Question

Bee & Gee is a multi-product, multi-brand, packaged goods company with a significant presence in the personal care and grooming category. Within each product category, it has numerous brands that sometimes compete with each other in the same geographical markets. Bee & Gee allocates its annual promotional budget for each product category using a top-down budgeting approach, after which brand managers of brands in each product category compete for promotional dollars for their own brand by submitting budget proposals.

The promotional budget for the next fiscal year, for each product category at Bee & Gee, was just released to the marketing chiefs of each category. In the shampoo category, Bee & Gee has four different brands, each targeted toward a different consumer segment, but available in the same geographic markets. Each of the four brand managers in the shampoo category started making a case for claiming a substantial piece of the promotional budget.

Once the promotional budget has been set, the next step is to allocate it. The allocation decision involves determining which markets, products, and/or promotional elements will receive which amounts of the funds appropriated. Some factors that influence budget allocation are IMC element mix, client/agency policies, market size, market potential, market share goals, economies of scale in advertising, and organizational characteristics of the marketer's firm.

Read the report below, which provides a summary of four brands in the shampoo category at Bee & Gee, and answer the questions that follow.

The four brands in Bee & Gee's shampoo category are Fansheen, Hair & Neck, Herb Essentials, and Brilette. Each of these shampoo brands targets different consumer segments, and they have varied brand histories. A summary of the market conditions and advertising situation of these four shampoo brands is provided in the following paragraphs.

Fansheen is the oldest of the four brands in Bee & Gee's shampoo category. It is targeted primarily toward women, aged 30-60, whose primary concern is nourishment for their hair. It is a clear market leader with a 42 percent market share in the segment it competes in. Fansheen's primary competitor is Love, a shampoo brand from a rival packaged goods company with a strong 28 percent of the market share in that same segment. Love has gained market share in the last few years by increasing its share-of-voice every year, thus maintaining a high share-of-voice in the market.

Hair & Neck is the most popular anti-dandruff shampoo in the market. It is a clear leader in market share and share-of-voice, by a mile, in the category of non-prescription medicated shampoo. There are several other brands in this category, with small market shares and low share-of-voice.

Herb Essentials is a shampoo targeted at teenagers and young adults, ages 16-29. It has a low market share and competes in a very fragmented market. A rival brand with the highest market share in this fragmented market, FruitEase, is also the brand with a high share-of-voice. Within the 16-29 age segment, FruitEase is most popular with young adults aged 21-29. The brand manager for Herb Essentials often contemplates whether Herb Essentials should fight FruitEase and other rival brands more aggressively across the entire segment or follow an alternate strategy.

Brilette is a shampoo targeted at males, ages 24-45, and is the newest brand in Bee & Gee's portfolio. It has low market share in a market with a few rivals who do not advertise very much. Historically, this market segment was not well defined, with many unisex shampoo brands competing for the male shampoo user. This segment has only recently seen exclusive for-men shampoo brands.

The marketing chief of the shampoo category at Bee & Gee has to decide on budget allocation among the four shampoo brands.

Question 1: Based on priorities in each of the individual markets, which of the following brands should dramatically increase its promotional budget in order to attack the competition with the objective of gaining a large share-of-voice? For this question, please use information provided in the report only, and no other information.

Multiple Choice

• Hair & Neck

• Brilette

• Brilette and Herb Essentials

• Herb Essentials

• Fansheen

Question 2: Based on priorities in each of the individual markets, which of the following brands should decrease its promotional budget in order to target a niche segment? For this question, please use information provided in the report only, and no other information.

Multiple Choice

• Brilette and Herb Essentials

• Brilette

• Fansheen

• Hair & Neck

• Herb Essentials

Question 3: Based on priorities in each of the individual markets, which of the following brands should increase its promotional budget in order to defend its market share? For this question, please use information provided in the report only, and no other information.

Multiple Choice

• Herb Essentials

• Fansheen

• Herb Essentials and Fansheen

• Hair & Neck

• Brilette

Question 4: Based on priorities in each of the individual markets, which of the following brands should maintain a slight share-of-voice premium in the market they compete in? For this question, please use information provided in the report only, and no other information.

Multiple Choice

• Brilette

• Fansheen and Hair & Neck

• Fansheen

• Herb Essentials

• Hair & Neck

Question 5: A new market entrant in the anti-dandruff shampoo market, Sun & Moon, launched a massive advertising campaign featuring a stylish, well-liked celebrity. The campaign seems to be working effectively, with a significant number of consumers switching from Hair & Neck, though Hair & Neck still maintains a lead in market share. In this "new" situation, how should Hair & Neck's promotional budget be allocated? For this question, please use information provided in the report and the "new" information provided in this question.

Multiple Choice

• It should decrease advertising spend and focus on a niche segment of loyal customers.

• It should increase promotional spend to defend its market share.

• It should get a celebrity spokesperson to rival Sun & Moon's celebrity spokesperson.

• It should maintain a modest spending premium.

• It should attack with a large SOV premium.

Question 6: FruitEase, the brand with the highest market share and share-of-voice in the teenagers and young adults segment, had to recall hundreds of thousands of shampoo bottles because of contamination with a harmful chemical. FruitEase found itself in an embarrassing situation with hundreds of consumers complaining of itching, and extensive damage to their hair. Faced with a slew of lawsuits and consumer complaints, FruitEase mismanaged the situation and made an executive decision to stop all advertising for the brand for an entire year. In this "new" situation, how should Herb Essentials' promotional budget be allocated? For this question, please use information provided in the report and the "new" information provided in this question.

Multiple Choice

• It should attack with a large SOV premium.

• It should maintain a modest spending premium.

• It should increase promotional spend to defend its market share.

• It should slowly withdraw this brand from the market and hence phase out the advertising.

• It should decrease advertising spend and focus on a niche segment of loyal customers.

Answer 1

i) Brilette and Herb essentials,should dramatically increase its promotional budget in order to attack the competition with the objective of gaining a large share-of-voice.

ii) Hair and neck,should decrease its promotional budget in order to target a niche segment.

iii) Fansheen,should increase its promotional budget in order to defend its market share.

iv) Hair and neck,should maintain a slight share-of-voice premium in the market they compete in.

v)It should increase promotional spend to defend its market share.

iv) It should increase promotional spend to defend its market share.