recent recession, the hair care industry has non emerged unscathed. According to Mintel the recession led to a quarter of shampoo users spending less on shampoo, thus contri excepting to the 15 million slide in market value between 2008 and 2009. However, revenue statistics from 2012 show that there was a 3% expansion in hair care products between late 2010 and early 2012, this is supported by the predictions of analysts that shampoo revenue will reach 19 billion by 2015. Innovation and an ability to alter helped the hair care market to survive the economic crisis demonstrated by the 165% increases in new product launches between 2006 and 2008.Trends And DevelopmentsThere has been a progeny of developments to Shampoo over t he years since it first became a product in 1762. In 1890, this then developed into a detergent product, and then the product became win enhanced when in 1903, Shampoo became a powdered product for the first time. The first shampoo product to appear as it does nowadays came about in the 1960s. Most recently, consumers who are looking for a quick beauty fix have helped the dry shampoo market double in size in the past two years. Sales have rocketed by 140 per cent year on year, and research by Mintel found 23% of women and 13% of men own a bottle of dry shampoo. According to Mintel it is especially popular amongst younger women, with nearly 4 in 10 of those aged 16 to 24, compared to 1 in 10 of the over-55s. They also predict that dry shampoo gross revenue will reach up to 17million this year.A trend that we noniced whilst researching was penetration determine which is when a business initially sets a low price when entering a new market. When the product becomes established, the company gradually increases its price. We found that around 80-85% of companies foundation a new shampoo in the market use penetration pricing as their entry mode strategy.An additional signifi fuckingt trend that we dismiss see in the shampoo market sector is the constant collect for innovation a brand must maintain its emulous advantage by continuously promoting its brand and undertaking research development. This helps to avoid losing market share and customers to its competitors. Out of all the products that are launched in the UK, a 1/4 of those are new shampoos. One example is the launch of Tescos new affordably priced, high quality roam called HBM which targets those most affected by the crisis, offering them professional, salon quality formulations on a budget.Strengths and WeaknessesIn order to compare the companies, we analysed their strengths and then their weaknesses. Firstly we studied the strengths of the global leaders Proctor and Gamble being that they operate o n a large scale and have a strong brand portfolio which includes the well-known Wella brand. A moreover strength is that not only do they offer shampoos nevertheless they also offer a wide variety of other household goods Pampers, Ariel and Duracell.We then studied Unilevers strengths. The group contains many successful brands including shampoos such as VO5 and Tresemme and other FMCGs (Pot Noodle, Comfort, Vaseline and Lynx) if one brand were to suffer fluctuations in sales, it would be supported by the success of another. Within Unilever, each brand is successfully advertised and promoted. A however strength is that there is constant research and development suggesting that Unilever is competing to offer the best they can.Loral doesnt have the support of being a brand within a group however it is more concentrated in one market (the cosmetics market) therefrom bases its strengths in its portfolio. It is a global competitor and supports its UK market with sales in other countr ies (130) and employs in truth successful promotion and marketing techniques by celebrity endorsements.The primary weakness evident with all three main competitors is the stiff ambition that they are subject to within the cosmetics market resulting in constant research and innovation. When studying the weaknesses of these organisations we found that Unilever and PG share similar weaknesses as they are groups which are not concentrated on one market. This can mean they have less expertise and experience possibly being a hindrance. (subivision) LOral has a competitive advantage to these two due to its one market focus. LOrals decentralised organisational structure can be considered an internal weakness as it causes difficulties in managing their world-wide spectrum, a weakness also shared by Unilever and PG. High promotional expenses, primarily from celebrity endorsements, mean that higher investment is taking a substantial riskiness when launching a new product range.SegmentationT his market sector can be segmented in many ways. Firstly it is segmented via demographics the sexual practice, age, race, religious belief and income of a person, within which it can be segmented further into life stages. For example an employed bachelor with a house and only himself to provide for, therefore having a higher disposable income, is able to spend money on luxury products including shampoos. However on the contrary in a Full nest 1 situation, the disposable income is allocated to the needs of others e.g children.A further method of segmentation is through psychographics. This segment considers the activities, interests, opinions, attitudes and values of customers. In relation to shampoo industry, the attitudes and values of customers are considered greatly importance. The psychographic segment has recently become more importance to companies as customers wanting organic and animal friendly products has become an increasing segment with sales increasing by 24% between 2011-2012. LOreals secure of the be Shop in 2006 also opened its doors to a wider customer market. By adopting some of The Body Shops policies such as no animal testing, the refusal to use chemical and products made with natural ingredients, Loreal has recently launched a new line of product befitting to the compose of customer whos psychographics influence their purchase choice.Thirdly there is behavioural segmentation via occasions. However we found that this is not a role taken by the company but a decision taken by the customer. It can be suggested that women in particular tend to use a specific shampoo for a specific occasion. We found that only one shampoo, Tresemme, catered for this type of segmentation, selling their range of salon quality shampoo.Competitor DifferentiationWithin the shampoo market, the competitors segments differ somewhat. LOral have always been known to have more of a focus on women, as do most shampoo brands including Wella, which we can see through t heir recent adverts. However, in recent years as men have started to place more of a focus on self-grooming, LOral has developed both(prenominal) shampoos and beauty products for them as have Wella. Wellas range is segmented into more specific needs of men than LOral, whose range is less extensive. Vo5 however, have equal gender segmentation within the brand but not with their shampoo range.Customer ProfilingWella segments its range into two main sections men and women. Within its range for women it profiles its customers by further segmenting into different needs. Its main focuses are sun damaged hair, condition improving, older age depleting hair and protection for coloured hair. Its focus is similar to those of other brands however it demonstrates some product differentiation in being the only one of the three main competitors which provides a shampoo to care for sun damaged hair. The bottles sell at 4 each showing that although the needs of the customer may differ, the price r emains constant.Wella has a rather extensive range of 10 shampoos to pillow example the needs of men all of which also have their corresponding conditioners. Their range includes Hydrate, Repair, Volumise and again SP Sun uniform with the womens brand. They are more expensive shampoos than other brands on the market for men as they retail at around 9 per 250 ml bottle.The 3 most famous brands in the Unilever group are Vo5, Tresemme and Sunsilk. Vo5 are the most recognised brand used by many people and focus on two main segments gender and styling. As previously mentioned the gender segment is divided equally within the brand, however, they only offer shampoo for women but styling products for both. It can also be noted from publicity that the brand target a young audience of teens and young adults.LOral has 4 main segments for its shampoos which are directed at women (selling through a company called LOral Paris), men (selling through a company called LOral men expert), the elderl y and children (selling through companies called LOral kids and LOral Elvive Age Defying).It also has a small expert range of supposedly higher quality products at higher prices aimed at a higher class.Within these demographics its products are split into the different needs of its consumers.ExpertLoreal also produce a higher quality, higher priced and ultimately higher class shampoo called hair expertise consisting ofEverpure includes a range of 9 products of which 3 are shampoos colour cair and moisture, colour care and volume and colour care and smoothingEversleek includes a range of 6 products of which 2 are shampoos smoothing and moisture and smoothing and intensely nourishEverstrong includes a range of 3 products including only one shampoo reinforcing and vitalityThese are separated into the various needs of the consumers colour care, nourishment, volume, smoothing and moisture similarly to other loreal shampoos but these are aimed at a more affluent customer retailing betwee n 6 and 8 a bottle16Loreal women- EmmaLoriel Elvive for women is broken down into 5 different needs within the demographicThey are coloured hair consisting of a range of 6 products of which 2 are shampoos Colour protect and sustain and Shimmer which both retail at 4 a bottleHard to manage hair consisting of a range of 7 products of which 2 are shampoos smooth silk light and smooth silk intense which also both retail at 4 a bottleDry and damaged hair consiting of a range of 15 products of which 4 are shampoos damage care ,triple resist, full restore 5 and re-nutrition which again all retail at 4 a bottleLong or dull hair consisting of a range of 10 products of which 2 are shampoos nutri gloss, nutri gloss light and nutri gloss crystal which like all the ranges we have seen so far for women retail at 4 a bottleAnd normal hair consisting of a range of 9 products of which 3 are shampoos multi vitamins and the nutri gloss range is also directed at this group. Again these shampoos all re tail at 4 for a 400ml bottle. So as we can see although the target market for each type of shampoo changes for the specific needs of the consumer, the price doesnt and remains consistent throughout.also conditioners, sprays, serums, 2 in 1s, hair masks17LOreal men- JadeWithin the demographic for men Loreal Elvive Men Expert is broken down into only three different segmentsAnti dandruff intensive 2 in 1 shampoo and conditioner, Anti dandruff normal to greasy hair shampoo and regenium xy body building shampoo. These all retail at the same price as womens shampoos 4 for a 400ml bottle. There are other products in these ranges for mens haircare mainly being styling products, but it is noticeable that the spectrum of products is much wider for women than it is for men.18Loreal young and old- YazLoreal have a product range targeted specifically at children called Loreal Kids, each bottle retails at around 2.20Rather than having many products targeted at the various needs of its consumer, in this case as the consumers are children and their hair is less varied in type, they focus more on different aromas of shampoo to meet the different tastes of the children.The one need which children have with shampoo and which is catered for is that their shampoos do not sting their eyes, hence their no more tears slogan. Also to meet the needs of the customer- the parents helping with their childrens hair care routine it is also designed for no more tangles hence the second part of their slogan no tanglesThey do however have a specific shampoo designed to remove the smell of chlorine and salt from hair after swimming.Other products in the range include sprays and conditionersThere is a very limited range available specifically designed for the elderly called age defying which is for those with depleted or thinning hair as they grow older. It retails at the same price as all other loreal shampoos but one will find it when looking, on the womens section of their UK website. This c ould largely be due to the assumption that men will lose their hair when they age rather than have a depleted amount or quality and therefore dont present much demand for such a product.Customer BehaviourCustomer behaviour specifies the amount of involvement in a purchase decision and how frequent certain products are bought. Looking at two types of customers we can distinguish that shampoo can fall into both the variety seeking and the brand loyalty/repeat purchase categories. In the purchasing of a shampoo we have come to the conclusion that there is often low involvement in the decision making process. sometimes people prefer to variety seek meaning that they will search for and try different shampoos, until they find the one that suits their hair the best. In this category price can be seen as an influential factor.On the other hand there are habitual defileers who may take longer in the purchase decision and prefer to repeat their purchases. This could suggest that they have f ound the shampoo that suits their hair and prefer to remain loyal with that one brand. Price may be a less significant factor in this process as people are willing to spend extra for a better do/product OR better quality.Purchasing ProcessThe purchasing process that a consumer goes through first begins with the recognition of a problem, such as the need to treat hair in a specific way. The next stage is to search for information about the shampoo necessary for your hair. After this, the consumer then has to do an alternative evaluation looking at other shampoos based on factors such as recommendations and price. The fourth stage of the purchasing process is the store the consumer chooses to buy the shampoo from and whether they purchase the shampoo online or in store. The final stage of the purchasing process is the post purchase activities such as whether the consumer is happy with the results of the shampoo on their hair.EvaluationConclusionThrough our extensive research we have come to conclude that the hair care industry, especially shampoo, is fast moving and innovative. We pass judgment this due to it being an FMCG but not to the degree that we found. Any company in this market must constantly research and aim to improve its products as competition is high. Not only does this demand come from within the industry but also from the customers. They must produce various versions of their product to fit the consumers requirements which has resulted in such broad segmentation. We have seen this through gender, age and other circumstantial means, and considering how many different types of people there are in the world it is not hard to believe that there is a corresponding shampoo for each and every one of us.AppendixWho are the main competitors in this market sector?pg 44.9unilever 17.7loreal 11.4kao brands compaNT- 10.7own lable- 5.2jhonson- 5.2others 2.7pz cussons 2.2The main competitors are firstly PG, which contain the very well known brands Pantene pro v, head and shoulders and wellaSecondly Unilever who own the likes of vo5 tresemme and sunsilkAnd then Loreal