Shampoo Market Analysis

wash Market AnalysisThe lave commercialize is one of the fastest moving and innovative fields of the FMCG market. It represents 35 of the EU fuzz-c argon market and is lead by three of import competitors, Procter and Gamble, Unliver and LOral who own agree market administers 44.9%, 17.7% and 11.4%. The attached report discusses the fol upseting points of import market competitorsGrowth, decline, trends and develop manpowerts in the shampoo marketStrengths and weaknesses of the main competitors breakdown of the market and differences between competitors segmentsCustomer compose 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 involve of customers as possible. Wella caters for a wider spectrum than the parvenu(prenominal) competitors various mens packs, various womens packs and even the elderly. It hold backs this theory as it has the highest market s h are as a company. They must too take into consideration the disposable in baffle and current family situation of the customer. They must outlay mathematical products adequately in order to enable the correct guides to barter for their particularized product whilst still making earn as a business.IntroductionThis report was commissioned to analyse the size, structure and prick of the UK shampoo market. Shampoo is a Fast Moving Consumer Good (FMCG) that is the cheapest and fastest moving good within the FMCG effort. Within this we focus on the three main competitors monitor and Gamble with a 44.9% market share, Unilever with 17.7% and LOral with 11.4%.We analysed each competitors strengths, weaknesses, methods and processes to lay each segment of its market.Main competitorsGlob bothy shampoo is the leading segment of the hairsbreadth care industry holding a 40% share of the market. The leading competitor of this area is Proctor and Gamble (P G). Similarly, the equal trend fol downhearteds within the EU as it is over again the most profitable segment of this market with a 35% share of the hair care market. The analogous competitor, P G, also leads the EU industry with 24% of the market value.Growth And DeclineSince the recent nook, the hair care industry has non emerged unscathed. consort to Mintel the recession led to a quarter of shampoo applyrs slip bying less on shampoo, thus contri simplying 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 change helped the hair care market to survive the economic crisis demonstrated by the 165% increases in immature product launches between 2006 and 2008.Trends And DevelopmentsThere has been a number of developments to Shampoo over the years since it first became a product in 1762. In 1890, this then developed into a detergent product, and then the product became raise enhanced when in 1903, Shampoo became a powdered product for the first time. The first shampoo product to appear as it does nowadays came active in the 1960s. Most recently, consumers who are looking for a firm beauty fix hand helped the dry shampoo market double in size in the past twain years. Sales have rocketed by 140 per cent year on year, and interrogation 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 sales will reach up to 17million this year.A trend that we noniced whilst researching was penetration pricing which is when a business initially sets a low price when entering a new market. When the product becomes establi shed, the company gradually increases its price. We found that around 80-85% of companies entree a new shampoo in the market use penetration pricing as their instauration mode strategy.An additional signifi fuelt trend that we can see in the shampoo market sector is the constant have for innovation a brand must maintain its competitive 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 background 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 th ey operate on a large scale and have a firm brand portfolio which includes the well-known Wella brand. A advertize strength is that not exclusively do they offer shampoos simply they also offer a wide variety of former(a) household goods Pampers, Ariel and Duracell.We then studied Unilevers strengths. The sort contains many successful brands including shampoos such as VO5 and Tresemme and new(prenominal) 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 further 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 withal it is much than concentrated in one market (the cosmetics market) therefore bases its strengths in its portfolio. It is a global competitor and supports its UK m arket with sales in other countries (130) and employs very successful promotion and marketing techniques finished celebrity endorsements.The primary weakness bare with all three main competitors is the stiff competition 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 perhaps 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 high investment is taking a substantial risk when launching a new product range.SegmentationThis market sector can be section in many ways. Firstly it is segmented via demographics the gender, age, race, pietism and income of a person, within which it can be segmented further into life stages. For example an employed bach 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 approach 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 set of customers. In relation to shampoo industry, the attitudes and values of customers are considered greatly importance. The psychographic segment has recently become much 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 purchase of the Body Shop in 2006 also undetermined 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 profile 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. enemy 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 s ee through their recent adverts. However, in recent years as men have started to place more of a focus on self-grooming, LOral has developed both 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 all-embracing. 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 retail at 4 each showing that although the needs of the customer may differ, the p rice trunk constant.Wella has a earlier extensive range of 10 shampoos to movement the needs of men all of which also have their corresponding conditioners. Their range includes Hydrate, Repair, Volumise and again SP Sun a equal 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 batch 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 order at women (selling through a company called LOral Paris), men (selling through a company called LOral men expert), the elderly 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 at last 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 between 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 get 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 natural 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 retail 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 work force 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. overly to meet the needs of the customer- the parents helping with their childrens hair care routine it is also intentional 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 websi te. This could 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 label 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 sum 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 universal clouders who may take longer in the purchase decision and prefer to repeat their purchases. This could suggest that they hav e found 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 uncoerced to spend extra for a better service/product OR better quality.Purchasing addressThe 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 side purchase activities such as whether the consumer is happy with the results of the shampoo on their hair.EvaluationConclusionThrough our extensive resea rch we have come to conclude that the hair care industry, especially shampoo, is fast moving and innovative. We judge 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 prov, head and shoulders and wella secondly Unilever who own the likes of vo5 tresemme and sunsilkAnd then Loreal