Estate of Paul Mitchell, Deceased, Patrick T. Fujieki, Executor - Page 5

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          discount stores.  Products sold through this distribution channel           
          are heavily dependent upon extensive and expensive mass-media               
          advertising to generate an awareness of the product and consumer            
          demands.  "Over-the-counter" products are sold through beauty               
          supply stores, which sell products that are not "salon-only"                
          products (and are generally not available in the mass market).              
          "Salon-only" (or "professional-only") products (such as the Paul            
          Mitchell line described hereinafter) are available to the public            
          only through professional hair salons.  Throughout the 1980's, the          
          greatest growth in sales of hair care products was in the salon-            
          only market.                                                                
               Salon-only products do not require a high level of advertising         
          expenditures,  but  they  are  heavily  dependent  upon  the                
          recommendation of a brand, product, or system, by the hair stylist          
          to the consumer  in the salon.  Because of the hair stylist's               
          ability to influence the consumer, companies that sell their                
          products through salons emphasize marketing to hair stylists and            
          salon owners.  Furthermore, these companies place importance on             
          educating hair stylists and salon owners about their products in            
          order to ensure correct recommendations to consumers, which in turn         
          increase the possibility of repeat sales.                                   
               The professional hair care industry is trendy and fashion              
          oriented and sells the public on changes in looks.  Hair stylists           
          learn the latest trends and fashions through trade magazines (such          
          as Modern Salon, Salon Today, American Salon, and Salon News).              



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