C A S E S T U D Y

The sales manager wants aprice cut. The ad rep wantsa relaunch. Meanwhile,La Shampoo is losing ground.

Can This Brand BeSaved?by Regina Fazio Maruca

It was almost 11 r.M, when Caro-line Portal left the office. Sbe was ex-hausted. The day bad been filledwith one meeting after another, andshe wanted nothing more than tocrawl into bed and get some sleep.But she couldn't bead home beforestopping by the local 24-hour super-market. The store was enormous -18 aisles of food, pharmaceuticals,stationery, and books, even small ap-pliances. Squinting in the brightlights, Caroline made her way to thehealth-and-beauty aisle and stood,staring, at the display of La Shampooon tbe top sbelf. Nearby, groupedwith otber conditioners, was the LaShampoo conditioner.

Introduced in 1973 and targeted atwomen between the ages of 15 and30, La Shampoo had a stylish imagethat bad immediately become popu-lar. Tbe line bad quickly advancedfrom a strong West Coast regionalpresence to a solid 4% share of tbenational market - a position it hadheld more or less steadily for 14years. La Sbampoo's basic productsand packaging had been modifiedseveral times over the years, butits look had remained essentiallyunchanged. And its slogan, "LaShampoo: For the Look and Feel ofFrance," had stayed the same sinceday one. In 1989, the line had beguna very slow descent, but tbe eompa-ny hadn't renlly addressed tbe prob-lem until two years ago, when itnamed Caroline brand manager.

At first, Caroline called for a newpackaging design. Sbc knew that LaSbampoo was in trouble, but maybea quick pick-me-up would do thetrick. The ad agency backed her upand developed a modest "new look"campaign. Tbis repackaging badcaused a lot of tension at the office.Most of the people wbo worked onLa Shampoo had been with the com-pany for years and couldn't imagineanything other than a slight varia-tion on the tall, slim, blue plasticbottles with the beige labels and cur-sive lettering. And, in fact, the re-packaging - a wider bottle and yel-low label witb sbarper lettering-hadbad no positive effect on sales since

Regina Fazio Maiuca is an associateeditor at HBR,

20 DRAWINGS BY MAXINE BOLL

C A S E S T U D Y

its introduction cigbt months ago:tbe numbers bad continued theirslow decline. Caroline wondered ifmany customers had even noticedthe change.

Caroline sbifted her gaze downto tbe products displayed at eyelevel. All newer than La Shampoo,All starting to grab market share.But with no consistent recipe forsuccess-at least none that she coulddiscern. Some claimed to be "green"products, charged a premium, andmade out like bandits. One touteda "Low, Low, Low Price!" and soldhuge quantities. La Shampoo badalways been a bigb quality product,a bit more expensive than its com-petitors, and its marketing strategy -other than the package redesign-had remained consistent over theyears. La Sbampoo had always soldon an image of European mystique.Clearly, tbough, that message wasn'tworking anymore. Bleary-eyed,Caroline left the health and-beautyaisle and walked slowly toward theexit, deep in thougbt.

The next morning, Caroline wasat her desk early, doing some last-minute prep work for an 8 A.M. mar-keting meeting with Eric Woolf, herproduct sales manager, and BethHanson, a representative of tbe ad-vertising agency that held the LaShampoo account. Both bad submit-ted proposals before the meeting;eacb document was thoughtfullyeonstructed and presented a cogentargument. However, the two recom-mendations were radically different.Beth thought that La Shampoo need-ed a strong brand campaign. Ericwanted to compete on price. Caro-line wasn't convinced either of themhad tbe right recipe, but she did feelstrongly tbat the middle road wasn'tan option.

At the meeting, Eric spoke first."I'm not going to waste anyone'stime mincing words. We need ashort-term solution as well as along-term plan. Some of our key ac-counts are in jeopardy, and tbe onlyway to save tbem is to lower ourprices permanently."

"That's not a real solution," Bethcountered. "What happens after youcut the price? The competing brands

will lower their prices, too, and thenwe'll be in the same situation we'rein now."

"You don't seem to be gettingthe point, Beth," Erie snapped. "LaShampoo is dead unless we discountright now. We need to buy sometime in order to save tbe brand."

Caroline raised her eyes towardtbe ceiling but said nothing. Eric wasknown for getting riled up prettyquickly, and today, it seemed, wasno exception. His style worked forrevving up his sales force, but itdidn't go over as well in a small con-ference room.

"And you don't seem to under-stand tbat you won't be buying anytime by making that kind of move,"Betb sbot back. "If you drop theprice, you won't bave a brand left tobuild up."

Eric stood up and grabbed a blackmarker. He quickly outlined a bargraph on the wall board depicting na-tional market-sbare levels of the topsbampoo brands and then circled thebar representing La Sbampoo, justbelow the 3% mark.

"Here is where we are," he said.He drew another circle below and tothe right of the first one. "Here is

HARVARD BUSINESS REVIEW Sfptember-Octobi:r 1994 21

C A S E S T U D Y

Beth Hanson

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where we'll be iti three monthswithout some sort of price advan-tage." He jahbed at the board, crush-ing the marker's felt tip. "I'm tellingyou, we don't have the time to devel-op and roll out a completely new adcampaign. After we've stabilized theaccount, maybe. But not now. I'meven beginning to think that tryingto protect any kind of brand nameis a losing battle. You've read thepapers - brands are going the way ofthe dinosaur."

"You're too elose to the issue tosee what's good for the product,"Beth said.

"And you're too concerned withyour own interests," Eric countered."At bottom, you want a new adver-tising campaign because it will begood for your company."

The debate went around in circles.After a mere 25 minutes, Carolinecould see that discussion of this kindwouldn't solve anything. She calledthe meeting to a halt.

"I'm going to have to review yourproposals again and come to a deci-sion," she said. "I'd like a commit-ment from each of you that you'llsupport the plan I choose, even if itis not yours. You hoth know that the

only way either of these options willwork is if we pull together at everylevel-and those of us at the top willhave to send that message."

Beth nodded. "I'll support that,"she said.

Eric stood up. "I will as well," hesaid. "But if you're seriously consid-ering a new advertising eampaign, Ithink you'll find out pretty quicklythat we're too late for that kind ofmove." He gathered his papers andquickly left, letting the door slamshut behind him.

Caroline was temporarily at a lossfor words. She hadn't expected Eric

22 HARVARD BUSINESS REVIEW September-October 1994

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to leave so abruptly. She told Beththat she'd get back to both of themwithin a week and followed Eric intothe hall, but he was already gone.

Back in her office, Caroline re-turned a few phone calls and thenturned her attention to her E-mail.She had only one message-fromMarni Shin, director of new productdevelopment.

"Caroline, I'd like to schedule ameeting with you ASAP to discussthe combination shampoo/condi-tioner our team has been workingon. We should have a preliminaryconversation about La Shampoo,

and whether or not you think ournew comho should be rolled out aspart of the La Shampoo line. I thinkit should. Our research indicatesthat people are increasingly demand-ing more convenient products likecombos. Without some kind of ashot in the arm. La Shampoo will beat the end of its life cycle soonerthan we'd all like to think. And,frankly, it will be an embarrassmentto the company if we don't introducea combo soon. We've been ready forfour months."

"As if I didn't have enough to dealwith," Caroline said under her

breath. The market research was socloudy that it could be used to sup-port almost any argument. And Car-oline had heard Marni talk ahoutnew product launches before. Marniclearly had no concept of what wasneeded to build a hrand. But Marni'slimitations weren't the issue rightnow. La Shampoo was the problem,and some decision about the mar-keting plan had to be made soon.

HBR's cases are derived from theexperiences of real companies andreal people. As written, they arehypothetical, and the names usedare fictitious.

HARVARD BUSINESS REVIEW September-October 1994 23