Estate of Paul Mitchell, Deceased, Patrick T. Fujieki, Executor - Page 12

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          to create a successful and effective product line.  The JPMS                
          products were marketed only to salons and emphasized education as           
          a selling technique.                                                        
          E.  Mr. Mitchell's Role in JPMS                                             
               In 1980, Mr. Mitchell promised hair stylists that his                  
          products, marketed through JPMS (then Paul Mitchell Systems, Inc.),         
          would be sold only through professional salons.  Mr. Mitchell's             
          promise carried credibility due to his stature in the professional          
          beauty industry.  The promise to remain "professional-only" was             
          important to the successful marketing of the Paul Mitchell                  
          products.                                                                   
               Mr. Mitchell was the heart of JPMS' connection to hair                 
          stylists, who were the foundation for JPMS' marketing strategy of           
          promoting and selling products that Mr. Mitchell developed.   Mr.           
          Mitchell was JPMS' creative trendsetter, and his hair sculpting             
          technique revolutionized hair styling.                                      
               In order to further promote its products, JPMS developed the           
          "Associates Program" to train hair stylists in the Paul Mitchell            
          system.  This program became an integral part of JPMS' marketing            
          effort.  JPMS associates underwent special training in both hair            
          styling and JPMS products.  Once trained, the associates went to            
          salons to teach the proper techniques to promote the products.              
               By April 21, 1989, JPMS had 700 associates.  The associates            
          were paid by the distributors, and they were involved with JPMS             





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