In the late 1990s, when Procter & Gamble was contemplating becoming a major player in the global beauty care sector, it had a big issue: It lacked a credible brand in skin care, the largest and most profitable segment of the sector. All it had was Oil of Olay, Procter & Gamble's skincare brand Olay has been struggling with declining sales for several years. The team has tried many remedies, but none has returned the brand to growth. As pressure grows from Olay's competitors, the P&G team saw four strategic choices in front of them: 1. launch a new brand or acquire an established skin care brand? Next, reinventing the Olay brand? Another option was that P&G should expand one of its leading beauty brands into skincare, such as Cover Girl.
P&G ended up deciding to launch an upmarket product called Olay Total Effects for $18.99. In other words, the brand once dismissed as “Oil for Old Ladies” was transformed into a prestigelike product line at a price point close to that of department store brands. And it worked. Mass-retail partners loved the product and saw new shoppers buying at new price points in their stores. Beauty magazine editors and dermatologists saw real value in the well-priced, effective product line.
The masstige strategy succeeded beyond expectations. P&G would have been happy with a billion-dollar global skin care brand. But in less than a decade the Olay brand surpassed $2.5 billion in annual sales by spawning a series of “boutique” product lines—starting with Total Effects and following with Regenerist, Definity, and Pro-X—that attracted more prestige shoppers and commanded prices eventually exceeding $50.

0:00 Olay Rebranding
0:20 P&G Plans to dominate the Beauty Product
1:39 Customer research
2:26 Grow the market
4:49 New Brand or Re-Invention
6:05 Brand Re-Invention
8:07 Olay Total Effect

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