It has been seven years since Procter & Gamble changed the brand name of Oil of Ulay to Oil of Olay, yet it is not uncommon to still hear shoppers refer to the product by its former title.
If some consumers are unaware of the change, even more seem oblivious to the fact that five years ago P&G dropped the 'Oil of' part of the name to woo younger buyers.
P&G felt that 'oil' had connotations with a greasy product, and hoped that ditching the tag would encourage uptake. However, the low-key nature of the name change has resulted in many consumers remaining oblivious to the repositioning.
Olay is Britain's bestselling skincare product, according to Marketing's Biggest Brands survey. However, year-on-year sales were down by 11% in the 12 months to July 2005, and in this year's Readers' Digest Most Trusted Brands survey, Nivea knocked Olay off top spot.
As well as increased competition from rivals such as L'Oreal Dermo Expertise, Boots No 7, and Garnier Skin Naturals, Olay may also be suffering from its image as an 'older person's' product.
Launched in the UK in 1958, little has changed in terms of Olay's logo design since. Recent expansion has introduced products that have focused on anti-ageing properties. These include Total Effects, which consists of five facial, hand and body treatments, and Regenerist, which launched as a premium product in 2003 and is based on scientific advances in the use of peptides in the skin.
Younger consumers seem reluctant to buy into a brand liable to be seen on their mother's or grandmother's dressing table, and the wide choice available in the skincare sector means younger women do not have to look far to find a more glamorous alternative.
Other mid-range options include Unilever's Dove and Johnson & Johnson's Neutrogena. Both have rolled out a host of brand extensions similar to Olay over the past few years and their marketing activity is focused on younger users.
What must Olay do to rebuild sales? We asked Nicky Owen, director of consumer service brands at brand consultancy Dragon, who has worked with several fragrance companies and conducted research on metrosexuals, and Shirin Valipour, global business director at JWT, who has more than 18 years of experience of working on beauty accounts for clients including L'Oreal, Clairol and Schwarzkopf.
VITAL SIGNS - TOP 10 SKINCARE BRANDS 2005 Value % change (pounds m) on 2004 1 Olay 85-90 -11 2 L'Oreal Dermo-Expertise 45-50 14 3 Boots 40-45 7 4 Boots No 7 40-45 13 5 Garnier Skin Naturals 30-35 2 6 Nivea Visage 30-35 7 7 Nivea 30-35 - 5 8 Vaseline 25-30 - 8 9 Simple 25-30 19 10 Clean & Clear 20-25 4 Source: TNS Superpanel, Biggest Brands, Marketing 24 August 2005
DIAGNOSIS 1 - NICKY OWEN DIRECTOR OF CONSUMER SERVICE BRANDS, DRAGON
With so much competition in the skincare sector, it is little wonder that Olay - a stalwart of the anti-ageing category - has dropped behind Nivea as 'most trusted brand'.
Nivea now offers ranges for face and body. For an old brand, it feels young; its communication has vibrancy and energy and it represents gentle care for everybody, both women and men.
Olay, meanwhile, has concentrated on 'reducing the signs of ageing' in women, with a portfolio approach that seems to compete with itself as much as with others.
The Olay branding is dominant on all its products, for which the design, structure and language are similar. Yet there is a huge price difference between its more everyday ranges and premium Regenerist products. It is hard to trust a brand that charges very different prices for what seem to be virtually identical products.
Crucially, for a brand that has focused on anti-ageing, the communication feels just a little too (dare I say it) old to appeal to many women looking to stay young.
REMEDY
- Increase prominence of sub-branding to help differentiate ranges and benefits.
- Ensure the packaging structure and design are distinct for each range.
- Inject a sense of youth and dynamism through the communication and product launches, but not at the expense of Olay's heritage.
- Explore new communication channels and have several Olay 'faces' in the communications to appeal to a range of consumers.
DIAGNOSIS 2 - SHIRIN VALIPOUR GLOBAL BUSINESS DIRECTOR, JWT
'I want to be beautiful whatever the cost' typifies the mindset for today's women. For skincare brands, perfecting the balance of emotion, image and technology is the recipe for success. Ultimately, a woman will choose the brand that she feels reflects her inner image.
Olay has done a superb job of building on its heritage of skincare for its core target - older women. They have a greater disposable income and will buy premium products, even if using mass-market brands for their daily skincare.
The challenge for Olay is how to capture younger consumers. The anti-ageing brands are driven by constantly changing ingredients, making it hard to build specific benefit loyalty. Olay's ads are approachable and real. It is a safe, trusted and comfortable brand, but maybe just too comfortable.
Now it must face its rivals. These include L'Oreal, whose image is aspirational and modern; Garnier, which targets younger women with natural ingredients; and Nivea, which captures a younger entry market for the anti-ageing category.
REMEDY
- Create a sub-brand aimed at younger consumers entering the skincare market.
- Keep advertising approachable, but modernise and strengthen it to tap into L'Oreal's users.
- Secure distribution for Olay's specialist products in premium outlets, such as Space.NK and Sephora,to establish parity of efficacy with prestige brands.
- Explore the opportunity for an Olay Naturals range.