to the 18-25 Year Old Female Demographic
Ravi Gupta Yang Yang
Yiyin (Stacy) Yuan
Xiaotian (Jeff) Zou
1. Situation Analysis:
BeautyCounter is a company that launched in 2013 hoping to sell healthy, effective, and safe products to mostly female individuals. By bringing safe products to the market, BeautyCounter believes it can enter the extremely competitive cosmetic markets. Through its direct-sales business model and e-commerce site, the company generated roughly $3.2M in revenue in its first nine months of existence. The company currently generates almost all sales through is 1,200 sales consultants. In order to continue growth in 2014 and beyond the company is looking to enter new markets. This coupled with higher retention and buying rates should allow the company to easily surpass its $15M in revenue target for 2014. If BeautyCounter can successfully enter the 18-25 year old female range successfully the company will be in a good position to hit $100M in revenue by 2015.
Beauty counter’s market strategy is to produce products for all segments of the population: women, men, and kids. Their plan is educate consumers on the toxic ingredients in cosmetic products. This is done to highlight the safety and lack of toxic chemicals in BeautyCounter products. BeautyCounter’s products give consumers the ability to find the best cosmetics to make your skin look healthy and amazing, without having to sacrifice by using products made from hazardous ingredients like lead.
In 2014 BeautyCounter plans on spending $3M+ for their marketing budget, with brand building still being at the forefront of their objectives. It plans to pay more attention to e-commerce, because it represents a small portion of their total sales. They’ve had success with events and will continue to create industry parties that are sales drivers. This should lead to more publicity regarding press releases and magazines, which builds brand awareness.
2. Market Analysis:
Market Supply structure:
The company uses a variety of production facilities, currently around 7, to make its products.
a. The cosmetic market is extremely large. There are very large players such as Estee Lauder that own multiple different brands. The facial skin care market is large and growing Sales in the facial skincare category have increased modestly between 2007 and 2012, rising by 11% during that period to reach estimated sales of $5.6 billion.
b. The main competitors in the Beauty and Personal Care industry are as followed: -Department store competitors: Clinique, Estee Lauder -Specialty brand competitors: Kiehl’s, Origins -Safety/healthy competitors: Tata Harper, Dr. Hauschka -Direct selling competitors: Arbonne, Pangea, Bona Clara -Luxury brand competitors: Chanel, Christian Dior, La Mer, Cle de Peau Beaute
a. Policy/Legal: There has been no regulation adopted in US since 1938, while there have been several regulations and restrictions in the European Union. If regulations are added BeautyCounter will become a first mover. Currently the consumer is not aware of any lack of regulations in the market. BeautyCounter should try to spread more awareness on this issue.
b. Demography: There is a growing demographic of people wanting to use natural products, which is closely aligned with the following characteristic: educated, med-to-higher income, above 25 years old, male and female. There is also a growing male market.
c. Environment: Booming cosmetic market growth among college students.
d. Society: Market as a whole supports beauty products.
e. Economy: Currently the economy is doing well. This should help the premium price.
f. Technology: Technology has allowed mfg. to produce products that are more effective in dealing with skin conditions such as wrinkles, dark spot, acne, etc. Social media should build brand awareness.
Market Trends: There are