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The U.S. Shampoo Market: A Competitive Profile
Kasarinlan: Philippine Journal of Third World Studies
View Archive Info| Field | Value | |
| Title |
The U.S. Shampoo Market: A Competitive Profile
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| Creator |
Datta, Y.
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| Description |
Porter associates high market share with cost leadership strategy which is based on the idea of competing on a price that is lower than that of the competition. But, customer-perceived quality-not low cost-should be the foundation of competitive strategy, because it is far more important to long-term competitive position and profitability than any other factor. So, a superior alternative is to offer better quality vs. the competition.In most consumer markets a business seeking market share leadership should try to serve the middle class by competing in the mid-price segment: and offering quality better than that of the competition: at a somewhat higher price to connote an image of quality, and to ensure the strategy is both profitable and sustainable in the long run. Quality, however, is a complex concept, consumers generally find difficult to comprehend. So, they often use relative price and a brand’s reputation as a symbol of quality.The U.S. Shampoo market is very competitive and consists of a large number of brands. Most brands are sold at supermarkets, drug stores, discount stores, and department stores. However, many premium and super-premium brands—called salon brands—are sold by beauty salons.The salon shampoo segment had captured 11.4% of market share in 2008.Most of the shampoos covered in this study are general-purpose shampoos—with the exception of five anti-dandruff and two psoriasis brands. Almost all are aimed at women. However, three are for men, one for babies, and four for kids.One characteristic of this market is the proliferation of bottle sizes that ranged all the way from 1 to 42 oz. These can be classified into three broad size groups. By far the largest is the medium group (11.6-15.4 oz) with a market share of 52%; next is the large group (22.5-25.4 oz) with a 17% market share; and small (8-11.5 oz) with a market share of 14%. We tested two hypotheses: (1) That a market leader is likely to compete in the mid-price segment, and (2) That the unit price of the market leader is likely to be somewhat higher than that of the nearest competition. Employing U.S. retail sales data for 2008 and 2007, we found that Procter and Gamble’s (P&G) Pantene, the overall market leader, was a member of the mid-price segment for both years—and for all three bottle-size groups.However, the results did not support the second hypothesis. This is because the runner-up happened to be P&G’s Head & Shoulders anti-dandruff shampoo: a type of specialty shampoo that is generally priced higher than general-purpose shampoos.Another notable result is that we found strong support for the notion that relative price is a strategic variable. Finally, we discovered four strategic groups in the industry.
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| Publisher |
SCHOLINK INC.
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| Contributor |
—
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| Date |
2018-05-29
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion Peer-reviewed Article |
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| Format |
application/pdf
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| Identifier |
http://www.scholink.org/ojs/index.php/jepf/article/view/1436
10.22158/jepf.v4n2p180 |
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| Source |
Journal of Economics and Public Finance; Vol 4, No 2 (2018); p180
2377-1046 2377-1038 |
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| Language |
eng
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| Relation |
http://www.scholink.org/ojs/index.php/jepf/article/view/1436/1611
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| Rights |
Copyright (c) 2018 Y. Datta
http://creativecommons.org/licenses/by/4.0 |
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