Nielsen and Group Collaborations

Nielsen Market Research on Pantene Case     

Introduction:

Pantene is one product line of Procter and Gamble (P&G) in the shampoo industry. The shampoo industry has a 98% market penetration rate with a 2.8% annual growth rate. The shampoo industry is susceptible to new entrants but market competition is not the only factor competing against Pantene. Most customers purchase shampoo based on habitual auto-pilot shopping mode called “Omega rules.” The omega rules influence customers buying decisions resulting in less time comparing products. Most of the research on new products is conducted prior to the shopping experience.


For a long time now Pantene has accomplished high rates of customer loyalty and is perceived as the number one high quality product in the shampoo industry. Pantene’s reputation is built based on the known parent brand P&G, which is highly recognized in the domestic and global market. Recently, Pantene’s market share experienced a small decline, taking Pantene from 22.5% to 20%. During that same period of Pantene’s decline another shampoo entered the market by the name of Garnier. Garnier’s market share, when entering the market, rose to 5.1% within a year. Pantene saw this as a problem. In order to better understand the decline factors P&G decided to hire a marketing research firm to evaluate the marketing mix of Pantene in comparison to competitors. Thus, Procter and Gamble chose and contracted with the marketing research firm, Nielsen. Nielsen is the leader in market research, ranked in the top five research firms with 16% market share and $31 billion global market research industry in 2010. Nielsen is already matured in marketing research where their role is to provide solutions to their clients for the marketing problems functional area.


The report Nielsen created about Pantene detailed the analysis of the category typology, the brand equity, drivers and associations of equity, the brand personality, the brand packaging, switch triggers, the shopping modality of customers, price appropriateness, and the impact of promotional activity and ad recall. According to Nielsen, all of these categories indicate a winning brand. Pantene scored high among the competitors in all measurable categories except the impact of promotional activity and ad recall. Pantene scored low on the impact of promotional activity that led to purchases which means that the product is not promotion driven (refer to Figure 16). The close competitors of Pantene are more promotion driven: Pantene has 20% of market shares while competitors sunsilk, VO5, and Palmolive have 10.4%, 9%, and 7.1% respectively. Although Pantene has the greatest market share, customers are more likely to purchase the competitor’s shampoos because their promotions trigger the purchase. Largely, the customers who purchase Pantene choose by Omega Rules; they are choosing based on habitual auto-pilot shopping, which is essentially choosing by muscle memory (refer to Table 5). Pantene has the lowest number of customers choosing shampoo by Delta Moments; times in which the customer is triggered to switch products and buy based on promotions, product research, and new brand entrants. Customers who use Pantene are extremely loyal, but the decrease in market share might suggest that the loyal customers are decreasing. Pantene has the highest brand equity in each target age group category (refer to Table 1). The target customers have such a wide age gap, therefore the brand needs to appeal to every age. In general, consumers view Pantene as confident and elegant, but not young, modern and fun compared to Garnier. Although the characteristics of Pantene are not young and modern, the brand is somehow able to appeal to all age groups, except families. For instance, Palmolive is viewed as family-oriented while Pantene is at the opposite end of the spectrum.


The Pantene shampoo packaging is viewed as not durable, not easy to open, and not easy to use in the shower. Altering the package would give the customer a better perception of the brand; to make it appear more user friendly.





Decision Makers:


The decision makers, in this case of the decline in the market shares of Pantene, is Procter & Gamble. As the owner of Pantene shampoo and the father brand name of the shampoo, Procter & Gamble sought out Nielsen Market research as of the most professional and well known firm of researches about consumers purchasing patterns and television advertisement and other social media viewership ranking to gain insight that with hopefully help counteract the declining market share.









Problem Statement:


The market share of the market leader Pantene products are facing a decline from 22.5% to 20% market share; caused by the heavy promotions by competitors, such as Garnier and Palmolive, lack of distributions intensity.


Identify Alternatives:


Pantene can create a partnership with a variation of businesses such as workout facilities, hotels and hair salons.


Create a Family Line of Pantene to embrace the younger and the older generations.


Create a more effective marketing campaign to promote current products.


Analysis of Alternatives: Pros & Cons:


We came up with three different alternatives to combat the declining market share. The first alternative we came up with was to establish a partnership with hotels, gyms, and hair salons will create awareness and associations with new customers. The amount of Pantene being purchased and packaged will be going up. A strategy like this could lend itself to growing the brand. There may not be enough current resources for an increase in travel size items. Associations with gyms and hotels with negative perceptions may create a negative perception with Pantene. The second alternative we came up with was to create a family line of shampoo and shower supplies,specifically something for those under the age of 18 since there are not currently a large number of Pantene users under the age of 18. This would allow for a younger range of buyers. Right now, the age of people using Pantene ranges from 18 and up. By providing a family line, or specifically “Kid Friendly,” no tears shampoo, we can expand the number of Pantene users. However, this would alter the current productions rates and systems of Pantene. Certain parts of production would have to be put on hold or completely changed, along with providing new labor and other jobs such as label design, expanded advertizing, etc. All of these are going to add to the costs. Our final alternative was to focus efforts on establishing a new marketing strategy. This would allow Pantene to stick with their current brand image without having to create new products and designs. They would be able to boost sales, increase brand popularity, and widen the range of customers. Introducing a new or revamped marketing plan is going to increase costs for the company. It will take a lot of planning (possibly creating new jobs), the marketing team with have to pause anything else they are working on or at least decrease the number of staff working on that project.


Action:


We think the best possible alternative would be for P&G to focus on revamping their marketing strategy for their current products and promote their products in hotels and gyms. There are a few different areas that should be focused on, such as the product design, supporting the current brand, and promoting by package promotions or savings deals. The conformance or the style of packaging needs to be changed to meet the new style of broader segment of consumers. This can be an attention grabber to pull in more “Delta moments” to produce more “Omega moments.” Lastly, by Offering more promotions to consumers p&g will enable the trigger switch of changing competitors clients behavior to switch to Pantene.

Implementation & Evaluation:

By taking the recommended actions of applying new marketing strategies, focusing more on the product design and conformance, and reaching the segment of young consumers then; P&G would not have to waste time or resources on creating new products or changing current production to fit those new products. Actually, they would save money on funding, and be able to focus that money on the new marketing plans.


To evaluate the effectiveness of changing the marketing strategies and promotions and creating the partnerships with gyms, salons, and hotels we will survey customers and analyze the sales from each quarter following the implementation. The surveys will be used to ask customers if the travel size items triggered a switch to buying Pantene and determine if the samples increased associations in new customers. Nielsen demonstrated that the majority of Pantene users are Omega Rule driven and engaging consumers who choose based on Delta Moments is crucial. A positive change in sales will inform Pantene if the solutions made a difference in shampoo purchases.


Generalization:


Any products that are able to produce similar products that are equal in quality will automatically provide competition. P&G and Pantene just need to focus on what is the most important for them at the moment. Promotion and positioning is the core marketing concepts of success, but without backing up these main points Pantene gave other companies the chance to take over with their similar products. Bringing in Nielson was helpful in determining what direction Pantene needed to take. Without the information Nielson had provided, it would have been hard to decide if there were any other factors that might have cause the market share decline for Pantene. Now, Pantene will be able to strategize and really focus on strengthening their brand and customer relation, while getting out their names to whole new world of customers through their relationships with hotel, gyms, and other businesses that will publicize their product.




Charts and Graphs:


Figure 16:





This table illustrates that Pantene’s purchases are not triggered by promotion, therefore, promotion should improve in order to lead consumers towards the shampoo.


Table 5:





This table briefly identifies Omega consumers are more prone to purchasing Pantene. Delta consumers are more opposed to purchasing Pantene due to their packaging.


Table 1:





This table briefly describes that Pantene has the highest brand equity by age coming out on top of every age group 18-40+. Garnier and Sunsilk come close with ages 18-20.



Evaluation of Nielsen case analysis by the group and group collaborations :

The Nielsen analysis illustrated what Pantene need to work on such as the promotion part, The need of change in the Packaging of Pantene products to attain and sustain consumers attention. Another factor that affected Pantene market share was, Palmolive, Vo5, and other brands , so in order to compete with those rivals; P&G should use different brand such as Clairol, where Clairol scored high score in the cross brand affinity graph.















The Group collaboration was great overall , When we discussed our individual ideas, we ended up with the same alternatives and results so that builds a good basic line of the group, we also used the chat icon in the shared word docs and powerpoint as tool of live collaboration in adding and changing structure, Great team collaboration and great work.