The international leader within the cosmetic industry had revitalize that the sales force and the sales number through moving the inter brand competitive benefits to the focused customer, along with setting norms, right practices, integrated strategy, which could focused on information and empowers the sales force (Bartlett & Ghoshal, 1998). This report will focus towards the present business operations, current issues, areas of sales and future trend and competitive benefits gained by Cosmetics Company (Bartlett & Ghoshal, 1998).
Outline Current Business Operation
Global cosmetic company is the top growing industry in the world that sell directly to the customers. In this industry, the client is the presently market leader. In the last around 20 years, the international beauty market had expanded by around 4.5% in the year on an average, having the yearly growth rate that had increased from 3% to around 5.5% (Bartlett & Ghoshal, 1998). The business operations of the industry includes the cosmetic and toiletries, along with personal care products. This market had highly proven its ability to attain the continuous and stable growth along with its capacity in case of resilience in most of the unfavourable conditions of economy (Bartlett & Ghoshal, 1998). The international beauty market is mainly categorized in the five key segments of business like, colour, skincare, toiletries and haircare.
All the above segments are quite complementary and by their diversity they are successfully able to satisfy the requirements and expectations of the customer in context to cosmetics (Bartlett & Ghoshal, 1998). Beauty items could be easily sub categorized in the mass production and premium segments, as per the price, brand prestige, and used distribution channels. As per international perspective, the mass segment presents around 72% of the complete sales in the year 2010, where else the premium segment highly accounts to around 28% (Bartlett & Ghoshal, 1998). Most of the international premium cosmetic sales is highly focused towards developed markets like France, US and Japan.
Current Issues Faced by the Cosmetics Company
Global cosmetic company includes the wide range of items, which owned around 50% of the total market that consist of around 30000 salons. This company also includes around four competing team of sales, which vary for the customers (Nolan & Zhang, 2003). It is evident that, the growth in this company is quite rapid from last five years, which had fluctuate among -1 percent to around +1 percent yearly. The problems that are explored is neither related to the sales team, which doesn’t have the actual knowledge about the customers, and they had done little to target them (Nolan & Zhang, 2003). It is noted that the culture was quite entrepreneurial; therefore, the sales people are not highly inclined towards the real process, and the basic model of business depends over the competition going inter brand (Anderson & Gatignon, 1986). The real and successful transformation would need the commitment towards the new goals of sales, process of sales, approaches of measurement, incentive system of training, accountabilities and organizational structure. Brand relationships requires to be properly redefined, and to move through the instigating the competitors existing among the multiple as well as complementary brands (Nolan & Zhang, 2003).
Areas of the Sales and Customer Service Needed to Handle
The A.T. Kearney team tries to work with the firm in order to explore the growth drivers, address the organizational challenges, structure, and even refine the sales and marketing needs (Rugman & Collinson, 2004). The analysis of scenario establish the stage for the purpose of evaluating the economic attractiveness related to the proposed strategies as well as ability towards reversing the strategies, which had failed earlier. The company make use of outcomes that tries to create the detailed model of customer targeting and even lay out the tools and process, which requires to refocus and help the sales company (Rugman & Collinson, 2004). The guided road map for the transition through the competitive approach of sales force towards the integrated model of coordinated sales as well as marketing plans (Rugman & Collinson, 2004).
Our team apply the focus group for the purpose of gaining the trust of customers. The extensive analysis highly revealed the significance of high brand of loyalty and the one mainly effective for the customers and salon buyers (Rugman & Collinson, 2004). Better focusing over the high profile and lucrative accounts prevent the waste efforts over the less account. The company make use of pilots, test, and workshops for introducing the sales force new approach, supporting in determining the resistance and permit time towards refining the process (Rugman & Collinson, 2004).
The CTPA depicts the distributors, manufacturers, wholesalers and retailers for supplying the services and ingredients, which includes 80% through the UK market value in case of finished cosmetic items. The cosmetic market of UK is highly worth the ?8438 million, which is considered as one of the top EU markets. It is noted that cosmetic market of EU is highly worth the 72 billion at the 2013retail sales price, which even presents the 1/3rd of the international cosmetic market, that is less than the japan and US market (Rugman & Collinson, 2004). There are more than 400 small and medium companies, which operate within the cosmetic industry of EU. Each year it is noted that quarter of every cosmetic item in the market is enhanced and completely developed with more than 25000 scientist, along with 520000 students of life science goes in Europe (Rugman & Collinson, 2004). Cosmetic includes around 10% of every patent, given to the European Union in the year 2009. The cosmetic industry face the barriers by placing the risk in particular place and depict the variation in hazards and risk (Rugman & Collinson, 2004).
What are the Future Trends and Competitive Advantages Model and Values they Need to Apply
Sale of company increased by 10% as the outcome of enhanced method of sales and product education along with additional 5% uplift of sales was noted to be attributed in the new multi brand approach of the company (Rugman & Collinson, 2005). Holding the customer intelligence, the firm was easily able to undertake the customer analysis and explore the new targeted items. Through the more coordinated customer perspective, they will be able to offer the sales management through the glimpse in the effectiveness and productivity of the sales team (Rugman & Collinson, 2005). This might result into increase in new accounts and enhanced profitability in previous accounts. The global cosmetic company market is noted to be around 460 billion US$ in the year 2014 and it’s measured that it might reach up to 675 billion US$ by the year 2020, by enhancing the rate of 6.4% (Rugman & Collinson, 2006). From the cosmetic items, it’s noted that skincare has reached to the highest share of market, where else Oral cosmetics are rapidly expanding as the fastest expanding marketing within the forecasted time phase (Rugman & Collinson, 2006).
Global cosmetic company is led by APAC, which had attain the market share of 35% in the year 2014, and later on same was achieved by North America and Europe. The increase in market share of various regions of Asia Pacific are highly attributed to the evidence that customers are relatively existing in the regions (Schlie & Yip, 2005). APAC is considered as the region that emphasize over the cosmetic offerors. The cosmetics sale is viewed to shift from the traditional form of purchase towards purchasing online. Moreover, enhancement in spending income, mainly in the developing countries is highly moving the market (Schlie & Yip, 2005). Along with the above factors, various other factors are highly acting towards constraints towards the industry.
Trends and Updates
Product innovations- companies are emphasizing towards coming up with items that are specifically as per the needs of customers. Ender particular items are also enhancing the rapid pace (Steenkamp, Batra & Alden, 2003).
Organic products- increasing concern over the long term impact due to the cosmetic use forces the company in coming up with organic items. The market expects to enhance the period of forecasting (Steenkamp, Batra & Alden, 2003).
Profiling of cosmetic manufacturers
Supplier intelligence includes about the information related to top industry players, such as Estee Launder, Procter and Gamble, L’Or?al, Johnson and Johnson, Henkel and Avon. This will provide the details about the market share of suppliers, along with competitive landscape (Steenkamp, Batra & Alden, 2003).
European market are most likely to go slow in the coming years. This will happen mainly due to the competitive cost existing in the key market players, increasing maturity of items and own label brands consolidation through huge supermarkets that rapidly expand the zones operations such as Eastern Europe (Davidson, 1983). The studied item category includes, hair conditioners, soaps and shampoos. The highest growth in the past years through the soap category is also included. The market is highly categorized through the increasing maturity and huge competition existing among the key brands (Dunning, 1993). Expansion of market is highly attributed towards development of new product like the liquid soaps for the purpose of showers and hand washing, which is supported through the promotional activity and heavy media advertising, which is undertaken by the key manufacturers of brand (Euromonitor, 2003). There are some competitive strategies applied in the sector and is categorized as per the market reports:
The significate of added value- the enhanced trend existing towards the products of added value such as items having the deodorizing and moisturizing properties, packaging is highly boosting the value of market. For the purpose of countering the increasing threat through the brands and supermarkets, that has highly sophisticated, had lead the manufacturers to step towards the programs of new product development with extension of brand and re-launching of basic brands, and emphasizing over the convenience and added value (Global Cosmetics Company Improves Sales Force Effectiveness, 2016). For instance, liquid soap for hand-washing including moisturizing, antibacterial, as well as deodorizing properties that are provide in the easy bottles of dispensing.
Environmental approach- the increasing concern of environment is highly lead towards the eco-friendly product development that includes natural ingredients, but it’s also used in refill packages and biodegradable packaging (Global Cosmetics Company Improves Sales Force Effectiveness, 2016). The industry is trying to constantly reach the items that could easily maintain the characteristic of performance, but at the same time it minimizes the environmental effects by reducing the substances that are used in the formation, such as phosphate based items. Mainly, the trend moving towards the natural ingredients is highly accelerated in coming years (Global Cosmetics Company Improves Sales Force Effectiveness, 2016).
Brand identity- the key stakeholders in the global market is highly control through the most significant brand in the respective sectors and holds marketing as well as financial resources that could combat with the increasing competition threat. All these manufacturers are highly tend towards the product families, not importantly the similar sector, in the basic brand identity (Johansson & Vahlne, 1977). For instance, Colgate Palmolive manufacturers the liquid soap, bar soaps, shampoo, shower gel, and all these products are under the same brand name. Palmolive is also supplied in Middle East, and African market. In case of Asian market, this brand id highly extended for covering the Palmolive naturals, Palmolive botanicals, as well as Palmolive optima (A Study of the European Cosmetics Industry, 2007). This is done for the purpose of increasing the effect of promotional and advertising activity and for promoting the loyalty of brand. Basically, the huge companies operate with the single identity of brand for its basic items. This kind of similar behaviour could be viewed in the sector of toilet soaps.
Recommendations & Conclusion
It is recommended that sales and marketing team should be given proper training about the work process of the cosmetic industry, so that, they could plan their action accordingly (Buying green! Green public procurement in Europe. European Commission, 2011). It is again recommended that staff should formulate the strategies that could help the company in targeting more customers and increase the sales. This report is helpful in understanding the issues faced by the company and it became easier to explore the best solutions that, could mitigate the problem.
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