Product Strategy & Management

Book Review on

Pantene: Building a global beauty brand

Submitted to
Prof. Ramesh Venkateswaran
By
Group B-14, PGP 2015-17
Mehul Popat

(Roll no. 155068)

Bankuru Vinay Kumar

(Roll no. 155029)

Priyank Verma

(Roll no. 155098)

Tribhuvan Shubhangi

(Roll no. 155141)

On
04.08.2016

Pantene: Building a global beauty brand

Overview:
Pantene was acquired by P&G in Richardson-Vicks Inc. (RVI) deal in 1985 and from the narrowest of
distribution channel in Taiwan to a surge in 1990s; Pantene became central place to P&Gs strategy.
Branding or Positioning story or one can say in other words, a Technology story of Pantene focused
not only on basis of performance, but also on the intangible and unmeasurable qualities.
It is a story of building a super brand globally and becoming an epitome of leveraging knowledge and
idea from within the company.
Background of P&G in Hair Care industry:
Pantene is successful since 1930s and since then it has strived to grow bigger and better. It acquired
about 25% of market share in the 1960s (through Head and shoulders) and 22% market share (through
Prell). Abrupt market shift and aggressive competition dislodged the position of Pantene. With low
entry barriers, large no. of competitors- highly fragmented market, inexpensive to manufacture, very
similar products and less differentiation amongst the products in the hair care category, P&G stood
without any proprietary technological advantage in the crowded and chaotic industry.
SWOT Analysis of the Hair Care Industry:
1. Success of
Head &
Shoulders
2. Inexpensive to
manufacture
1. 40% preferred
speciality
shampoos
2. Conditioner
segment

S
O

W
T

1. No proprietary
technological
advantage
2. Less
differentiated
product
1. Low entry barriers
2. Large no. of
competitors
3. Commoditization
4. Low switching cost

Consumers were switching between at a higher rate while almost 40 % of customers preferred
speciality shampoos (combat dandruff, split ends, add fragrance or resuscitate lacklustre locks).P&G
hoped to turn this trend around by its new brand Pert in 1979.
Pert was initially positioned as a refreshment shampoo with tagline Coast for your hair but seeing
competition from conditioner brands, Pert formula was changed and was repositioned as Wash and
go but it worked less compared to regular conditioner.
Following Ansoff matrix depicts how P&G took the Product deveopment route to come up with a new
product against the competition.

Pert, BC18,
Pantene

Pert failed!!- Company went below profitability level. All brands except Head and Shoulder were
losing market share. Only thing that kept sales of beauty care unit sustained were increase in shampoo
frequency and market growth. Shampoos were becoming a commodity product driven by
marketing on the basis of aesthetics.
P&G was eyeing a probable technological breakthrough which could have dual benefits of both, a
shampoo and a conditioner.
Technology Breakthrough:
Although the idea of providing a single product with both shampoo and conditioner features was an
innovative concept, Pert failed in the market because of its wrong position in the market. Although it
was better than a plain shampoo, it was nowhere closer to conditioner features. According to Kano
model, although the absence of excitement features doesnt dissatisfy consumers, wrong execution of
those features definitely lead to dissatisfaction. So, Pert lost its market share and remained as a
failure. One of the main reasons for the low performance of Pert in the market is the technological
abundance, so the company concentrated on the Product development strategy which involves
developing on the 2 in 1 concept (both shampoo and conditioner) and provide to the existing market.
So, P&G continued to do intense research on this idea.
Formulation of BC-18:
Problem identification: The problem with the synthetic shampoos is that they wash out the hair oils
and left hair difficult to comb. Adding a little soap to the solution may make it easier to comb but it
makes the hair heavy, dirty and coated. So, the solution to be found should be a replacement of hair
oils washed down by the shampoo.

Conducted tests on various possible approaches: The researchers tried various solutions for this
problem like depositing fats, clay usage, doubly charged surfactants. But all of them failed.
Discovery of the magic ingredient: After many attempts, Bolichs team discovered that blend of
silicone oil and silicone gum can create a solution which not only provides conditioning features but
also additional benefits like smoothness, softness and shine. Thus BC-18 (Beauty product 18) finally
got formulated.
The entire formulation of the BC-18 was a result of the demanding nature of P&Gs R&D team and
the focus of the team on the successful ideas.
Pert Plus:
Now an innovative product is ready in the hands of P&G but the main problem is how to brand it.
They have already positioned Pert with the same features but it failed which led to consumer
scepticism. They have thought of launching BC-18 with a new brand name and tried different names.
But later company thought that it would be a good idea to launch it as an extension of Pert because it
has already been launched as a conditioning shampoo and also it is the philosophy of the company to
provide newest technologies to the current brands first. So, they launched BC-18 as Pert plus.
Before launching nationally they tried the product in Seattle and observed the tripling of market share.
Based on this success Pert Plus was expanded nationally in 1987 with a tagline of Great looking hair
with minimum fuss and an advertising campaign called Lockers. They described their target
customer as an independent, self-confident, active lifestyle woman. Heavy sampling helped the
company to increase their market share in the initial stages only. Also the independent testimonials in
consumer reports, Good morning program had accelerated the sales which drove the market share to
7% by 1990.
Change in Market conditions:
Procter & Gamble had positioned Pert plus on a convenience platform emphasizing its generic benefit
of 2 in 1 technology i.e. shampoo plus conditioner. But with success of 2 in 1 technology of Pert plus,
competitors had started entering the market in 1991 with the same 2 in 1 technology. So the company
decided to concentrate more on positioning based on hair performance rather than their functional
convenience benefits.
Pantenes entry into Taiwan:
Procter & Gamble had entered Taiwan in 1985. In spite earning little profit, P&Gs few brands like
pampers and few toilet soap brands did well in the market. But as they were not able to break even so
they thought to launch some beauty care brand. P&G introduced Pert plus in 1987. Pert, the first two
in one product (shampoo and conditioner) did well in the Taiwan market with a market share of 11
percent followed by head & shoulder with 7 percent. Due to huge competition from Kao Sifone and
Lux, P&G started to work on third hair care brand. As Taiwan had longest hair care experience, P&G
chose Taiwan group for launching new hair care brand.
In 1985, P&G inherited Pantene through acquisition of RVI. The name Pantene derived from an
ingredient Panthenol. This ingredient helped in strengthening the hair and makes it softer. Wei was,
marketing executive had worked on Head & Shoulders and Pert Plus in Taiwan. He used his learnings
from his early work experience of laundry brands.

Birth of Pantene Pro-V:

While launching Pantene in Taiwan, the management team thought the product should be perfume
based but R&D stated that varieties based on fragrance and colour would be too expensive. Local
managers thought that two functional brands i.e. head & shoulder and Pert Plus had been quite
established in Taiwan market so they felt that the third brand should be related to beauty care.
Taiwans market managers collated marketing ideas from other Pantene campaigns in other countries
specially U.S and France. So they combined U.Ss beauty through health positioning and Frances
shine outside/strength inside positioning, which led to Taiwan concept of shine through health. So
the companys R&D improved the product by putting Pantenes Pro vitamin in BC I8 formula.
Based on top prioritized hair care attributes, they decided to position the third hair care brand as
strength inside/ shine outside. So in order to show strength, they connected it with vitamins as a health
factor. Now the Pantene was changed to Pantene pro vitamin. Hence, P&G launched Pantene Pro-V in
Taiwan in April 1990. Then the shampoos came in four different versions: normal, dry, oily and
permed and every version had its own colouring pattern. Changes were also made in design of bottles
and caps. They tried to adopt U.S Pantene ad commercials for Taiwan advertising. The U.S ad
commercial had tagline Dont hate me because I am beautiful. Taiwan people did not respond very
well to this ad when it was adopted in Taiwan. So the brand team modified the tagline stating, Dont
envy my healthy, shiny hair. The ads featured models with straight hair in Taiwan and then this shiny
and straight hair became the centrepiece of the brands marketing campaign. The original Pantene
marketing plan took one year to get 3 percent share and Pantene Pro-V took only six months to double
the goal of 3 percent. Pantene Pro-Vs brand awareness was increased to 70 percent and advertising
awareness was increased to 60 percent.
Pantene as a Global brand:
In the launch of Pert plus the branding and establishing of the product was done haphazardly in
different regions like it was known as Pert Plus in US and became Vidal Sassoon Wash & Go in
Europe, and Rejoice in Japan. The second time with the launch of Pantene Pro-V the P&G followed a
tighter alignment and using the Taiwan model the brand was launched globally.
Pantene Pro-V expanded through Asia in various countries like Philippines, Thailand using the
Taiwan model. After establishing itself as a brand in Asia, Pantene targeted to the market of Latin
America and Europe.
After the global launch of the product Pantene Pro-V, there was a main challenge for P&G waiting in
U.S. as Taiwan was a small market so the model worked there and if the model hasnt worked there
then also the loss would not have been so big but the American market was 10 times bigger than the
Taiwan market therefore the risk factor here was also bigger. Another problem was that the U.S.
managers were accustomed of exporting the ideas and not importing the ideas and hence they were
reluctant of implementing the Taiwan model in U.S. market.
The position of Pert was declining in the market so the U.S. and the competitors were also ready to
launch new products managers doesnt have much of the choice but to use the Taiwan model.
Neuchtern was given the responsibility of running hair and care business in U.S. The tough
competition in U.S. market didnt give time to Neuchtern to test the product because testing of the
product requires the time and in that duration there were chances that the competitors might have the

chance of conquering the market. Hence Neuchtern continued with the campaign of Pantene using the
healthy, shiny hairs tag line even before the official launch of the product in the U.S. market.
The product Pantene Pro-V was launched in a hurry and was having a very rough launch as a product
in the market. There was some tweaking done to the ad campaign of Taiwan and Japanese ad and the
product was launched. Hence it was obvious that the product was not going to make any profit in its
initial phase.
As the time passed by the Pantene Pro-V discovered more and more growth potential and at each level
the brand paid out and Pantene Pro- V was able to establish as a megabrand in U.S. market.
Thus, Pantene Pro-V became a globally successful brand with the major shares in U.S., Europe, and
Asian market.
Key Learnings:
1. Demanding and supportive Research and development team is necessary for a successful
innovation
2. Monitoring change in market conditions is very important for the companys product to
succeed. ( Repositioning Pantene pro-V as aura product by using BC-18 formula which was
initially positioned as a convenience shampoo)
3. Developing a sense of ownership in various geographical parts and recognizing the strength
of their work is very important for the success of a global enterprise.
4. Innovation alone is not sufficient to achieve success, branding that innovation is also very
important to create market leadership.( Brand iterations using BC-18 formula when
competitors tried to imitate the technology)
5. Culture plays a very important part in branding and advertising. The brand team before
launching the tagline should have studied the Taiwanese culture and then decided the tagline
instead of adopting taglines used in other Pantene ad commercials.
6. The Pantene Pro-V was the result of many customers insights and attributes that was needed
by the customers in the market.