2. 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.
3. 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
4. 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
5. •
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
6. 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
8. 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.
9. 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
11. 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.
12. 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.
13. 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.”
14. 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.
16. 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”
18. 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
19. 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.….!!!!!!
20. 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.
21. 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 .
22. VALUE PROPOSITION CURVE
LOW
HIGH
The Body Shop
Cosmetic Industry
Price
Packaging &
Advertising
Hi-Tech
Scientific
Image
Glamorous
Image
PARAMETERS
Natural
Ingredients
"Ethical"
Concerns
23. 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.
24. 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”.
25. 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.
Notes de l'éditeur
Lohas : lifestyles of health and sustainability consumersLeading-edge thinkersHigher-than-average educationAverage incomes (this may be a surprise to many who thought their incomes would be higher, but it’s no surprise to people with PhDs!)Among the least price sensitive consumersExpect good value (they expect green products to perform equal to or even better than equivalent non-green products)Extremely brand loyalTend to write blogsInfluence others, particularly their family and friendsEarly adoptersInfluenced by brand image
The Body Shopmade clear decisions regarding: What factors could be reduced below the industry standard? What factors could be eliminated that the industry had taken for granted? What factors should be raised beyond the industry standard?What factors should be created that the industry had never offered?