Harvard Case - Facelift at Olay (A)
"Facelift at Olay (A)" Harvard business case study is written by Sunil Gupta, Rajiv Lal, Olivia Hull. It deals with the challenges in the field of Service Management. The case study is 22 page(s) long and it was first published on : Aug 6, 2020
At Fern Fort University, we recommend Olay implement a multi-pronged strategy focused on service innovation, customer experience management, and brand revitalization to regain its competitive edge and appeal to a wider, more diverse customer base. This strategy will leverage service design, technology-enabled services, and employee empowerment to deliver a seamless and personalized customer experience, while simultaneously strengthening the Olay brand through service differentiation strategies and service marketing mix adjustments.
2. Background
This case study focuses on Olay, a leading skincare brand facing declining sales and a perception of being outdated. The brand is struggling to connect with younger generations and compete with newer, more innovative brands. The case study highlights the challenges of adapting to changing consumer preferences and the need to redefine the brand's value proposition.
The main protagonists are:
- The Olay team: They are tasked with reviving the brand and finding ways to attract new customers.
- The target audience: This includes both existing and potential customers, particularly younger generations who are seeking more personalized and innovative skincare solutions.
3. Analysis of the Case Study
Strategic Framework: We will analyze the case using a combination of the Service-Dominant Logic framework and the Service Quality Gaps Model.
Service-Dominant Logic: This framework emphasizes the importance of co-creation of value in service experiences. Olay needs to shift its focus from simply selling products to creating a holistic and personalized skincare experience that customers actively participate in.
Service Quality Gaps Model: This model highlights the potential gaps between customer expectations and perceived service quality. Olay needs to identify and address these gaps to improve customer satisfaction and loyalty.
Key Issues:
- Outdated Brand Image: Olay is perceived as a brand for older women, failing to appeal to younger generations.
- Limited Innovation: Olay's product portfolio lacks the innovation and personalization seen in competitor offerings.
- Weak Customer Engagement: Olay has not effectively leveraged digital channels and personalized experiences to engage with customers.
- Internal Challenges: The company faces internal resistance to change and a lack of employee empowerment.
4. Recommendations
A. Service Innovation and Customer Experience:
- Develop a Personalized Skincare Ecosystem: Leverage technology to create a personalized skincare experience through:
- Skin Analysis Apps: Offer interactive tools for customers to analyze their skin type and receive personalized product recommendations.
- Virtual Consultations: Provide online consultations with skincare experts to address individual concerns.
- Subscription Services: Offer tailored subscription boxes with personalized product selections based on customer needs.
- Enhance Service Design: Optimize the customer journey through:
- Service Blueprinting: Map out the entire customer experience, identifying touchpoints and potential pain points.
- Customer Journey Mapping: Understand customer needs and expectations at each stage of their journey.
- Service Scripting: Develop clear and consistent service scripts for customer interactions across all channels.
- Embrace Technology-Enabled Services: Integrate technology to enhance service delivery and customer engagement:
- Self-Service Technologies: Offer online resources, FAQs, and chatbots to address common customer queries.
- Multichannel Service Delivery: Provide seamless service across online and offline channels, including social media, email, and physical stores.
- Service Level Agreements (SLAs): Establish clear service standards and performance metrics to ensure consistent quality.
B. Brand Revitalization and Competitive Advantage:
- Redefine the Brand Value Proposition: Position Olay as a modern, inclusive, and innovative skincare brand that caters to diverse needs and preferences.
- Develop a Strong Service Brand: Focus on delivering exceptional customer experiences that build trust and loyalty.
- Leverage Service Marketing Mix: Utilize a comprehensive service marketing mix to communicate the new brand positioning and attract new customers:
- Service Product: Offer a range of innovative and personalized skincare products and services.
- Service Price: Develop competitive pricing strategies that align with the value proposition.
- Service Place: Expand distribution channels to reach new customer segments, including online retailers and social media platforms.
- Service Promotion: Utilize targeted marketing campaigns and influencer partnerships to reach the desired audience.
- Service People: Invest in employee training and empowerment to deliver exceptional customer service.
- Service Process: Streamline service processes to ensure efficiency and customer satisfaction.
- Service Physical Evidence: Create a modern and inviting brand experience across all touchpoints.
C. Employee Empowerment and Performance Management:
- Empower Employees: Create a culture of service excellence by empowering employees to make decisions and provide personalized solutions.
- Implement Employee Incentives: Develop incentive programs that reward employees for exceeding customer expectations and contributing to service innovation.
- Foster a Service Culture: Promote a customer-centric culture that values empathy, responsiveness, and continuous improvement.
- Implement Employee Performance Management: Establish clear performance metrics and provide regular feedback to ensure employees are aligned with service goals.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: Olay's core competencies lie in product development and marketing expertise. The recommendations align with these competencies by leveraging them to create innovative and engaging customer experiences.
- External Customers and Internal Clients: The recommendations address the needs of both external customers and internal clients by focusing on customer satisfaction and employee empowerment.
- Competitors: The recommendations consider the competitive landscape and aim to differentiate Olay by offering a personalized and innovative skincare experience.
- Attractiveness: The recommendations are expected to improve customer satisfaction, increase sales, and enhance brand equity, ultimately leading to increased profitability.
6. Conclusion
By implementing these recommendations, Olay can effectively revitalize its brand, attract a wider customer base, and achieve sustainable growth. The focus on service innovation, customer experience management, and employee empowerment will create a strong foundation for long-term success.
7. Discussion
Alternatives:
- Focusing solely on product innovation: While product innovation is important, it is not sufficient to address the broader challenges facing Olay. A holistic approach that includes service innovation and customer experience management is crucial.
- Maintaining the status quo: This would likely lead to further decline in market share and brand relevance.
Risks:
- Resistance to change: Overcoming internal resistance to change is essential for successful implementation.
- Technological challenges: Implementing technology-enabled services requires careful planning and execution.
- Financial investment: Implementing these recommendations requires significant financial investment.
Key Assumptions:
- Customer willingness to embrace personalization: The success of personalized services relies on customer willingness to share data and engage in co-creation.
- Employee buy-in: Employee engagement and commitment are crucial for delivering exceptional customer experiences.
8. Next Steps
Timeline:
- Year 1: Develop and implement the personalized skincare ecosystem, enhance service design, and launch targeted marketing campaigns.
- Year 2: Expand service offerings, refine service processes, and monitor customer feedback.
- Year 3: Evaluate results, make adjustments as needed, and continue to innovate and improve customer experiences.
Key Milestones:
- Launch of skin analysis app and virtual consultation service.
- Implementation of subscription service and personalized product recommendations.
- Development of a comprehensive service brand strategy.
- Training and empowerment of employees to deliver exceptional customer service.
By taking these steps, Olay can successfully navigate the evolving skincare market, regain its competitive edge, and achieve long-term success.
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Case Description
By October 2017, 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, including hundreds of new direct-to-consumer brands catering to millennial women, North American Skin Care General Manager Chris Heiert must identify a winning marketing strategy that will appeal to women of all ages.
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