Introducing New Hair Product Collection

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Introducing the ESSENTIAL hair product series into the market

To:Mr. David Lau

From:Mimien Shuk Chong Poon101463816
Smiley Suet Man Lee100088596
of Class: 21909F-3B

Date:27 April 2012

Hong Kong Institute of Vocational Education
(Tuen Mun)

1. Executive summary
To survive in a highly competitive market, a new product must adopt effective strategies to get a foothold in the market. Facing those strong and mature competitors like Pantene and Rejoice, Essential has to put all those strategies into action promptly to prevent striking down by competitors.

The objective of this proposal is to seek out the threats and problems for the situation of Essential and suggest probable strategies. Through observation and analysis by our team, we have concluded four existing problems. This proposal analyzes the existing problems of Essential and makes advisements on its potential threats.

Recommendations for overcoming the problems are also discussed in this proposal. It suggested that Essential may offers special discounts and gifts for customers to delight them and enhance their loyalty, hold seminars and make advertisements to differentiate the products, and to develop after-sales service to cater and listen to the needs of customers.

2. Introduction
KAO LTD. is a worldwide company founded in 1940 developing consumer product business that targets general consumers. Its business segments include beauty care, premium skin care and hair care products, human health care and fabric and home care, etc. Essential Damage Care series (Essential) is a newly established hair product line by KAO. Since the hair product market is nearly saturated and that is in extremely intense competition, a new product can be easily failed. By our observation, Essential is still not very popular in Hong Kong, and is not selling well as a whole. We aim to illustrate the underlying problems in depth and to offer solutions to successfully introduce the products into the hair product market, enhance sales volume and to sustain its competitiveness after getting a foothold in the industry in Hong Kong.

3. Discussion
4.1 Problem Identified
4.2.1 Intense competition
There are so many homogeneous products in the hair product market to make it becomes competitive. Customer always knows or recognizes what products they need or want, but doesn’t know that there is a product, the Essential hair product series that will fulfill their wants, or other company does. Essential will need to be given the extra effort and really stick to the competition to succeed. The new brand may be at a disadvantage in a competitive market and it could get easily discouraged when it doesn’t get leads to the market. With a lot of established rivals, it might take more time to get a foothold in the market.

3.1.2 Low market share
‘New’ means start from ‘Zero’. A new product starts with low market share all the time. In this stage, Essential is lack of a well-defined cross-functional new product strategy and its products differentiation and positioning (Appendix 1) is relatively weak as well. As a result, its products don’t get enough market shares to support long live and is unable to attract new and profitable market share. Compare with its major competitors, like Pantene and Rejoice (Appendix 2), which are much mature in the hair product market, it does need to take some time and costs to get into the market.

3.1.3 Low popularity
Now, while everyone could use a new product, not everyone will. Some of them will be afraid of anything new and some will be loyal to existing brands. Consumers in different segments differ in the speed with which they adopt new products, in part for economic reasons and in part because of attitudes toward new products. By our observations, Essential is not supported by adequate marketing initiatives and resources as we never perceive any of its advertisements in any places, and...
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