13 Pages
3318 Words
Introduction : Comparative Analysis of Brand Strategies in the UK Shampoo Market
The report delves into a comparative evaluation of Target marketing and the 4P of the marketing mix i.e. Product, Price, Place and Promotion on popular brands Brand A: Head & Shoulders Shampoo and Brand B: L'Oréal Elvive Shampoo. Head and Shoulder brand is a British brand that has manufactured non-dandruff or anti-dandruff shampoo since 1961 by Procter and Gamble (Headandshoulders, 2023). The company mainly emphasise non-dandruff or anti-dandruff shampoo by supplying a large product range basically for identifying dandruff-related issues. In the UK the brand poses 95% awareness among them 40% of users said that they prefer this brand over others (See Appendix 1). The company hold a 16% retail sales market share within the women's hair Care market in the UK (Mintel, 2023).
L'Oreal Paris is a British corporation that holds the largest beauty and cosmetic corporation image. The company was founded in 1932 with more than 30 leading brands in skin care, hair care, cosmetics and fragrance (Loreal, 2023). The corporation also holds a nanotechnology patent in the US (Statista, 2023). The market share of this company has enhanced in the last 2 years and made a jump to 14% from 13.2%. They make a consolidated sale of 39 billion euros across the world.
Findings
1. Comparison of Target Markets
Figure 1: cosmetics and personal care consumption value in Europe as of 2022 by nation
(Source: Statista, 2023)
The above report reflects European cosmetic market shows the 4th highest consumption value as of 2022. Taking over 27% of the cosmetics market of Europe in 2019, skincare persists to be a prevalent power in Europe's cosmetics industry (Statista, 2023). Additionally, according to the Mintel report, women’s haircare product sales make a growth of 5.4% in 2022. Hence there is a significant opportunity to innovate and enhance revenue.
Basically, they focus on 20 to 60-year-old people who are seeking anti-dandruff shampoo to eliminate their scalp problems through everyday use (Kiraz, 2021). They use mass market initiatives to attract a large customer base attraction.
Figure 2: H&S product category to attract customer
(Source: Annual report, 2023)
The above report represents H&S product category strategy to attract customer.
On the other hand, L'Oreal Paris is another brand that also produces shampoo which poses a target market considering psychographic and demographic factors. They target 20- 40 years old women. It attracts those people who want to protect their hair colour along with nourishing it (Inmaculada Sánchez-Labella Martín, Irene Raya Bravo and Valeriano Durán Manso, 2024).
Porter five forces
| Forces |
Factors |
Impact |
| Threat to new entrants |
- Popularity in the brand image:
Head and Shoulder Corporation and L'Oreal Paris Corporation generate their benefits from their brand value and brand interaction with clients that make a challenge for new entrant corporations (Shi, 2021)
- High distribution network
Both the corporation L'Oreal Paris and Head and Shoulder possess large supplier and distributor chains that help them to develop strong distribution networks that create challenges for entrepreneurs or startup business
- Extensive economies of scale:
Buddha Corporation poses extensive economic sales that help them to minimize their operational cost and ensure comparative cost |
LOW |
| Bargaining power of suppliers: |
Both corporations have large supplier ranges across the world that minimize their dependency on a particular supplier
Both corporations have high popularity in the market which provides them with a large range of operation opportunity that minimizes the bargaining power of the supplier (Arockia Doss et al., 2023) |
LOW |
| Bargaining power of buyers |
The client poses a large shampoo collection within the moderate range that increases customers' bargaining power
- Client selection on price:
the large collection of shampoo has different pricing range that have a high impact on their decision, particularly in case of head and shoulder as they work in the large market segment (REVSON, 2020)
Alternative products having the same price that help to generate minimum switching cost among customer who made a perception to switch to another brand considering their needs and preferences |
MODERATE |
| The threat of substitute product |
In the hair and personal care market, there is a large alternative product shampoo available within the market that enhances the high threat to switch to other product
Both brands have popularity in the market that helps them to develop powerful brand loyalty among customer and minimizes their alternative switch
head & shoulder shampoo has a different feature from L'Oreal Elvive shampoo as it has a premium feature that helps to minimize product switching threat |
MODERATE |
| Intensity of competitive rivalry |
Both the corporation head and shoulder and l'oreal Paris function in a red sea that enhances competition within the market
The large market base of both brands enhances pricing competition however head and Shoulder have a minimum price as compression to the L'Oreal Elvive which provides an advantage to Head and Shoulder to achieve a high market share (Sonia et al., 2023) |
HIGH |
Table 1: Porter five forces
(Source: Self-developed)
2. Product-Evaluation of the Products and their Brand Values
The levitt model is based on different organization components such as people, Technology, structure and task. In the task it focuses on its key aims to attract customers while its technology component signifies its different approaches such as state forward and transparent packaging to represent hygienicity (Mindtools, 2023). Additionally, the structure contains its safety in the context of shampoo using a standard design for the bottle to help maintain stability. In the case of L'Oreal Elvive, the product is differentiated by its stylish and slick bottle approaches. The product can be used for all coloured or non-coloured hair. However, the product's core benefit is to protect coloured hair from damage. The shampoo is available in red colour packaging which attracts most customers. The hyaluronic acid element helps to provide nourishment to those who love coloured hair but want to protect hair from colour damage and want frizz-free hair. The customer expectation from the product is maximum.
On the contrary head and shoulder core benefit is providing dandruff dandruff-free scalp while protecting their hair. The basic product is designed in a simple packaging that comes in white. That illustrated the company's simplicity and lighter appearance (Wu, Ai and Xu, 2023). However, customers have high expectations to provide a blend of dandruff-free and nourished experiences. However, the company focuses on other scalp issues.
In the aspect of Aaker's brand personality framework, both brand personality A divided into 5 dimensions such as sincerity, excitement, ruggedness, sophistication and competency
| Brand personality dimension |
Head & shoulders |
Loreal Elvive |
| sincerity |
Illustrated sincerity via simple and practical initiative for encountering dandruff-relevant issues |
Illustrated sincerity through incorporating features of hyaluronic acid to provide nourishment for coloured hair |
| excitement, |
Continuously supplying significant anti-dandruff solution |
Continuous supplying anti-hair damage treatment for coloured hair |
| competency |
The brand initiative to become innovative and possess relevancy in the context of anti-dandruff part |
The brand's vibrant red colour packaging represents latest innovation and trends for protecting coloured hair |
| sophistication |
Resonate with scalp itchiness and dandruff-free selection |
Resonate with sophistication by supplying a premium selection for coloured hair-loving people |
| ruggedness |
Does not contain a rudeness message |
Some product ranges can bring ruggedness since especially for coloured hair damage repair |
Table 2: Brand personality dimension
(Source: Self-developed)
3. Price - Evaluation of the Pricing Strategies Used
Brands' pricing strategy maintenance revolves around selling the product within an affordable range while supplying standard products. The pricing strategy of H&S is based on product value. They demonstrate the product price considering the perceived value which they supply to customers. They supply large product ranges such as exclusive, standard and premium with different price points to attract different customer segments (Pathak, Velasco and Spence, 2019).
Figure 2: head and shoulders top chart pattern
(Source: Cmcmarkets, 2022)
This graph shows how the H&S price patterns increase according to the time. It shows development of right shoulder, head and left shoulder and after that the crypto currency declined via neckline illustrating a sharp declination of their pricing strategy.
On the contrary, Loreal focuses on a premium pricing strategy for the Elvive shampoo. They are unique selling point is reversed around the commitment to beauty industry research and development by developing innovative quality products. This product pricing is mainly focused on middle to upper-class women.
In order to understand both brands’ pricing strategies a table has been provided below-
|
product
|
H&S
|
Loreal Elvive
|
Competing products
|
|
Standard size shampoo
|
2.5-4.5 sterling pounds
|
5-8 sterling pounds
|
Competing for nourishing hair
|
|
conditioner
|
2.5-4.5 sterling pounds
|
6-9 sterling pounds
|
Premium product variants
|
|
Specialised treatments
|
5-9 sterling pounds
|
10-15 sterling pounds
|
Scalp issue solutions
|
Table 3: brands’ pricing strategies
(Source: Self-developed)
4. Place Distribution of the Brands
H&S is largely distributed across the world maintaining its product can be available to all customers in multiple regions and countries. Additionally, the corporation strategically positioned itself as a leader online which helped them to enhance their eCommerce business. Besides that, they also collaborate with different partners to supply exclusive deals with a high product range with increasing store visibility (Edwin, Mohamed and Vergara, 2020).
Figure 3: H&S’s place distribution sales
(Source: Annual report, 2023)
On the other hand, L'Oreal is available on five continents and in 130 countries. It is available in its own brand boutique pharmacy, salons, eCommerce website and cosmetic store showing its significant placing strategy (KANWAR, 2020). The international presence permits them to attract a large customer base by making entry into an untapped market.
Figure 4: Loreal distribution channels
(Source: Loreal-finance, 2023)
In this aspect the CEO stated that digital beauty is one of the most important pillars that focused on increasing amount of the share in E-commerce site in between 2020 up to 23 % from 15 % (L'Oréal, 2022).
5. Promotion-Communications by the Brands
Promotion-Communications of head & shoulder shampoo:
The e-commerce platform for this brand incorporates all the products they sell considering hair type and concern. It has been selected in a method that is effortlessly affordable by UK users considering their problems such as sensitive scalp, itchy scalp, dry scalp and more. They have incorporated a free survey for the customer to address their scalp. H & S product availability is noticed in multiple platforms such as Amazon offering a particular app shopping experience to provide all products under one roof becomes a game changer for the company. On social media, the company is a proactive user (Headandshoulders, 2023). The corporation's relevant new offers, awareness, campaign and products possess relevancy with the articles. They use Twitter, Instagram and Facebook for new services and product awareness enhancement. Indus Media uses campaigns such as detox campaigns, TV commercials, Say It Proud campaigns and many more. In 2022 41% of hair care clients in the UK heard about this brand (Mintel, 2023). They learn about this brand through media, TV and advertising social media. In the cultural aspect, they use 700 dialects and languages while tailoring regional radio advertisements. Additionally, they closely monitor content within social media and review the output that is dropped by the customer on their product is beneficial to establishing an adequate product to ensure customer safety.
On the other hand, in the context of elvive promotion L'Oreal stated that their aim is to acknowledge how their expertise and intimate hair can address the particular concerns of their valuable GCC customer. On Elvive Total Repair 5, they also developed a personalized campaign that represents the science behind their innovative production to suit individual customers' particular digital journey (Lorealparisusa, 2023). They use storytelling personalization initiative instead of developing from a brand point of view. They have already developed nearly 30 tailor videos with 2000 images in the aspect of customer signals. This new initiative provides more relevancies to cultural norm and their point of view resulting in an excellent increment that breaks previous records, particularly in engagement and brand lift. In VTR 53% increment and in CTR 43% increment was noticed (Thinkwithgoogle, 2023). In the Technological aspect, they use UM's ACE personalisation framework that provides them the opportunity to engage with “Google's marketing platform”. That helps them to communicate with large customers.
Conclusion and Recommendations
H&S focuses on anti-dandruff features by using value-based pricing strategy and simple packaging that is available in online platforms, and supermarkets while Loreal L5 focuses on premium product development for coloured hair through a premium pricing strategy that is largely available in 5 continents and 130 countries. Both brands are using social media platforms to reach large customers. In this pricing strategy, loreal can use offers by maintaining an equilibrium between premium features and functionality (Kiraz, 2021).
References
- Annual report (2023). Annual Report. [online] Available at: https://www.annualreports.com/HostedData/AnnualReports/PDF/NYSE_PG_2023.pdf.
- Arockia Doss, A.S., Lingampally, P.K., Nguyen, G.M.T. and Schilberg, D. (2023). A comprehensive review of wearable assistive robotic devices used for head and neck rehabilitation. Results in Engineering, [online] 19, p.101306. doi:https://doi.org/10.1016/j.rineng.2023.101306.
- Cmcmarkets (2022). Head and shoulders pattern. CMC Markets. [online] 31 Jan. Available at: https://www.cmcmarkets.com/en/trading-guides/head-and-shoulders-pattern [Accessed 21 Nov. 2022].
- Edwin, M.D., Mohamed, S. and Vergara, J. (2020). A Study on Consumers’ Brand Preferences Relating to Specific Cosmetic Products among Omani Women. Saudi Journal of Business and Management Studies, 5(7), pp.418–427. doi:https://doi.org/10.36348/sjbms.2020.v05i07.006.
- Headandshoulders (2023). Our history | About us | Head&Shoulders UK. [online] www.headandshoulders.co.uk. Available at: https://www.headandshoulders.co.uk/en-gb/our-history/#:~:text=In%201961%2C%20after%20ten%20years [Accessed 20 Jan. 2024].
- Inmaculada Sánchez-Labella Martín, Irene Raya Bravo and Valeriano Durán Manso (2024). The ‘Cosmetic Feminism’ of L’Oréal Paris. A Study of the Representation of Mature Women from the Perspective of Femvertising. Women’s Studies, pp.1–27. doi:https://doi.org/10.1080/00497878.2023.2292135.
- KANWAR, S. (2020). CONSUMER PERCEPTION OF GLOBAL AND LOCAL BRANDS : COSMETIC INDUSTRY. Dtu.ac.in. [online] doi:http://dspace.dtu.ac.in:8080/jspui/handle/repository/18129.
- Kiraz, L.N. (2021). The role of culture in glocal advertisements of global brands: A comparison between Turkey and United Kingdom. [online] gcris.ieu.edu.tr. Available at: https://gcris.ieu.edu.tr/handle/20.500.14365/332 [Accessed 16 Jan. 2024].
- L'Oréal (2022). Interview: How Supply Chain Evolves to Meet Our Consumers’ Demands. [online] L’Oréal. Available at: https://www.loreal.com/en/articles/operations/supply-chain-transformation/.
- Loreal (2023). L’Oréal UK and Ireland. [online] www.loreal.com. Available at: https://www.loreal.com/en/uki/#:~:text=Established%20in%201932%2C%20L [Accessed 20 Jan. 2024].
- Loreal-finance (2023). L’Oréal Annual Report | A responsive and responsible supply chain. [online] L’Oréal Finance. Available at: https://www.loreal-finance.com/en/annual-report-2022/a-responsive-and-responsible-supply-chain/.
- Lorealparisusa (2023). Elvive Shampoos, Conditioners & Hair Treatments - L’Oréal Paris. [online] www.lorealparisusa.com. Available at: https://www.lorealparisusa.com/brands/elvive.
- Mindtools (2023). MindTools | Home. [online] www.mindtools.com. Available at: https://www.mindtools.com/ac3k6vj/leavitts-diamond.
- Mintel (2023). UK Women’s Haircare Market Report - Market Size & Growth. [online] store.mintel.com. Available at: https://store.mintel.com/report/uk-womens-haircare-market-report#:~:text=Hair%20care%20products%20market%20share [Accessed 25 Oct. 2023].
- Pathak, A., Velasco, C. and Spence, C. (2019). The sound of branding: An analysis of the initial phonemes of popular brand names. Journal of Brand Management. doi:https://doi.org/10.1057/s41262-019-00183-5.
- REVSON, C. . (2020). Competitive strategy. doi:https://nscpolteksby.ac.id/ebook/files/Ebook/Business%20Administration/Principles%20of%20Marketing%204th%20edition%20(2005)/Chapter%20Twelve%20-%20Competitive%20strategy.pdf.
- Shi, X. (2021). P & G Product Strategic Analysis. International Journal of Frontiers in Sociology, [online] 3(17), pp.81–84. doi:https://doi.org/10.25236/IJFS.2021.031713.
- Sonia, S., Suman, R., S., Slim, H., J, O., Ahmed and R, R. (2023). Data-Driven Decision Making for Long-Term Business Success. [online] Google Books. IGI Global. Available at: https://books.google.com/books?hl=en&lr=&id=69LrEAAAQBAJ&oi=fnd&pg=PA356&dq=porter%27s+five+forces+of+head+and+shoulder+and+loreal&ots=uKtUWRB6cq&sig=9bzOVJWX0qJXfFeorCodEY4jzc4 [Accessed 27 Jan. 2024].
- Statista (2023a). Europe: cosmetics consumption value by country 2018 | Statista. [online] Statista. Available at: https://www.statista.com/statistics/382100/european-cosmetics-market-volume-by-country/.
- Statista. (2023b). Total number of employees of L’Oréal worldwide 2010-2022 | Statistic. [online] Available at: https://www.statista.com/statistics/259262/total-number-of-employees-of-loreal-worldwide/ [Accessed 20 Jan. 2024].
- Thinkwithgoogle (2023). Using data to create personalized campaigns. [online] Think with Google. Available at: https://www.thinkwithgoogle.com/intl/en-emea/marketing-strategies/video/loreals-elvive-uses-data-inform-multiple-personalized-creatives/.
- Wu, H.-C., Ai, C.-H. and Xu, H. (2023). Exploring the drivers of pink-seeking intentions among women consumers. Journal of Marketing Communications, pp.1–28. doi:https://doi.org/10.1080/13527266.2023.2183427.
