Marketing Essay Example | Topics and Well Written Essays - 2250 words - 2

Marketing - Essay Example All the shampoos and conditioners of the line are packed and labeled in a similar manner, but each type of the product has a different color of packaging (Palmolive Hair Care 2011). The bottles that are used for packaging all have a label that outlines the purpose of each separate product (for brilliant color or for smoothing hair, for instance), and stresses that the shampoo or conditioner includes natural ingredients. The life itself is called Palmolive Naturals. There are no extra services or products that the consumer gets when purchasing the product. Palmolive shampoos and conditioners are mass consumer goods (Kotler and Keller 2006). For this reason, their search cost is low – all similar products are located in one place, so a consumer can instantly compare them all and make a choice. Substitutes will be accepted as well. 1.2 Current Pricing The market of shampoos is rather competitive. Though it requires quite high entry costs, the number of current competitors of Colg ate-Palmolive is quite significant, and includes such large companies as Procter & Gamble, Church & Dwight Co, L’Oreal and Unilever. The market is characterized by strong buying power of retailers, high threat of substitutes and high degree of rivalty (Morningstar, Inc. 2010). Currently the price of Palmolive Naturals shampoo ranges from $4.45 (Getprice.com.au 2011) to $5.13 (Thefind.com 2011). The price for the conditioner ranges from $3.55 to $4.60 (Getprice.com.au 2011). At the same time, Thefind.com (2011) reports that Procter & Gamble Pantene shampoo prices start at $4.99. The price in most cases is higher than that of Palmolive shampoos. The cheapest L’Oreal shampoo sells at $5.49. So, Palmolive products seem to be the cheapest famous brand goods in their niche. Though there are some competitors’ products, the price of which is rather close to Palmolive’s, the number of such shampoos is not great. At the same time, the number of highly priced produc ts of the rivals is very significant. So price can be said to be one of the competitive advantages of Palmolive. Therefore, if Palmolive changes the price for its products, consumer demand for them may decrease since there will be more similarly priced substitutes. Since Palmolive is a mass-consumer shampoo, consumers do base their purchase decision on price: David Mercer outlines that individual consumers always tend to spend less (Mercer 1996). However, brand awareness is important as well. The price of the product is determined on the basis of business’s costs in the first place. Business’s costs determine the minimum price at which the product can be sold to cover the business’