Old Spice Market Overview
Upon purchasing the Old Spice brand from the Shulton Company in 1990, Procter and Gamble strategically repositioned the brand and adapted product mix to meet more current demands. The strategy included launching various products focused on a younger, expanding target market which was created as a result of a greater emphasis on male grooming, especially in the 18-24 year old age range. A unique advertising campaign has directly resulted in the Old Spice brand gaining significant market share within the last 2 years. Key findings of the brand, company and market are contained below:
· Brand: Old Spice
· Manufacturer: Procter and Gamble
· Mission (Procter and Gamble): “Provide branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come. As a result, consumers will reward us with leadership sales, profit and value creation, allowing our people, our shareholders and the communities in which we live and work to prosper.”
· Target Market: Men, age 18-24
· Fragrances are particularly important to this age bracket
· A deodorant that smells good eliminates the need to wear cologne
· Male grooming is perceived to have a direct impact on attraction
· Product Positioning: Positioning has undergone significant change in the last 20 years, most notably in the last 3-5 years. Old Spice is now known as a brand that offers a suite of male grooming products including antiperspirants, deodorants, body washes, body sprays and fragrances. Highly successful advertising campaigns have not only contributed to increased market share, but have essentially helped grow the market itself.
· Market Share:
· 37.8% - men’s deodorant (3)
· 6.6% - men’s fragrance (4)
· Macro-Environmental Issues: In 2010, Procter and Gamble announced a sustainability mission, to be implemented by 2020 include:
· Powering plants with 100% renewable energy
· Using 100% renewable or recycled materials in all products and packaging
· Having zero consumer or manufacturing waste going to landfills
· Designing products that delight consumers while maximizing the conservation of resources (1)
· Corporate social responsibility: Again, major focus on corporate and social responsibility. In fact, their commitment to social responsibility is woven in to their mission statement, “…improve the lives of the world’s consumers”. Some noteworthy initiatives include:
· Live, Learn and Thrive programs – over 100 programs in over 60 countries. Provide vaccinations, safe water, homes, educational opportunities to underprivileged children
· Safe drinking water program – partner with Centers for Disease Control to distribute PUR packets that turn harmful, possibly deadly water in to clean, drinkable water
· Pampers vaccination program – partner with UNICEF to produce and distribute vaccines for tetanus
· P&G Hope Schools – partnership with the China Youth Development Foundation, have built 200 schools in poverty-stricken rural areas of China
· Project Shiksha – Increasing access to education and immunizations in India (1)
· Key Recommendations:
· Expand market, focused on BRIC countries – Procter and Gamble’s current global experience and distribution can be effectively deployed for the benefit of Old Spice in the BRIC countries – Brazil, Russia, India and China. These emerging markets and their expanding middle classes have resulted in expanded purchasing power and the desire for grooming products/fragrances. Expansion in to these emerging markets further reinforces P&G’s mission statement and brings value to their benefit offering.
· Expand “Classic” products as target market ages – Old Spice’s current target market is clearly the 18-24 male demographic. As this population ages, Old Spice should expand their “Classic” products to maintain their current customers. Products geared towards this younger generation may not be as appealing to an older customer base as lifestyle and expected benefits change. A secondary benefit of expanding their “Classic” products could be gaining market share in existing aging baby-boomer generation.
· Expand Old Spice Body Spray product line – Axe body spray essentially created a market in the early 2000s and they have maintained over 20% market share since this time. The high reported usage of Axe and body sprays in general demonstrates the potential profitability when focusing on a relatively small, but very high-demand Segment (3). Old Spice can leverage their successful advertising campaigns in the deodorant and body wash business lines to create a greater emphasis on their limited body spray products.
· Development of an Organic/Natural Product Line – Products such as Tom’s of Maine (Colgate-Palmolive) are positioned as eco-friendly. Such eco-friendly products which are perceived to be healthy both for the customer and provide benefits to the environment, tend to create brand identity and customer loyalty. Similar to the emergence of body sprays which serve a small segment, eco-friendly products can be very lucrative and carry significant growth potential. Furthermore, an organic product line reinforces P&G’s commitment to the environment and sustainability.
Old Spice Commercials
When P&G purchased Old Spice, the brands product line consisted primarily of aftershaves, shaving soaps, and a small line of deodorant sticks. P&G purchased the brand with the specific intentions of developing Old Spice’s deodorant and repositioning the brand (5).
In the expansion and repositioning of Old Spice, P&G chose to target young men as both a short-term and long-term strategy. In a 2004 interview with BusinessWeek, GM of deodorants & Old Spice Esi Eggleston-Bracey spoke about their target market by saying, “What we learned over the years was we can get teen and young adults by targeting what we call "the sweet spot." We know teens aspire a little older, and we know adults aspire a little younger. That tends to be the 20 something.” (5). By choosing to target men in their early to mid twenties, PG expected to also gain share with men in their teens and late twenties to early thirties. This new youthful image shows that PG was well aware of the internal factors driving those who fall on the fringes of their target market. This target market tends to be the most frequent user in the $1.3 billion antiperspirants and deodorants market and is also willing to pay the highest price per unit (3).
As P&G was developing the deodorant product lines in 2003 they also created a men’s body wash under the Old Spice brand. Since then, sales of deodorant bar soap sales have been dropping significantly (6). Although the target market did not change in promotion of their body wash, P&G did face the challenge of getting the product in their markets hands. Since the concept of men using a body wash was somewhat new, P&G had to focus on acceptance, triggering demand, and driving the purchase of the new product. The importance of women in this equation is evident in the majority of Old Spice’s commercials. P&G recognized that 60% of men’s grooming products are purchased by a woman. Women are also an important part in the trial and acceptance of men’s grooming products (3). It only makes sense for Old Spice to also target their message to women to who may have a part in creating demand, driving the purchase and acceptance.
Focusing on age as the primary demographic for the Old Spice revitalization and framing their message to both men and women, P&G has rose to the top of the class in men’s personal cleansing category. They have demonstrated a sound understanding of the drivers with in their target market.
Old Spice deodorant is positioned as an innovative and masculine product that offers long lasting protection and an attractive scent at a moderate price. The positioning of Old Spice deodorant dates back to 1990 when Procter & Gamble purchased the brand from Shulton Company. When P&G purchased Old Spice, it was a brand that was associated with a has-been, highly fragrant aftershave, and it was known mostly for its graying customer base (7). P&G bought Old Spice with the intention of repositioning the brand to be younger by marketing to young adult men and teenagers. At the time of the purchase, Old Spice was not a leading deodorant brand; however, P&G bought the brand specifically to get the male deodorant so it could develop it with the advantage of an established brand name. The intention was to shed the image of an older man’s aftershave, but keep the masculine and rugged attributes associated with the whistling sailor (5).
Old Spice developed and positioned the brand to what it is today through innovation, increased product offerings, and heavy promotion. In order to reposition itself, it has introduced many forms of deodorant sticks, body washes, and body sprays in several scents under the Old Spice brand. Old Spice deodorant is recognized and positioned based on price, quality, innovation, product attributes, and image. On the perceptual map, it would be in the high quadrant based on these positioning bases in all categories with the exception of price, as it is priced moderately relative to competitors, which is further discussed in the Pricing section. Through effective promotion, the company communicates its values to meet an everyday function of applying deodorant.
Old Spice has differentiated its products and further established itself as a leader through brand image. A key to the success of the Old Spice brand is that Procter & Gamble has provided the marketing support to ensure the awareness of the brand and communicate that the line delivers the key attributes (protection and scent) that many consider when purchasing a deodorant (3). There have been a series of successful advertisements including the Matterhorn line, Isaiah Mustafa, and Fabio that have contributed to the brands current position.
The Matterhorn ads position the brand as one for those who are a step above the rest, and frames the product as one that can contribute to confidence and make a man appear successful as well as sexy (3). The more recent marketing efforts including Isaiah Mustafa and Fabio were considered viral, as they spread at a rapidly through various forms of media. These advertisements used the slogans “The man your man could smell like.” or “Smell Like a Man, Man.” These ads further positioned Old Spice as a masculine brand and imply that the Manly smell attracts women. While these ads have a masculine focus, the ads appeal to men and women, which is one of the reasons that the brand has been able to successfully position itself (Mintel).
Not only is Old Spice innovative in terms of its product offerings, it has further positioned itself as technologically innovative based on promotion through its website, Facebook, Twitter, and YouTube. This social media appeals to a younger population, and it shows that it is positioned to reach its target market. Procter & Gamble successfully repositioned the Old Spice brand in the late 1990s and early 2000s, and in recent years it has further enhanced its leadership position through successful advertising campaigns.
Strength: As evident through the millions of hits generated by their social media campaign, Old Spice has definitely struck a chord with their target market (8). The success of the Old Spice marketing campaign established P&G as a recognized product leader. The acquisition of the brand in 1990 gave P&G a starting point for entering the young men’s personal cleansing category. The success in the repositioning of the brand was also in part because of their established distribution network and innovation with new products and new product lines. The many product lines have allowed users to experiment with a variety of products while staying in the brand.
Weakness: As a brand with an ultra youthful image Old Spice is potentially neglecting and older more sophisticated market. In reality P&G probably views their Gillette deodorants and body washes as ideal for the late 20’s and older market. However, for the purpose of this analysis in only looking at Old Spice, this should be considers a weakness for them.
While competitor Axe has a full line of hair care products to complement it deodorants and body washes, Old Spice does not. Although Axe’s haircare products are not the focus of their brand, they do help to round out the product offering and have been picking up market share over the past few years (9).
Opportunity: P&G recognized that product experimentation is fairly common among these categories of products. By creating more products and product line they benefited from allowing consumers to experiment while staying in their preferred brand, thus retaining market share. Young men (18-34) are the most likely to experiment with new products or new brands which is why many of the new product lines in these categories target young men (3). Old spice has actually encouraged experimentation high school and other sporting events to get samples into their target market (7).
Other apparent opportunities are the BRIC Countries. Its apparent that Old Spice products are found in most English speaking countries, however; no evidence could be found of Old Spice in these larger emerging markets. The growing middle class in these countries could present big opportunities for Old Spice or a spin off product in the future (10).
Threats: Brands such as Axe and Right Guard are direct threats to Old Spice’s market share. All three brands continue to create new product lines to gain market share and allow for in-brand experimentation.
It has also been know that some of the new deodorant scents with higher scent loadings can cause reactions in some users. Rashes, burning sensation, reds, and chemical burn like symptoms have been reported. This has the potential to turn some user off of the entire brand if they have a bad experience with a few of the lines.
To fully understand the current product offerings, it is important to note that the brand has undergone a significant repositioning since it was acquired, with a greater emphasis on the younger men demographic, as described in the target market section. Prior to 1990, the brand was focused largely on the older male demographic, offering grooming products such as cologne, after shave and other shaving accessories. Interestingly, these pre-1990 products are currently categorized as “Classic Old Spice” and bear an older logo, color palette and product packaging. In analyzing the market segmentation and Old Spice sales, it is clear that the “Classic” products are more limited and not as prevalent in the current product mix (2) (Appendix A).
The modern Old Spice brand contains numerous male grooming products, but is segmented in five clear lines, comically referred to as the “Gentleman’s Stockade”: Antiperspirant, Deodorant, Body Wash, Body Spray and Fragrance (2). The product lines are expanded primarily based on scent and product type and all utilize a similar color scheme containing red or white packaging, various sailing ship logo and “Old Spice” written in classic cursive. A detailed product mix is given in Appendix A. In addition to the grooming products, Old Spice has begun offering “Swag”, consisting of men’s and women’s shirts, hats, flasks and belt buckles. These fringe products are a reinforcement of successful advertising and are perceived as comical gimmicks (2).
Retail sales in the antiperspirant and deodorant market remained fairly stable from 2008-2010, which indicates that this product is resistant to recessionary pressures (3). Based on recent research data, most people spend between $2.50 and $4.50 per container of antiperspirant/deodorant (3). Statistically, 13% of males spend less than $2.50, 52% spend between $2.50 and $4.50, and 18% spend between $4.50 and $10.00 (3). When researching pricing at a local supermarket and also online, it was found that the price of a container of deodorant ranges between $1.50 and $4.50, which is in line with the market research data.
At the local supermarket, Old Spice antiperspirant/deodorant products have a price ranging from $1.50 to $4.39. This is reflective of a strategy that Old Spice offers a range of products depending on consumer preference of scent and/or performance. A smaller container with a basic scent was priced at $1.50, which meets the needs of someone who is price conscience, but also recognizes the value and quality of the Old Spice brand. As the prices increase for Old Spice so do the scents available and suggested performance. There is a $2.79 price level, a $4.19 price level, and a $4.39 price level. Old Spice’s High Endurance and Red Zone lines have higher price levels, as they suggest better performance. In addition, these lines have more scent offerings.
Market research shows that people are willing to pay more for improved protection, along with pay extra for products and scents they like (3). Consumers expect to get a premium quality product in terms of performance and scent with Old Spice. The higher performing lines of Old Spice have prices of $3.00 to $4.00 per container, which supports the brand offering of high performance at a moderate price point. P&G has invested heavily in advertising to promote the brand, which provides additional recognition that supports its pricing strategy (3).
The competitive products in the store and online are comparable in price with basic products on the low end of the price scale. Products with various scent and performance options, including sprays, are on the higher end of the price scale. Old Spice’s product offerings cover the range of prices, which allows each line to serve different demands in the segment. Despite the various offerings, Old Spice is focused on its High Endurance and Red Zone lines, which offer higher performance and more scent options. The moderate price point and promotion of these lines support why Old Spice is the segment leader in the men’s deodorant segment.
In terms of product placement, Old Spice deodorant can be found at almost any retail establishment. Their product line is carried at mega-retailers such as Wal-Mart, Costco, and Target as well as local grocery and convenience stores. Those options currently make up a large part of the sales percentage of deodorant (3). Current research shows that consumers are using alternative shopping outlets in search of a deal (3). Old Spice can take advantage of this trend by utilizing their already existing website which includes a list of on-line retailers that allow their products to be available at any time. If you are unsure of where a local Old Spice retailer may be located, there is a zip code search option located on their webpage. This search option guarantees that anyone can find the closest accessible location offering Old Spice deodorant, therefore never allowing the consumer to be removed from their product. Consumers have found that “the web is an easier way to disseminate information than traditional media. Blogs, discussion boards, videos, and reviews all offer glimpses of real-life experiences with products, and in addition to pictures of various styles and instructions about how to achieve certain looks, companies can also encourage interaction and questions while projecting their brand images”(9).
Old Spice has been extremely successful, especially in the last 2-4 years with regards to their comprehensive promotion strategy. Most notable to consumers are their effective use of advertising, sales promotion, event sponsorship/marketing, use of digital media and public relations.
In the last 3 years, Old Spice has focused heavily on television advertising. Three particularly noteworthy campaigns were “The Man Your Man Could Smell Like”, “Isaiah Mustafa” and “The Matterhorn”. The humorous creative frames Old Spice products in a way that they can contribute to confidence and attractiveness, playing on male bravado. Further contributing to the success of these campaigns is the appeal to both men and women, who may be purchasing Old Spice products for their significant other (3). While these advertisements were focused on specific products, they had an ‘umbrella’ type effect that translated in to increased sales across all products.
The aforementioned television advertisements had a carryover and dramatic impact using digital media. From a broad digital marketing perspective, Old Spice uses Twitter, Youtube, Facebook and their company websites to promote their brand. Following the initial “The Man Your Man Could Smell Like” campaign, Old Spice captured over 40 million Youtube views in twelve months, increased Twitter followers by 2,700%, Facebook traffic increased 800% and website traffic increased 300% (3). Making effective use of digital media has strengthened Old Spice’s connection with their target market and created mass appeal.
Since 2006, Old Spice has served as the title sponsor for an early-season NCAA basketball tournament. The tournament is a 3-day, 8-team event held Thanksgiving weekend featuring major and mid-major college basketball teams. Not surprisingly, this event is both participated in and viewed by their target market. Old Spice has launched several sales promotions to coincide with this tournament, offering coupons and free products to participating universities.
Direct marketing is effectively employed by Old Spice through their displays and shelving techniques in various retail establishments. Men’s grooming products, including deodorant, body spray and body wash, are typically found in the health/beauty care sections of grocery stores and pharmacies. Building on the expanding “male grooming” market, the concept of “Man Aisle” has become a more recent development. This direct marketing technique creates a separate aisle containing all male-specific products as opposed to mixing them in with female products. It is estimated that more than 1/4 of men would like to see their products organized in this fashion, making their shopping experience more organized and efficient. CVS has already committed to implementing a similar store strategy.
- Mintel: Antiperspirants and Deodorants – US – February 2011
- Mintel: Fragrances – US – September 2011
- http://www.businessweek.com/magazine/content/04_44/b3906117.htm - Changing Old Spice’s Message
- Mintel: Soap, Bath and Shower Products – US – March 2011
- http://www.businessweek.com/magazine/content/04_44/b3906116.htm - Old Spices Extreme Make Over
- Data Monitor: Old Spice Case Study
- Mintel: Men’s Toletries US September 2011
- The Emerging Middle Class in Developing Countries by Homi Kharas – Centre For Development
- The America's Intelligence Wire, April 27, 2011 pNA