Pantene Pro"V Shampoo & Conditioner Environmental and SWOT Analysis

Environmental Analysis Introduction: Pantene Pro-V, one of the world's leading hair care products, delivers over $1.7 billion a year to its parent company, Procter & Gamble. Procter & Gamble experiences annual sales of over $40 billion and is one of the world's largest advertisers " ahead of General Motors and Phillip Morris. Pantene Pro-V is targeted at women 18-49, and is positioned as the brand that makes hair so healthy it shines. Situational Analysis: Pantene Pro-V has the best selling shampoo in the world. Marketed in 72 countries, it is one of Procter & Gamble's truly global products. Although "Pantene" has been on the market for over 50 years, it was acquired by Procter & Gamble as part of their 1985 purchase of Richardson-Vicks. At the time, the shampoo's market share was less than one-half percent and it was priced at more than $6 for a 7 oz. Bottle. Procter & Gamble sent the shampoo to its research labs in Taiwan, which came out with a lower cost product, Pantene ProV, named for its vitamin formula, in 1990. Procter & Gamble began promoting it worldwide, turning it into the world's best seller within a few years. Global sales are at an all-time high. However, in the U.S. Pantene Pro-V Shampoo sales have been generally flat. Conditioner sales have dropped .3%. Situational Analysis (continued): In June 2001, Pantene Pro-V was relaunched with new packaging and product enhancements. While much money was invested in the relaunch, it has not yielded the expected results, and there is concern that we may be losing loyal customers. Additionally, there is concern that a downturn in the economy could cause customers to switch to a less expensive shampoo and conditioner. Chief competitors in the Shampoo arena include: Clairol Herbal Essences, Pert Plus, Head & Shoulders, and Suave. Conditioner competitors include: Clairol Herbal Essences, Thermasilk, Infusium 23 and Suave. The U.S. market is saturated. While it may be possible to achieve some market growth domestically, substantial growth is more likely in the international arena. SWOT Analysis Strengths: Global positioning " Pantene Pro-V is regarded as "the only truly global hair product". It is distributed in 72 countries, with market share of close to 30% across most of Europe and Asia. Pantene has a patented formula of Panthenol, Pantethine and vitamin B5. The unique formula penetrates and strengthens the hair shaft and bonds the molecular structure of damaged hair. All products are PH balanced. Strengths (continued): We benefit from the strength of Procter & Gamble. The company has received many awards for its dedication to quality, value, and its employees. P&G markets approximately 300 brands to nearly five billion consumers in over 140 countries. For the fiscal year ended June 30, 2000, P&G had worldwide sales of $40 billion. Pantene is more economical than other "salon quality" hair care products. Its formula can compete with highly regarded salon products like Paul Mitchell, Redken and Nexxus but does so at a fraction of the price. Solutions based approach -- Pantene offers a simplified selection process customized to the consumer's styling needs instead of the traditional hair type. Pantene offers a complete product line. There are five Pantene collections based on styling needs: Volume Care, Smoothing Care, Color Care, Curl Care and Basic Care. The Pantene brand name is strong. Pantene has been on the market since World War II. Its brand recognition is strong. It is #1 in the marketplace. www.pantene.com offers free custom beauty profiles online. Profiles create a collection of products that cater specifically to the individuals hair needs. Pantene Girl and Pro Voice contests attract much attention worldwide. They are a big draw for the teenager and young

adult audiences. Weaknesses: We test our products on animals. This has been a constant source of attack from consumers and competitors. Weaknesses (continued): Pantene is more expensive than supermarket brands. Products like Suave who are known for their low prices continue to eat away at our market share. The recent product launch was done poorly. It did not meet expectations. There may be confusion in the marketplace with past customers. Opportunities: Spending power of American 12-17 year olds has increased substantially in recent years. Recent studies show that today's teenager spends an average of $80 per week. Another study showed that 67.4% of teenagers influence the shampoo purchasing decision in their home. Good potential for expansion of the current target. Hispanic-American market is growing faster than the general population. Few brands concentrate on the Spanish language market. This is an excellent opportunity for Pantene, because according to a recent study this target audience is 30% loyal to a specific brand of shampoo. Good niche market potential. Only 58 % of shampoo users also use a conditioner. An education on the benefits of using both products could yield a spike in conditioner sales. 50% of Americans suffer from dandruff at some point. Pantene's new True Confidence anti-dandruff shampoo could tap into this market. Israel's shampoo market is estimated at $100 million, although Pantene has yet to be introduced in this country. Excellent expansion opportunity. Threats: Shampoos and conditioner markets have low levels of loyalty as people are constantly enticed into trying new formulations and brands. Economic downturn in U.S. is effecting consumer spending level. There is concern that loyal users will switch to a cheaper brand (likely Suave) to save money. The U.S. economic downturn causes a ripple effect throughout the world. This could affect worldwide sales. Competitors Clairol Herbal Essence and Infusium 23 have joined with online distributors to make buying products available over the internet. Thermasilk has followed our lead in introducing a "Solutions" based approach. While our launch did not yield the anticipated results, we have started the education process on the purchase of "solutions". Thermasilk could reap the benefits of that groundwork. Suave has run concentrated marketing efforts designed to lure the "price conscious" consumer. Their product currently sells for as little as 99 in retail stores. Political unrest in Pakistan could affect sales in that region.