TECHNOLOGICAL UNIVERSITY OF ZINACANTEPEC

"T.S.U. EDUCATIONAL PROGRAM IN MARKETING,

INTERNATIONAL BUSINESS AREA"

"INTERNATIONAL MARKETING"

CASE STUDY

LIC. MONICA LILIANA HERNÁNDEZ MEDINA

STUDENT. FATIMA GUADARRAMA LOPEZ

GROUP. DN 5B DATE. 13/06/2023

INTRODUCTION

Head & Shoulders is a brand of anti-dandruff shampoo produced by Procter & Play.
A powerful P&G brand, this brand made its debut in India in 1997. The entire
shampoo market was dominated by HLL with a huge market share of around 46%.
The high-profile launch of Head & Shoulders fueled the growth of this specialty
market. Now the anti-dandruff segment constitutes around 15% of the total
shampoo market.

It was "the number one dandruff and dandruff-free shampoo brand in the United
States and the world" of shampoo, and it was noted that "no hair care brand gets
as many advertising dollars as Head & Shoulders, a twenty-year-old brand, and no
other brand matches its sales," despite being a "medicated" shampoo. The brand
has long been marketed with the tagline "You never get a second chance to make
a first impression," which has been identified as an example of "anxiety marketing"
commonly used by Procter & Gamble to drive sales by inducing social media fears.
consequences associated with the condition the product is intended to address.
However, sales of the product fell, a phenomenon attributed to the excessive
extension of the brand into too many varieties, with more than thirty types of Head
& Shoulders sold.
THE EVOLUTION OF HEAD & SHOULDERS

From its original formula in original cream

to the number one anti-dandruff shampoo
in the world.

1949

In 1949, John Parran Jr., a chemical

engineer and bacteriologist at the
University of Tennessee, joined Procter
& Gamble. His task was simple: rid the
world of dandruff.

Back then, solutions to remove

dandruff, such as trace tar and egg oil,
were unpleasant and even if they
worked, they damaged the hair. Dr. Parran wanted to create an effective solution to
the problem of dandruff that did not damage the hair and was much more pleasant
to use.

1961

After 10 years of clinical trials, Head &

Shoulders was born.

In 1961, after ten years of clinical trials, Dr.

Parran and his team of scientists
highlighted a potent compound that proved
successful in removing dandruff.
Their product, codenamed Head & Shoulders, was finally ready to test on the
market. It was so successful that it was released nationwide the following year.
When the product came out, it was a cream formula, but we knew we could make it
even easier and more enjoyable to use. So they went back to the lab and spent
years reformulating the product.

1975

They turned their formula into a

shampoo. Not only is it clinically
proven to fight dandruff. It also
smells very, very good!

By 1975. He had created a clinically

proven dandruff removal shampoo
with a pleasant fragrance.

In fact, it was so effective and

enjoyable to use that it soon became the number one shampoo in the world, and
still is today.

2002

They decoded the genetic code of

Malassezia globase, the fungus that
causes dandruff.

In 2002, they deciphered the genetic code

of the dandruff-causing fungus,
Malassezia globosa.

That means they could go beyond removing dandruff and combat the root cause of
dandruff. Since then, they have expanded their goals. Now they don't just fight
Against dandruff, the goal is to give everyone a healthy scalp and great-looking
hair as well.

NOW

However, the story does not end

here.

With over 500 experts around the

world, they are as committed as
ever to improving their shampoos
and conditioners to make them the
best they can be.

Even now, they constantly strive to improve their formula because they are
dedicated to making it better with every new scientific discovery, something they
believe Dr, Parran and his original team of pioneers would be very proud of.

EXECUTIVE REPORT

H&S, the world leader in scalp and dandruff care, now comes to market with an
innovative and revolutionary product. For this company, the health of the hair is
essential, and this begins with the care of the scalp. For this reason, it has been
working since 1961 on a wide range of products dedicated to the elimination of
dandruff; products that have served to maintain to this day the number 1 shampoo
in the world, clinically tested more than 200 times. And it is that this is the result of
the trust placed by all its clients, which has contributed to its placing in this
benchmark position and which, in addition, has driven it to improve incessantly
every day.

Thanks to this, today it launches the “H&S Hair Regenerating Shampoo”, the result
of a long investigation by all its workers, teams and laboratories.
 This recent discovery will be its flagship article: it consists of a shampoo
focused on the male gender, whose function is the regeneration of hair on
the scalp of those who have begun to suffer the effects of baldness; it can
be applied both with the first symptoms of hair loss, and with the obvious
lack of it. It is designed for all those men who see their baldness as a
problem to which they wish to find a solution.

1. H&S INTERNAL ANALYSIS

 ANALYSIS OF HUMAN RESOURCES.

At Head & Shoulders, human resources are decisive, since without the staff
that he has relied on throughout his career, it would have been impossible to
reach the situation and position where he currently stands. This staff has been
formed, for the most part, by scientist who have been mainly interested in
clinical research on the treatment of dandruff, to:

- Try to determine the first symptoms that the appearance of this

dermatological condition on the scalp presents.
- Try to identify the causes that motivate it and favor its further
development and proliferation.

And all this in order that the consumers of their products can, in short, show off
beautiful and cared-for hair, as well as a healthy scalp.

Currently, the Procter & Gamble (P&G) group, to which the prominent and well-
known company H&S belongs, has a workforce of 127,000 employees.

In addition to the scientists, H&S considers its suppliers as an important factor in

obtaining the raw materials that are necessary in the production of the different
products that the company itself offers.
Before reaching the commercialization of the genre, the performance of the
workers that it has in the different factories that it has at its disposal is decisive,
since these

are the ones that produce the different products of the brand and, without them, the
materialization of the advances achieved by the scientists would be impossible, as
well as the aforementioned sale in the establishments where it is presented to final
customers.

In this since, the intervention of sales representatives and distributors is also of

great importance for the company, since they are in charge of ensuring that the
brand’s product is present in different businesses or stores, such as supermarkets,
drug stores, cosmetics, beauty salons, etc.

Leaving aside the production process, and entering a more economical aspect,
H&S also works with financial advisers to keep proper accounting and to control
the financial resources used in its daily operation and in its activity. These also
have an influence when it comes to making the necessary investments to start new
projects, as they seek to locate the most profitable opportunities and thus avoid the
loss of resources.

Finally, we must highlight the great importance of the advertising department, in

charge of designing the advertisements broadcast on television, magazines and
radio, through which the brand itself has been making itself known and has placed
itself in the minds of consumers as a leading dandruff treatment company.

 ANALYSIS OF FINANCIAL RESOURCES

Financial resources are those sources of financing, such as credits or loans,

among others, that the company uses to buy the assets it needs in the
management and ordinary execution of the activity that is the object of the
business.
H&S has its main source of financing in the sale of the products it offers through
the different points of sale in which it is present (leading supermarkets, groceries,
beauty salons, etc.). This form of financing is of vital importance, since the income
derived from it is used in order to obtain greater financing and under better
conditions (think,

for example, of paying creditors), which will allow you to carry out a better business
management.

Within financial resources, we are going to analyze two key indicators:

- Debt ratio = debts/own funds = *(66017/52293) = 1.26

- Net cash-flow/Fixed assets = *(9861/94990) = 0.1038 *millions of USD.

Consequently, we can observe how H&S obtains financing from commercial

creditors and credit institutions, as well as through the issuance of bonds. In
addition, the financing of the business activity, including the facilities, production
equipment, etc., with own resources, is decisive.

 ANALYSIS OF PRODUCTIVE RESOURCES

The productive resources or also called factors of production are land, labor and
capital; that is, the different resources that a company or a person uses to create
and produce goods and services. In addition, technology could also currently be
considered as one of these factors. H&S investigates and develops new products
or manufacturing techniques, and also manufactures and sells them, thus
intervening in the production chain. In addition, being a large brand, it has control
over the distribution channel.

The land includes all the natural resources that can be used in the productive
process. H&S is committed to guaranteeing that all the ingredients used in the
manufacture of its shampoos are safe for its customers, in addition to providing full
information about them.
For example, an essential ingredient is water. The right balance of water is
essential to give the shampoo the perfect consistency and help it spread
throughout your hair. Likewise, the water it uses undergoes a special process in
order to have exceptional purity. Another example could be zinc carbonate, which
hydrates the scalp to fight dandruff more efficiently.

Furthermore, to complete the shower experience, H&S adds plant essences and
long-lasting scents ranging from green apple to fresh mint, to keep users' hair
smelling great all day long. Some shampoos also contain natural plant extracts,
such as aloe, lemon, eucalyptus, and almond oil.

Work can be defined as the human, physical and/or mental capacities that workers
possess and that are necessary for the production of goods and services. As we
have already mentioned above, H&S has a large section of human resources (see,
in this regard, section 1.1), whose skills and knowledge are essential for sustaining
production.

Finally, the era of technology has managed to incorporate it into the factors of
production, since great advances can be achieved thanks to it. Technology refers
to the set of knowledge and techniques that, applied in a logical and orderly
manner, allows solving problems or facilitating tasks. In our case, H&S has
advanced technology in its laboratories, by virtue of which they manage to remain
the world leader in scalp care and dandruff treatment.

 ANALYSIS OF COMMERCIAL RESOURCES

To analyze the commercial resources of H&S, we must focus on its marketing mix
strategy. This strategy is made up of four variables, known as the 4Ps.

First, we find the product variable. H&S has a wide variety of products, but all of
them are focused on scalp care. Mostly, they focus on eliminating dandruff. On the
other hand, the quality of its products is adequate and has been clinically tested
more than 200 times. They have a raw material of excellent quality. In addition, it
has its own design and packaging, which induces customers to buy it, since they
quickly recognize the brand and can associate the quality and prestige it
possesses. This is thanks to the predominance of the blue color of the brand and
the peculiar design of the packaging. As for the characteristics of the product, while
there is a wide variety of products, the truth is that each one has specific
characteristics, such as fragrance

or color. The brand has a long history in the

market, where it has earned the trust of its
customers and has managed to differentiate
itself, placing its shampoo as number 1 in the market.

The second “P” that we find is the price. Its price is between €1.25 and €7,
approximately; that is, a competitive price in order to reach a wide target audience.
To these competitive prices, we add the discounts, coupons and offers that they
periodically offer. Among these, the well-deserved coupons are worth mentioning,
through which they intend to promote the quality brands behind their website, such
as Ariel, Fairy, Oral-b, Ausonia, Olay and Pantene. The strategy of these discount
coupons is called "money that comes back".

Next, in reference to distribution, we can say that it is distributed through stores,

whether they are large franchises, such as Carrefour and Mercadona, or small,
such as Coaliment, and other supermarkets. Its channels are physical stores or
supermarket websites; In this sense, it must be said that through their website
there is no possibility of purchasing their products, but, on the contrary, they refer
to the

distributors they have so that, through them, they can carry out all kinds of sales
Thanks to all these establishments, it has great coverage, and its products can
reach a wide audience.
Finally, we analyze the communication of the company. H&S advertises itself
through its website, advertisements on TV, magazines and radio, and brochures or
advertisements in supermarkets. Recently, they have improved their website,
turning it into a site whose use is made more intuitive and accessible and which
includes more personalized content.

Along with this, it also uses public figures such as Iker Casillas or Sofía Vergara in
campaigns to promote itself in a more original way. Regarding its public relations,
the truth is that this company spends little effort, compared to the other instruments
it has, so that it can carry out its work more effectively.

For example, invest in more sustainable production, thus raising awareness about
the environment. In fact, it is currently working on reducing waste, reducing the
impact of manufacturing waste derived from its activity, recycling and reducing the
amount of water used in its production.

2. EXTERNAL ANALYSIS (MACRO ENVIRONMENT)

 ECONOMIC ANALYSIS

Regarding the economic environment, it should be known that, after the crisis
suffered in 2008 until 2014, according to official data, which affected the well-being
of society in a more than noticeable way, both publicly and privately, especially the
consumption of families, a moment of economic growth has begun.

This continued growth has led to an increase in the purchasing power of all
Spaniards, which has led to a gradual increase in spending by families, which
includes, of course, the consumption of products cosmetics and personal hygiene.
To support these statements, we rely, for example, on a piece of news whose
headline is the following: "Family spending grew in 2017 at the highest rate in a
decade", which reports that inflation and economic recovery lead the households to
disburse an average of 29,188 euros per year, 3.5% more than in previous
moments. (The Country, 2018).

 TECHNOLOGICAL ANALYSIS

Within the technological aspect, we must highlight the significant growth that has
taken place in relation to capital investment in state-of-the-art technology during
the past year; specifically, 40% compared to 2016), which means that an amount of

approximately 46 million euros has been allocated. In addition, it is worth

mentioning that Spain has become a very attractive destination to work in the
technology companies that it has at its disposal (Innova Spain, 2017).

However, in view of the aforementioned verification that Spain continues its

improvement in development and investment in the emerging world of
technologies, the truth is that, according to a study published by the World
Economic Forum (WEF), Spain obtains a score of 5 '7 in technology and innovation
(ABC, 2018). This means that, despite the incessant efforts that Spain is carrying
out, it is still a pending task to optimize the investment of resources in this area, so
that the objectives of research, development and technological innovation can be
achieved in an effective way.

Having analyzed and understood the situation that prevails in our country in this
sense, it is possible to affirm that companies in this sector must continue to invest
in the already essential world of technologies today, as this will allow them to
obtain a great competitive advantage. Even more so when, taking advantage of the
Spanish regulatory situation that exists, although it also exists, it can become a
great opportunity for them to obtain greater profitability and, ultimately, obtain
greater power in the market in which they are developed (Spanish Agency for
Medicines and Sanitary Products, 2018).

 LEGAL ANALYSIS
Addressing the legal aspect, it is necessary to highlight the difficult situation
prevailing in these times in Spain, since the uncertainty, consequence of the
changes in the regulation, can be detrimental for companies. However, a company
that complies with all current regulations can use it as a strategy for attracting and
subsequent customer loyalty.

Thus, we observe that, on the one hand, there have been various regulatory
reforms in the different Annexes that regulate this matter, including the current
European

Regulation, namely Regulation (EC) No. 1223/2009, promoted by the legal

institutions of the European Union, from 2013 to date. Along with all this, the other
Regulations, Decisions and Guidelines of the Commission for the application of
said Regulation (CE) must also be taken into account.

On the other hand, Royal Decree 1599/1997 and the corresponding Ministerial
Orders whose purpose is cosmetic products are superimposed, as a consequence
of the various and recent modifications experienced, both at the European level,
the last one in 2017, and in at the national level, the recent and current Royal
Decree 85/2018, which regulates cosmetic products, whose publication in the BOE
was on February 27, 2018.

 CULTURE ANALYSIS

Undoubtedly, and this is becoming evident day by day, the cultural environment
has undergone a notable revolution in recent years, it has undergone a great
change in

mentality that has brought with it the formation of more pluralistic and diverse
societies.

The main note that underlies this fact and allows us to understand it has been the
appearance of new ways of conceiving reality, in all its different spheres, which the
new generations have progressively incorporated into our most immediate reality,
the result of the new order of values that it has been gestated from the social,
political and economic conjunctures that took place.

In addition, over the years, cosmetics has become more fashionable, promoted, for
example, by media personalities and by young people's referents (so-called
"influencers"). However, at the same time, new currents or detractor figures have
appeared with respect to any product that tries to disguise or change the physical
appearance.

3. EXTERNAL ANALYSIS (MICROENVIRONMENT)

 ANALYSIS OF DEMAND AND CONSUMERS

In the first place, it should be noted that the cosmetics sector has gradually
recovered after the 2008 crisis, due to the increase in Spanish spending, as we
have previously commented. Thus, the consumption of 'beauty' products in Spain
increased by 3.25% in 2017 and reached 6,660 million euros. In addition, there are
more than 250,000 references on the market between perfumes, cosmetics and
products for skin or hair care. (Stanpa, National Association of Perfumery and
Cosmetics, 2017)

On the other hand, focusing on the product "H&S Hair Regenerating Shampoo", as
we said before, this is focused on men who suffer from the effects of baldness and
this represents an aesthetic problem that they want to solve. This means that it is
directed to a specific market niche, and that the demand will depend on it.

Currently, the demand may be high, because many men would like not to suffer
from hair loss and keep it despite their years of age; that is to say, this is the desire
that they intend and want to satisfy, and with this product they are given the
effective possibility of achieving it.

Increasingly, internal factors reach a greater force and impact on people, so it is

possible to quantify an estimate of future market demand, which is clearly higher
than the current one.
Regarding the problem that we must solve, we can say that we are facing a society
in which the fact that men buy personal care products is not yet seen as completely
normal, that is, that they worry too much about their physical appearance,
aesthetically speaking. With this we want to show that, if we solve it, we will be
boosting the demand, both current and future, for said product, since it will end up
being bought more naturally and with less fear of prejudice.

 COMPETITION ANALYSIS

As far as the competition for the new product is concerned, we must say that an
analysis of it allows us to discover that it is possible to divide it into three very
different

groups. Thus, they acquire the status of substitute products, insofar as they can
satisfy a need, when not the same, very similar to the one intended with this
product.

In the first place, we find the products that have a similar function, that is,
shampoos from other brands with similar characteristics that are also offered as a
remedy against baldness. Such products can be purchased in the same stores as
those of the H&S brand, so the consumer will not only find this product. This
implies that, on many occasions, you can opt for the solution offered by
competitors.

Finally, it is important to refer to the fact that we will be competing with a

product/service that offers a definitive solution to baldness, although this cannot be
a price competitor, since it is the most expensive. We refer to the group made up of
clinics focused on hair implants. Being more expensive, such products or services
will actually be accessed by people with more purchasing power, so that we will not
share many consumers with the same personal and professional characteristics.
In short, we could consider as key competitors those that manufacture products
based on shampoos, since, if we look at the general criteria of value for money,
and the speed to obtain the expected results, they are the ones that appear most
similar.

4. GOALS

The launch of our new product, the hopeful "H&S Hair Regenerating Shampoo",
not only means taking another step in the constant search for the maximum
possible benefit for consumers and users of H&S, both current and potential, but
also, It is conceived from the company itself as an instrument that will act as a real
bridge towards greater growth, both professionally and in the economic sphere.

There are certain aspects that have been put in relation to the Procter & Gamble
(P&G) group, since this company is an integral part of this family, and in the
analysis carried out about the objectives of our product, it must be taken into
account.

The objectives to be achieved are the following:

5. Obtain profits of €70,772.72 through sales to mitigate as much as possible

the reduction that these have experienced in the P&G group (36.4%) last
year. We believe that an increase in the profits of H&S implies, inevitably, an
increase in the profits of the company to which it belongs.
6. Obtain great customer loyalty to consolidate sales, which will be achieved
through the benefits that our shampoo offers to consumers.
7. Attract new customers who were reluctant at first to this type of product,
through the delivery of free product samples or similar instruments and
strategies that have the same purpose.
 8. Enhance the image perceived by consumers of our product, increasing
availability and customer service.
9. Facilitate product purchases through an online platform for those who prefer
to purchase items online. In this sense, it is intended to provide a quality
service in terms of returns.
10. Position itself as a leader in hair care, taking advantage of the fact that H&S
shampoos have been number 1 on the market for 50 years.
11. Achieve an increase in notoriety by investing in advertising both on TV and
in magazines, radio...

5. STRATEGIES

 SEGMENTATIO

In order to achieve the sale of our product in a more efficient and effective way, we
have divided the market into different groups so that we can easily identify the true
audience to which we will address. Our main objective is, however, to match your
needs with the characteristics of our product, the "H&S Hair Regenerating
Shampoo".
Therefore, in this process we have decided to use the following variables or
segmentation criteria:

- Demographic variables: age and gender.

Segmentation for reasons of age is inevitable, since the raison d'être of our product
lies in the regeneration of hair for those people, more specifically men, who either
have hair that shows clear evidence of weakness or the loss is noticeable. of it,
and these symptoms can appear normally in men aged 20 years and over.

For its part, it is necessary to point out that, for reasons of probability, we have
opted to offer the product to men, as we have just mentioned, since these,
hypothetically, can suffer baldness more quickly, lightly and frequently than the
female sex. .

- Psychological variables: personality and attitude.

The reason why we have used psychological segmentation criteria is the attitude
that each man develops when assessing perception over desire or, even, the need
to effectively use our new product, since this could in no case obey the category
entitled as physiological needs, which are located at the base of the well-known
Maslow pyramid. Furthermore, due to the fact that she must always be linked to a
man whose personality is characterized by the desire for change or, at least, the
impulse to want to try new solutions.

Thus, since these are the segmentation criteria used, we can affirm that we are
dealing with a differentiated marketing strategy.
6. TARGET AUDIENCES
7. POSITIONING

In the attached positioning map we find a

comparison of H&S in relation to its
competitors within the sector of shampoos
dedicated to anti-hair loss. We conclude that
the company is located in the same
quadrant as Tresemme in terms of value for
money; therefore, it would be its most direct
competitor.

8.DISTRIBUTION

The distribution includes the set of activities related to the approach of the product
to the consumer. To do this, it uses the distribution channel, which is the set of
interdependent organizations that participate in the process of making a product or
service available to the consumer or user.

Our product is manufactured by the P&G organization, but marketed under the
H&S brand. The manufacturing company is not the one in charge of bringing the
shampoo closer to the customer, but rather we contract with a distributor who helps
us eliminate the barriers of place, time, form and possession. With this, our
distributor is adding value to the product, since it is reducing the number of
transactions necessary to reach the consumer compared to what we as a company
would need if we carried them out.

Regarding the management of the distribution channel, we opted for a

conventional marketing system, since we coordinate the successive stages of
production and distribution through companies that participate in our channel that
seek to maximize their benefits and no member has more power than the rest.
However, the

distribution channel is different depending on the different situations in which we

find ourselves:

- Retail: In the first place, a channel member -in this case H&S- has
contracts with other companies in order for them to be in charge of
selling the product to the consumer or end user. As is the example of
Mercadona:

- Wholesale: In addition, our company has contracts with others that act
as intermediaries that offer a set of services intended not for the final
consumer but for a retailer so that he can manage his sale. These
wholesalers are, for example, Mercadona, Makro, among others.

9. PRICE

If we look at the price of our product, it is important to say, first of all, that this not
only includes the cost of its manufacture, and a percentage of it -which acts as
profit-, according to the classic scheme. In addition, it includes all the values that
customers give up when obtaining this shampoo, and the advantages that are
derived from it, and not another.

Thus, after an exhaustive analysis of the different factors to be taken into account
when determining the price, we understand that the new H&S Hair Regenerating
Shampoo should be sold to the consumer for €19.99 per unit.

This price includes the following aspects:

 On the one hand, the cost of production of the article. This is made from a
large number of ingredients (water, onion extract oil, stabilizers,
preservatives such as sodium benzoate and benzyl alcohol, foaming agents,
etc.), and thanks to a manufacturing process in which a modern and
complex machinery, as well as highly qualified employees, all of which
implies assuming costs that, with the sale, can at least be recovered.
 In addition, the highly qualified human factor of the H&S company. This
includes from scientists dedicated to the research, development and
innovation of our product, to distributors that allow it to reach large stores
where it is offered directly to the final consumer, as well as workers
dedicated to production or publicists. whose main objective is to publicize
this product.
 Lastly, the effort and work, including the psychological one involved in the
invention, production and sale of a new product, while all material
production work is supported by detailed analysis and study work, with the
intrinsic intangible value that this entails. Add. In addition, the risk involved in
launching a new product on the market, since it is not possible to know if it
will be accepted by consumers; To this must be added the strong investment
 both economically and in terms of means (raw material, machinery, time,
etc.) that this specific product requires and that, on the other hand, it has
been decided not to allocate to other projects that They could also be
interesting for the growth of the company, by focusing on the revolutionary
regenerating shampoo.

CONCLUSION

 The money factor is not very important as long as the product does or brings
what it indicates.

• The participants indicated that the characteristics of the product are more
important than external factors. However, a quantitative study is necessary to
identify the special characteristics that predominate.

• A sense of practicality and "loyalty" to the brand they use is appreciated. Because
they care that it “works” or simply because “that one has always been used”.

• No general “disadvantages” of the shampoos they use were mentioned. Except

for the very strong smell of one of them.

• It is confirmed that advertising is a determining factor to remember the brand

(H&S and EGO). However, they considered this issue as a “personal” issue.

• Since most of the participants indicated that they bought their products
personally, the campaigns and advertising should be directed at them directly.