Cosmetics brand Dark and Lovely, owned by L’Oreal East Africa, last month launched a range of natural hair products for Africans— Au Naturale—in a bid to catch the shift in fashion towards natural hair care.
Evidence shows that large brands that adapt to fashions, even as latecomers, survive better than those that remained wedded to old product ranges.
Overall hair care continues to be a growth market in Africa, but consumer tastes have changed in the last two years, with a rise in interest in natural haircare products.
“Hair styling products form a highly attractive segment in the hair care market and are projected to expand at a 4.4 per cent compound annual growth rate. Its growing demand is due to the changing purchasing behaviour and patterns of consumers,” reported the global Transparency Market Research in 2016.
“A key trend noted in this segment is the fact that local manufacturers in Africa and Asia Pacific have been focusing on new product development and innovation, catering to consumer preferences so as to establish a loyal customer base over the years,” reported the researchers.
In Kenya, L’Oreal East Africa had a market share of 28 per cent in hair care products in 2016, making it the second biggest hair company in Kenya.
Its products appealed to consumers who prefer the straight and fuller hair achieved with its relaxer products. However, a change in consumer preference has seen it face stiff competition from new companies, such as Marini Naturals, which are offering natural hair products.
With its new launch, “our tailor-made recipes cover both the hair care and styling needs for the African natural hair,” said Dark and Lovely.
The launch is likely to now present serious competition to Kenya’s early stage natural hair care producers.
“Established brands have an upper hand in evolving markets because the brand is already registered in the minds of the consumers who associate it with success. Consumers’ familiarity with the existing brand therefore eases the new product entry into the market and helps the brand extension to capture new market segments,” said Bruce Gumo, Marketing Analyst at Biztrace, a marketing solutions agency.
Innovation by established brands additionally reduces the costs of new product introduction, marketing research, and advertising to achieve brand awareness, and normally increases the chance of success due to associations with the main brand, according to a paper titled Launching of a New Product With the Brand Extension Strategy by the International School for Social and Business Studies, Slovenia.
However, where an established brand fails to respond to changing fashions, it can, instead, lead to business deterioration, as it loses consumer appeal and its market value declines.
“One of the most common business phenomena is also one of the most perplexing: when successful companies face big changes in their environment, they often fail to respond effectively. Unable to defend themselves against competitors armed with new products, technologies, or strategies, they watch their sales and profits erode,” reported a Harvard Business Review article on Why Good Companies Go Bad.
“It is often assumed that the problem is paralysis. The problem is not an inability to take action, but an inability to take appropriate action.”
Such was the case with Xerox, the world’s largest photocopier maker. In 1974 the company controlled 85 per cent of the photocopying market, however with the emergence of Japanese competitors such as Canon, its market share dropped and profits declined.
By 1985, its market share had dropped to 40 per cent due to a failure to challenge the new products on the market.
In 1999, when the personal computer became a must-have product in the office it went into further decline. The following year, it reported a loss of $273m losing $20bn in stock market value-from April 1999 to May 2000.
It is believed that the company would have survived had it innovated while it was still the market leader and commercialized on its Xerox Alto- the first PC ever invented.
It has since become a cautionary tale for companies that fail to adapt to meet market demands.