Estate of Paul Mitchell, Deceased, Patrick T. Fujieki, Executor - Page 6

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          Growth in sales for a professional hair care company depends upon           
          maintaining a forward edge in fashion and trends.3                          
               There are three categories of liquid hair products: "Hair              
          care" (shampoos, conditioners, and rinses); "styling products"              
          (hair sprays, fixatives, mousses, sculpture lotions, etc.); and             
          "chemical reactive products" (hair color, perms, and bleaches).             
               Professional-only hair care products are marketed on an                
          implied promise to the hair stylists that such products will not be         
          mass marketed or sold through drugstores, supermarkets, or discount         
          stores.  Professional hair stylists will not sell or use mass-              
          marketed products in their salons.  Mass marketing a product closes         
          the salon or professional market to that product.4                          
               Education is an important aspect of marketing hair care                
          products to hair stylists.  This education includes hair shows,             
          product knowledge classes, and styling classes (featuring new ways          
          to cut hair and new products to achieve the latest looks).  During          
          hair shows, platform artists demonstrate new styles and techniques,         


               3    For instance, Redken was a professional hair care                 
          company that dominated the salon-only market through the 1970's.            
          In the early 1980's, Mr. Mitchell began to convince hair stylists           
          that the new trend in styling was the "sculpted look".  Redken's            
          sales growth flattened when it did not keep abreast of this                 
          trend.                                                                      
               4    During the 1960's and 1970's, companies such as Wella             
          Balsam, Aqua Net, Vidal Sassoon, and Jhirmack broke the implied             
          promise and changed their distribution from salon-only to the               
          mass market. The products of each of these companies were closed            
          out of the professional market shortly after being mass marketed.           




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Last modified: May 25, 2011