Latin America Hair Care

LA Hair Care Overview Analysis
Alfy Samuel Ankit Jain Apoorva Mishra Archit Rathi Siddharth Venkatesh Vineet Bhadani
Mentor - Preetpal Singh
Proprietary Information of Fractal Analytics Inc.

This document contains proprietary and confidential information of Fractal Analytics and subsidiaries (Fractal) and shall not be reproduced or transferred to other documents, disclosed to others or used for any purpose other than that for which it is furnished, without the prior written consent of Fractal. It shall be returned to Fractal upon request.
Contents
Business Objective and Approach Executive Summary report Assumptions LA Hair care Market Overview Shampoo : Market Overview Performance Drivers Pricing Distribution P&G brand Analysis Conclusions & Recommendations Conditioner : Market Overview Performance Drivers Pricing Distribution P&G brand Analysis Conclusions & Recommendations
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LA Hair Care Overview Analysis

BASIC QUESTION TO BE RESOLVED Evaluate & compare the Client and its competitors performance by identifying market drivers in the LA hair care industry
1. Background Hair care products witnessed a 6% global sales hike in 2011-12, the categorys best showing in the past ten years inviting a number of SMEs to the market Client wants to analyze this growing hair care segment in the emerging Latin American economies which account for more than 25% of the global market 2. Desired outcome To ascertain the effectiveness of distribution, promotion and pricing on sales A complete performance analysis of the clients and its competitors 3. Scope Brand level data consisting of sales & distribution for industry The analysis is to be performed only for the Latin American countries Hair care products to be considered for analysis: Shampoo and Conditioner
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4. Constraints Depth & accuracy of data is affected by wide fluctuations in foreign exchange rates Promotional data is not available Distribution data for Mexico conditioner market is not available
5. Stakeholders LA Hair Care division Head of the Company
6. Resources Previous three years data for various Shampoo brands & two years data for Conditioner brands consisting of value/volume sales & distribution Analysts team & mentor Visualization tools such as Spotfire, Excel
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Issue Tree
Executive Summary
Business Question
The LA Hair care business at P&G wants to understand how the market has performed in the last 2 years? What were the major drivers of performance among the different LA countries ? How did the P&G brands fare amongst each other, How are they dependent on pricing and distribution? Analyze the strategic differences between competitors and P&G in terms of Distribution, pricing activity ? What can P&G do to improve sales & share in this area?
LA Hair Care Market Overview

Amongst the two categories, Shampoo and Conditioner comprise a majority of the LA Hair Care market. In Shampoo market, P&G is the market leader in terms of value sales, with a 25.5% share while Unilever is the market leader in terms of volume sales with a 29.5% volume share. Private Label brands are gaining at a fast pace. Market share (volume) of P&G is seen to be in a decline. In Conditioner market, Unilever is the market leader with 28.6 % value share and 30.2 % volume share. Amongst P&G brands, Pantene and H&S has shown the maximum sales in terms of value and volume.
Executive Summary
Driver Analysis:
Venezuela and Columbia are dominantly distribution driven markets while Argentina, Mexico and Brazil are dominantly price driven markets. P&G sales are centered at higher price than market average in Argentina and Brazil. Price is not a major driver for P&Gs sales, P&G enjoys high sales in spite of being relatively high priced. Distribution is a major sales driver for P&G.
P&G Against Competition: How Do P&G Brands Fare?

Many of the P&G brands are at the maturity stage of their product life cycle. Among the growing segments, most P&G brands are stagnant or declining in terms of volume and value sales, where as the other competitor brands are enjoying relatively high growth Relatively new P&G brands such as Wella Proseries are the only brands which are performing well. In spite of having a large product portfolio, most P&G brands have reached maturity.
Conclusions & Recommendations

The reason for decline in sales of P&G in price driven markets i.e. Argentina, Mexico and Brazil is high price. Distribution and a Large product portfolio are P&G strengths. Most P&G brands have reached maturity. P&G needs to continuously innovate its brands in terms of their products and marketing strategies. Newer products like Wella Proseries are doing better.
Assumptions
The macroeconomic effects have been excluded. Data points used collectively are considered to be the market. When evaluating Price and distribution effectiveness, the effect of other factors is not considered. Every manufacturer has an empty brand. This is due to the nature of the data. We have included all outliers in our analysis, owing to the skewed nature of our data. All factors of demand, except the ones considered in the analysis, have been kept constant.
Market Overview : Shampoo and Conditioner
Market Overview : Shampoo
Market Overview : Total Sales of Shampoo across Countries
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Market Overview : Sales across Channels in Different Countries
DPP: Drugs, Pharmacy and Perfumery HFS: High frequency stores
MR: Modern Retail
In Mexico & Columbia the main channel of distribution is Modern Retail

The main channel of distribution in Brazil and Venezuela is through DPP
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Driver Analysis : Distribution
Venezuela and Columbia are heavily distribution driven. However, Argentina and Mexico are not significantly distribution driven.
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Driver Analysis : Price
Mexico and Argentina are heavily price driven. Brazil is driven by both distribution and pricing.
Driver Analysis : Venezuela
Market In Venezuela, the market and P&G behave similarly

P&G
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Driver Analysis : Argentina
Market
P&G
Industry crowded at a lower price as compared to P&G.

Driver Analysis : Brazil
Market
P&G
Industry crowded at a lower price as compared to P&G

Driver Analysis : Mexico
P&G In Mexico, P&G and the entire Industry behave similarly
Market
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Driver Analysis : Columbia
Market
Market and P&G behave similarly
P&G
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Driver Analysis : Sales across Distribution Channel DPP
In Venezuela & Mexico, DPP channel is distribution sensitive.

Driver Analysis : Sales across Distribution Channel HFS
In the high frequency stores , Argentina is distribution insensitive.

Driver Analysis : Sales across Distribution Channel MR
All countries except Venezuela are distribution sensitive in the modern retail channel.
Driver Analysis : Conclusions

Venezuela and Columbia are more distribution driven markets while Argentina, Brazil and Mexico are more price driven. P&G is performing well in distribution driven markets. In Argentina and Brazil, P&G sales are centered at higher prices than average. There is scope of improvement in low tier products. MR (Modern Retail) is the most popular distribution channel across LA and highly distribution sensitive. In Venezuela & Mexico, DPP channel is distribution sensitive. In the High Frequency Stores , Argentina is distribution insensitive.
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Price Analysis for Shampoo : Across Countries
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Price Analysis for Shampoo : Brazil
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Price Analysis for Shampoo : Mexico
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Price Analysis for Shampoo : Argentina
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Price Analysis for Shampoo : Columbia
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Shampoo Growth Analysis : Argentina Top Manufacturers
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Shampoo Growth Analysis : Argentina Top P&G brands
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Shampoo Growth Analysis : Brazil Top Manufacturers
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Shampoo Growth Analysis : Brazil Top P&G Brands
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Brazil - Wella Proseries launch
P&G(overall) sales
Wella Proseries sales
* Scale has been reduced to magnify the effect of launch
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Shampoo Growth Analysis : Columbia Top Manufacturers
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Shampoo Growth Analysis: Columbia Top P&G Brands
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Shampoo Growth Analysis : Mexico Top Manufacturers
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Shampoo Growth Analysis : Mexico P&G Top Brands
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Shampoo Growth Analysis : Venezuela Top Manufacturers
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Shampoo Growth Analysis : Venezuela P&G Top Brands
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Price and Growth Analysis : Conclusions
Average price of Venezuela and Columbia is much higher than the rest. P&G caters to higher price segment of the market in all the 5 countries. In general, sales of all the major players are declining while smaller players are gaining the share. In Argentina, in spite of reducing the prices, sales of P&G are declining faster than the market standard. In Brazil, sales of P&G are improving. The new launch Wella Proseries has shown exceptional growth. In Mexico and Columbia, P&G sales are declining faster than its top competitors. In Venezuela, P&G is performing better than the market but sales of Pantene is performing below expectations.
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Performance Analysis of P&G : Brazil
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Performance Analysis of P&G : Argentina
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Performance Analysis of P&G : Mexico
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Performance Analysis of P&G : Columbia
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Performance Analysis of P&G : Venezuela
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Recommendations : In Argentina and Brazil, P&G should focus more on the low price product portfolio.
P&G needs to continuously innovate its brands in terms of their products and marketing strategies. Newer products like Wella Proseries are doing better.
P&G should improve the distribution in DPP channel of Venezuela and Mexico.
Distribution of Pantene and H&S in Mexico, Columbia and Venezuela should be increased to improve sales.
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Conditioner Market
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LA Market Overview : Conditioner
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Market Overview :
Top 5 Manufactures in terms of Value Sales over last two fiscal years:
1. 2. 3. 4. 5. UNILEVER P&G LOREAL NIELY GARNIER
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Market Overview : Total Sales across Countries
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Market Overview : Sales across channels
In Mexico, Columbia and Argentina the main channel of distribution is Modern Retail. This shows that these markets are highly structured. The main channel of distribution in Brazil and Venezuela is through DPP. This implies a high dependency on day and night DPP stores.
Driver Analysis : Distribution
Venezuela, Columbia and Brazil are distribution driven. However, Argentina is not distribution driven.
Driver Analysis : Price
Brazil and Argentina are price driven

Driver Analysis : Argentina
All Manufacturers
P&G

Driver Analysis : Brazil
All Manufacturers
P&G

Driver Analysis : Colombia
All Manufacturers
P&G
Market and P&G behave similarly

Driver Analysis : Venezuela
All Manufacturers
P&G
In Venezuela, the market and P&G behave similarly

DPP - Drugstore, Pharmacy and Perfumery
Venezuela and Columbia are distribution driven

HFS High Frequency Stores
Argentina is distribution insensitive

MR Modern Retail
All are distribution driven

Driver Analysis : Conclusions

Venezuela and Columbia are more distribution driven markets while Argentina, Brazil are more price driven. P&G is performing well in distribution driven markets. In Argentina and Brazil, P&G sales are centered at higher prices than average. There is scope of improvement in low tier products. DPP is the most popular distribution channel across LA and highly distribution sensitive. In Venezuela & Columbia, DPP channel is distribution sensitive. In the High Frequency Stores , Argentina is distribution insensitive.
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Price Analysis for Conditioners : Brazil
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Price Analysis for Conditioners : Argentina
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Price Analysis for Conditioners : Venezuela
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Price Analysis for Conditioners : Mexico
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Price Analysis for Conditioners : Columbia
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Conditioner Growth Analysis : Argentina Top Manufacturers
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Conditioner Growth Analysis : Argentina Top P&G brands
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Conditioner Growth Analysis : Brazil Top Manufacturers
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Conditioner Growth Analysis : Brazil Top P&G brands
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Conditioner Growth Analysis : Columbia Top Manufacturers
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Conditioner Growth Analysis : Columbia Top P&G brands
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Conditioner Growth Analysis : Mexico Top Manufacturers
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Conditioner Growth Analysis : Mexico Top P&G brands
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Conditioner Growth Analysis : Venezuela Top Manufacturers
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Conditioner Growth Analysis : Venezuela Top P&G brands
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Price and Growth Analysis : Conclusions
Average price in Mexico is much lower than the rest P&G caters to the higher priced segment in Mexico and Venezuela In general, sales of all the major players are declining while smaller players are gaining the share In Argentina, P&G overall is performing well but volume sales of high priced Herbal Essence are falling In Brazil, volume sales of P&G are improving. The new launch Wella Proseries has shown exceptional growth. In Columbia, P&G sales are declining faster than its competitors In Venezuela, P&G value and volume sales are improving
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Performance Analysis of P&G : Argentina
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Performance Analysis of P&G : Brazil
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Performance Analysis of P&G : Venezuela
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Performance Analysis of P&G : Columbia
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Recommendations : In Argentina and Brazil, P&G should focus more on the low price product portfolio.
P&G needs to continuously innovate its brands in terms of their products and marketing strategies. Newer products like Wella Proseries are doing better.
P&G should improve the distribution in DPP channel of Columbia.
Distribution of Pantene in Columbia and Venezuela should be increased to improve sales.

Increasing the distribution in MR could boost up the sales in all countries.
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Questions and Answers
82
Thank you
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Latin America Hair Care

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LA Hair Care Overview Analysis

Mentor - Preetpal Singh

Proprietary Information of Fractal Analytics Inc.

LA Hair Care Overview Analysis

5. Stakeholders LA Hair Care division Head of the Company

Confidential | Copyright Fractal 2013

LA Hair Care Market Overview

Confidential | Copyright Fractal 2013

P&G Against Competition: How Do P&G Brands Fare?

Conclusions & Recommendations

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Market Overview : Shampoo and Conditioner

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Market Overview : Shampoo

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Market Overview : Total Sales of Shampoo across Countries

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Market Overview : Sales across Channels in Different Countries

DPP: Drugs, Pharmacy and Perfumery HFS: High frequency stores

MR: Modern Retail

In Mexico & Columbia the main channel of distribution is Modern Retail

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Driver Analysis : Distribution

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Driver Analysis : Price

Driver Analysis : Venezuela

Market In Venezuela, the market and P&G behave similarly

Driver Analysis : Argentina

Industry crowded at a lower price as compared to P&G.

Driver Analysis : Brazil

Industry crowded at a lower price as compared to P&G

Driver Analysis : Mexico

P&G In Mexico, P&G and the entire Industry behave similarly

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Driver Analysis : Columbia

Driver Analysis : Sales across Distribution Channel DPP

In Venezuela & Mexico, DPP channel is distribution sensitive.

Driver Analysis : Sales across Distribution Channel HFS

In the high frequency stores , Argentina is distribution insensitive.

Driver Analysis : Sales across Distribution Channel MR

Driver Analysis : Conclusions

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Price Analysis for Shampoo : Across Countries

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Price Analysis for Shampoo : Brazil

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Price Analysis for Shampoo : Mexico

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Price Analysis for Shampoo : Argentina

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Price Analysis for Shampoo : Columbia

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Shampoo Growth Analysis : Argentina Top Manufacturers

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Shampoo Growth Analysis : Argentina Top P&G brands

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Shampoo Growth Analysis : Brazil Top Manufacturers

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Shampoo Growth Analysis : Brazil Top P&G Brands

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Brazil - Wella Proseries launch

Wella Proseries sales

* Scale has been reduced to magnify the effect of launch