1. Why is Tom so worried? Give as many reasons as you can. What is Ellen Vallera saying and why?

Following are the reasons why Tom was worried

1. Research shows that Shampoo used by 50% of women never went for brand Suave, while only those who
used are 28% non-current user
2. There is high threat of competition from Hazel 3 (low priced), P&G (low priced) Shampoo and also Gillette
White Rain which led to fragmentation
3. Women are the demographics of Suave tier- rejections having high income and small families (short dyed
hair)
4. Only 2% ahead of previous year sales through October 1983 for Suave shampoo that was, 2% below the
objective set.
5. The changing market dynamics as family’s size would be smaller and women over 52.4 million by 1990
Suave shown poor performance history of new product introduction

Ellen is saying that “company was price brand, increase in advertisements means increase in price and they all were
price sensitive regarding the company”.

2. Has marketing support for Suave decreased, increased or remained the same over the year?

The marketing support for Suave increased overt the years as in evident by the increase in net sales from
1982 to 1984. For fiscal 1985, the marketing program support for Suave was to be increased by 18% as well. The
share of spending also increased from 3.5 to 5.5 from 1981 to 1982 for Suave.

3. Has fragmentation decreased, remained same or increased over the year (in the market)? What will be its
impact on Suave?

The shampoo market was highly fragmented. Fragmentation was increasing over the time . there were only
9 brands that had more than 3% market share and no brand had more than 12%. The increase in fragmentation of the
shampoo market would only result in further disfiguration of market share for Suave once consumer would switch
brand faster with more options available in the market.

4. Calculate growth in dollar sales in SUAVE shampoo and SUAVE line in percentage across years. Do the
same for any other brand (only shampoos)?

Line growth 1983-1984

(89755-99005)/89755=10.30%

The line growth is 10.30%

Sales in 1982= 9.4% x 1082= $101.708m

Sales in 1983=9 x 1160=$ 104.21

Growth in sales = (104.21/101.78) x 100%

=2.574% growth

5.Who buy Suave?

Suave was brought by female heads of household aged 18-45, large families with the buyer were from
heavy German/Dutch neighborhood in rural and downward backward areas in West Central and mountain regions,
selling through retailer.
6a. What do you learnt about brand loyalty in the market in general and of Suave in particular?

Loyalty was an important factor in the industry but it was hard for companies to keep customers loyal as
they would get bored easily and would shop their shampoo brands. Similarity they would use multiple brands at
same time. Suave had higher loyalty level. The user satisfied 37% of their shampoo requirement with Suave where
other private labels brand had 35% loyalty and Flex had 33% loyalty.

6b. Is there any cross purchasing between higher priced and low priced brands?

`there was certain degree of cross selling as customer rarely just one brand and kept on number of brands on their
share. This is future elaborated in exhibit no 5 which shows Suave user also use expensive brands like Flex and
Johnsons.

7. Draw a graph with axes: x = price per ounce and y = share of spending (A/S) and show all brands

8. Analyze Competition

Suave had tough competition with Gillete, P&G, and Hezel Bishop entering market with low priced Shampoo.
Generic and Private label had also posed tough competition to Suave.

. Draw a table comparing SUAVE with Other Brands on Price/oz, Share of Ad spending, % of marketing budget
dedicated to ads, consumer promotion, trade promotion; Strategy, Consumer, Line Length, Competition

9. Draw a table comparing SUAVE with Other Brands on Price/oz, Share of Ad spending, % of marketing
budget dedicated to ads, consumer promotion, trade promotion; Strategy, Consumer, Line Length,
Competition
10. Why Advertise?

Advertising is necessary due to highly competitive nature of the market for increase the brand awareness of
brands, Suave required advertising. It was heaves among its competitors when it comes to total brand awareness.
Data suggest that the brand loyalty among Suave customers was high but awareness was low.

11. Has Advertising helped SUAVE? If yes how? If no, why advertise now?

Yes, advertising did help Suave. Since an increase of 15% in ounces falls of Suave shampoo was
experienced. But advertising was not effective to capture a large number of customers. Day time advertising has
only helped substantially.

12. Who should be the target of Advertising?

Most shampoo markets targeted 18-34-year-old age group. Female heads of household age of 18-45. Large
families with young children, middle income, blue collar occupation tend to be the Suave customer, 28% of women
who had tried Suave were not current user, 50% of women who used Shampoo had tried Suave.

13. Media Allocation: What should be do?

Media Allocation could be between prime-time advertising, day time advertising and print advertising. Prime time
advertising could need more current and potential customer particularly working women.