It was too late, given the deliberative style of Kao's Japanese management, for Kao to counter by that much, said executives familiar with the matter.
Some analysts believe one reason P&G wanted Clairol so much was to keep Kao and its legendary research and development prowess from getting a foothold in the U.S. hair-care market.
If so, the strategy didn't entirely work. Denied Clairol, Kao in August 2002 bought John Frieda Professional Hair Care. With sales of $160 million, John Frieda had 10% of Clairol's sales, and Kao's $450 million outlay was 10% of what it bid for Clairol.
That's where the parallel ended. Clairol's sales and share declines have continued-or accelerated-under P&G. John Frieda, marketer of brands Frizz-Ease, Sheer Blonde and Beach Blonde shampoos, conditioners, colorants and styling aids, had double-digit growth when it was acquired, and that growth has continued under the watch of Kao's U.S. Andrew Jergens Co. unit.
Kao's strategy has been to add its strength to Frieda and vice versa, including retaining the services of John Frieda himself, said Brad Kirk, VP-marketing at Jergens. Kao now makes Frieda's products and is applying product technology from Asia. Adding some marketing, media and distribution know-how is Kao's Cincinnati-based Jergens management, which long has operated under neighbor P&G's shadow.
Jergens last year consolidated Frieda's advertising with its own agency, Interpublic Group of Co.'s Bozell Worldwide, now Lowe & Partners, New York. Frieda's in-house design group handles Jergens skin-care product packaging, and Lowe has taken on one of Frieda's top in-house creatives, keeping the eye-catching advertising for such lines as Sheer Blonde intact. John Frieda ads that had run mainly on spot TV are now running on national cable and network TV under Kao.
"We think [John Frieda] is an on-trend brand with a lot of credibility and low awareness," Mr. Kirk said. "So [with more media support] we fully expect to double the business in a couple of years. But I don't know how high is high."
Hair-care competition increasingly has focused on value brands, with P&G earlier this year discontinuing supperpremium VS Sassoon. But Mr. Kirk sees room to grow in superpremium products.
"We think we can be a leader if not the leader," he said, "in the superpremium end of the mass market."