Case
Hair removal
Case prompt
Our client is a global consumer products manufacturer called B&G with multiple business units (skin and beauty products, personal care products, washing products etc).
They are successful (No 1 or 2) in almost all the segments that they operate in. However, they have not been successful with their hair removal products.
They have hired us to advice them on this segment and help them achieve market leadership.
Detailed solution
Paragraphs highlighted in orange indicate hints for you on how to guide the interviewee through the case.
Paragraphs highlighted in blue can be verbally communicated to the interviewee.
Paragraphs highlighted in green indicate diagrams or tables that can be shared in the “Case exhibits” section.
Suggested case structure
Key question: Why is the company not successful in this segment? How can it increase market share?
Brainstorm with the interviewee on a possible structure to solve the case.
Below would be the steps to solve the case:
- Market trends: The candidate should attempt to understand the hair removal product segment– customers, product usage, customer behaviour etc.
- Company: The candidate should try to understand the company’s capabilities in this segment – products, price, customer perception, brand etc.
- Competition: The candidate should try to understand the competitors, market concentration, market share, etc.
- Final recommendation: Based on the analysis, the candidate should attempt to combine his understanding of the market, competition and the company’s capabilities in order to get to the root cause for the low market share in the segment. Then the candidate must succinctly lay down the next steps for the client in order to succeed in this segment.
1. Market trends
The interviewee should at the outset try to understand the market and the customers in the hair removal segment – customer segments, product usage etc.
Allow the interviewee to think aloud and lay out the list of information required in order to understand the market and the customers.
Share Exhibit 1 with the candidate if s(he) enquires about the product usage. It shows the percentage of consumers that use a particular type of product (from the total users of hair removal products)
Exhibit 1
Share the following information with the interviewee:
The sum of each segment in Exhibit 1 is more than 100% as one consumer uses multiple types of products.
Share the following information with the interviewee if enquired:
- 90% of women (above 10 years of age) use hair removal products regularly. Primarily old women do not use these products regularly
- 98% of men (above 10 years of age) use hair removal products regularly
- Women do not use wet/ dry shaving method as much as men, due to their fear of skin rashes, cuts, pigmentation, increase in hair growth etc. Several product innovations have been done in the wet/dry shaving segment for women; however they prefer waxing
- The usage trends (% of consumers using a particular method) have remained stable for the past few years
Key insight:
- Almost all men use hair removal products (98%), so there is limited scope of acquiring new customer segments.
- Only 90% of women use hair removal products; 10% women (primarily senior women) don’t use these products. Potential to explore products for this segment and grow the market.
- 80% of the women use waxing products.
- Men primarily use wet and dry shaving products. Very few men (5%) use waxing products.
2. Company
The interviewee should now try to understand the company’s capabilities – products, pricing strategy, consumer perception, brand etc.
Allow the interviewee to think aloud and lay out the list of information required in order to understand the company’s strengths and weaknesses in this segment.
Share Exhibit 2 with the candidate if s(he) enquires about the product lines. It shows the no. of products of B&G in each segment
Exhibit 2
Share Exhibit 3 with the candidate if s(he) enquires about the product pricing. It shows the average prices of B&G products compared to competition
Exhibit 3
Share the following information with the interviewee if enquired:
- B&G is perceived as a cheap brand by women
- Men perceive the B&G brand as a high end brand
- All the products (across different segments) have similar margins
Key insight:
- B&G does not have a large variety of products for the women’s segment. It has 3 products for wet shaving (which is not a preferred usage method) and only 2 for waxing.
- The products in the waxing segment are common for men and women. This could potentially be a difficult value proposition to sell. Also, given waxing is not a preferred usage method for men, having common products in this segment adds little value.
- The brand perception of B&G in the men vs. women segment is very different. In the women’s segment B&G is perceived as a cheap brand. B&G has also kept its product prices in the medium-low range in the women’s segment.
3. Competition
The interviewee should now try to understand the competitive landscape in this segment – competitors, market share, market concentration etc.
Allow the interviewee to think aloud and lay out the list of information required in order to understand the competitive segment.
Share Exhibit 4 with the candidate if s(he) enquires about the market share information. It shows the market share of B&G (%) in each segment
Exhibit 4
Share the following information with the interviewee if enquired:
- Men’s segment is largely concentrated with the top 3 players holding 80% market share. B&G is the second largest player in men’s segment for both wet and dry shaving
- Women’s segment is very fragmented with over 10 players holding 60% of the total market share
- B&G is the 15th largest player in the waxing segment
Key insight:
- B&G is a strong player in the men’s segment with a 35% market share in the wet shaving segment and 22% share in the dry shaving segment. These two product segments are the preferred hair removal methods by men.
- B&G is weak primarily in the women’s segment. It has a 2% market share in the waxing segment which is the preferred method for women and a 10% market share in the wet shaving segment. However wet/ dry shaving is not a preferred hair removal method in women’s segment.
- The waxing segment is a poor performer for B&G. The company has only 2 products in this segment and they are common for men and women.
- Women’s segment is fragmented, which could make it easier for the company to acquire market share.
4. Final recommendation
The candidate should synthesize his recommendation as follows:
Focus on the waxing segment (primarily for women)
- The company should explore launching products specifically targeted at women, as they are the primary audience in this segment.
- It could evaluate exiting the market segment for men (Waxing products), as only 5% men use this method.
Improve value proposition for women’s segment
- B&G is perceived as a cheap brand by women; medium-low pricing in the segment.
- Increasing prices coupled with the launch of women focused waxing products could help improve the brand image of the company and make it consistent with the high end image in the men’s segment.
Increase the market by targeting senior women
- The company could launch specific products targeted at senior women and try to increase the market and gain share.
Acquire competitors
- Since the women’s segment is fragmented, B&G could look to acquire a competitor which would help accelerate the market share gain.
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