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The Australian Cosmetics Company Is A Cosmetic Company Marketing Essay

4513 words (18 pages) Essay in Marketing

5/12/16 Marketing Reference this

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As more and more people pay attention to their appearances and looks, cosmetics are becoming so popular that have attracted much more consumers than ever before and the trend is increasing. Therefore, it has brought an excellent opportunity for Australia cosmetic company to expand its market overseas. So this assessment aims to make a marketing plan for Australia cosmetic company to develop its natural products overseas in Japan to have a further market expansion. Japan is the second largest market in cosmetics production and consumption that just falls behind the United States only. Almost everyone in Japan use cosmetics. Considering about the Japan cosmetic market, it has five obvious characteristics that are: Japanese luxury cosmetics sales are still hot; thin makeup market is good and popular, imported products become increasingly popular; there is a products polarization from low levels to high-end market; Old cosmetics market becomes strong.

Before Australian Cosmetics Company enter the Japanese market, the enter mode should be considered, including many factors. Political factors are the most prominent risk manifestations. Social and cultural factors are key factors to help consumers to make their decision. Industry factors analysis will be useful to help Australian Cosmetics Company to surpass its competitors (Kondo, 2004; Orzen, 2008). Therefore, Australian Cosmetics Company should take green foreign investment.

Target customer need is a source of conceptual design and power. Thus Investment analysis should consider those factors: Customers of consumer motivation, Customers of consumer choice, the timing of customer consumption, Customers of consumer sites and Customer consumption analysis. Product positioning should orient the consumers’ gender and age. And the ages are divided into three stages which are people aged in 16-25, 25-45 and older than 45. Exploiting products should consider consumers preference and habits.

As an account Manager, demand forecasting plays an important role in connecting link. The market can be predicted in two ways that are forecasts by brand and by customer forecasts. During the prediction, the manager should monitor the prediction. To the market mix strategy, Australian Cosmetics Company has two strategies which are market segmentation and target market.

2.0 Introduction

The Australian Cosmetics Company is a cosmetic company located in Australia and its main products are made from natural materials, such as local Australian ingredients, pure extracts, natural oils, organic materials which also reflect the essence of Australian, and it aims to help people become more beautiful. It does not provide cosmetic, but also provides body and bath care products with high quality.

Australian Cosmetics Company has developed a green cosmetic that can improve local blood circulation, eliminate excessive accumulation of pigment in the organization, promoting skin cell metabolism, and thus to the role of beauty. And it is conducive to water leakage and the role of a tranquilizer and beauty; moreover it is replenishing the top grade. It inherits the essence of classic cosmetology, blending of herbal essence and the latest achievements of modern biotechnology. During exploiting, the products are applied with equilibrium theory and the overall concept of Chinese medicines unique. High-tech is also used in extraction of natural herbal essence, thus it makes the product can rest up physically and mentally, skin, body, spirit to achieve harmony, ideals, vivid best, natural glow, personality, health and original beauty. At the same time the development of the products also meets modern people pursue on the “natural balance” of beauty. All age groups are suitable for with different skin types and have no effects. Long-term use of the products, it can make herbal extracts the essence of fine texture and mild, and can rapidly penetrate the skin, improving skin microcirculation, promoting cell metabolism, removal of skin aging, a comprehensive repair uneven skin tone, skin whitening fine, just like Creamy. Body fluid regulation system can achieve its own balance (Park, 2009).

3.0 Situation analysis

Japan is the second largest market in cosmetics production and consumption that just falls behind the United States only. The Japanese place great emphasis on appearances, and treat appearances as “dressed” as a ritual and a kind of value. In Daily life, very few Japanese women take to the streets to see hair disheveled, without makeup. They catch up with fashion, so that Japan became the “Paris of Asia”; Japan also understand self-innovation in beauty make-up, therefore, the Japanese cosmetics been recognized as a truly “make-up power.” As time progress, the status of women has improved a lot, and women can dress themselves according to their own wishes (Kumar, 2005). In Japanese women, 99.9% of them use cosmetics. Office worker’s purse, they always have to put two or three like cosmetics, even housewives, after waking up, the station also used to make up one level to their own foundation, make-up is the beginning of day to a Japanese woman. After the war, Japanese people’s lives gradually become rich, and they start to import cosmetics from Europe and the United States, thus they make-up of Western like the west women. This gives Australian Cosmetics Company is a big opportunity expand market in Japan. Japanese cosmetics market has the following characteristics:

First Japanese luxury cosmetics sales are still hot. Although the Japanese economy in 2008 is seriously affected by the financial crisis, but the Japanese economic recession does not seem to have any impacts on the cosmetics market. Although statistics show that wages in Japan is decreased, but the high-end cosmetics sales are still hot. As more and more Japanese women out of the home and go into the workplace, a substantial increase in income so that they are capable of consuming luxury cosmetics. In order to make staying young, they are willing to spend thousands of dollars to buy beauty.

Second thin makeup market is good too. In the 60s and70s, Japan is the example of the popular peak “makeup.” But after 80s, the Japanese women to recognize that the thin “makeup” better reflects the natural character Oriental Beauty, so make-up can even more promote lives. In Japan, make-up is popular of all ages. A phenomenon is that a makeup trends is driven by a female high school. These young girls love to dress very psychological, in order to allow schools to see their make-up, that thin makeup is their best choice. Meanwhile, the thin “makeup” also brings more business opportunities to the beauty industry in Japan. Recently baked Japanese men frequently have more to learn from the light make cosmetic techniques.

Third Imported products become increasingly popular. Since 2001, after the new cosmetic regulations, the Japanese cosmetics market is easier to close. Although incomplete, the adjusted requirements and rules of the EU’s cosmetics line makes regulations to reduce red tape and reduce management costs.

Forth there is a products polarization from low levels to high-end market, financial crisis expanded the overall size of the cosmetics market, but reduces the ability of mid-market consumer. The crisis came, people tend to pay more attention to the use of cosmetics to digestion pressure and improve self-confidence, and cosmetics sales rise, not fall. But to the Japan’s main consumer group of middle-income class, in order to compress cost they tend to turn inexpensive low-end products more easily, and therefore a polarization appears, one is the growing popularity of high-grade cosmetics, the other side of the other consumer ( or is the same but with different types of consumer products) prefer popular products.

Fifth Old cosmetics market becomes strong. Work habits of old people in high-end cosmetics by pension post-retirement life, low-cost high-quality cosmetics will be their first choice. At the same time after retirement, these professional women have the ability to buy cosmetic products they need. In order to meet the needs of an aging society, the elderly showed strong growth trend in cosmetics.

More importantly, the Australian Cosmetics Company developed natural cosmetics to meet people mental and physical, mental and physical is a perfect synergy. With respect to the Japanese balance of nature, Australian Cosmetics Company is developing products that meet the Japanese consumer characteristics and attitudes and psychological characteristics (Punj, 2002), the natural cosmetics market in Japan has a broad prospect. That’s why Australian Cosmetics Company chooses Japan as the focus of the development of overseas markets.

4.0 Entry mode

Before Australian Cosmetics Company selecting of which mode to enter the market, some political, economic, social and cultural backgrounds and factors should be considered within the industry (Farmer, 2002; Bask, 2009).

Political factors. Political factors are the most prominent risk manifestations (Jackson, 2010). If the target country’s policies and regulations discourage foreign economic relations, such as setting import quotas, set high tariffs, or even not allowed to import certain products or foreign investment in the country, then, the company’s entry mode choice is greatly restricted. In addition, if there is political or policy instability in the target countries thus the company should take a cautious approach to enter the market for the use of a high level of resource commitment and in favor of safer export model. For Japan, as a developed country, its politics is relative stability for investment. The Japanese government can encourage domestic investment and encourage multinational enterprises to domestic enterprises cross-border investment.

Social and cultural factors. Social and cultural differences, also known as cognitive gap, mainly refer to the company’s host country and target country in language, values, their ways of living and doing things differently. If cultural differences were large that the companies are difficult to measure which mode in the target country is considered appropriate, what management actions will need to spend more to adapt to cultural differences in the cost (Afonso, 2008). Lack of international experience in the company, the company will not be introduced to the investment into the model. For Japan, its high degree of development is very receptive to foreign products, especially after 80 years. For cosmetics, more and more companies started to pay attention in Japan, and Japan has begun to import large quantities of cosmetics. So this brings a wide range of opportunities to the Australian Cosmetics Company to Japanese investment.

Industry factors. Because of external economies of scale, upstream and downstream industries and enterprises within the enterprise interdependence of enterprises, choosing an enter mode will also consider the impact of these factors. External economies of scale exist when an industry, that there is interaction between enterprises, or closely linked with upstream and downstream businesses, if the host does not have the relevant supporting industries, or related to the number of enterprises is low, companies will choose to enter a low control mode to reduce risk, so that corresponds with the low-income. From the long-term perspective, because competitors will choose to follow up, these multinational corporations will gradually increase the branch’s control as a prevention strategy (Piccolo, 2008). The Australian Cosmetics Company accounted for a significant advantage in the industry factors. First Australian Cosmetics Company is in itself a multinational company with a strong economic force, with the integrity of the downstream structure, which can be very good to deal with various industry factors of the windfall. Secondly, Australian Cosmetics Company is efficient in management. Meanwhile, Australian Cosmetics Company strong corporate culture is another guarantee of its success. Third, there is flexibility in the management. Australian Cosmetics Company may change management and marketing strategies at any time according to market needs. For consumers, Australian Cosmetics Company is much focused and the exchange and discussion between consumers, according to consumer habits and preferences, at any time to change the product strategy. Meanwhile, the company will also often concern about repeat business.

Therefore, through the above analysis, Australian Cosmetics Company should take green foreign investment. Main reasons: 1).Australian Cosmetics Company is a technology-intensive enterprise with high technical level of transnational corporations and host country’s technological level of the acquired party has a gap. As the Australian Cosmetics Company technology-intensive, if the mergers and acquisitions, post-transplant technology may be difficult. In addition, technology is relatively high in the industry, the performance of the enterprise market is generally more difficult, and is very difficult to distinguish between human or technical factors, so if by way of mergers and acquisitions to enter the enterprise market performance is even more difficult to control and evaluation. 2) As the Australian Cosmetics Company’s technology, high-density, it can focus on the main line of products and profits. Some empirical studies have shown that low intensity management techniques (such as textiles, leather products) of multinational companies are usually less implemented product diversification, and the company also pursued innovative marketing and distribution channels. The high degree of technology-intensive products (such as biotechnology, pharmaceutical, electronics) companies are more likely to implement product diversification. Reason may lie in technology-intensive products that are generally less standardized products; product differentiation has little effect on consumer demand. Higher in technology-intensive products, consumption, consumer preferences for diversity more evident, multinational corporations to meet the diverse needs of the host market is more likely related to the main line of products, product diversification. However, if considering the diversity of non-related products, the technology-intensive products are more likely to diversify into reverse with the relationship, because of the main line of products, technology-intensive multinational higher the degree; they have the greater advantage of market-specific. Therefore, the use of the new investment can give full play to their strengths. 3) The advantages of the new investment allows investors to invest in selecting the appropriate location and scale according to their own desired build businesses, proper arrangements for plant layout, capital investment and expenditure on the implementation of full control, without the existence of the original enterprise system to adapt to the cost and the cost of a new trust, investment risk, the government obtained with the support of the regional market, but slow to enter the market, capital expenditure is relatively high. As a result, strategic choices can are made accordingly. Meanwhile, in mainland Japan, it also has a powerful cosmetics company. Therefore, investment in new Australian Cosmetics Company can rationalize the allocation of resources to their own conditions, and expand the market stable.

5.0 Target customer and product positioning

5.1 Target customer

Target customer need is a source of conceptual design and power, which, in the conceptual design process, should be goal-oriented by customer needs. Target customer needs should be organically integrated into the structured, standardized, systematic and scientific process of conceptual design. The design evaluation of products will be realized according to the customer satisfaction, so that objectives can quickly form a concept of customer satisfaction, thereby shortening the development cycle of new products, improving the quality of new product development, and thus improving enterprise’s market competitiveness. Customer needs have the following characteristics: variability, that the level of customer demand changes constantly as the economy’s improved, a society’s development and the renewing of the concept ; Difference diversity, that is because the social environment, economic development is uneven and the difference between ideas such as customer demand with difference and diversity; Cyclical, that customer needs to go through a cycle, they may return, but this return is not a simple return to the origin, the demand for content has occurred qualitative and quantitative changes. Therefore, to obtain realistic needs of customers needs, the contents of the investigation must be carried out. The Australian Cosmetics Company conducts original research and analysis or re-investigates new customers according to the company’s customers.

Investment analysis should follow the following aspects: 1) Customers of consumer motivation. Why do customers buy our goods or services? While some customers why not buy? In fact, the motive of customers is very complex, or even customers themselves are not clear. A common misunderstanding is that the eyes of marketers think that their “product interest” is equivalent to the customer’s “product benefits.” Therefore, to understand changes in customer consumption of motivation, clearly in the eyes of customers, our products or services in the end was good, the main motive to buy is necessary. On the other hand, customers are made up of people whose preferences are fickle, especially for daily consumer goods, preferred by the society, politics, economy, culture, lifestyle of great changes. Analysis should be dynamic concept. From the table below, motivation can be seen in the importance of luring the engine.

2) Customers of consumer choice. Non-monopolistic market, highly competitive products, customers selecting the products has a lot of space. Any product can all be replaced. Therefore, in the analysis, we must know who are your main competitors? Customers can find out with our other products to replace what products? The customers what products they may be replaced by other of our products? What customers of our products have high product loyalty? What customer loyalty of our products low? Why? How to improve? So to the Australia cosmetic company, new products should focus on the consumers’ demand and preference.

3) The timing of customer consumption. Different products or services at different times, the buying frequency of the customers is different, and only gaining a clear understanding of its characteristics can grasp the marketing initiative.

4) Customers of consumer sites. Customers purchase and use of products or services have an appropriate place, and they usually used to gain a clear understanding of where customers buy our products? What may be the best selling local place? Customers use our products in any place? It can also be used to expand the space of our products? From this we can find the ideal sales channel and product applications.

5) Customer consumption analysis. Customers buying our products are numerous and complex, there must be several types of customers to buy more, and each type of customer groups have different consumption characteristics, so we have to analyze each category of consumption that is the number of customer groups? Quantity is insufficient; the market can not be developed as a subdivision alone. Of course, what can not be measured or is not in contact and we can not fully meet their needs, customer groups, it can not be our main marketing target. Thus it includes each type of customer groups and elimination, and the final target customers are determined.

5.2 Product positioning

Product positioning should be set based on different consumer groups (Gruca, 2003). From a gender perspective, different gender should develop different products. Research shows that in recent years, cosmetics increasingly focused on the instrument men are to promote the global personal care products market growing rapidly. Different from the situation in previous years, the cosmetics counters at major shopping centers are found, as temperatures rise, the men quietly occupy special cosmetic counters, and sales are picking up gradually. It is understood that, with the men’s increasing emphasis on skin care, men’s cosmetics sales market continued to raise an average annual increase of 20-30 percent. So men can be used as a cosmetics research focusing on treatment quietly. But women are still the main market (Ghodsee, 2007). In terms of age, of different ages should be targeted development of appropriate cosmetics. For consumers (16-25), production in the development should focus on practical and the price is an important consideration, because at this stage people are not necessarily sufficient consumption potential. For middle-aged consumers (25-45), which are the main consumers of its different products and the products should be developed according to the consumers’ choice and interest. At this stage of the consumer, they have enough spending power thus all they want to do is to buy the right products of their own, making them healthy and beautiful; price may not the highest priority to considerations. They pursue a healthy and beautiful. For older consumers (> 45), they are looking for is practical products with reasonable price. So during product development process, more attention should be paid to consumer’s habits and psychology. Meanwhile, the now popular old cosmetics have very strong potential. At the same time, consumption in different locations also needs to be considered.

6.0 Demand forecasts

Managing a company is another way of managing the company’s future, and managing the future is that it should have accuracy prediction of future. Now, the economic environment vibrates and new technologies appear one after another, that it results unstable market demand. Thus, to the company, it should not only focus on the presence, but they should focus on its future. Therefore, the main propose of demand forecasts is to analyze the present situation and then make decisions for the future as well (Lin, 2009; Afonso, 2008; Ehret, 2004).

There are many features in the sale forecasts, which are: creating new method to product marketing; placing advice for new technology; providing augment and planning for procurement; supplying information for market expansion; reducing operating cost as much as possible. Based on the company’s long-term forecasts, it is helpful to analyze the current operation. First of all, to have a good calculation of the market, the company should aim to look for the market blanks. Second the company should research the market policies and the dynamic of the consumer trend. If there is a policy adjustment and change in consuming trend, a new product should be development or the old products should upgrade (Jackson, 2010). For example, as the appearance of consumerism, a new lifestyle and appears and the people prefer green products.

There are many methods of forecasting as following: Delphi method or expert investigation. This method is designed for the expert, the user or the customers who know very well about the market situation to collect their opinions on the market. Then focusing on the advice, a means of predict will build. It is a systematic method with anonymous. Sometimes, there will be several rounds until a same opinion is drawn out. The main procedure is following: First, asking for a better forecast target, writing a list of the selecting experts to provide relevant reference and asking them to talk about the information and an analysis of the issues. Experts could make projections and comments based on their knowledge background and experience and then write them down. After that, according to the experts’ advice and many other different forecasts and reasons, the advice would be sent to other experts. Then the experts can revise the initial to make a satisfactory conclusion. It can save much time, reduce operation cost and forecast well. It is also quite useful to long-term prediction.

Second, gathering views, also called collective prediction. The management layer could hold regularly or irregularly procurement, marketing, planning, finances, prices and other department to exchange ideas with the staffs to discuss the core issues to predict future market. This way is quite easy and is widely used in market prediction. In addition, short meeting and market analysis is another way of collecting wisdom.

Third, comments prediction method. With the method, the management layer can seek views of all the staffs to synthesize, to analyze and make predictions directly. The main steps are as following. 1), the manager should write down the market trend and future sale target of the forecasts and comment. 2), the staffs write down all the opinions and advice. 3), raising some questions or suggestion to meet the customers demand. Moreover, all the methods should be used synthetically. At the same time, grasping the quality requirements demand forecasts to ensure objectivity is essential (Minc, 2006).

Fourth, experience Judgment. To most of the forecasters, they make their judgments according to available and practical data depending on their knowledge and experience or depending on collective wisdom and experience. The method is more like to be applied in prediction. But to some degree, the results may be subjective, not scientific.

Fifth, trend prediction. This prediction is made on the base of history data and the present data. From the history data, a trend will be drawn and analyzed. Then having a review of the present data to see the trend is right or wrong and make comments about the trend or modify the trend. Soon afterwards, using the present data predicts the future market.

Fig. 1 Cosmetic demands in Japan. Source: ABS catalogue number

So to Australia Cosmetic Company, if it follows the method above, it will have a good future. According to the data from ABS, it has an increasing trend in the cosmetic products. From the figure, it can be drawn that the cosmetic demand is increasing since 2001. It is also can be predicted that the increasing trend will continue, and the cosmetic will have strong market. In addition, although economic depression, the cosmetic market in Japan enlarged in contrast. From the sale trend, a similar conclusion will be gained as well. It can be seen that the sales increase in recent years (Fig.2) and it has great market potential.

Fig. 2 Cosmetic sales in Japan. Source: ABS catalogue number

7.0 Marketing mix strategy

7.1 Market segmentation

To understand the market much better and enlarge the company’s market competitiveness, market segmentation is essential in the market strategies. According to consumers’ preference and habits, market segmentation has divided the large market into many smaller markets which have something in common. It mainly aims to meet different needs of different consumers (Bock, 2002; Jan-Benedict, 2002 ; Friedman, 2002). In natural market, it is impossible to meet all the consumers that market segmentation is needed. Moreover, the company can benefit a lot through market segmentation. 1), assisting the company to have a much better understanding of the customers; 2), promoting and enhancing the efficiency to find a target market and the market share; 4), lowing the operating cost and gaining good reward as well. Though market segmentation, Australia cosmetic company could have a brighter sail to future.

7.2 Target market

Target market aims to meet the practical and potential consumers’ demand and to have a more specific market. According to the company’s resources, technology level, competitive environment, market ability and other elements, companies have chosen their best, and decide which sub-market inputs (Lee, 2006; Morrson, 2002). Then these parts should be evaluated, and determine which products and services segment. In the target market selection in the cosmetic market you can follow these steps: First, the assessment of market segments. Second, the choice of market segments. Therefore, the company must decide how to enter the market. Australia companies range of options from the market point of view.

8.0 Conclusion

In conclusion, Australian Cosmetics Company has a large market according to consumers’ preference and habits. And Japanese cosmetic market has a strong demand for Australian Cosmetics Company’s products as well. Considering about its priority, Australian Cosmetics Company takes green foreign investment in Japan. Australian Cosmetics Company can also find its target though consumer motivation, customers of consumer choice, the timing of customer consumption, customers of consumer sites and customer consumption analysis. The products are posited by ages and gender. Australian Cosmetics Company has two market mix strategies which are market segmentation and target market.

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