1 CHAPTER 1 SCOPE OF THE STUDY 1.1 INTRODUCTION ...

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natural and organic personal care products, whilst supermarkets such as Loblaw’s, anddrugstores like CVS are expanding product ranges (Just-Style, 2003).Ingredient and formulation issues are becoming increasingly important. The largenumbers of pseudo-natural products are leading consumers to scrutinise thecomposition of natural and organic personal care products. Manufacturers areresponding by launching products with high levels of natural extracts, ethical andcertified organic ingredients (Just-Style, 2003).Euromonitor International (2009), reports that US sales of cosmetics and toiletries wereflat in 2008. This situation was a sharp contrast to previous years of value sales growth.Cosmetics and toiletries sales growth slowed as the US fell into a deep crisis, with risingjob losses and reduced availability of consumer credit. Worries about the US economyled to reduced consumer confidence and lower spending. US GDP grew by only <strong>1.1</strong>percent in 2008, lower than the 2.9 percent and 2.8 percent growth achieved in 2005and 2006 respectively. Americans who had traded up to premium goods were said to bechanging their focus towards necessities such as food and fuel. In 2008, this shift ofconsumer spending led to massive discounting in cosmetics and toiletries. Premiumcosmetics which previously were never discounted had price cuts in December 2008.Retailers including Macy’s, Neiman Marcus, Nordstrom and Saks marked downfragrance prices temporarily. While the discounts had the effect of selling fragrances,they hampered value growth. Retailers also discounted colour cosmetic gift sets fromBobbi Brown and MAC. As a result, sales of premium cosmetics and toiletries declinedin 2008 after growing in 2007.Euromonitor International (2009) presents the following as the forecast of the UScosmetic industry for 2008 through 2013:The cosmetics and toiletries sector is expected to decline between 2008 and2013 in constant value terms. Given tighter household budgets, it is likely thatconsumers will be more cautious about buying such products and will be lookingfor value. Despite the bleak economic outlook, some sectors are still expected to12
grow in the forecast period. Men’s grooming products, in the areas of skin care,bath and shower products, and hair care, are expected to continue showing goodgrowth. Due to the immaturity of these subsectors and growing comfort withgrooming regimens among younger American men, sales of these male-specificproducts are expected to continue growing, regardless of the economy. Thedesire to look good will also aid sales of anti-ageing products. Body wash/showergel, liquid soap and sun care are also expected to remain fairly recessionresistant.For the Ethnic specific market however, Guzman (2007) forecasts retail sales tosurpass $2.5 billion by 2012, with a compound annual growth rate of 5.4 percent from2006 to 2012. The 38 million blacks in the US currently account for just fewer than 13percent of the nation's population and the black population is estimated to grow by 13percent from 2000 to 2010 (Euromonitor International Two, 2007).Ethnic Cosmetics and Toiletries Market Segments in the United Statesa) Baby Care Products current and future trends:Current trends of Baby Care ProductsCaridad (2006) explains that mothers are looking for the fragrance and benefit trendsfound in adult products for their babies as well. Therefore, benefits such as nourishing,moisturising and soothing, as well as, fragrances such as shea butter, mango, coconut,green tea, vanilla, and cucumber are migrating to baby products. Parents have anemotional investment or attachment to bath-time activities with a little one, so makingthe bath-time-fresh baby feeling last all day (through scent and benefit) is anoverarching trend that will drive incremental use of toiletries products.According to Caridad (2006) natural and organic products are the biggest trend in babycare. Increasingly, parents want products that are made with natural ingredients. This13
Page 1 and 2: CHAPTER 1SCOPE OF THE STUDY1.1 INTR
Page 3 and 4: 1.3 RESEARCH OBJECTIVESThe primary
Page 5 and 6: ) Qualitative Research“Qualitativ
Page 7 and 8: The respondents to be chosen need t
Page 9 and 10: • Living Standards Measure: It di
Page 11: 2.2 INDUSTRY ANALYSIS2.2.1 Ethnic c
Page 15 and 16: cleans conditions and detangles whi
Page 17 and 18: In the general market, products are
Page 19 and 20: “all natural” claims by special
Page 21 and 22: As a segment, this market sector ha
Page 23 and 24: launching new Ethnic facial product
Page 25 and 26: h) Skin Care products current and f
Page 27 and 28: organic market, but are also breaki
Page 29 and 30: (2000) asserts that Ethnic women no
Page 31 and 32: experience time and time again. Pre
Page 33 and 34: the government. The emerging black
Page 35 and 36: Deodorant body sprays are particula
Page 37 and 38: Euromonitor International One (2007
Page 39 and 40: way, making it difficult to compete
Page 41 and 42: and 2.14). As South African men bec
Page 43 and 44: sales through those outlets is expe
Page 45 and 46: Producers of mainstream skin care b
Page 47 and 48: k) Sun Care Products current and fu
Page 49 and 50: Trends and insights into South Afri
Page 51 and 52: 2007:38). This expansion of distrib
Page 53 and 54: CHAPTER 3STRATEGY FOR BUSINESS GROW
Page 55 and 56: d) Improved SynergyImproved linkage
Page 57 and 58: The market penetration strategy is
Page 59 and 60: ) Gaining competitors' customers (P
Page 61 and 62: power saw and a lady in a clown sui
Page 63 and 64:
Hoskisson and Hitt (2009:183) expla
Page 65 and 66:
Vertical integration is also claime
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) InternationalisationAnsoff (1965)
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are described as non-equity based a
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Another common reason for operating
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In recent years however, companies
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isk than simply attempting to incre
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Further advantages of diversificati
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efficiency. Quantity discounts thro
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CHAPTER 4FRANCHISING AS A GROWTH ST
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Franchising is a commercial relatio
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usually grants further licenses wit
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Miranda (2009) further explains tha
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The franchisee is said to carry a h
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e) Competitiveness achieved through
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franchise, and pay royalties on tim
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of the franchise is what breeds pos
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4.6 CONCLUSIONIn this chapter franc
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onset, which factors may cause cert
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5.3.1 ValidityIn its purest sense,
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Speciality Top End, Ethnic Cosmetic
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5.4.2 Ethical AspectsWritten inform
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Section three, deals with benchmark
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Currently Mr Munroe is still occupy
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) Are current retailers situated in
Page 113 and 114:
e) Because of this move, is their s
Page 115 and 116:
concludes however that that there a
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(2009) states that SA retailers are
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Carter and Carter (2009) proclaim t
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6.3.5 Product RangingSection Five o
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According to The Free Library (2009
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The literature review reveals that
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BabyCarter and Carter (2009) explai
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(2009) also feels that such a niche
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Munroe (2009) also suggests mini LC
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) Do you see an interest from the f
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e) What services are the above reta
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h) Could current top end retailers
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Page 141 and 142:
A goal of Market Penetration Strate
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store to aid in the purchaser’s d
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Carter and Carter (2009) assert tha
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Page 149 and 150:
The literature review reveals that
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The Ethnic cosmetic and toiletry ma
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• Differentiation from competitor
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In terms of focus shown to the Ethn
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and brand reassurance, their desire
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c) Store design and layoutThe layou
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f) Promotional ActivitiesThe majori
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From the conclusions drawn, it was
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Available from:http://perfumesmelli
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Cosmetics Design. 2005. Black hairc
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Fortune Manning Lawyers. 2008. Freq
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LaPolt, E. K. 1997. Ethical dilemma
Page 173 and 174:
Pearce, L . 2009. How to Take Your
Page 175 and 176:
Stilwell, J. 2007. Strategies for B
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APPENDIX AQUESTIONNAIRE1. INDUSTRY
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4. GAINING MARKET SHARE AS A NEW EN
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c) How would you suggest a retail s
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f) Are current SA retailers who sto
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10. FUTURE OF THE ETHNIC COSMETICS
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10.Vetiver, woody notes (men and wo
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Table 2.9: forecast sales (in Milli
Page 191 and 192:
Table 2.17: Forecast sales (in Mill
Page 193 and 194:
Table 2.22: Forecast sales of Depil
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