Pantene Set to Try Again to Reverse Slide

How P&G Plans to Fix High-Profile Brand's Problems With Latest Restage

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BATAVIA, Ohio ( -- Ever struggled to get just the right look, to tame that cowlick that defies repeated product applications or trips to several stylists? Pantene feels your pain.

After a second restage in three years failed to take hold with consumers last year, the Procter & Gamble Co. brand is preparing another course correction later this month for what remains the leading brand in U.S. and global hair care.

At stake is a high-profile initiative and brand for P&G that's been touted as an example both of the company's application of "design thinking" and its drive to streamline product assortments to improve efficiency, profits and consumer satisfaction.

P&G believes it's identified and will soon fix problems with the latest restage. Executives at the company's analyst meeting last month said those problems included consumers being more loyal to discontinued products (particularly two-in-one shampoo-conditioners) than the brand, and restrictive policies at Walmart that kept the brand from communicating changes to consumers at the shelf.

P&G is fixing the former issue by bringing back some two-in-one products. The latter has changed largely thanks to new leadership at Walmart U.S. last year after Bill Simon became CEO. A spokeswoman said retailers are welcoming back the discontinued shampoo-conditioners.

But some competitors privately say the problem goes deeper to the basic premise behind the restage. Traditionally hair-care products touted what they do for your hair -- be it volumize, smooth or add shine. Pantene took a different approach -- organizing into ranges based on hair types, not solutions.

"I was worried when I heard [that], because it didn't match up with what consumers were telling us they want," said an executive for one rival. He's now confident that he, and consumers, had it right.

Pantene sales were down 7.5% to $88.5 million for the 12 weeks ended Nov. 28 and 3.7% to $424 million for the 52 weeks ended then, according to SymphonyIRI.

The latest Pantene restage was an example of applying design thinking -- for example, by approaching projects from the ground up without preconceived notions or traditional category norms. The approach has had some notable successes for P&G, including rescuing Herbal Essences from the threat of mass retailer delistings following a restage of its own in 2006 and last year's launch of the Crest 3-D White range for beauty-focused consumers across all oral-care product lines.

But Pantene now has had two design interventions -- first by independent LPK in 2007, then by WPP's Landor last year -- without solving its problems. (WPP's Grey Global Group, New York, handles advertising.)

One hopeful sign is that the midcourse correction following Pantene's last restage, which included more readable packaging and more focus on value positioning vs. salon brands, ended a similar skid.

Even so, the restages and tweaks have engendered skepticism among analysts. "It's going to be a tough slog," said Sanford C. Bernstein's Ali Dibadj of the latest intervention. He said Pantene may be facing consequences of line extensions that aimed to blunt advances by Kao Brands' John Frieda and L'Oréal's Garnier Fructis last decade, which left Pantene with a complex product lineup and growing distance from its "healthy, beautiful hair that shines" equity.

To be sure, the U.S. hair-care business has been brutal for big players and design firms beyond P&G -- though the mass business did begin growing again last year after two years of decline. Unilever last year discontinued Sunsilk in the U.S. four years after its launch and little more than two years after a 2008 Super Bowl ad for the brand created by design firm Desgrippes Gobe (now BrandImage) and positioning specialist BrandThinkTank. L'Oréal Vive, launched in the 1990s, is hanging on in drug and grocery stores, but is off shelves at Walmart and Target .

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