• Business Week , Thursday, June 19, 2008 11:45 AM

Mass-market shampoo Herbal Essences was a stale brand in its mid-30s when Procter & Gamble acquired it from Clairol in 2001. By 2006, there were three apparent choices, says P&G chairman and CEO A.G. Lafley: "Abandon it, divest it, or frankly, reinvent it and resuscitate it." Susan Arnold, P&G's beauty business chief, decided to bet on the latter.

A small interdisciplinary team of R&D, marketing, and design managers came up with a new target audience for the brand-Generation Y. The packaging was redesigned to "fit" this more tailored market: The shampoo and conditioner bottles are curved so that they literally fit together on the shelf. The nesting shape not only helped Herbal Essences stand out but also encouraged more young women to buy both products, driving up conditioner sales.

To appeal to Millennials, the team also updated the language on the packaging. The ho-hum "dandruff" reference gave way to "no flaking away." And names for different hairstyles were changed to more youthful phrases such as "totally twisted" or "drama clean." "We totally reframed the proposition," says Lafley.

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