Tilting Windmills: Sanex Tries to Conquer Europe

Course: Marketing Management Case Study: â€Å"Tilting Windmills – Sanex Tries to Conquer Europe 1st Question: What were the reasons for the success of Sanex in Spain? The product Sanex, or moreover the Sanex concept, became a success in Spain because the company responsible for it, CVL, and it’s local President, Mr. Martin Munoz, carried out one of the first rules of Marketing: they invented a Consumer’s need and provided the right answer for it. Mr. Munoz was able to find a gap in the Household and Personal Care (HPC) Market, and namely in the Bath & Shower Products Market, where we could only find, in the mid 1980’s, 2 types of products: Cosmetics and Pharmaceuticals. After studying this market along with his management team, Mr. Munoz realized that the first ones were perceived as lower end products, abrasive (sometimes giving rashes to its users) and with strong scents, only suitable for cleaning one’s body and not offering additional properties. The second ones were perceived by costumers as being suitable for almost medicinal purposes only, with no day-to-day applicability. Pharmaceuticals were not appealing to the mass consumer, namely because they had no perfume in its composition, besides being rather more expensive than their counterpart ones. We could find Cosmetics in supermarket chains and Pharmaceuticals in pharmacies. In this way, we can say that Cosmetics and Pharmaceuticals divided the Bath & Shower Products Market, but in fact these were 2 completely different segments of the Market, with totally different approaches and Marketing Mix, being it in terms of Product, Price, Placement or Publicity. Accordingly, Mr. Munoz realized that there was a huge gap in the Market and thus started developing a product that should position itself between Cosmetics and Pharmaceuticals: it should be cleansing as Cosmetics were, but slightly milder, and should offer a protection side as the Pharmaceuticals did. It should embrace the best of those 2 opposite worlds, but should be aimed at the mass consumer market. The result was the creation of Sanex and of a whole new category in the Body Care Market: Dermo-Protectors. The team readily started to develop and fine tune the Marketing Mix of Sanex. 1 Concerning the product in itself, they chose it to be white in order to differentiate itself from cosmetics (colorful) and pharmaceuticals (transparent). Sanex should also be soft and slightly perfumed. Cosmetics had strong perfumes and pharmaceuticals were odorless. Sanex should produce more foam lather than pharmaceuticals, but less than cosmetics. Sanex would ultimately have to provide a day-to-day cleansing function but also a protective effect to ones skin, thus contributing for it to be healthy. A great deal of concern was also taken into account concerning the packaging of the product. In terms of pricing, and regarding the positioning of the product, Sanex should be proposed at a premium price, closely linked with the highest price of its cosmetic counterpart so that it could be reachable by mass consumers. This was considered to be the right price. Another important aspect concerning its large scale availability was distribution, and Sanex was thought out to be available in supermarket chains and retail outlets. Lastly, a great deal of importance was given to the communication aspect. Being a whole new product, produced by a company that was in this market for the first time, Mr. Munoz realized that awareness of the product would be very important so he asked for an advertising campaign that should be adroit and credible, able to convey the message that using Sanex would not only result in a clean skin but also in an healthy skin. This was the Sanex concept. A whole new different concept. With the correct Marketing Mix, Sanex was launched in Spain in 1985 and became a winner almost instantly. Followers appeared with â€Å"substitute† products beginning in 1986, but Mr. Munoz used its 1st mover advantage and continued investment of revenue in strong advertising support, year after year, to ultimately achieve a Share of Voice of 37% in 1990 and continued leading market share throughout those years. 2 2nd Question: Do you think the reasons for success and the strategies used in Spain can migrate to other countries? Being a concept that didn’t exist in many other countries, Sanex had all odds in favor in order to replicate the success it had in Spain in other countries. That way, the reasons for success were all there. In fact, Mr. Munoz was invited by Sara Lee/DE headquarters, the mother company of CVL, based in the Netherlands, to roll out Sanex throughout Europe as a coordinator. Mr. Munoz’s firm beliefs were that the objectives, product policy and marketing policy of introducing Sanex should be identical for all the countries, and replicated exactly as done in Spain. Initially the different subsidiaries in countries such as Denmark, the Netherlands, France, Belgium, UK and Greece were quite unfavorable, namely due to the name of the brand and product characteristics. In the Netherlands, France and Denmark, management’s disbelief was confirmed by initial market research and local product testing that presented dismal results. However, in time, Sanex proved to be a success in all this markets and the way it got there was by implementing the same strategy and keeping the same product name and identity, as defined by Mr. Munoz. The only country where Sanex failed was in the UK, apparently because it was the only one where local management distorted the original product by changing the product’s name (from Sanex to Sante) and the market strategies accordingly. This way, it appears that Sanex could become a global brand and its marketing mix could be implemented in different countries, with minor adaptations, as illustrated by the stated above. I think this is particularly true in countries such as those in the EU where there is a convergence in terms of buying power, people’s interests/concerns, market structure and distribution channels. Last but not least, if nothing else, the uniqueness of the product/brand/concept should allow it to cut across borders and be managed as a whole.