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New skin care product
EXECUTIVE SUMMARY
The project is to find appropriate customer base to launch and establish new skin care product (Sunscreen Lotion). So the various steps involved are to be covered in the report. The various aspects to be covered include a strategy building for market research, to find appropriate customer base and location from where we will be able to capture maximum area and seek our requirements: man power, raw material, land, equipment, future diversification needs, etc, and also steps like pricing, product design, supply chain selection etc.
I am developing a marketing plan for the introduction of a new skin care (Sunscreen Lotion) product for women in the Indian market. It will be targeting the age group between 18-25 years, in a medium-high level price bracket.
1. So, I am providing information on successful marketing strategies which are used by me to launch the product in the market.
2. I am also providing details about industry growth trends, key competitors, segmentation strategies, distribution strategies/channels.
Company Description
Avon is a US cosmetics, perfume and toy seller with markets in over 140 countries across the world and sales of $9.9 billion worldwide as of 2007. ‘Avon Products’ is a multi-level marketing company. Traditionally a direct marketing company, Avon’s fastest growing markets today are in China and Russia. The company’s chairman and CEO is Andrea Jung, who was promoted to the position in 1999. Avon uses both door-to-door sales people (“Avon ladies,” primarily and a growing number of men) and catalogs to advertise its products. In some markets (most notably China, which had banned all door-to-door selling before mid-December 2006) Avon products are sold primarily in retail stores. Avon’s product lines include lipsticks, foundations, bath and skin lotions, anti-aging cream, perfumes, as well as jewellery and clothing. Although the company has always been more directed toward female customers,
Avon’s line of male products continues to expand, and its children’s products (such as shampoos and toys) have also proved successful. Two brand diversifications, “MARK.” (targeted to younger, college-aged women) and “M” (an Avon catalogue for men), have helped the company reach out into markets it has not serviced. Mark proved to be successful in reaching a new generation of recruits, primarily young women ages 18-25, with a monthly “magalog” featuring award-winning products. In 2007, Reese Witherspoon signed a multiyear agreement to serve as Avon’s global ambassador. The actress was involved in product development, appeared in advertisements, and served as the honorary chairman of the Avon Foundation.
Sales leadership was established by Avon in the United Kingdom in 2004. It is a network marketing scheme that pays sales leaders a percentage of their down lines team sales. Sales leadership is open to any new and existing Avon representatives.
In addition to its corporate pursuits, the Avon Corporation is involved in philanthropic causes. The Avon Foundation is an accredited 501(c) (3) public charity founded in 1955 to improve the lives of women and their families. The Avon Foundation is currently focused on two key causes: breast cancer and domestic violence. Through 2007, Avon raised and awarded $580 million worldwide.
History
The company was founded in 1886 by then 28-year-old David H. McConnell who sold books door-to-door and gave out perfume to entice women to buy his books. His perfume became so popular that eventually that is all the women wanted. He then founded the California Perfume Company (CPC) in New York, New York in a 500-square-foot manufacturing and shipping office at 126 Chambers Street. As the company grew, he hired his first representative, Mrs. P.F.E. Albee. In 1897, McConnell built a small (3000 square foot) laboratory in Suffern, New York. In 1906, the West Coast office in San Francisco was destroyed in the Great Earthquake. In 1914 the first non-US office was opened in the Canadian province of Quebec. The California Perfume Company was incorporated on January 28, 1916 by David H. McConnell and Alexander D. Henderson (businessman) in Suffern, New York.
By 1918, five million units were sold in North America, and by 1928, sales reached $2 million. In October 1939, the name was changed to Avon Products, Inc. The company was taken public in 1946. By 1954, sales reached $55 million, and the “Avon Calling” advertising campaign introduced. By 1971 the lab would grow into the Avon Suffern Research and Development facility. By 1979, sales reached $3 billion, with one million direct sales agents. Today sales exceed $8 billion worldwide. In 2005 they opened a $100 million dollar 225,000-square-foot (20,900 m2) R&D facility to house its over 300 research and development scientists on the original site in Suffern, NY. Avon also has offices in Luzerne, Pennsylvania and Davenport, Iowa.
BUSINESS MISSION
In order to achieve our Vision, Avon, commits to the following: Avon mission is to provide glamour, excitement, and innovation to consumers through high-quality products at affordable prices. The company is moving into an era of “transforming the beauty industry”. Avon aims to emerge as the dominant cosmetics and personal care firm through the twenty-first century. Avon continues to focus on developing products to reach existing customers and to attract new customer groups in both domestic and international markets. Avon also strives to treat employee’s equal, fair, honest and with integrity.
MARKETING OBJECTIVE
- To valorize the brand to occupy a premium position in the market
- By taking big price leaps of their existing range: Avg MRP up from Rs. 250 to Rs. 400 post 2007
- By launching more and more high value, latest international products. E.g. colour stay soft & smooth (Rs 575); mineral foundation (Rs 900), limited editions (Rs 600-1000) as well as skin care products
- Focus on strengthening Modern retail operations
- New international imagery in modern retail
MICRO AND MACRO ENVIRONMENT
Factor which always affect every product whether that is old or new:-
There are two kind of environment in the market which affects the new as well as old product. That is:-
- Macro Environment
- Micro Environment
Macro Environment: – which is not controllable.
- Demography Environment
- Economic Environment
- Culture Environment
- Natural Environment
- Political Environment
- Technological Environment
Micro Environment: – which is controllable
- Public
- Supplier
- Company
- Costumer
- Competitors
PROCESS OF DEVELOPING A SKIN CARE PRODUCT IN THE MARKET:-
When we launch something in the market. We have to make some strategies for that particular product. First, we have to look for the substitutes of that product. Because in this huge market every single product has a number of competitors. We should look proper environment for that product. Like now a days many companies are competing in the field of skin care because now a day’s people are more concern about their skin or beauty.
Secondly, we have to develop our product, and then we have to launch that product in the market. We have to fix a perfect price for that product.
Thirdly, advertisements are necessary now-a-days. Without advertisement people cannot be made aware of that product.
Fourthly, we also have to take into account about the supply of that product. Controlling and evaluating are the last steps in the product development.
INDIA COSMETIC SECTOR ANALYSIS
According to growth rate, the market provides wide opportunities to local and global players. Even with two times growth rate, the market penetration of beautification products and toiletries products in our country is low. This low market penetration for beautification and personal care commodities in India gives an opportunity for aditional important growth down the road in India of 1.2 billion populations .
SITUATION ANALYSIS
SWOT ANALYSIS
Strength
- Strong Retail presence
- Attractive counters
- Multiple product category
- High quality
Weakness
- Need to fill the gap of well informed new product launches.
- Small market
- High prices
Opportunity
- First mover advantage as it has presence in fragrance and experience in the price range category
- Has a lager portfolio in order giving high distribution capacity.
Threat
- Low media spends may make the brand weak over period of time resulting to death.
- Other players
- Huge no. of substitutes
MARKETING STRATEGY
TARGET MARKET:
Target market of Avon for its sunscreen lotion will be the upper class and the womens of metropolitan cities mainly.
MARKETING MIX
Marketing mix of any company involves 4P’s of the company. These are as given below:
- Product
- Price
- Place
- Promotion
For the sun screen Avon, these are as discussed below:
PRODUCT:
This is the very first p of the marketing. For knowing about this, we will be studying product description, segmentation for Avon’s new sunscreen and what will be the positioning and product differentiation.
Product Description:
There will be 4 main products in the clinic:
- Avon Gold
- Avon Premium
- Avon Platinum
- Avon Pearl
Product Segmentation:
These all products will be segmented on the basis of the following factors:
- Demographics:
- on the basis of age – 18 to 40 years
- on the basis of sex – women only
- on the basis of income – higher income group
- Geographic:
- On the basis of social class – upper class
- On the basis of region – metropolitans and big cities
- Psychographics:
- Lifestyle
- Personality
Product Differentiation:
Products under sunscreen will be different from the competitors under following ways:
- High quality products
- Give softness to skin
- Reduce dryness
- Keep the skin shining
Positioning:
The products will be positioned as follow:
- Only for elite and upper class
- High quality products
- Good for skin
Branding strategy:
The branding strategy for products will be umbrella branding such as:
- Avon Gold
- Avon Premium
- Avon Platinum
- Avon Pearl
PLACE:
This is the second marketing mix and place for the Avon sunscreen is as follows:
Metros: Delhi , Mumbai , Chennai , Bangalore and Kolkata.
Other cities: Pune , Meerut , Chandigarh, , Kanpur, Moradabad , Surat , Ahemdabad etc.
Distribution channel:
A four tier distribution channel will be followed for the products distribution:
- Manufacturer
- Distributor
- Stockist
- Retailor and salon
PRICING STRATEGY:
- Market skimming will be there for all the products under sun screen
- High quality- high price
- High price to target niche market
DISTRIBUTION CHANNEL
There are three categories of channels of distribution –
- Prestige – Department stores, specialty stores and chain department stores, such as Macy’s, Neiman-Marcus and J.C. Penney (internationally) and Shoppers’ Stop, VAMA, Westside, and Bombay Stores etc (nationally).
- Broad – Drug stores, food stores, cosmetic discounters, warehouse clubs, and mass merchandisers. Such as Eckerd, Pathmark, Cosmetic Center, Sam’s Price Club and Wal-Mart (internationally) and Satyam, Haiko, Sahkari Bhandar, Beauty Center etc. (nationally)
- Alternative – is identified by five different marketing methods:
- Direct Sales
- Direct Mail/TV/Print
- Salons (Lokhandwala)
- Sourcing: Imported and Local manufacturing. (AC Neilsen)
Promotion:
Promotional pricing:
Marketing pricing: We will merge with famous existing shops, so that customer can buy directly from the dealer and hence the element of middleman is not there.
Here the retailer in this category buys watches for lesser than MRP and hence they are able to get the profit margin on sales.
Price discount and allowances: We will give price discount sale on the MRP of the sun screen at initially. The allowance varies from one segment to another.
Type of advertising: Our ads will be clean, well made, touch on emotional chord. As our company will use superstar Katrina Kaif.
As here we can say that the Katrina Kaif would be more effective for the promotional purpose. It can be Katrina Kaif, as now she is one of the popular actresses in Bollywood.
A. Promotion on occasion: Our Company will also promote the product on the famous occasion & festival depends upon time, place and culture.
POSITIONING STATEMENT
AVON approached with AVON SUNSCREAM LOTION in 2009. It promoted as “SHEILD AGAINST SUN “. This positioning statement demonstrated young girls who anticipated the image of trying to be unusual and “cool”.
SEGMENTATION
Geographic
Area: Metropolitan cities and town
Company has targeted metropolitan cities and town because of population, consumer knowledge about the product is considerable and towns are upcoming business places.
Behavioural
Occasions: Going out regularly (schools, college and parties)
User status: Regular usage
Attitude towards the product: necessary part of everyday accessories.
Benefits: develops beauty, exceptional colors, good quality ingredients, atmosphere friendly packaging.
Demographics
· Age: 18-40
They targeted age 18 TO 40 and product launched to cover teenagers.
· Education: Students or graduates.
Students and graduates have more knowledge about the product.
· Sex: female.
Product was launched only for female.
· Occupation: students and working women
Company has targeted students and working women, because basically Redwood was to cover students and working women.
· Life cycle: young, single and married.
When it comes to Life Cycle Stage Company targeted to young, single and married, because they have more influence to buy the products.
· Social class: Middle and lower class people
People have enough money to afford the product.
PEST ANALYSIS
- P for political factors
- E for economic factors
- S for socioculture factors
- T for Technological factors
Pest analysis is to summaries the legal and external environment for the business. It should be done in consideration of influence and responses to the business. These are the pest analysis of Redwood nail enamel.
POLITICAL FACTORS
Indian cosmetic industries is least affected when compare to other developed economy and Indian cosmetic industry developed by 7.5%, which attributed to our policy frame work with respect to capital and liquidity. Avon sunscreen lotion have built strong links with trade based on mutuality in support of Indian government.
ECONOMICAL
Indian economy registered a growth of more than 9 % for last three years and it maintained robust growth rate as compare to other countries which are developed and developing, so Indian cosmetic industry is directly related growth of economy, which is highly support cosmetic industry.
SOCIAL
Avon have loyalty factor as compared to counter part in other countries. They are strong in organizing social and promotion events and other fashion events, which build huge reputation among the people.
TECHNOLOGY
Technology advancement changes the face of traditional Indian cosmetic market. It is giving faster and secured service, strong consumer understanding and technology of company has been delivered world class product. Company also introducing new innovating technology due to advancement in technology, Hence technologies continue to evolve and it will meet consumer expectations and habitats.
MARKETING PLAN FOR NEXT ONE YEAR
Since, industry grows at 12.5% per annum, and there is considerable income growth of middle class people is an opportunity to develop the business. Hence beautification is fast growing segment in the market, more number of women becoming awake of looking better through the use of beautification products. This low market penetration for beautification and personal care commodities in India offers a chance for more considerable increase, in this country of 1.2 billion people.
Company targeted only younger age people to sell their products, and targeted only middle class and lower class people. Tupperware can introduce new products to cover upper end of the market. Company already built a brand image among middle class. So it will help them to capture the upper class market very soon. Since the customers are able to pay for better products which makes them happy and looks better. So Avon sunscream lotion can concentrate to initiate product lines on premium range. Avon competitor Revlon launched street wear to compete with Avonsuns cream lotion, so company can consider to more depth in product range and to influence new innovation technology.
Now company targeting only 18 to 40 age people and they can spread their segmentation level from age 10 to 24. They can advertise to cover school students. Company should be very sensitivity about price of the product; they should not increase the price of the product because low price is the major strength for Avon sunscreen lotion. Avon sunscreen lotion have good distribution channel in metro politic cities and towns, beautification products has less penetration in rural area so Tupperware can improve their distribution channel in rural market.
Company can offer combo set of products to the consumers and if they give nail enamel remover along with the product it will help them to increase the sales. Company has to advertise to create more awareness about the product.
Bibliography
Marketing Management – Philip Kotler
Marketing Plan Provided by Manish Rajput Sir
www.avon.com
