US Shampoo: A Tale of Two Brands MATRIX AND PANTENE
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1 US Shampoo: A Tale of Two Brands MATRIX AND PANTENE 1
2 Our model of consumer decision making is your brand Meaningfully Different? Successful brands are Meaningful, Different and Salient Predisposition and in-market activation allow us to determine what drives your financial performance and the best way for you to leverage volume share and/or to justify your price point now and in the future. 2
3 What is the overall current equity for Matrix and Pantene? POWER AND PREMIUM 3
4 We assess current brand equity using two of our key predisposition metrics POWER is a prediction of the brand s volume share based purely on perception, absent of activation factors. We report the Power score as a percentage share because we want to reflect the relationship it has with Volume Share. PREMIUM is the ability of a brand to command a price premium relative to the category average, based purely on perceptions. We report the Premium score as an index because we want to reflect the relationship it has with in-market Price Index. All the predisposition metrics are based on the same foundations (Meaningful, Different and Salient) combined in different ways. All are validated to in-market results. 4
5 Brands with high Power drive market share and brands with high Premium can charge more We have learned brands that are Meaningfully Different are the ones that generate greater volume share and can command premiums. VOLUME BOUGHT (index to average) PRICE PAID (index to average) POWER PREMIUM LOW MEDIUM HIGH LOW MEDIUM HIGH Source: Shopcom panel data merged with equity survey responses. Based on comparing Power and Premium scores to shopping habits of 1600 consumers. Analysis includes 65 brands in 4 categories. Low = bottom 25%, Medium = middle 50%, High = top 25% 5
6 Pantene is the strongest brand in the market in terms of brand equity The strong predisposition that consumers have for Pantene translates into a willingness for consumers to pay more for that brand. Meanwhile, the Matrix brand may not generate massive volume, but consumers are willing to pay a high price for it. POWER Are consumers predisposed to choose you? KEY Brands with high Power AND Premium Brands with high Power OR Premium Brands with low Power AND Premium PREMIUM Are they willing to pay more for you? 0.0 Pantene Pro V Suave Fructis Clairol Herbal Essences Dove Tresemmé Head & Shoulders Nexxus John Frieda Aussie L'Oreal Neutrogena Matrix Johnson's Thermasilk Store brand
7 PREMIUM - Are they willing to pay more for you? A quadrant map of Power and Premium shows the strength of Pantene even more clearly, leaving its competitors far behind Matrix sits in a clear niche, premium position along with its close competitors: John Frieda and Nexxus PREMIUM BRANDS POWER PREMIUM BRANDS MATRIX JOHN FRIEDA PANTENE PRO V NEUTROGENA L OREAL AUSSIE NEXXUS TRESEMME DOVE FRUCTIS CLAIROL HERBAL ESSENCES HEAD & SHOULDERS 90 THERMASILK 80 JOHNSON S SUAVE STORE BRAND KEY Brands with high Power AND Premium Brands with high Power OR Premium Brands with low Power AND Premium UNDERPERFORMING BRANDS POWER - Are consumers predisposed to choose you? VALUE BRANDS 7
8 PREMIUM - Are they willing to pay more for you? By looking at actual price compared with Premium we can understand whether brands have the opportunity to charge more Pantene chooses to build market volume power and strong relationships, rather than trade on the opportunity they have to charge more. Although expensive Matrix is worth every penny. 115 PANTENE PRO V JOHN FRIEDA MATRIX 110 FRUCTIS NEXXUS TRESEMME DOVE L OREAL CLAIROL HERBAL ESSENCES AUSSIE NEUTROGENA 95 HEAD & SHOULDERS JOHNSON S SUAVE ACTUAL PRICE INDEX (Shopcom) 1.2 8
9 Where does the equity for Pantene and Matrix come from? BEING MEANINGFUL, DIFFERENT AND SALIENT 9
10 To understand equity - we need to look at whether brands are meaningful, different and salient Being Meaningful, Different and Salient is the foundation for creating a strong brand. Using these foundations we can combine the measures to understand how predisposed consumers are to a brand. 10
11 Depending on the objectives for your brand - growing Premium or Potential - being Meaningful, Different or Salient may become more important 47% 50% 14% 48% POWER PREMIUM 38% 3% In the Haircare category POWER or Volume is driven by Meaningful and Salient. However if brands want to charge a PREMIUM, they need to be Meaningful and Different. 11
12 Understanding how Meaningful, Different and Salient your brand is: The Propeller 1. First we plot how important Meaningful, Different and Salient are in explaining Power within the category, as in a pie chart. 2. We then add how strong your brand performs on each of Meaningful, Different and Salient. The numbers are indexed against the category average. 3. We overlay an average circle (100) so you can see how your brand is performing compared with the category. 4. The final red circle in the centre indicates your brand s Power, the likely share of market of your brand based purely on predisposition. 12 Meaningful Different Salient Power Index 100
13 Understanding Meaningful, Different and Salient in the Haircare market With its strong Power score, it is unsurprising that Pantene is both Meaningful and Salient. But unlike immediate competitors, it also manages to be Different. This above average level of Different for Pantene means that although a mass market brand, consumers would be willing to pay a premium. This puts it in a strong position in comparison with close competitors. Fructis Suave Herbal Essences Meaningful Different Salient Power Index
14 Understanding Meaningful, Different and Salient in the Haircare market Looking at the smaller, more niche brands, Matrix and direct competitors are also viewed as being Different and Meaningful - but are, of course, weak for Salient. The weak level of Salient is causing Matrix to have a low Power score. However these small, specialist brands are Different and ultimately worth more because of their exclusivity. Nexxus John Frieda Pantene Pro V Meaningful Different Salient Power Index
15 How can equity for Pantene and Matrix be leveraged? What are the steps to take to improve? BRANDDYNAMICS DIAGNOSIS AND IN MARKET ACTIVATION 15
16 Image associations drive the components of equity We build models for each study which help us identify how image associations group together to drive the components of equity. Look really good Care for your hair Functional Feel confident Makes you feel happy Emotional Good deals / price discounts More acceptable price Value Meaningful Heard a lot about Have great advertising Is the most famous Unmistakeable look Are fun to talk about Like to post or read Would follow Buzz Fame Community Different Salient POWER Feel a connection to others Values that you identify with Affiliation Make lives better Values you can connect with Purpose / Ideal 16
17 Using the Image Diagnosis we are able to simulate the best way forward for brands Our simulator is designed to help clients optimise investments for better returns It will simulate what might occur in different scenarios for the brand It provides a simplified representation of marketing processes used to understand how to predict or control +1% +5% +3% +3% +1% +2% +3% 17
18 For the US Shampoo data there are 11 independent levers that we can pull to influence brand predisposition Functional Associations Emotional Associations Value/Price Buzz Make your hair look really good Care for your hair better than others Are always trying to improve their products Make you feel confident You have a higher opinion of than others You would be proud to use You trust more than others Using them makes you feel happy You want to be seen using Understand what is important to you Are a part of you and who you are Always offer good deals or price discounts Are at a more acceptable price than other similar shampoos You have heard a lot about recently Have great advertising Purpose/Ideal Affiliation Environmental /Natural Distinctive Committed to make the world a better place Are trying to make people s lives better Improve people's lives Have values you can identify or connect with Would make world worse if they did not exist Are authentic Would deserve a second chance if they made a mistake Feel a connection to others Have values you identify with Contain more natural ingredients than others Are more environmentally friendly than others Stand for something unique Offer something different to others Are different in a good way Fame Is the most famous brand of shampoo Easier to find than others Have an unmistakable look (Too) Exclusive Cost more than you are prepared to pay Are Glamorous brands Are difficult to find Only appeal to specific type of people Community You would like to post or read about online Are fun to talk about Feel a connection with other users Like to follow on social networking sites Listen to you don t just talk at you Empower you Quality Barrier Don t care for hair well enough Don t make hair look good enough Are too cheap to be of an acceptable quality Contain too many artificial ingredients 18
19 Building Power in Haircare is about balancing emotional and functional characteristics, with value Emotional Associations 34% Associations that have a negative contribution Associations that have a positive contribution Purpose / Ideal 4% Buzz 5% 15% Value/Price Exclusivity Barrier -6% POWER Fame 6% Quality Barrier -6% 7% Community 7% 10% Distinctive Functional Power: Emotional benefits at a good price, built on strong functional foundations. NOTE: Value and Environmental / Natural make small positive contributions 19
20 The mass market Pantene performs well on emotional and functional values. It is also thought of as famous Importance to Power Pantene Pro V Emotion Price value Function Distinctive Make you feel confident Higher opinion Proud to use Trust more Make you feel happy Want to be seen using Community Quality barrier Understand what is important to you A part of who you are Fame Exclusive Buzz Make your hair look good Care for your hair better Always trying to improve their products CSR/Affiliation Value environment Most famous brand Easier to find Have an unmistakable look Pantene should continue to appeal to consumers at both an emotional and functional level. Because they are stronger on functional values they could consider building emotional associations (especially given its importance to Power). 20
21 But which emotional associations to build? Looking at how the emotional and functional associations group together will help direct recommendations for Pantene. You trust more than others NEUTROGENA THERMASILK Care for hair better than others You would be proud to use NEXXUS JOHN FRIEDA DOVE You have a higher opinion of than others MATRIX TRESEMME L OREAL You would want to be seen using Make hair look really good AUSSIE Make you feel confident about yourself HEAD AND SHOULDERS Understand what is important to you Are always trying to improve their products PANTENE PRO V FRUCTIS CLAIROL HERBAL ESSENCES SUAVE Axis % Are part of you and who you are Using them makes you feel happy = Correlation < 0.50 Bi-plot analysis Axis % 21
22 Leveraging Functional Associations From the positioning map we see that in the Haircare market some functional benefits are clearly related to more emotional associations. Pantene has particularly strong Functional associations. They could leverage these in an emotional way to help build strength in understand what is important, proud to use, want to be seen using and confidence. FUNCTIONAL ASSOCIATIONS Always trying to improve their products Relate to EMOTIONAL ASSOCIATIONS Understand what is important to you Care for your hair better than others You would be proud to use Make hair look really good You want to be seen using Make you feel confident about yourself 22
23 To justify a Premium for Haircare brands the most important thing is to avoid perceptions of poor quality... Quality Barrier QUALITY BARRIER -28% Doesn t care for hair well enough Doesn t make hair look good enough Others* Fame Exclusivity 4% 6% 3% 17% Emotional Associations Is too cheap to be of an acceptable quality Contains too many artificial ingredients Community 5% PREMIUM Purpose / Ideal 5% Buzz 7% 11% Functional 14% Distinctive Associations that have a negative contribution Associations that have a positive contribution strong Emotional and Functional associations are also key, but the offer has to be Distinctive and preferably supported by some Buzz. * Value and Environmental / Natural make small positive contributions 23
24 IMPORTANCE TO PREMIUM For Matrix, we need to understand what helps drive their strong Premium score In addition to emotional and functional associations, which are important in explaining Premium, they have strong exclusivity associations. HEATING UP HOT QUALITY BARRIER They are not considered to be particularly distinctive and this is important for Premium. Something they could try to build in the future. Negative Contribution Positive Contribution EMOTION 15 DISTINCTIVE 10 FUNCTION BUZZ 5 CSR/AFFILIATION PRICE VALUE FAME COMMUNITY VALUE ENVIRONMENT EXCLUSIVE MATRIX
25 Matrix makes consumers feel proud and they want to be seen using it. It s also glamorous and expensive EMOTION EXCLUSIVE Make you feel confident You have a higher opinion of than others 9 12 Cost more 56 You would be proud to use You trust more than others 4 13 Glamorous 51 Using them makes you feel happy Want to be seen using 4 12 Difficult to find 25 Understand what is important to you Part of you and who you are 2 3 Only appeals to specific people 22 These are key strengths for Matrix to leverage 25
26 Understanding In-market Barriers and Facilitators Understanding how Volume flows between the brands and what happens in-market enables us to link brand predisposition to volume share and completes the pieces of the consumer decision making model Bridging the gap between intent and action 26
27 The Volume Flow analysis is anchored in the linkage between Predisposition and Volume The framework allows us to assess inherent brand strength but to also break out volume opportunity and risk. % of market which is DIVERTED away from you % of market which is CONVERTED to you at the point of purchase % of market who is predisposed to choosing you % of market who is buying you In-Survey Volume POWER % of market which is FULFILLED for you 27
28 Volume Flow analysis 5.5% 1.8% Diverted Predisposition/ equity that doesn t translate to Volume 8.0% Converted Volume not due to predisposition/ equity Total Volume 19.4% Fulfilled Volume due to predisposition/ equity 11.4% 1.3% 1.1% Total Volume 2.4% Around 40% of Pantene s volume share is not due to its strong levels of equity. It is thanks to the sheer in-store presence of a brand of its size. More than half of Matrix s equity is not translated into sales = a huge opportunity for them to leverage on the strength of their brand in store. 28
29 In Market Barriers and Facilitators: Pantene Pantene leverages its strong distribution in-store using deals and packaging to encourage those who have no predisposition for the brand to choose them. 5.5% Diverted % Converted 11.4% Fulfilled Power Share Good price Competitors cost too much Deals and promo Unmistakeable look (packaging) Easy to find Competitors hard to find Total share of volume Diverted Converted Fulfilled Predisposition/ equity that doesn t translate to Volume Volume not due to predisposition/ equity Volume due to predisposition/ equity 29
30 In Market Barriers and Facilitators: Matrix Matrix does not activate well in-store. It should consider improving its packaging to leverage its exclusive associations with the aim of becoming unique, easy to find and unmistakeable % 1.3% Diverted Converted 1.1% Fulfilled Power Share Good price Competitors cost too much Deals and promo Unmistakeable look (packaging) Easy to find Competitors hard to find Total share of volume Diverted Converted Fulfilled Predisposition/ equity that doesn t translate to Volume Volume not due to predisposition/ equity Volume due to predisposition/ equity 30
31 What is the future potential for Matrix and Pantene? POTENTIAL 31
32 We assess future brand equity using our final predisposition metric: Potential POTENTIAL Consumers are predisposed to stick with the brand in the future, or try it. This will prime the brand for future value share growth. AVERAGE VALUE SHARE CHANGE (%) % Brands Gaining Share vs. % Losing Share 19% 33% 47% % brands gaining share % brands losing share 37% 25% 52% LOW MEDIUM HIGH LOW MEDIUM HIGH Source: Millward Brown s validation dataset, including 350 brands from diverse categories (CPGs and non CPGs). Lose/Gain 0.2 points of market share. Low = bottom 25%, Medium = middle 50%, High = top 25% 32
33 POTENTIAL - Is your brand set to grow in the future? Plotting Potential against Power allows us to sort brands into simple typologies As a result of its inherent brand strength Pantene is likely to hold its value market share in the future. Matrix; a strong little brand that s going place is also primed to grow. HEATING UP HOT PANTENE PRO V MATRIX JOHN FRIEDA THERMASILK NEUTROGENA NEXXUS FRUCTIS CLAIROL HERBAL ESSENCES STORE BRAND L OREAL DOVE TRESEMME JOHNSON S AUSSIE HEAD & SHOULDERS SUAVE COLD POWER - Are consumers predisposed to choose you? COOLING OFF 33
34 Understanding Pantene brand equity With a strong Power and Premium score, Pantene has great predisposition which translates into a willingness for consumers to buy more and pay more for the brand. Pantene is such a strong brand because it is thought of as being Meaningful, Different something that is not a strength for its near competitors - and Salient Pantene has a broad base of functional associations and could use these to help build stronger emotional associations for the brand. Pantene has good in-store presence. Which means it gains a significant amount of sales not due to equity (rather good distribution). Pantene leverages this distribution using deals and packaging. 34
35 Recommendations for Pantene Pantene is a very strong brand with a range of emotional and functional strengths. These associations translate into Pantene being Meaningful, Different and Salient. They should use these strengths to continue to create a buzz around the brand and be on the look out for emerging trends. Pantene does not translate all of its strong equity into sales. It could leverage its current in-store strengths (packaging and deals) even further to turn this opportunity into volume. Pantene should leverage their functional associations in an emotional way to help build strength in understand what is important, proud to use, want to be seen using and confidence. 35
36 Understanding Matrix brand equity Because Matrix is Meaningful and Different, consumers think of it as being worth more despite the fact that amongst the total sample, it has low levels of Power. Matrix is thought of being worth more because of associations with exclusivity. The brand makes consumers feel proud and they want to be seen using it. Matrix does not activate well in-store and more than half of Matrix s equity is not translated into sales. 36
37 Recommendations for Matrix Given Matrix s position in the market, it should consider growing levels of unique standing for something unique or being different in a good way. We know that this could help them grow levels of Premium which will help overcome the price barrier and ultimately grow share. There is a huge opportunity for Matrix to leverage on the strength of their brand in store. It should consider improving its packaging to leverage its exclusive associations with the aim of becoming unique, easy to find and unmistakeable. 37
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