BA 331 - THE BODY SHOP CASE ASSIGNMENT
BA 362 – CONSUMER BEHAVIOR
PERCEPTION CASE PROJECT
Team Members:
Erin Ingraham
Rob Ruckman
Sherry Thompson
Lisa Weseley
9/10/00
Matthews[1], a leading consumer products company in the U.S. decided to launch a new hair care brand, Illustra[2], in January 2000. This product launch represented Matthews' first new hair care brand in twenty years. Illustra is a unisex hair care brand that utilizes leading-edge technology to satisfy the number one unmet consumer need – the ability to create and maintain the style they desire. Illustra had been successful in creating a new tier in retail, which bridged the gap between salon and mass markets. This prestige positioning was accomplished through superior product technologies, upscale packaging, invigorating fragrance, and premium pricing. Illustra is priced roughly two to three times higher than the average price of competitive products found at food, drug, and mass channel stores. It has been able to capture a 3% dollar market share in just seven months.
Illustra’s product portfolio includes a variety of shampoos, conditioners, and styling aids that are categorized in the following regimens: volumizing, straight, and curly. For example, a Volumizing shampoo (Step 1), Volumizing conditioner (Step 2), and Volumizing styling spray (Step 3) are considered a “regimen." The products are scientifically designed to work together; therefore, consumers are encouraged to use all three products in order to gain the maximum benefits of the products. Beyond the three defined regimens, the Illustra product line consists of additional shampoos, conditioners, and styling aids to help consumers achieve unique styling goals.
The original formulation of Illustra’s Volumizing shampoo is opaque in color and washes in style enhancers that start the three step "gravity-defying" process by building air pockets between hair strands. Five months after Illustra was first introduced on the market, Matthews’ R&D group proposed a change to the Illustra Volumizing shampoo, removing the color. Based on information received from previous consumer focus groups, it was believed that consumers preferred a clear formula because it represented lighter, fuller hair. The R&D department believed that if the color was removed they would have a product that not only represented a breakthrough in achieving volumized styles but also a more appealing clear formula and lower production costs. While the clear formula would minimize costs it would also require a lower fragrance level compared to the current product because of chemical stability concerns. The impact on consumers of this change was not certain.
Changing the formula is a risky proposition for several reasons. Illustra has only been on the market for a short period of time and has not completely established itself in the marketplace. In fact, brand awareness has been lower than anticipated. The Volumizing shampoo is the highest selling SKU in the product line. The Illustra brand team has a good understanding of how consumers perceive the current Volumizing product line. They know that most people who tried the product loved it and became loyal users. In fact, the repeat usage rate for Illustra's volumizing regimen has exceeded initial targets. It is extremely critical that the brand not lose these loyal consumers.
Research shows that the volumizing performance of the original and modified versions of the shampoo is the same. However, in addition to the unique volumizing properties achieved by using the shampoo, the fragrance is sighted as one of the top reasons consumers love Illustra. Altering the level of fragrance could have negative consequences on consumer preferences and consequently on sales. For this reason the brand team decided to conduct market research with current Volumizing shampoo users to collect their feedback on the new version.
In-home, product use market research was conducted. Members of the Illustra brand team went to over 30 current Volumizing shampoo consumers' homes to have them evaluate the new product. Consumers were asked to use the “new formula” for a week and to record their experience with the product on a daily basis. The Illustra team did not tell the consumers that something was different about the product they were being asked to use. A “written product concept” was given to the consumers to read before trying the new version. While the concept described the new formula, the consumers believed the concept described the original version of the Volumizing shampoo they had been using.
The bottle used for the new formula shampoo was the same as the current packaging used for the current shampoo, except for a small graphic addition in the lower right hand corner. (Please refer to attachment I for the actual design.) Both bottles were white with a large colored label around the entire bottle. The Illustra team considered using a clear bottle for the new formula; however, they were concerned that a clear bottle might confuse consumers since Illustra's Clarifying shampoo (one of the products sold outside the three regimens) was a clear liquid sold in a clear bottle. All other shampoo products were opaque in color.
The market research results showed that most consumers noticed the difference in the fragrance and the shampoo color immediately. It was questionable whether consumers really valued the fact that the shampoo was clear. Some consumers perceived the clear liquid as representing “cleanliness” or “purity,” while others regarded it as the same as the opaque product. Interestingly, some customers felt that the clear formulation implied that some ingredients had been removed and therefore expected a decrease in the price of the shampoo. In most cases, when asked to comment on the overall nature of the product, rather than on one characteristic, consumers believed that the new formula was superior to the old formula. Consumers' perceptions about the product performance were as follows: “My hair feels cleaner,” “I don’t have to use as much to clean my hair,” and “My hair feels lighter with this product.” The market research results also showed that most consumers did not notice the addition of the graphic on the bottle for the new formula.
Based on these research results the brand team needs to decide whether or not to introduce this new formula. It is important to note that after Illustra's successful product launch, several competitors are introducing "volumizing type" products into the market. If Illustra moves forward with the change what is the best way to communicate the news of a “new,” improved clear formula to both loyal and prospective users? How can the brand team utilize their knowledge of consumer perceptions with regards to the products' clarity?
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[1] For the purposes of this discussion the fictitious name Matthews will be used as the company name.
[2] For the purposes of this discussion the fictitious name Illustra will be used as the Brand name.
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