The shampoo market is considered mature with growth aligned with the population growth. There are few barriers to entry in the Shampoo market however; a considerable amount of money is needed for ads and promotion and approximately nine out of ten new shampoos fail. Consumer behavior in the shampoo market is relatively complex as they tend to make purchasing decisions at the point of sale (at the shelf). With little brand loyalty consumers are indifferent to what they see during ads on TV and what they end up actually purchasing. Consumers are quick to tire of a particular brand and are willing to try something new due to the low cost of investment, tending to purchase more than one brand at a time. Suave’s position in the market is the low-priced brand with their target demographic being women who are heavy shampoo users between the ages of 18-45 in the middle income bracket. Suave has the longest line of shampoos (40 SKUs) generating the most options for a consumer however; approximately 50% of women had never tried it. Suave’s strategy was to have many choices which would allow for switching within the same brand so that people would not leave the Suave family. Some women believed that since Suave was inexpensive it was not good enough for their hair. Due to this finding Suave launched a new advertising campaign that focused on a more quality image, running the tag line “Suave makes you look as if you spent a fortune on your hair”. Suave had the highest loyalty levels but private label brands were picking up ground. The fundamental problem in this case is what promotional mix Suave should use to stay alive in this industry and continue to grow market share. Suave is a price brand and therefore unable to spend exorbitant amounts of money on advertising and still make a profit. The case state that operating margins have fallen and soon other brands will introduce new low-priced shampoos. To combat this Suave needs...
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