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
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Weakness
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The organization is innovative, it is able to think outside the box and generate new products and ideas
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Little knowledge of the market
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The organization has a well- segmented portfolio operating across different pricing tiers.
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Opportunities
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Threats
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Demand for organic products creates room for the company’s products
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Other existing companies with similar products pose a threat to the company products
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Technologogical advancements in marketing
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Growing competition in the emerging markets
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Increased consumer marketing power in the emerging markets
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Increased demand of organic products of all ranges including cosmetics
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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
