Case Essay

1341 WordsApr 12, 20156 Pages
ABC Ltd., (A) ABC, a well-known and respected retailer in the United Kingdom, sells a range of health and beauty products. The company develops and manufactures its own products. In November 2013, the marketing chief of ABC was planning his sales promotion strategy for a line of professional hair-care products comprising of shampoos, conditioners and styling products (gels, wax, mousse, etc.). He was examining different sales promotion schemes for the ensuing Christmas season. He understands that the proposed sales promotion schemes would have immediate effect on costs and sales as well as long-term implications for the brands involved. His primary objective was to increase sales volumes and increase trade-up consumers from lower-value brands, while retaining or building brand equity. He wanted to ensure that the promotions were profitable, but the importance of maintaining and enhancing the concerned brands’ image also could not be understated. ABC’s hair-care product strategy There were over 60 major brands of hair-care products in the UK market. None of these brands had more than a nine per cent market share. The overall market was expected to grow between one per cent and three per cent per year for the next five years. However, severe price competition meant that volumes would grow more than value. In some instances, notably shampoo, the use of price promotions to secure volume could see an overall decline of approximately one per cent in prices. Significant price discounting through promotional activity and competition from low-cost private label alternatives were expected to continue into the foreseeable future. In such a market, ABC saw an opportunity for building retail hair-care brands by using brands created by celebrity hairdressers. At that time, celebrity hairdressers had their own branded products, but distribution was limited to their own salons. No

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