Rediscovering market segmentation Dark Horse Team
Cup Moscow 2013
Executive Summary Market and brand analysis General approach for developing strategy “Dove - 2014� - New segments - Current segments Promotion and sales channels Risks Timeline Summary Appendix 2
Executive Summary
Expansion and development of existing segments and introduction of new products will provide achievement of ambitious goals by 2015 Key steps for reaching the goal of increasing sales:
Increase in sales during 2014 Economic effect, mln units +31% 305 6
1
6
21
• Mother & daughter campaign • Baby products
39
• New model of liquid soap
232
2013 Mothers Babies Hotels
Liquid Market soap growth
2014
• Distribution in hotels
3
Market and brand analysis
Russian market analysis shows constant growth rate 1
In 2013 Beauty market still grows, but at a lower rate
+2% +8% 296
2007
334
2008
351
2009
407
380
2010
2011
430
438
447
2012
2013
2014
454
461
469
2015
2016
2017
Sales of Beauty and Personal Care, bln rub
2
Key trends for Russian beauty and personal care market*
* According to Euromonitor International, August 2013
• Natural and healthy products • Premium products, baby care, liquid soap dynamic • Retail develops store based chains • Special positioning even for mass products 4
General message of the Dove brand in Russia has distinctive features which should be preserved Features of the brand: • High quality • Mass but not cheap • “Consists by ¼ of cream, does not dry your skin” Pure beauty and self-esteem campaign: • Promote the natural beauty
• Expand brand conception: “Dove is not just soap” • Create brand awareness of Dove caring about women beauty 5
General approach for developing strategy
Discovery of new segments and development of current segments will become the main growth driver for sales Share in total: Volume
$
Mothers of teenage girls New clients (target audience redesign)
Mothers of babies Hotel contracts
Increase sales by 30% by 2015 Current clients (current segments development)
Liquid soap promotion
6
Combination of segment redesign and effective use of promotion and sales channels are two main parts of the strategy
Supply and demand should be fully satisfied through effective combination of promotion and sales channels
Demand To form the demand
Promotion channels
Supply
+
To make products accessible
Sales channels
Current clients (current segments development ) 7
New segments
Current positions for the target audience is a good basis for development in other segments
Target audience: women at the age of 25 to 45
15
20
25
30
35
40
45
50
Their characteristics: Do not strive after model-like appearance. 76% of them have children Appreciate products with natural origin Main interests: social problems, cooking 8
We recommend to make emphasize on the segment mothers and their teenage daughters who are the main followers of their moms Target audience has additional potential: mothers of teenage girls
12-18 years
15
20
25
30
Triggers of growth
*Team survey: 43 out of 50 respondents
35
40
45
50
• Over 85% of girls begin to use the
same cosmetic products as their mothers*
Long-term effect
• Dove brand gains loyal customers from young age
Penetration
• Awareness of Dove brand will
increase due to young users
9
Campaign will be targeted on mothers of young girls but will have impact on both mothers and daughters Message
Believe in your own unique beauty and guide your daughter to believe in hers Features Mothers (Influencers)
Daughters (Followers)
• 35-45 years
• employed • understand that their appearance is far from ideal • 12-18 years • pupils (financially dependent) • are influenced by their mothers very much • worry about their appearance
Main needs • to teach their daughters to feel beautiful despite their appearance differs from imposed standards
• to be confident with their appearance • to learn how to use cosmetics
10
Campaign will be targeted on mothers of young girls but will have impact on both mothers and daughters Message
Believe in your own unique beauty and guide your daughter to believe in her
Self-esteem project: examples of campaigns in foreign markets
Our next target segment is mothers with babies 2-5 years old Baby care remains one of the most dynamic categories in Russia
Main reasons to focus on baby products
Amount of sales, mln rub
+6% 6 903
2 347
7 328
2 496
• Baby care remains one of the most dynamic categories
7 701
2 641
Baby hair care Baby skin care
• Many parents willingly spend money on high-priced baby products offering high quality • Positive birth rate
4 556
4 832
5 061
2013
2014
2015
• Products positioned to be natural (like Dove for adults) are popular among babytargeted products
Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources
11
Baby-oriented products will be presented in three main categories
Baby soap bar
Opportunity to attract
Description of a product
Baby shower gel
Baby shampoo
• Is recommended by pediatricians
• Protects against skin • Natural ingredients are crucial for dryness baby’s hair
• Contains 1/4 moisturizing cream
• Hypoallergenic structure
• 100% tear free
Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources
12
Additional measures
High growth of liquid soap segment is a good opportunity to keep current customers and to create loyalty Long-term expectations for liquid soap are also favorable, while sales of bar soap are expected to decline 2 650
+16%
2 291
Forecast sales of liquid soap, mln.rub.
2013
2017
Promotion of the liquid soap and new business model gives Dove unique opportunity to win Russian market of liquid soap
Tying: sets of branded dispensers and liquid soap bags Branded soap dispensers • Loyalty • Image preserving
+
Special soap bags • compatibility • tied good • easy to use
Dispensers provide exclusive image of the brand and inspires to buy only Dove liquid soap 13
To strengthen penetration and indirectly stimulate sales it is recommended to sign a supply contract with Azimut Hotels: Benefits for Azimut Hotel: •
Dove is world-known brand => increase Azimut’s customer loyalty
•
We supply products to Azimut at low cost – our primary goal is market penetration
Benefits for Dove: Azimut Hotels is growing Russian hotel network; year’s occupancy about 2 000 000 people across the country •
Supplying Azimut hotels with bath and shower products will significantly increase market penetration 14
Promotion and sales channels
Effective combination of online and offline marketing will help to attract new segments and to keep current customers Offline marketing (costs, rub)
Online marketing (costs, rub)
9 mln
141 mln Websites
TV
8 mln 21 mln
Social networks
~210 mln 5 mln
Context ads 25 mln Billboards
0.5 mln Blogs
Approximate costs for marketing (2014) 15
Risks and Timeline
Integration plan
Initiatives
Q2
Q1
2014
Q3
Q4
Baby care
Creation of new products Production launch Advertising Testing and amendment Sales promotion
Girls care Advertising Testing and amendment
Hotel Search available hotels Formation of contracts
Procurement
Liquid soap Production customization development
integration 16
New strategy is prone to a number of risks, but they are manageable and can be mitigated Risk Evaluation Matrix
High
7 1
5
Medium
2 6
4
Low
Significance
Controlled risks
3 Low
Medium
1
People won’t buy dispensers
2
People will not refill with genuine Dove soap
3
Teenage girls prefer youth cosmetics
4
Risk of being a brand for “fat girls”
5
Hotels won’t sign contracts with Dove
6
Mothers can choose specific baby products
Uncontrolled risks
8 High
Possibility of appearance
7
Slow economic growth and continuing inflation
8
Consumers trend to save money
17
Expansion and development of existing segments and introduction of new products will provide achievement of ambitious goals by 2015 Key steps for reaching the goal of increasing sales:
Increase in sales during 2014 Economic effect, mln units +31% 305 6
1
6
21
• Mother & daughter campaign • Baby products
39
• New model of liquid soap
232
2013 Mothers Babies Hotels
Liquid Market soap growth
2014
• Distribution in hotels
18
The strategy was developed by the “Dark Horse” team
Dmitry Vlokh
Alina Verbenchuk
GSOM SPbU Master in Corporate Finance
GSOM SPbU Master in International Business
• Changellenge >> Spb 2012 Winner • MCC Sky 2013 Semifinalist • EMC Company Scholar
• GSOM SPbU Case Club Leader • V. Potanin Foundation Scholar, Russian Economy Fund Scholar • MCC Sky 2013 Semifinalist
Oleg Sokolov
Dmitry Vladimirov
GSOM SPbU Master in Technology and Innovation Management
GSOM SPbU Master in Corporate Finance
• MCC Sky 2013 Semifinalist • V. Potanin Foundation Scholar • V. Potanin Foundation Grant
• MCC Sky 2013 Semifinalist • 1st National Scientific Congress ITMO – 2012 Participant
7
Appendix
Finance Dove Sales, units 2013 Deodorants for women
24 673 670
growth of sales, %
Dove Sales, mln rub 2014
2013
32 207 672
Deodorants for women
2014 581
722
30,5%
growth of sales, %
6 769 735
8 944 772
Roller deodorants
367
463
Sprays
17 903 935
23 262 900
Sprays
214
259
Hair care for women
56 580 103
93 334 174
Hair care for women
1 460
2 028
Roller deodorants
growth of sales, %
65,0%
growth of sales, %
Masks
1 174 116
1 779 551
Conditioners
9 689 992
12 427 605
Conditioners
45 715 996
79 127 018
143 342 230
169 732 869
Shampoos Skin cleansing for women growth of sales, %
18,4%
24,2%
Masks
38,9% 27
34
374
480
Shampoos
1 059
1 514
Skin cleansing for women
2 329
3 000
growth of sales, %
28,8%
Liquid soap
4 864 420
6 660 343
Liquid soap
113
147
Shower gels
33 052 833
42 450 266
Shower gels
310
402
105 424 977
120 622 260
1 906
2 451
7 405 613
8 735 321
699
1 198
Bar soap
Skin care for women growth of sales, %
18,0%
Bar soap
Skin care for women growth of sales, %
71,4%
Creams
5 044 776
5 845 153
Creams
319
536
Lotions
2 360 837
2 890 168
Lotions
380
662
232 001 616
304 010 036
5 069
6 948
TOTAL, units growth of sales, %
31,0%
TOTAL, units growth of sales, %
37,1%
19