Published on March 3, 2014
PRESENTED BY: APARNA MOHAN
GLOBAL COSMETIC INDUSTRY • Global MARKET Size by value : $382 billion. • The e-commerce of beauty products increased by 47% in 2011. • 2011 was the rebound year for One-brand shop, recording 32.1% growth. • In 2010, premium beauty growth in Russia leapt to 12%, consumer spending on the category in 2010 was 9%. • Brazil is world’s largest consumer of natural cosmetic products followed by India and China. • Natural and organic cosmetic market posted a double-digit growth , and its CAGR since 2009 exceeds 15%. • The keyword of cosmetics market in 2012 is “SMART.” Source : Premium Beauty News, Euromonitor International.
Global trends • Global male skin care • Growing diversity in men market growing at a rate • fragrances. self-tanning of 16% annually. lotions and creams. • • Growing popularity of Anti-aging Online sales Increased to anti-cellulite $11 billion in 2010. creams and skin care products • Growing trend towards "masstige", or premium, brands sold at lower prices. • Promotion of beauty from within. • Sun Care • Virtual experience based shopping. • According to RNCOS latest industry monitory report "Cosmetics Trends", nano-particles are nowadays increasingly being used to enhance cosmetics products quality and efficiency. Source : Global Beauty Industry Trends 2011
Global trends • Conscientious beauty : • Long-lasting beauty is • Time-saving : R&D Naturally another focus on areas like positioned, overriding organic and fair-trade theme. These products fast-drying nail beauty products are are hassle-free and a polish, 3 – in - 1 rapidly moving from good value-for-money. shower gel, facial niche to mainstream status. • High-tech wash and shaving foam for men. developments: with high-tech innovations. • • Catering to “all women” : products to address Alternative shapes is one of the newer trends in needs of consumers across and within different beauty packaging. ethnic groups. Source : New & Unique Innovations in the Beauty Market, February 2010
• INDIAN MARKET Indian beauty industry : Rs 3000 crore. • 40 percent of cosmetic sales catered to male consumers. • Apart from natural, organic and fair trade is the new movement in the beauty segment. • Cosmetic industry growth rate 15-20% . • Skin care @ 7-8 %, Herbal cosmetic @ 40%. • Beauty and personal care @ 18%. • Largest market in India : Western India 28% share. – Fastest growing regions : East and North East India. • Strong beauty sales in rural. • Consumers demanding enhanced packaging, more efficient product, enhanced functionality, versatility… Source : CMIE
porter’s 5 force AnAlysis of indiAn mArket • High concentration of suppliers. • Backward integration in brands. • High degree of imports. SUPPLIER’S POWER • High entry barriers. • Long-established companies. • Monopolistic competition. • Government regulations. • Distribution channels. • Economies of scale in big brands. NEW ENTRY • Major players targeting niche customers => Greater loyalty & low Buyer Power. BUYER’S POWER • Mature market . • Long-established companies. • Niche players. • Other non-organic products. • Home-made products. • Home facials. RIVALRY SUBSTITUTES
MAJOR NATURAL COSMETIC PLAYERS
LUSH HANDMADE COSMETICS • COMPETITORS “WE REALLY DO PUT THE WHOLE FRUIT IN…!!! “ • Positioned as Natural handmade cosmetic brand. • Premium segment. • Word of Mouth advertising. • Strong CRM. • No animal testing. • Innovative approach. • Simple or no packaging. FOREST ESSENTIALS : “LUXURIOUS AYURVEDA” : Founded in 2000 • Luxurious natural and ayurvedic. • Super premium brand. • Supply across 5-Star hotels and spas. • Attracting customers from middle income segment. • USP : Light , pleasurable and utilitarian products. • Started with SHOP-IN-SHOP approach, now switched to their own retail outlets.
5 PRODUCT MODEL FOREST ESSENTIALS UNIQUE PRACTICES AYURVEDIC NATURAL HANDMADE NATURAL EFFECTIVE EFFECTIVE MOISTEN AND WHITEN MOISTEN AND WHITEN SKIN PROTECTION SKIN PROTECTION UNIQUE PRACTICES + VALUES COMPLETELY NATURAL EFFECTIVE MOISTEN AND WHITEN SKIN PROTECTION THE BODY SHOP LUSH
An indiAn consumer’s mindset
MINDSET TAKEN FORWARD... (kAno’s model) •Variety of flavors •Ambience •CRM •Eco-friendly brand •Offers •Availability •Reasonable price •Natural Ingredients •Brand Image •Effectiveness •Reliable •Significant Usefulness •Products as per skin type.
Who buys what?? Behavior & lifestyle TECHNOLOGICAL PRODUCTS • Blue-Collar workers • Unconcerned — buy products strictly on price, value, quality, and convenience. • Preppy Generation — Experiments with colors. • Attracted by Glamour & Glitz — Read a lot of fashion magazines, trendy, follows latest styling. • Wandering Customers — Have no prior product priority but buy the products most readily available and in demand. • Discount Customers — Most interested in products in sale and discounts. Mostly students or less earning professionals with no fixed priorities on brands.
Who buys what?? Behavior & lifestyle NATURAL PRODUCTS • White-collar workers • LOHAS — socially responsible, influencers, value practises of companies , meditate, exercise. • Naturalites — interested maintaining personal health. • The Living Natural consumer — Driven by awareness, eat organic foods. – “She’s finding new ways to use her old clothes, shopping vintage and thrift shops, and buying clothes made of recycled fabrics.” • The Core Fashionista — – “She is rethinking and redefining her sense of style and eco-chic. “ • The Walking Natural consumers —Trend followers. – “driven by wanting to belong to a greater community.” • The Spending Natural profile — – “Sense of exclusivity and entitlement are important to her. For her, buying natural connotes luxury, not any kind of sacrifice.”
WHY A MOVING TREND TOWARDS BEING NATURAL ? • 60% of skin products are absorbed & deposited in the blood system. • Average woman absorbs 30 pounds of ingredients in cosmetics over 60 years. • Users consume an average of 7 pounds of lipstick in a lifetime. • Contain aluminum, artificial colors, etc which cause major skin diseases in older ages. Source : Eco Healthy Living, PRLOG.2011 DEMOGRAPHICS • Rise in consumer spending power high income consumers have started to look for premium products, which essentially mean natural and organic cosmetics. • Consumers with increasingly active lifestyle are going green. AWARENESS • Health awareness as well as the desire for sustainability. • Entry of herbal and organic products. • Massive advertising and promotion strategy . • Consumers concerned about social and environmental issues. CELEBRITY INFLUENCE • Cameron Diaz, Madonna use Juice Beauty Products. • Brooke Shields use Weleda Products. • Jennifer Lopez etc use Dr. Hauschka Products. • Hillary Duff uses and endorses Nvey Eco Products.
CAPTURING THE TRANSITION
CONSUMER CLASSIFICATION on Buying Frequency Want to buy, But lack resources. ASPIRERS • Want to be in the limelight, has role model, want to use luxurious (good fragrance, good feel) products. LOYALISTS • Influencers, brand loyal, value practises of companies & CRM. • Baby boomers + matures Once Always DRIFTERS • Motivated by latest trends, shifters, • Gen Y - 18-27yrs, Gen X - 28 – 40 Don’t stick to one particular brand. Makes purchases as per convenience. CONVENTIONALS • Driven by practicality and resources: • Young baby boomers • Recently married, looking for VFM products. UNCONCERNED / STUBBORN • Not concerned about the type of product they buy. , …!!!! Don’t make purchases on regular basis. “I don’t care”
CONSUMER CLASSIFICATION CONVENTIONALS DRIFTERS ASPIRERS LOYALISTS STUBBORN
TAPPING THE ASPIRERS, DRIFTERS AND CONVENTIONALS PRICE PROMOTIONS TARGET CUSTOMER Coupons For consumers to buy new / more products. Attract drifters and conventionals. Rebates To generate trust in the consumers. Price-off Deal Prices lowered for short durations / Attract drifters and conventionals. Trade-In To encourage repeated sales / Attract drifters . Loyalty Programs Memberships, rewards to loyalists. Sampling and Free Trials To encourage use of new unused products. Premiums Free service/ Attract drifters and conventionals. Online Contests and sweepstakes To attract new customers / Attract Aspirers. Source : Karen Gedenk, Price Promotions, Frankfurt - 2004
A step AheAd…. DRIFTERS CONVENTIONALS ASPIRERS Coupons Coupons Coupons Trade-In Premiums Contests Premiums Sweepstakes Coupons : Via electronic medium and Internet, promoting customer interaction. Trade-In : Encouraging customers to return used bottles for yearly redeemable points. Premium : Free offerings like F2F, Tele, Web-Based consultation and applications. Contests : Online contests on various social-networking sites. Sweepstakes : To be held online. “BIRTHDAY FREEBIES” for member customers.….!!!!!!
Swot analysis • Ethical standards and natural ingredients. • Lull advertising. • L’Oreal economies of scale and experience curve. • High pricing. • Own retail outlets. • Mild haircare products. • Focus on ethical beauty and humanitarian issues. • Innovative approach. • Increased interest of men in their appearance. (The ‘Metrosexual’ factor). • Increased preference and awareness of organic and eco friendly products. • Growing urbanization, and increased disposable income. • Higher SPF sunscreen range in India. • Their USP “green message” is being taken ahead by various other brands. • Brands offering natural cosmetics at lower prices. • New legislation banning animal tested products is bound to increase competition.
ANSOFF MODEL • Smaller SKU’s for travelling purpose. • For Indian market ideal sunscreen should effectively block both UVB and UVA rays, which is done with an SPF of 30 or greater. Source : Indian Journal of Dermatology, Venereology, and Leprology, New Markets Existing Markets Existing Products New Products Higher SPF range in sunscreen. Small SKUs in all product ranges to capture the ‘On-the-Go’ market. Improve online supply chain . Promotional Packaging. Sunscreen ranges for haircare. Water-resistant products. No Diversification .
VALUE PROPOSITION CURVE LOW HIGH The Body Shop Cosmetic Industry Price Packaging & Advertising Hi-Tech Scientific Image Glamorous Image PARAMETERS Natural Ingredients "Ethical" Concerns
PACKAGING “WAlk the Green journey” • Each and every product would have a booklet attached to it which mentions about the product, ingredients and social benefits associated with it. • Carry bags would contain different facts about “THE BODY SHOP” to make the consumers aware about the brand in – depth. • The consumers like LOHAS, Naturalites etc would take pride thereby increasing loyalty towards the brand. • This is in line of their values where they aim to “ACTIVATE SELF-ESTEEM” in the users for using the eco-friendly products.
PACKAGING “continuing the Green journey” • Wild flower seed bag to be attached to all the bottle shaped products & • Wrapping non-bottled product with a strip of organic bio – degradable paper infused with wild flower seeds. • This would be an initiative to encourage consumers plant seeds in their houses and then in their communities. • This is in line of their values where they aim to “ PROTECT THE PLANET”.
PROMOTING “pArtnership mArketing” • This is in line of “THE BODY SHOP”’s strategy of using recycled material for product packaging. • Consumers would be encouraged to be a part of company’s recycling practice. • Consumers would gain points on returning the used bottles back which could be further recycled. • The points accordingly can be redeemed in the year end.
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