Marketing facial skin care
in Brazil
Task 1: How marketing
theories have changed over the last 60 years
Changes in the business philosophies over time
The marketing concept and philosophy is essential in marketing as it has
customer and customer satisfaction as the central point of focus. The
philosophy emphasizes on the need for the organization to meet the consumer
needs as it meets its goals and objectives. The marketing concept and
philosophy have progressed as the last three major philosophies comprising of
product, selling and marketing philosophies (Baker and Saren, 2010). The
product philosophy was the first and the most leading in the 1920’s prior to
the industrial upheaval. This philosophy holds that an organization knows its
products best and that it is aware of what can work in the product design and
what cannot work. For instance, the organization in the marketing exercise can
make a decision to emphasize on the low cost of their products or the low cost
of their products. Primarily, the concept relied on the organization skills and
desires for the product and indeed organizations made huge sales in the era.
The product era was fashionable in the pre-industrial period and time after the
industrial upheaval. This is the period in which the products were majorly
handmade.
The selling era had the shortest phase of supremacy contrasted to the
other two for it only lasted from 1930 to 1950. The selling philosophy alleged
it that an association can sell the merchandise it manufacture using marketing procedures
comprising of advertising and personal selling. This is through organizations
creating marketing departments whose sole purpose is selling goods and other
parts of the organization focus on production of goods. With the industrial
revolution, there was an influx of various goods in the market and each
organization wanted to make sell, this prompted the invention of selling
philosophy (Baker and Saren, 2010). The surplus manufacture led to the use of marketing
and personal selling to reduce on the stocks and sell the manufactured goods
and services.
After the selling era was the
marketing philosophy that started its dominance in the 1950s and recognized
that the knowledge of goods and designing of the products is not enough to meet
consumer needs. Additionally, good sales departments are not enough to meet
consumer needs especially where the consumers have variety of choices to choose
from the one that best meets their needs. Therefore, the marketing concept and
philosophy emphasizes that understanding the customer needs and wants as well
as meeting organization goals is essential in an organization. This calls for a
critical understanding of the consumers and hence the invention of the many
marketing research techniques and strategies used by the present day
organizations.
The marketing theory changes from the
early days
Marketing refers to the management process that comprises of
the process of identifying, anticipating and satisfying consumer requirements
popularity. In marketing, organizations create customer interests through
products and services through generating strategies that underlie sales
techniques, business communication and business development. It is primarily
the integrated process through which organizations build strong customer relationship
and create value on the customers for the organization products (Baker and Saren, 2010). Other activities of marketing comprise of advertising
strategies, promotions and other selling activities. Historically, marketing
has changed greatly especially due to the fact that the consumer tastes are
changing drastically with the tremendous technological advancements.
Since 1950’s, marketing has evolved through various stages
including production orientation, product orientation and marketing orientation
in 1950’s, 1960’s and 1970’s respectively. The research marketing approaches
comprise of issues that focus on consumer satisfaction, business marketing and
industrial marketing focusing on organization or institution and social
marketing. The organizations embrace the new trends in marketing that include
the use of the internet that has given rise to e-marketing, online marketing,
personalized marketing and one on one marketing.
Marketing theories in the past were majorly product oriented;
this implies that they were focused on the production process and the product
itself. There was an intense focus on the product production technology as well
as quality but no focus on the consumer needs in the market. This was triggered
by the fact that there were limited competitors in the market and the market
products were unique. However, as time went by and technological advancements
intensified, more products were available in the market triggering a shift in
the marketing theories to market orientation. This is a situation in which the
business places the consumer needs and requirements as a sole factor in
decision making. The marketing plans are based around marketing concepts and
hence the production of products that suit the consumer needs. Today, marketing
theories comprise of customer value theory, buyer behaviour theory, segmentation
and targeting theory among others that greatly borrow from the 4p’s marketing
model.
The 4p’s marketing theory centred on the product, pricing, place and
promotion. Using this model, the organization puts into consideration the
product pricing and its influence on the target market as well as the product
itself and whether it meets the consumer needs (Baker and Saren, 2010). The
place in these contexts implies the organizations location, the nature of the
market and the target market generally. Promotion focuses on the tools functional
to initiate the manufactured goods to the market. Principally, the 4P’s
addresses all the issues surrounding a product and the nature of the market to
predict the possible output expected from the product in the market.
How this theory is
applicable in
This report is based on the marketing of skin
care products in the Brazilian market. To understand the nature of marketing
and make decision on suitable methods to embrace, there is a need to explore
the historical changes of marketing theories and the nature of marketing
generally. This would give clues on what marketing entails as well as offer
theories that are suitable in creating a viable breakthrough in to the market.
For example, it is noted that marketing has evolved through three key stages
that is product, selling and marketing philosophy. In understanding the
approach to apply in the Brazil context, study on how marketing was undertaken
in these stages would give an insight on the development of a market entry
strategy.
Task 2: Market
Analysis-Brazil
An analysis of the macro- and micro-environment trends
for the market
Within the last few years, the cosmetics, fragrance and toiletries of Brazil
have captured the worldwide market. These are ranked as second best selling
products all over the world. It is believed that Brazil market will beat the
Japanese market till the end of 2020. There are various factors which are
effecting on the trade such as Class C growth, improved lifestyle, factories
revolution and profit in business. The statistics state that Brazil facial
products’ market was just 12180 billion in 2007, whereas it touched the figure
8023 billion till the start of 2012. It is remarkable to view the retail market
for facial products has gained profit in 2007 above 455.97 million euro, 2012
profit 720.92 million euro and it is anticipated that the net output will be
661.21 million euro in next three years. From 2007 to 2012, the expenses per
capita have increased from 2.4067 to 3.6183 Euro. There are many other facial
products such as skin cleansing cream, anti-aging products, masks, toning
products and moisturizers are going to be more familiar. Synopsis of research
from the year 2008 to 2012 shows that the production rate was 5.1% and it will
cross the figure 661.21 million euro in 2017. The growth rate will keep on
increasing with a ratio 3.7% in the upcoming years. (Lourenco, 2014)
In the beginning, research was based on Brazilian Facial products to
revitalize the skin and the sale of amazing products like “skin whitening
creams, cleansing lotions, anti-aging products, toning products, specific
creams to enhance the female skin beauty and masks”. The price of these
products was directly proportional to the customers’ demand. It involves the
worldwide market as well as the status lines; however it has left the
particular sector, like beauty shops and parlors. Another research on the Brazil facial skincare
market revealed that it is bound to grow and develop in various outlined
categories just as the previous research (Lindsley, 2014). For instance, the Brazil consumers are expected
not to use the anti-aging merchandise as contrasted to the European market.
This is an indication that the development of the product and its introduction
in the market is likely to raise a potential market. This is especially when
the products have a claim of concealing skin imperfections and emphasis on its
suitability for the Brazil skin.
The country age structure, on the other hand, offers room for the growth
potential of facial products market. In
this regards, more than 40% of the country population are between 25 and 54
years and 41% are less than 24years. This is an indication of future market for
the anti-aging products in the near future.
This is a clear indication that the Brazilian market offers a potential
market for the organization facial product if they are branded and marketed to
meet the consumer needs. Besides that fact that the market is not saturated
with facial products, the population is comprised of young individuals who may
require the facial beauty products to emphasize their beauty.
An additional research on the skin
care products indicate that the target market prefers the skin care products
derived from natural ingredients and no significant demographic differences
(Ramirez, 2014). The best part about this discovery is that the launches of
products in the market seem not to realize the concept and instead focus on the
performance through technologies and chemical based ingredients and not the
innovative botanical elements. This offers the organization a good market entry
strategy and a good competitive edge if well embraced in the products
production and marketing efforts. The innovative botanical products are likely
to attract new consumers as they meet the natural desires for natural products.
Using products with skin care products familiar with the consumers such as food
ingredients appeals more to individuals looking for skin care products with a
natural formula. The approach has been successful in the Asian market, where
you find that most of the brands in the market use food ingredients.
An analysis of the customers and competitors of the
company
Globally, the consumer especially on the facial products has
significantly changed which is based on five key factors that promote their
purchasing power. For example, the global population is getting older as there
has been an increase on the life expectancy. In Europe for example, over 5% of
the population is above 40years, Japan has 22% of its population over 65years
and many other countries across the globe. This has in turn increased the need
for facial products and especially the anti-aging products for the increasing
elderly population. Brazil to the contrary has a higher population of young
individuals of less than 50 years and a potential market for in the future for
the anti-aging products. However, it is also at an advantage having a
population of young people for they are the largest consumers of the beauty
products. Therefore, this shows that the organization has a potential market in
Brazil for its facial skin care products.
Additionally, there is increased wealth in the emerging markets such as
Brazil, Russia, India and China which promotes the consumer purchasing power as
they shift from the poverty level to the middle class. This social shift comes
with a higher demand on high priced brands in these markets. For example, in
Brazil there was a tremendous increase in skin care product sales from 2002 to
2007 at a growth rate of 128% while china’s sells grew by 132%. The increasing
pursuit for agelessness across the world population also contributes to the
increased demand for beauty products.
The people’s habits of taking care of themselves to feel younger and
youthful prompt the use of the anti-aging products to complement their
appearance. This life style change has created a market for the beauty products
across the world and Brazil is not an exemption with its large population and
demand for beauty products.
Principally, the technological advances especially on the formulation
have enabled the skin care companies to make significant changes in their
products pricing. The consumers, on the other hand, are ready to pay an extra
cost for quality products that have more benefits to the skin such as firming
and wrinkle reduction, containing an exotic ingredient among other
features. It is worthwhile to conclude
that the increase in income in the emerging markets and technological
advancements had influence on the consumers to shift to higher quality products
in the market. This has come with the increase in the market sale for the
pharmacy brands that has seen them move from the usual France market to other
markets including Brazil, Canada, China, Russia and the US. The manufactures
have also embraced the increase of price points through unique delivery points
to make a sale like the case of the Nivea Body Good-bye Cellulite Patches asserting
to offer “continuous release of L-carnitine”. This is an indication of the
significant changes in consumer behaviour as a result of technological
advancement and wealth that has increased its purchasing power.
One more significant aspect that has influenced the attitude of consumers
is the considerable attentiveness for wellbeing and health. The social,
electronic and print media has highlighted the issues like “food recalls, SARS,
lead in toys, Mad Cow disease, cosmetics phthalates and plastic bottles for
babies causing bisphenol A”. The awareness has perked up the anxiety of buyers
and they prefer the safety products to enjoy good health. The latest alert in
the market is on the issue that moisturisers have potential to promote skin
cancer and many others that have had the consumers concerned on the products
they use on their bodies. Concurrently, an increased knowledge on other harmful
products used to produce the skin care products has had the consumers avoiding
products such as pesticides, growth hormones, preservatives and artificial
colors. This issue has not only remained on the food products but has extended
to the cosmetic products leading the consumers to avoid the products all the
same.
This has led to increased demand for organic foods and beverages in many urbanized
countries. Many of these same customers are now looking for a reduced exposure
to harmful substances in cosmetic products. As noted earlier, the beauty
product market is shifting to use of organics in the production of their
products to beat the issue on the fear of dangerous chemicals claimed to be
used in the production of cosmetics. For example, Natura, the chief direct
seller in Brazil, initiated the Natura Ekos line in 2000 with characteristics of
natural ingredients utilized by traditional neighbourhood with technically
proven benefits such as guaraná, mate verde and cocoa. In addition, the
organization seeks to place itself as a “green” company using the sustainable
materials to protect Brazilian biodiversity and investing in local sustainable
development. The organization can use
the same approach in the market to penetrate the highly competitive market.
Taking a look at the competitors, one research established that the
competitors in the market comprise of Avon Products Inc, 21.2% market share in 2012, Natura Cosméticos
S.A 14.7%, The L’Oréal Group ,10.7%, Beiersdorf AG , 2 5.7%, Johnson &
Johnson Inc, 4.2%, Botica Comercial
Farmaceutica Ltda, 4.1%, Mary Kay Inc, 2.7%, Cria Sim Produtos de Higiene Ltda 1.1%,
Galderma SA, 0.8%, L’Occitane Internacional SA, 0.4% and others occupying 34.4%
of the market share in the year 2012. This is an indication that the
organization needs to be aggressive and develop a competitive edge to get a
market share in the highly competitive market (Lourenço, 2014).
A SWOT for the company
|
Strength
|
Weakness
|
|
The organization is
innovative, it is able to think outside the box and generate new products and
ideas
|
Little knowledge
of the market
|
|
The organization
has a well- segmented portfolio operating across different pricing tiers.
|
|
|
Opportunities
|
Threats
|
|
Demand for
organic products creates room for the company’s products
|
Other existing
companies with similar products pose a threat to the company products
|
|
Technologogical
advancements in marketing
|
Growing competition
in the emerging markets
|
|
Increased
consumer marketing power in the emerging markets
|
|
|
Increased demand
of organic products of all ranges including cosmetics
|
|
A breakdown of the segments in the market
According to a report by Eurometer international (2010), Brazil ranks at
or near the top of the global Cosmetics, fragrances and toiletries segments.
The skin care products have gained a considerable market share in the modern
years with make ups and skin care being the most valuable with the rising sales
of the anti-aging merchandise. The chart below offers a breakdown of the
Brazilian market segmentation based on the skin care products. The chart
reveals that skin care products occupy 13% of the market products.
Identification of the target segment for the new product/service
The target market of the new product is primarily the entire population
since the facial beauty products are of different users. For example, the
elderly population is likely to be interested in the anti-aging products as
they would want to retain their youthful skin and face. The middle aged would
want to take care of their skins and enhance their beauty hence they would be
interested in products that would offer them that. In addition, the young
adults would require facial products that protect their youthful skins as well
as enhance natural beauty. In order to perfectly breakthrough in the market,
the organization would need to deliver products that meet the various target
market groups and hence the need to provide the diverse products necessary.
In addition, putting in to consideration the increased financial
empowerment and the rise of the middle class, the changing life styles and the
demand for herbal products, the organization needs to provide the target market
with products that meet the market demands. In addition, the products should
give the organization a competitive edge bearing in mind the nature of the
market competition in reference to the beauty products.
References
Baker, M. J. and
Saren, M. 2010. Marketing
theory: A student text. Los Angeles: SAGE.
Lindsley C. 2014. Spotlight on
Brazil – Trends, Drivers and Innovation - in-cosmetics.) [Online] Available at
http://www.in-cosmetics.com/News-Media/Spotlight-on-Brazil--Trends-Driver-and-Innovation/(Accessed
on December 14, 2014
Lourenço S. 2014, August 14.
Brazil Country Focus – Part 3: The Facial Care Market - in-cosmetics Brasil. [Online]
Available at http://www.in-cosmeticsbrasil.com/Blogs/blog_brazilcountryfocuspar3/(Accessed
on December 14, 2014
Ramirez I. 2014, February 27.
Opportunities in the Brazilian facial skincare market | Mintel.com. [Online]
Available at
http://www.mintel.com/blog/beauty-market-news/where-do-the-opportunities-lie-in-the-brazilian-facial-skincare-market(Accessed
on December 14, 2014
