Strategies for Launching a New Hair Care Product Range in Australia

This document discusses the strategies and risks involved in launching a new hair care product range in Australia. It explores the external environment analysis, including political, economic, social, technological, legal, and environmental factors. The document also suggests customized hair care range and strategies to deal with potential risks. It concludes with a cost-benefit analysis and recommended communication strategies.

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lead innovative thinking and practice
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8/28/2019
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Contents
Introduction......................................................................................................................................3
External environment analysis.........................................................................................................5
Pestle analysis..............................................................................................................................5
Political environment...............................................................................................................5
Economic factors.....................................................................................................................6
Social factors...........................................................................................................................7
Technological factors...............................................................................................................7
Legal factors............................................................................................................................7
Environmental factors..............................................................................................................8
New hair care product range in Australia........................................................................................8
Customized hair care range.....................................................................................................8
Risks and barriers may affect the new product launch....................................................................9
Potential risks...............................................................................................................................9
Strategies to deal with risk.........................................................................................................10
Focusing benefits instead of features.....................................................................................10
Testing the waters..................................................................................................................11
Setting realistic expectations.................................................................................................11
Be different............................................................................................................................12
Cost-benefit analysis......................................................................................................................12
Research and development....................................................................................................12
Manufacturing cost................................................................................................................12
Prototyping and product testing.............................................................................................13
Marketing activities...............................................................................................................13
Recommended communication strategies.....................................................................................13
Focus over specific customer segment..................................................................................13
Customer need understanding................................................................................................14
Various communications mix................................................................................................14
Social media communication.................................................................................................14

Customer feedback................................................................................................................14
Risk assessment.............................................................................................................................15
Conclusion.....................................................................................................................................16
References......................................................................................................................................17

Introduction
Innovation is one of the best strategies for a company to sustain in industry and for growth of the
company. However, innovation comes with various opportunities and risk involved, as it can be
said that higher the risk and the return is also higher. The purpose of the report is to assist the
innovation through an organizational case that is P&G group. The report will discuss various
innovative ideas while analysing the external environment and opportunities for the innovation,
the risk associated with new product launch and cost benefit analysis to assess the return of the
innovative product launch for P&G (pginvestor, 2019).
An American multinational consumer goods company that is Procter and gamble company was
founded in 1837 and expanded in various nations internationally. The company has considered
innovation strategy and by launching every product in segment. The company and will report
suggests that the cause for growing segments of P&G company is innovation, this includes
innovation through product launch, environmental sustainability, packaging innovation.
Considering the products, the company consider innovation principles. Other than this the
company has considered the operations innovation in order to respond to changing consumer
habits. The company’s global business units are responsible for the innovation and new product
upgrade, overall brand strategy and marketing plans. Key strategic objectives of the company
include value creation, productivity improvement (pginvestor, 2019). The strategic objective of
P&G also includes acquisition and joint ventures as a growth strategy of the company, which are
accomplished through use of innovative product strategy, innovative production strategy. The
evidence suggests that the key strategy or strategic objective of the company is to build a better
company, value creation, operating shareholder return. Innovation is the base for the company to

accomplish its strategy through sectors which have always been implemented by the company
through each of the product categories of P&G has provided of innovation portfolio as it
considers a game changing innovation and product improvement to be the key objective (pg,
2019).

External environment analysis
Pestle analysis
This is the external environment and opens at unity for new product launch in Australia will be
analysed. P&G is a global company, it is conducting business in various nations, and however
the opportunity to be found through this report is in Australia, which reflects the analysis of
external environment through pestle analysis (Ho, 2014).
Political environment
One of the factors that will affect the opportunity of a new product launch in Australia will be
political stability. From the graph below it can be said that the political stability index is not very
strong for Australia, however this does not reflect any negative outcomes, which depicts that this
factor is neither major threat for the company not act as an opportunity (Findlay & Garnaut,
2017).
Figure 1: (Source: (theglobaleconomy, 2019)

The corporate tax of the nation is 30% which is constant since 2006, which reflect that the
company profit margin will not be disturbed so awful due to stability in the tax paid by the
company, therefore, this is not a major threat for the company to launch new product
(theglobaleconomy, 2019).
Figure 2: (Source: (theglobaleconomy, 2019)
Economic factors
Economic factors can play a major role in the purchasing power of the customers. For instance,
can be set at the GDP of the Australian economy has identified to be growing, which reflect that
the purchasing power of people in the nation is also increasing, which can act as an opportunity
for the company (Bergin, 2017).

Figure 3: (Source: (theglobaleconomy, 2019)
Social factors
These include demographic and cultural factors, considering the hair care, the climate of the
nation is often to words the cool temperature. The western culture has been followed in
Australia, which reflects use of good products and taking care of their skin and hair has been
identified. These factors reflect that there is opportunity for the company to launch a new product
in hair care range (Adam & Kotler, 2014).
Technological factors
Australia is one of the technically advanced nations, this reflects opportunity for the company
while production of products using advanced technology, distribution of goods using digital and
technological ways (Aas & Rubin, 2015).
Legal factors
The laws and regulations are to be abiding by the company while launching new products, this
may not be a major threat for the company as the company has already been established in the
nation. However the laws are to be kept in mind while production of new product for example
safety act, employment and labour act, consumer protection act (Bergin, 2017).

Environmental factors
These are the major factors that the company has been following while integrating innovation
through environmentally friendly products and production. Therefore, this may reflect an
opportunity for the company to create good brand image and abide by the environmental factors
for new product launch and packaging as well (Ho, 2014).
New hair care product range in Australia
New opportunities identified through various sources and external environment analysis for your
product range by P&G to be launched in Australia include
Customized hair care range
It has been identified that the climate change is one of the major factors that may impact the
health of here the people, and obvious here types, and eat here type it is suggested do use a
separate set of help you reach according to the suitability of individual here. This range may
include for me to products that help individuals here to improve area of concern. Examples in
case of curly hair kind, the major area of concern include rough hair and hair fall. What is the
product may be customised with here mask, shampoo, conditioner and serum for treating this
particular kind of hair (Aksoy, 2018). Since it has been identified that the economic factors are
reflecting opportunity for the company, this will be included in premium hair care range as the
purchasing power in Australia is increasing. Another opportunity identified through
environmental factors is packaging, which could include environmental friendly packaging for
example in glass bottles, or recyclable plastic containers (Ahlin, 2014). Through this, the
packaging can be made interesting and innovative in order to attract customers, for example
combining all the products for one type of hair into a package for providing combo packages.

The lifestyles of people in Australia are identified to be stressful, extensive use of styling
products like iron rod, curling iron, hair colour and bleaching, which eventually affect the quality
of the hair care products and excessive use of chemicals. This reflects the opportunity of offering
natural and organic hair care range, which will be exclusive of parabens, sulphate, SFS
chemicals (einnews, 2019).
The key requirement identified are the legal factors, for which ingredients need to take care and
consumer protection act needs to be kept in mind while offering goods to the customers.
Risks and barriers may affect the new product launch
Potential risks
Various product risk associated with the launch of new products that are customised here care
range by P&G in Australia. These risks include
 Demand risk, the demand risk is related to the customer demand that this generation of
demand in the industry for customise product the risk related to demand. There is a risk if
customers prefer to use customised products or would like to continue with the traditional
product range that they are using by now. Operational risk please risk involved in
launching of the product timing, which could be delayed due to issues in production
distribution issues.
 Price acceptance risk, these are the risk associated with the pricing strategy of the
company, as the pricing strategy selected for this new product range would be premium
pricing which may not be accepted by the customers initially which is one of the major

risk. Another risk associated with the price could be the price war, the reason being there
are various competitors in the industry in Australia.
 Risk of customer experience, in case of lack of research and development investment, the
risk of poor usability by the customers may reflect or degrade the customer experience
which will eventually lead to a risk of product launch failure (Veron et al., 2019).
 Brand risk, this is one of the major risk which P&G is going to be considered as the brand
reputation of P&G is quite good in Australia, which could hamper in case customers do
not like the product or suffered any inconvenient to customer experience.
 Compliance and regulation risk, this is one of the major barriers for a product launch in
Australia that is the regulations and laws applicable to the product development and
product offering
 Risk of brand positioning, launching new products that are an innovative and new
product to the industry, the brand positioning and commercialisation of new products
play major role. In case of inability of the company to position the appropriately or
advertise the product in the right direction is the need to risk involved which could
hamper the product success rate (Pappas, 2016).
Strategies to deal with risk
The innovation strategies with the risk to change or product launch risk identified above include
Focusing benefits instead of features
One of the risk identified is the brand positioning wrist which could be mitigated to focusing on
benefit to commercialisation of the new products instead of providing the features information to
the customers. This can be fuelled through innovation in marketing activities or promotional
activities. Four example social media promotional activities before launching of the product

could be one of the strategies that can build up the brand positioning before the launch. This
strategy also focuses that there are not unnecessary confusion due to feature adding and
explaining the features to the customers, this may make the promotion more complex and
diversify the focus of brand positioning (Norman & Verganti, 2014).
Testing the waters
One of the ways to mitigate the risk is through the development of a prototype. It is better to test
the performance of the product before launching the product in order to reduce the risk of
customer experience and poor quality product. The key focus through this innovation strategy is
to provide premium quality product as the company is asking for premium pricing for the
product launch, for which the customer satisfaction should be maximum and the customer
experience should be extraordinary. Before pursuing the full product launch it is important to test
the performance with the help of prototype (Javed, 2015).
Setting realistic expectations
It must be known that the new product launch may take time due to marketing communications
and product recognition in the industry and among customers. Moreover, at times companies
provide unrealistic timelines for the launching of the product in order to generate excitement
among the customers. Nevertheless, in case due to any production delays in the company and
unable to launch on time this may hamper the reputation of the brand name and also losing the
momentum due to which the customers may lose interest in the products (Huggins & Thompson,
2015).

Be different
Through the innovation strategy is one of the key objectives is to be different while launching the
product, as the competition is very high in the market and in case the company is targeting a
large number of audience with everything in focus, its attractiveness would decrease for the
suitable customer. Therefore the strategy involves avoid hopefully everything to everyone and
instead be more focus over the particular customer segment and offering them unmet needs and
requirements (Fazlıoğlu, 2019).
Cost-benefit analysis
The cost benefit analysis is the analysis that will reflect the cost associated with each face of new
product development and launch, and the benefit associated with the product so as to understand
the return on investment on new product development. The key cost associated with this new
hair care arrange launch includes
Research and development
This is the initial step taken in the new product development that is to understand the market
scenario and be demand forecast, for which the estimated cost is $20,000, for which the
associated benefit includes a decrease in risk of product failure (Alves & Sousa, 2018).
Manufacturing cost
Manufacturing of the product is the major activity that will involve a high amount of cost due to
procurement of raw materials, processing and packaging of the finished goods. The cost is
estimated for this business activity in walls $150,000. The benefit associated with this cost is
high quality finished goods, which are the priority in case of new product development and
launch (Amabile & Rigolizzo, 2015).

Prototyping and product testing
The cost associated with this activity is $10,000 that is to test if the products will be effective and
the usage is as per the standards planned. The benefit associated is the minimisation of risk of
product failure in future, an increase in demand for the product before actual launch (Biemans,
2018).
Marketing activities
This activity includes commercialisation, brand positioning strategies, advertising through
various promotional tools like social media marketing, and ads through television and email
marketing. This marketing activity includes commercialisation, brand positioning strategies,
advertising through various promotional tools like social media marketing, and ads through
television and email marketing. The estimated cost associated with this activity is $50,000 and is
considered to be one of the most important and prioritize cost to be involved that is a major
investment in order to gain the returns which are key benefit by targeting Australian population
and an increase in sales of the product. The marketing activities benefits include return on
investment in smallest span of time (Bottani & Galli, 2017).
Recommended communication strategies
Focus over specific customer segment
For new hair care range, the recommended customer segment to be targeted would include
businesswoman, working women and young girls. The reason being these are understanding the
need of natural hair care products, and the lifestyle of this customer segment to be targeted also
includes a stressful lifestyle, which increases the need for customise hair care products.
Moreover the understanding of this group of customers will be higher and they will be interested

in trying innovative and new products due to use of chemicals and styling tools regularly
(Camison & Fores, 2016).
Customer need understanding
Prior to offering products to the customer, ask the customer to fill a form which would include
detail regarding the customer’s hair type, and other details, so as to provide personalized hair
care products and understand the key areas for concern as per the customer. This will increase
the customer relationship and customer database for the company (Coulson-Thomas, 2017).
Various communications mix
It is recommended to use various tools to communicate with customers four examples magazine
advertisement, email newsletters, billboards, in-store display, direct mail letters, product
packaging so as to reach out deals with affective message and suitable brand positioning (Bruns,
2013).
Social media communication
Social media is one of the trendy platforms for marketing by most of the companies, the reason
being people spend their most of the time on social media platforms like Instagram, facebook,
snap chat, Pinterest. Therefore, it is recommended to use social media platforms to communicate
with the customers and enhance product recognition among the customers through video
marketing on these platforms (Ding, 2018).
Customer feedback
In order to keep the product improved and increase the customer experience, it is important to
get a rating from the customers to understand the area of improvement. This may include a
feedback form, of star rating to the product (Du & Bstieler, 2016).

Risk assessment
Risk description Likelihood Impact Priority Preventative action/contingency plan
Demand risk Almost
certain
Major 1 Demand forecasting, pre-launch
marketing
Price acceptance
risk
Likely Moderate 5 Effective communication, premium
quality product, focus over benefit
Risk of customer
experience
Likely Major 3 Prototyping, product improvement,
customer feedback
Brand risk Possible Moderate Product diversification
Compliance and
regulation risk
Possible Major 4 Abide legal laws and regulation
Risk of brand
positioning
Almost
certain
Moderate 2 Be different, communication mix

Conclusion
From the Procter and gamble report, it can be concluded that an American multinational
consumer goods company that is Procter and Gamble Company was founded in 1837 and
expanded in various nations internationally. Key strategic objectives of the company include
value creation, productivity improvement. The evidence suggests that the key strategy or
strategic objective of the company is to build a better company, value creation, operating
shareholder return. New opportunities identified through various sources and external
environment analysis for your product range by P&G to be launched in Australia includes
customised hair care range. This range may include for me to products that help individuals here
to improve area of concern.
Since it has been identified that the economic factors are reflecting the opportunity for the
company, this will be included in premium hair care range as the purchasing power in Australia
is increasing. The opportunity of offering natural and organic hair care range, which will be
exclusive of Parabens, sulphate, and SFS chemicals. Various product risk associated with the
launch of new products that are customised here care range by P&G in Australia. These risks
include demand risk, price acceptance risk, risk of customer experience, brand risk, compliance
and regulation risk, and risk of brand positioning. The innovation strategies with wrist to change
or product launch risk identified above include focusing benefits instead of features, testing the
waters, setting realistic expectations, and be different. The key cost associated with this new hair
care arrange launch includes research and development, manufacturing cost, prototyping and
product testing, and marketing activities

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