La Shampoo Case
La Shampoo It was almost 11 P. M. when Caroline Portal left the office. She was exhausted. The day had been filled with one meeting after another, and she wanted nothing more than to crawl into bed and get some sleep. But she couldn’t head home before stopping by the local 24-hour supermarket. The store was enormous -18 aisles of food, pharmaceuticals, stationery, and books, even small appliances. Squinting in the bright lights, Caroline made her way to the health-andbeauty aisle and stood, staring, at the display of La Shampoo on the top shelf.
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Nearby, grouped with other conditioners, was the La Shampoo conditioner. Introduced in 1975 and targeted at women between the ages of 15 and 30, La Shampoo had a stylish image that had immediately become popular. The line had quickly advanced from a strong West Coast regional presence to a solid 4% share of the national market — a position it had held more or less steadily for 14 years. La Shampoo’s basic products and packaging had been modified several times over the years, but its look had remained essentially unchanged.
And its slogan, “La Shampoo: For the Look and Feel of France,” had stayed the same since day one. In 1989, the line had begun a very slow descent, but the company hadn’t really addressed the problem until two years ago, when it named Caroline brand manager. At first, Caroline called for a new packaging design. She knew that La Shampoo was in trouble, but maybe a quick pick-me-up would do the trick. The ad agency backed her up and developed a modest “new look” campaign. This repackaging had caused a lot of tension at the office.
Most of the people who worked on La Shampoo had been with the company for years and couldn’t imagine anything other than a slight variation on the tall, slim, blue plastic bottles with the beige labels and cursive lettering. And, in fact, the repackaging — a wider bottle and yellow label with sharper lettering — had had no positive effect on sales since its introduction eight months ago: the numbers had continued their slow decline. Caroline wondered if many customers had even noticed the change. Caroline shifted her gaze down to the products displayed at eye level.
All newer than La Shampoo. All starting to grab market share. But with no consistent recipe for success — at least none that she could discern. Some claimed to be “green” products, charged a premium, and made out like bandits. One touted a “Low, Low, Low Price! ” and sold huge quantities. La Shampoo had always been a high-quality product, a bit more expensive than its competitors, and its marketing strategy -other than the package redesign -had remained consistent over the years. La Shampoo had always sold on an image of European mystique.
Clearly, though, that message wasn’t working anymore. Bleary-eyed, Caroline left the health-and-beauty aisle and walked slowly toward the exit, deep in thought. The next morning, Caroline was at her desk early, doing some last-minute prep work for an 8 AM marketing meeting with Eric Woolf, her product sales manager, and Beth Hanson, a representative of the advertising agency that held the La Shampoo account. Both had submitted proposals before the meeting; each document was thoughtfully constructed and presented a cogent argument.
However, the two recommendations were radically different. Beth thought that La Shampoo needed a strong brand campaign. Eric wanted to compete on price. Caroline wasn’t convinced either of them had the right recipe, but she did feel strongly that the middle road wasn’t an option. At the meeting, Eric spoke first. “I’m not going to waste anyone’s time mincing words. We need a short-term solution as well as a long-term plan. Some of our key accounts are in jeopardy, and the only way to save them is to lower our prices permanently. ” “That’s not a real solution,” Beth countered. What happens after you cut the price? The competing brands will lower their prices, too, and then we’ll be in the same situation we’re in now. ” “You don’t seem to be getting the point, Beth,” Eric snapped. “La Shampoo is dead unless we discount right now. We need to buy some time in order to save the brand. ” Caroline raised her eyes toward the ceiling but said nothing. Eric was known for getting riled up pretty quickly, and today, it seemed, was no exception. His style worked for revving up his sales force, but it didn’t go over as well in a small conference room. And you don’t seem to understand that you won’t be buying any time by making that kind of move,” Beth shot back. “If you drop the price, you won’t have a brand left to build up. ” Eric stood up and grabbed a black marker. He quickly outlined a bar graph on the wall board depicting national market-share levels of the top shampoo brands and then circled the bar representing La Shampoo, just below the 3% mark. “Here is where we are,” he said. He drew another circle below and to the right of the first one. “Here is where we’ll be in three months without some sort of price advantage. He jabbed at the board, crushing the marker’s felt tip. “I’m telling you, we don’t have the time to develop and roll out a completely new ad campaign. After we’ve stabilized the account, maybe. But not now. I’m even beginning to think that trying to protect any kind of brand name is a losing battle. You’ve read the papers — brands are going the way of the dinosaur. ‘ “You’re too close to the issue to see what’s good for the product,” Beth said. “And you’re too concerned with your own interests,” Eric countered. “At bottom, you want a new advertising campaign because it will be good for your company. The debate went around in circles. After a mere 25 minutes, Caroline could see that discussion of this kind wouldn’t solve anything. She called the meeting to a halt. “I’m going to have to review your proposals again and come to a decision,” she said. “I’d like a commitment from each of you that you’ll support the plan I choose, even if it is not yours. You both know that the only way either of these options will work is if we pull together at every level — and those of us at the top will have to send that message. ” Beth nodded. “I’ll support that,” she said. Eric stood up. I will as well,” he said. “But if you’re seriously considering a new advertising campaign, I think you’ll find out pretty quickly that we’re too late for that kind of move. ” He gathered his papers and quickly left, letting the door slam shut behind him. Caroline was temporarily at a loss for words. She hadn’t expected Eric to leave so abruptly. She told Beth that she’d get back to both of them within a week and followed Eric into the hall, but he was already gone. Back in her office, Caroline returned a few phone calls and then turned her attention to her Email.
She had only one message — from Marni Shin, director of new product development. “Caroline, I’d like to schedule a meeting with you ASAP to discuss the combination shampoo/conditioner our team has been working on. We should have a preliminary conversation about La Shampoo, and whether or not you think our new combo should be rolled out as part of the La Shampoo line. I think it should. Our research indicates that people are increasingly demanding more convenient products like combos. Without some kind of a shot in the arm, La Shampoo will be at the end of its life cycle sooner than we’d all like to think.
And, frankly, it will be an embarrassment to the company if we don’t introduce a combo soon. We’ve been ready for four months. ” “As if I didn’t have enough to deal with,” Caroline said under her breath. The market research was so cloudy that it could be used to support almost any argument. And Caroline had heard Marni talk about new product launches before. Marni clearly had no concept of what was needed to build a brand. But Marni’s limitations weren’t the issue right now. La Shampoo was the problem, and some decision about the marketing plan had to be made soon.
HBR’s cases are derived from the experiences of real companies and real people. As written, they are hypothetical, and the names used are fictitious. Questions: 1/ Define the management problem(s) 2/ Determine the marketing research objectives 3/ Identify the accurate research design and justify your choice 4/ Identify possible sources of secondary data 5/ Design the data collection tools (questionnaire or observation grid or a moderator guide) 6/ Given the method you have selected, select the accurate sampling technique and sample size