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An Analysis Of Dermatologic Cosmetic Laboratories Marketing Essay

In 1988, DCL was one of the original pioneers in the cosmetic use of Alpha Hydroxy Acids. The wide range of protocol products includes an extensive selection of AHA formulations and forms including creams, lotions and gels containing increasing concentrations of Glycolic Acid for “step-up”dispensing.

DCL was also a pioneer in dispensing product by working with medical practices to demonstrate that its comprehensive product line achieves the following:

Complements medical acumen

Ensures patient compliance

Provides patient value and service

DCL continues its mission to optimize a doctor's diagnostic and clinical skills by continuously making dispensing easy, effective and risk-free with our 100% unconditional product guarantee. Dermatologic Cosmetic Laboratories continues to lead in advanced skincare technology with clinical studies, providing superior performance of patent pending technologies and comprehensive systems. The company's commitment to quality and physician exclusivity sets it apart and beyond industry standards.

In 2007, DCL became the First cosmeceutical company in Pakistan. Essentially catering to physicians' needs before and after aesthetic medical procedures, DCL Pakistan offers targeted skin conditioning programs to doctors who settle for nothing but the best for their patients.

The Company wants to introduce its products and services into foreign countries like UK. So I have made a plan for company how it can enter into UK market. I have analyse lots of factors which will affect the company to enter into UK market. I have discussed about the companies foreign policies, how company will face the problems into UK market in aspects of Political, Social, Economical, Technological, Legal factors. I have also discussed about the competitors of company into UK market and how our company product will compete with all its competitors (SWOT analysis, market segmentation). I have also discussed about the market entry mode of company how can company enters into UK market. So this report will definitely helps the company to introduce itself into UK market.

PRODUCT: - I have chosen a company who is dealing in Skin care products. The company deals in a wide range of products, all products are very competitive in market.

Cleansers

A cleanser is a facial care product that is used to remove make-up, dead skin cells, oil, dirt and other types of pollutants from the skin of the face. This helps to unclog pores and prevent skin conditions such as acne.

Scrubs

A natural-fiber facial scrub that exfoliates the surface layers of your skin to uncover a healthy, glowing complexion. Dead skin cells build up on the surface of your face clogging pores and dulling natural radiance

Creams

Creams are semi-solid emulsions, that is mixtures of oil and water. They are divided into two types: oil-in-water (O/W) creams which are composed of small droplets of oil dispersed in a continuous aqueous phase, and water-in-oil (W/O) creams which are composed of small droplets of water dispersed in a continuous oily phase.

Gel

A gel that moisturizes and promotes suppleness of the bust. Visibly improves skin firmness for immediate skin-tightening effects

Suncare

For best sun protection, a UVA and UVB-protective sunscreen with a SPF of 15 or higher should be applied to clean, dry skin 30 to 60 minutes before exposure to UV-rays.

Packs

Face packs are softer and more porous types of facemasks. They improve circulation as well as cleanse and tauten the entire face. Because they are soft, they allow the skin to breathe more and are gentler than masks; they can be on longer, even during a full body massage.

Toners:- A natural facial toner will improve your skin tone by tightening your pores helping to reduce the appearance of fine lines and wrinkles, it will increase circulation, giving your face a healthy glow, hydrate your skin and restore your skin natural PH balance.

TARGET MARKET:- Company decided to export their product into UK market. The UK market is already full of natural facial products. There are lots of world famous companies who are in same business and they having a strong hold into the market. So my company will face a strong competition with all of them. UK is a developed country which has lots of trading facilities such as communication, trading policies, transportation, market exposure etc. The main advantage of UK is that it has world recognize place. The consumer of UK are very well aware of all of the product and their features. As far as beauty products are concern they are very much sensitive about that. These type of products are very much popular in UK consumers specially the natural products. They spent huge amount of money on beauty products. They always tried to use new products for their body for new features.

MARKET ENTRY STRATEGIES:- Entry strategy for international markets in a comprehensive plan, which sets forth the objective, goals, resources, and policies that will guide a company’s international business operations over a future period long enough to achieve sustainable growth in world markets ( Roots, 1994). For entering into the foreign market there is few strategies by which company use for their business. There are two types of strategies.

Indirect strategies

Exporting

Licensing

Joint venture

Direct Investment

Exporting: - It is the simplest way to expose their products into foreign county. Exporting is the marketing and direct sale of domestically-produced goods in another country. Exporting is a traditional and well-established method of reaching foreign markets. Since exporting does not require that the goods be produced in the target country, no investment in foreign production facilities is required. Most of the costs associated with exporting take the form of marketing expenses.

Exporting commonly requires coordination among four players:

Exporter

Importer

Transport provider

Government

Licensing:- The method of foreign operation whereby a firm in one country agrees to permit a company in another country to use the manufacturing, processing, trademark, know-how or some other skill provided by the licensor. Licensing essentially permits a company in the target country to use the property of the licensor. Such property usually is intangible, such as trademarks, patents, and production techniques. The licensee pays a fee in exchange for the rights to use the intangible property and possibly for technical assistance.

Licensing gives the following advantages:

Good way to start in foreign operations and open the door to low risk manufacturing relationships.

Linkage of parent and receiving partner interests means both get most out of marketing effort.

Capital not tied up in foreign operation.

Options to buy into partner exist or provision to take royalties in stock.

The disadvantages are:

Limited form of participation - to length of agreement, specific product, process or trademark.

Potential returns from marketing and manufacturing may be lost.

Partner develops know-how and so licence is short.

Licensees become competitors - overcome by having cross technology transfer deals.

Requires considerable fact finding, planning, investigation and interpretation.

Joint Venture:- An enterprise in which two or more investors share ownership and control over property rights and operation. There are five common objectives in a joint venture: market entry, risk/reward sharing, technology sharing and joint product development, and conforming to government regulations. Other benefits include political connections and distribution channel access that may depend on relationships.

Such alliances often are favourable when:

the partners' strategic goals converge while their competitive goals diverge;

the partners' size, market power, and resources are small compared to the industry leaders; and

partners' are able to learn from one another while limiting access to their own proprietary skills.

The key issues to consider in a joint venture are ownership, control, length of agreement, pricing, technology transfer, local firm capabilities and resources, and government intentions.

Potential problems include:

conflict over asymmetric new investments

mistrust over proprietary knowledge

performance ambiguity - how to split the pie

lack of parent firm support

cultural clashes

if, how, and when to terminate the relationship

Joint ventures have conflicting pressures to cooperate and compete:

Strategic imperative: the partners want to maximize the advantage gained for the joint venture, but they also want to maximize their own competitive position.

The joint venture attempts to develop shared resources, but each firm wants to develop and protect its own proprietary resources.

The joint venture is controlled through negotiations and coordination processes, while each firm would like to have hierarchical control.

Foreign Direct Investment: - Foreign direct investment (FDI) is the direct ownership of facilities in the target country. It involves the transfer of resources including capital, technology, and personnel. Direct foreign investment may be made through the acquisition of an existing entity or the establishment of a new enterprise.

Direct ownership provides a high degree of control in the operations and the ability to better know the consumers and competitive environment. However, it requires a high level of resources and a high degree of commitment.

Key factors to an organizations success in launching a new product:-

Good management by giving heavy emphasis on planning, organization, and interaction among various functional groups or units for e.g. .Marketing, Manufacturing, Engineering, R&D etc.

New products quality must be in proportional with the price and the products synergy with the company.

New product process will be well planned and executed.

Providing efficient and friendly customer service.

The competitive advantage of the new product over similar products by virtue of features, quality, price, uniqueness, etc.

Primary reason for new product failure

Company’s inability to catch up with its offerings to the needs of the customer, there is three reasons for that, they are:-

Inadequacy in intelligent effort.

Failure on the part of company to stick with what they do best.

Inability to provide valuable products and services than competing.

COMPETITOR: - In UK market there is lots of companies who are dealing in beauty products. The main competitors of DCL company are Nivea, L'Oréal etc.

Nivea is a global skin- and body-care brand, owned by the German company Beiersdorf. The company began in 1911 when Beiersdorf developed a water-in-oil emulsifier as a skin cream with Eucerit, the first stable emulsion of its kind. The company's owner,Oskar Troplowitz, named it Nivea, from the Latin word niveus/nivea/niveum (meaning snow-white). During the 1930s, Beiersdorf began producing products such as tanning oils, shaving creams, shampoo and facial toners. The trademark "Nivea" was expropriated in many countries following World War II. Beiersdorf completed buying back the confiscated trademark rights in 1997. Internationalisation during the 1980s propelled the Nivea brand to a wider global market.

As one of the internationally leading companies for skin care we are close to consumers, offering them compelling, innovative products. Their brands enjoy universal trust from NIVEA, one of the world’s largest skin care brands, to other internationally successful brands such as Eucerin, La Prairie, Labello, 8×4, and Hansaplast/Elastoplast. With more than 125 years experience in skin care and one of the world’s most modern research centers, Beiersdorf stands for innovative and high-quality cosmetic products.

The L'Oréal Group is the world's largest cosmetics and beauty company, with its registered office in Paris and head office in the Paris suburb of Clichy, Hauts-de-Seine, France, it has developed activities in the field of cosmetics. Concentrating on hair colour, skin care, sun protection, make-up, perfumes and hair care, the company is active in the dermatological and pharmaceutical fields and is the top nanotechnology patent-holder in the United States.

Present in more than 120 countries, L'Oréal Paris grew from one philosophy: to innovate and offer top performing products at great prices to the greatest number of consumers possible. A philosophy which stems from the research carried out in our laboratories and our will to make professional expertise accessible.

Through our continued pursuit of excellence, L'Oréal Paris is sculpting the future of beauty. Thanks to our engagement and genuine value for respect and closeness between women and men of the world, we have been able to become a global leader in the world of beauty trends.

MARKETING: The American Marketing Association defines marketing as “the process of planning and executing conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals”. Marketing is getting the right product to the right people at the right price at the right time.

Market Segmentation Marketing segmentation analysis is a cornerstone of sound marketing planning and decision making. Marketing segmentation may be defined as the process of dividing a market into groups of similar consumers and selecting the most appropriate group(s) for the firm to serve.

CONSUMER ANALYSIS

The prime reason found for new product failure is an inability on the part of the selling company to match up its offerings to the needs of the customer. Social, marketing and situations are the factors which influences on the consumer’s decision making. The amount of influence these factors will have on the consumer’s decisions depends on a number of psychological influences. The effective marketing starts with the recognition of customer needs and then works backward to devise the products and services to satisfy these needs. Product introductions that generate substantial consumer acceptance contribute to the firm’s market share in the category and the brand reputation (Choi, 1998). Since NEC play is introduced by a brand with more market power and when it is marketed as a brand extension, using a reputable brand name this may attract more consumer acceptance creating a virtuous cycle of innovation success. To estimate a new products early performance, it is important to consider both total purchases and as well as the trend in purchases (cf. Gatigon & Robertson,1985) Further industrialist study the (Ernst/Youg/A.C.Nelson, 2000) indicate that the first year is crucial for success of new packaged good. Moreover in all countries the product and the competitive environment factors are much stronger in shaping new products success than consumers’ factors.

AnSoff Matrix:-

The Ansoff Product-Market Growth Matrix is a marketing tool. The matrix allows marketers to consider ways to grow the business via existing and/or new products, in existing and/or new markets – there are four possible product/market combinations. This matrix helps companies decide what course of action should be taken given current performance. The matrix consists of four strategies:

Market Penetration: - (existing markets - existing products): Market penetration occurs when a company enters/penetrates a market with current products. The best way to achieve this is by gaining competitors' customers. Other ways include attracting non-users of your product or convincing current clients to use more of your product/service, with advertising or other promotions. Market penetration is the least risky way for a company to grow.

Product development: - (existing markets - new products): A firm with a market for its current products might embark on a strategy of developing other products catering to the same market

Market development: - (new markets, existing products): An established product in the marketplace can be tweaked or targeted to a different customer segment, as a strategy to earn more revenue for the firm.

Diversification: - is the most risky of the four growth strategies since it requires both product and market development and may be outside the core competencies of the firm. In fact, this quadrant of the matrix has been referred to by some as the "suicide cell". However, diversification may be a reasonable choice if the high risk is compensated by the chance of a high rate of return. Other advantages of diversification include the potential to gain a foothold in an attractive industry and the reduction of overall business portfolio risk.

PEST ANALYSIS

Political

The company’s move must be in accordance to the governmental policy.

The acts of the company according to the tax policies on every government.

As the policies of UK government is open for the business, so our company will not face much more problems to enter into UK.

Now at present the Government in UK has change so that company should moniter the new government policies about the business.

Economic

The company can reduce the cost of structures of its products.

The increase in the market share can also be applicable to the company.

It can also maintain its profitability.

The company also looks on the financial position of UK as it is changing with the effect of recession.

As in UK DCL company will face a strong competition with their competitors so company should also thinking about their pricing policies.

Social

The company should also consider the population distribution factors which effects the business.

The company should also consider the income status of the company.

As in UK almost from all over the world the peoples living, so the company should also consider the mentality of all these persons.

The impact on many lives and to the strong partnerships in the suppliers.

The working condition in UK is very good for the companies, so DCL

Technological

Company should aware of the new products launching by the competitors.

DCL should also develop some new products as per the market requirement.

The upgraded technology on the product of DCL for strengthening the growth segments and to produce profitability.

The company use new technology to develop their product in better way.

The company should also share their product knowledge on internet for better marketing.

Legal:-

The company should aware of the UK health and safety regulations.

The company should aware of UK and EU laws about the free trading.

Company should appoint some expert in UK for the solution of their legal aspects.

SWOT ANALYSIS

STRENGTH

The DCL Company deals in Natural products, which are non toxic to the body.

The company products having unique features, by which it is famous in Pakistan.

The company has fully trained peoples which will helps to present the company product into market.

The price of company product is very competitive in the market.

WEAKNESSES

The company products famous in Pakistan but it is unknown to the UK market.

The company staff is trained for local markets such as in Pakistan but it will face the problem when they will enter into the UK market.

The product of company will face the strong competition into UK market because in UK market the present product having a high quality as per market requirement.

The DCL Company has limited resources in terms of finance, trained staff, and other resources.

The company has lack of competitive strength.

OPPORTUNITIES

As the company has Natural products so it has a bright future in UK market as the UK consumers are very much sensitive about their health and safety.

The market for the Natural beauty products is increasing very rapidly, so it has great future in market.

The price of company product is competitive so it will compete well in market.

If company starts its business in UK then it has a great future to expand into other countries also.

THREATS

As in UK new government form, so company should monitor on the new policies of the government.

As the products are related to the beauty and facial so that company should take care of environmental issues also.

The market of the competitors in UK are very much strong so company will face the strong competition in market.

The geographical changes also affect the business of company.

Marketing Objectives

In simple words, an objective is ‘what you want to achieve’ and strategy is ‘how you plan to achieve your objectives’. The main objective of DCL is to introduce its product into UK market and capture a reputed market share because the DCL is dealing with in natural products which is non toxic and non harmful to the customers. Company wants to expand its business into UK market with quality services. So the company is basically introduce itself aiming towards new markets.

Some of the main objectives of DCL about its product:-

To boost sales revenue at least by 10% by the end of the year

To gain 25% of market share within 5 years of launch

To introduce a natural product into new market.

Marketing Strategies

Marketing Strategies are means by which marketing objectives will be achieved and generally are concerned with 7Ps (Marketing Mix) as follows.

Product

The products of DCL is natural product which is very much popular globally.

The company has a wide range of products which helpful in beauty purpose.

The quality of DCL company’s product is much high which keeps it into high level.

Price

The prices of the DCL company products are very competitive in the local market as it is made up of Natural resources so that company can kept their prices competitive to another one. A product Nivea is selling in 5 pounds we can the same product in 4 pounds as introductory price because our company is a Pakistan based organisation and all the production is going there and we have cheap labor that is the key factor on which we can start our competition.

Place

The company products will be available either on its outlets or with its partners. It has its own website on which customers can get information about the products and company. www.dclpakistan.com

Promotion

One of the major methods of promotion is through advertisements. Advertisements of DCL company products will be displayed through newspapers, websites and TV channels.

Free trial facilities for their customers so that customers can get more information about the products.

Sponsorships will be provided for various marketing campaign where company will display its product to the customers.

Some type of promotional outlets should be introduced which will helps the displaying the company product in better way.

People

The direct interaction of employees with customers takes place only at some outlets or where company displays their product publically. The employees need to explain to the customers the features and advantages of the product. So two things are most important, one that employees should be well aware of the product and secondly their communication skills need to be good in order to interact with the customers flawlessly. It is equally important to keep employees motivated. The company pays high salaries to all its employees. The company will also provide commissions on every console sold by the employees.

Process

Process of production is of least concern to consumers. For busy customers, speed and friendliness are more important. As DCL Company is dealing with the beauty product so they should very much concern about their working process such as customer services, product delivery etc. The company makes sure that if customers ordered online they would be receiving it within a given time. The employees are trained to be friendly to customers. The customers can interact with employees and clear their queries.

Porter’s generic competitive strategies

The company will be following certain generic competitive strategies suggested by Porter.

Cost Leadership:-

In cost leadership, a firm sets out to become the low cost producer in its industry. The sources of cost advantage are varied and depend on the structure of the industry. They may include the pursuit of economies of scale, proprietary technology, preferential access to raw materials and other factors. The products of the DCL Company is on natural resources so they concentrate on lower price to compete with their competitors.

Differentiation:-

In a differentiation strategy a firm seeks to be unique in its industry along some dimensions that are widely valued by buyers. The DCL Company is different from other competitors as they provide quality services with better result.

Cost Focus

The main cost advantage of DCL product over the other competitors is that they have quality products with affordable range of product.

Differentiation Focus

DCL satisfy special needs of customers as they fulfill all the requirement of the customers.

RECOMMENDATIONS

Once the product is launched, more and more customer feedbacks must be collected. This can help in betterment of the product in future

Need to cope up with advanced technologies developing fast. The company should be able to release a better and more compact version of NEC Play as soon as possible with more features and advanced technologies

More and more gaming competitions need to be sponsored in the future. It is one of the best methods used for promoting gaming consoles by major competitors like Sony and Microsoft.

CONCLUSION

Success of new product depends on good marketing plans and strategies. The company should carry out their objectives and strategies in an efficient and cost effective manner. Customer satisfaction is also equally important. The main factor includes which can affect the entry into foreign market are social culture distance, firm size, international experience etc. Due to being a multistage decision making process (Roots 1994) the choice of foreign market entry mode must be addressed in accordance to that..In short, for a company to be successful it should be able to carry out all its strategies & objectives in an efficient and cost effective way which also leads toward customer satisfaction.

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