Executive Briefings

What Does Manufacturer Do About Tired Hair-Care Product Sales? Reduce SKUs, for One Thing.

Procter & Gamble is hoping that the third revamp since 1999 of Pantene, its biggest beauty brand, will restore sales in the U.S., where competition from cheaper rivals-including private-label alternatives-has intensified with the recession. Two-thirds of Pantene shampoo varieties saw sales declines in the 52-week  period ended Apr. 18, according to SymphonyIRI Group, a Chicago-based research firm. P&G, like other big consumer-products companies, also has been under pressure from big-box retailers and drugstore chains that are trying to cut down on brand clutter. "You'd go to CVS or Wal-Mart and the whole shelf would be Pantene," says Ali Dibadj, an analyst with Sanford C. Bernstein. "They added more and more products that confused the consumer."

As part of the relaunch, P&G reduced the number of shampoos, conditioners, and styling aids by close to one-third, to around 116 products. The entire line has been reorganized around four specific hair types-color-treated, curly, fine, and medium-to-thick-and color-coded to make selections easier for shoppers.

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Procter & Gamble is hoping that the third revamp since 1999 of Pantene, its biggest beauty brand, will restore sales in the U.S., where competition from cheaper rivals-including private-label alternatives-has intensified with the recession. Two-thirds of Pantene shampoo varieties saw sales declines in the 52-week  period ended Apr. 18, according to SymphonyIRI Group, a Chicago-based research firm. P&G, like other big consumer-products companies, also has been under pressure from big-box retailers and drugstore chains that are trying to cut down on brand clutter. "You'd go to CVS or Wal-Mart and the whole shelf would be Pantene," says Ali Dibadj, an analyst with Sanford C. Bernstein. "They added more and more products that confused the consumer."

As part of the relaunch, P&G reduced the number of shampoos, conditioners, and styling aids by close to one-third, to around 116 products. The entire line has been reorganized around four specific hair types-color-treated, curly, fine, and medium-to-thick-and color-coded to make selections easier for shoppers.

Read Full Article