SALON HAIR CARE PRODUCTS: Trade Perception and Satisfaction Analysis

Transcription

1 SALON HAIR CARE PRODUCTS: Trade Perception and Satisfaction Analysis A first-edition study on how to retain current salons and distributors and acquire new ones, offering an optional focus on perception and satisfaction at either the salon or distributor level KLINE & COMPANY, INC. OVERLOOK AT GREAT NOTCH 150 CLOVE ROAD, #10 LITTLE FALLS, NJ (3)

2 INTRODUCTION Kline & Company, a leader in business-to-business perception and satisfaction research, is pleased to announce to the salon hair care market a new trade perception and satisfaction analysis. This analysis will focus on perceptions and satisfaction at the salon and/or distributor level and loyalty toward marketers of salon hair care products, examining categories such as hair colorants, styling aids, and perming products. Salon hair care products represent a $2 billion market composed of 155,000 retail establishments. While the market is fragmented, chains are growing in market share, and industry experts recognize about 150 chains in operation in Serving this market is a complex web of some 1,200 distributors each with an average of four locations and 10,000 cash-and-carry outlets. As with most industries, however, marketers are consolidating, and as consolidation continues, most of the surviving companies are offering a stable of similar products that are sometimes sold through multiple full-line subsidiaries. This means that many different factors can influence the decision of what marketer is selected. SALON HAIR CARE PRODUCTS: Trade Perception and Satisfaction Analysis has been specifically designed to assist marketers of salon hair care products in answering a variety of strategically challenging questions about their markets, including: How are we viewed by current and potential salons and/or distributors? How do we rank against our competitors in servicing the market? Is our image in the marketplace as strong as we think it is? How are our technical service product development capabilities perceived by salons and distributors? How should we prioritize critical salon and distributor issues? Has a recent trade service initiative achieved the desired effect with salons and/or distributors? What improvements in the way we meet our trade partner needs will generate the biggest return? Because this is a new service, charter subscribers will have the opportunity to provide input regarding the scope of the study. Depending on subscriber preference, the report data will focus on trade perceptions and satisfaction at either the salon or distributor level. If sufficient interest is demonstrated, both options may be explored in the report. REPORT PROGRAM AND SCOPE - Purchase decision factors - The basis for the report and the first step in this analysis is an importance rating and performance evaluation. Each major marketer will be rated according to 10 to 15 key purchase decision factors and sub-factors that are important to users or distributors of salon hair care products. The initial list of factors will be created from those listed below. The final list will be developed in conjunction with charter subscribers.

3 Adequate number of new products introduced during a year Bonus packs Complete product range Consumer promotions (GWP, PWP) Discounts/price offs Free smocks and styling aprons Innovative products Merchandising fixtures and display racks Merchandising material and collateral literature On-time delivery Overall value Package design Price Product quality Response to inquiries Samples/testers Service Training and educational materials Training schools Any low overall rating will be followed up with a request for an explanation. Our analysis will determine the importance of the selected factors, the performance of marketers in these areas, and the way in which these and other factors are linked together in the purchase decision process. Specific sub-factors will be developed to support the product quality factor. For example, product quality for hair coloring products could include: Color range Ability to cover gray Fragrance Resistance to fading Coloring tools (application bottles, bowls, brushes, etc.) Shade charts, swatch books, swatch rings A separate list will be developed for each product category with charter subscriber input. - Marketer Importance - Marketer importance is measured by three positions: a distributor/salon (1) is aware of but does not buy products; (2) purchases product but the firm is only a secondary source; or (3) considers the firm a major source. Differences in marketer importance will be used as a comparison to clarify performance ratings on the purchase decision factors and to help determine which marketers best retain their salons and distributors. We expect to evaluate a maximum of six marketers, depending on statistical reliability. Based on the likely frequency of marketer mentions, we expect to include some or all of the following marketers in our report: L Oreal (Matrix, Redken) Nexxus John Paul Mitchell Procter & Gamble/Clairol Shiseido/Zoto Wella Figure 1 provides an example of a deliverable for the marketer importance analysis.

4 Figure 1 MARKETER AWARENESS ANALYSIS 100% 0% 80% 0% 0% 50% 0% Major marketer Secondary marketer Company 1 Company 2 Company 3 Company Company 5 Company Aware of but not a marketer - Best Practices Analyses and Competitive Priority Matrix - The Best Practices analyses provide a benchmark of marketplace satisfaction for each salon hair care products company analyzed, based on the marketer purchase decision factors selected for the needs analysis. By statistically analyzing the performance ratings, we will be able to provide a quantitative measure of each firm s performance in meeting the expectations of salons and/or distributors. This will also identify ways to improve subscribers understanding of evolving needs of distributors and salons. The following questions will likely be addressed: Which marketers are the leaders from the trade (distributors and salons) perspective? What are the strengths of salon hair care products firms as perceived by the trade? What are the relative strengths and weaknesses of salon hair care products companies versus their competitors? What improvements in performance will generate the biggest revenue response? How are purchase decision factors clustered into groups of sub-factors, and how does that affect the buyer s decision? Figure 2 provides an example of a deliverable for the Best Practices analysis, a tool that measures differences in performance perceptions by salons and/or distributors for each company examined in the study.

5 1 0.5 Competition outperforms vs. Company X Figure 2 BEST PRACTICES ANALYSIS Marketer A Marketer B Marketer C Company X outperforms vs. competition Internal Mirror Analysis and client questions (optional component) - The Internal Mirror Analysis enables subscribers to evaluate the perceptions of their own personnel who are actively involved with accounts (e.g., sales, service, technical support). These will be compared with the findings of the external (trade) survey. Selected questions that will be answered in this phase could include: Figure 3 provides an example of a deliverable for the internal mirror analysis. Subscribers who purchase this option will also have an option to add two client-specific questions. Figure provides an example of the format that will be used to depict the areas of improvement that will generate the biggest market response. RESEARCH METHODOLOGY Kline & Company will utilize a carefully sequenced program to meet charter subscriber objectives, as described in Figure 5. In order to ensure that the survey meets the needs and objectives of the subscribers, Kline will conduct a kickoff meeting with each subscriber to discuss the program objectives and segmentation, as well as to brainstorm the design of the survey. The final survey instrument will be determined by Kline, taking into consideration the collective needs of the subscriber base. The most critical phase of our methodology will be the survey interviews, the majority of which will be carried out via telephone. We will interview purchasing agents/buyers at distributors and/or owners/managers of the salons. Depending on the number of subscribers to this report, approximately 00 salon interviews or 200 distributor interviews will be conducted, with each respondent evaluating a maximum of three companies.

6 10 Figure 3 MIRROR ANALYSIS Marketer-Specific True Importance Internal Importance True Performance Internal Performance Figure COMPETITIVE PRIORITY MATRIX Marketer Versus Consolidated Competition High Importance of attribute Low 3 2 Ahead WIDEN 5 THE ADVANTAGE MAINTAIN POSITION REVIEW 11 PERIODICALLY 15 NOTE: Numbers represent attribute plotting. 1 CREATE AN ADVANTAGE MAINTAIN POSITION 13 REVIEW PERIODICALLY Equal Competitive gap 1 1 ESTABLISH 8 PARITY THEN CREATE ADVANTAGE ESTABLISH PARITY REVIEW PERIODICALLY Behind

7 Figure 5 TENTATIVE REPORT SCHEDULING AND TIMELINE Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Presurvey meeting with subscribers Questionnaire design and receipt of customer lists Primary research interviews Analysis and custom report writing Subscriber presentations TENTATIVE SCHEDULE If sufficient subscriber interest is received by April 15, 2003, presurvey meetings with subscribers will be held in May The presentation of the customized report will then be tentatively scheduled for October and November A tentative report schedule is provided in Figure 5. REPORT DELIVERABLES Each subscriber will receive a customized report, delivered electronically in PowerPoint format, containing the analysis of the structured questionnaires and open-ended questions. For each subscriber, the Kline project team will conduct a half-day of strategic planning assistance, featuring a personalized presentation and discussion of key report findings. If individual subscribers opt to purchase the internal mirror analysis component, an analysis of the key findings, conclusions, and recommendations for this component will also be presented and discussed. Subscribers also have the option to purchase an interactive CD-ROM model so that they may carry out their own specific what if analyses and data cuts. SUBSCRIPTION OPTIONS AND CONDITIONS SALON HAIR CARE PRODUCTS: Trade Perception and Satisfaction Analysis is only available by subscription. Specific details regarding subscription options, conditions, and pricing are described in the attached subscription agreement. To subscribe now, please complete the subscription agreement and forward it to our office. To obtain more information about the study, please contact Lenka Contreras at (3) or Lynn Gillette at (3)

8 SUBSCRIPTION AGREEMENT Please fax signed agreement to SALON HAIR CARE PRODUCTS: Trade Perception and Satisfaction Analysis Please enter our subscription to your comprehensive study SALON HAIR CARE PRODUCTS: Trade Perception and Satisfaction Analysis. This subscription includes the deliverables we have selected below, plus one day of strategic planning assistance within the scope of the study. To protect our investment in this report and that of other subscribers, we agree that, for a period of three years after its date of issue, we will: (1) refrain from reproducing or copying this report in whole or in part by any means; (2) restrict its circulation to our own employees; and (3) use all reasonable precautions to prevent the disclosure of its contents to any other persons or organizations. We may, however, make this report available to any subsidiary company in which we hold more than half interest or to any parent company that holds more than a half interest in our firm. We may also use or disclose any information in this report that is public knowledge, that was already in our possession before receipt of the report, or that comes to us from third parties independently of this report. Kline & Company, Inc. similarly agrees that it will use all reasonable precautions to prevent the disclosure of the contents of this report to any persons or organizations other than subscribers for three years after its date of issue. We understand that SALON HAIR CARE PRODUCTS: Trade Perception and Satisfaction Analysis is available only by subscription. Subscription prices do not include sales tax. (NJ add % sales tax.) You will invoice us for the total amount, and we will pay this invoice within 15 days of receipt. We understand that if a sufficient number of charter subscribers is not obtained, the study will be canceled before an invoice is submitted. We further agree that if this study is launched, this agreement is fully binding on the corporation and non-cancelable. Domestic ground shipping within the United States is included in the subscription price. Overnight and international shipping fees are optional and will be added to the total amount. Study options Standard price (U.S. funds) Discounted price (U.S. funds) (valid through Feb. 28, 2003) Amount (please fill in price) Three hard copies of the report - Salon $28,000 $22,00 Three hard copies of the report - Distributor 2,300 21,200 Internal mirror component plus tailored questions 5,000,000 Interactive CD-ROM model 1,500 1,500 Subtotal NJ only: % sales tax TOTAL (U.S. funds) We have completed and signed this subscription agreement. Please indicate your acceptance of this subscription by countersigning and returning one copy for our files. Send invoices to: COMPANY NAME SIGNATURE DATE TITLE NAME ADDRESS TITLE PHONE PURCHASE ORDER # Shipping address (if different than billing address): Kline use only: NAME ACCEPTED TITLE SIGNATURE ADDRESS NAME TITLE DATE METHOD OF PAYMENT: Send invoice Card #: Exp. Date: Name (as it appears on the credit card): Signature (for credit card authorization): Y553