The Australian Beauty and Cosmetics Industry
Having been ranked 12th world economic power, Australia has one of the highest buying powers in the world (Tuten & Solomon 2014). There is also a firm demand in the nation for high value-added products coming from North America, Europe, and Asia. The Beauty and Cosmetics industry is no exception. Boasting of an estimated 12million inhabitants, the industry is quite small but also a steadily developing market. This has been attributed to the fact that the Internet and proximity of Asian markets have helped small local brands to come up quickly. The Beauty and Cosmetics industry in Australia is predicted to grow yearly by about 1.2% from 2016 to 2021, enhanced by the popularity of multifunctional, natural and organic, and innovative products (Drucker 2007). Moreover, the competition is also expected to increase following the increased interest of consumers for mass market products. The dynamism of the Australian Beauty and Cosmetics market is confirmed by Australian brands themselves such as the performance of organizations such as Nutrimetics, SelfCare Corporation, Inika, Natio, Sugar Baby, Napoleon Perdis, or Ere Perez.
Ere Perez Natural Cosmetics, is an Australian company which was established by Ere Perez in 2004 (Drucker 2011). This idea emerged from her desire to produce herbal products which contained healing components. Eventually, her desire developed into what is the organization’s vision. Perez is generally inspired by nature and makes use of ingredients such as corn, beetroots, and rice in place to possible hazardous ingredients present in most synthetic makeup. Ere Perez Natural Cosmetic’s mission and vision statement is to give women a high quality yet inexpensive option to chemical based makeup. Its values are health from the inside-out, wellbeing and natural beauty (Kottler & Armstrong 2006). Perez’s values are quite evident throughout her premium variety of boutique makeup that makes women appear good and feel great. The organization allows women to get outcomes without having to sacrifice their health or environment.
Given that the current beauty and cosmetics market has drastically transformed, organizations have been coerced into changing the way they deal with the marketplace. A company’s orientation towards the market addresses concepts which the organization may apply while targeting a particular market. Overall, there are five distinct orientations which organizations such as Ere Perez Natural Cosmetics can consider towards the marketplace (Elliot, Rundle-Thiele & Waller 2012). Firstly, the production concept is where an organization tries to increase manufacture regardless of the demands of the customers. Secondly, the selling concept suggests that customers cannot purchase products unless they are convinced to do so. Thirdly, the product concept is whereby a customer will always purchase an organization’s products which are better in terms of features and quality performance. Fourthly, the marketing concept says that the triumph of an organization is determined by the marketing efforts of an organization in delivering a value proposition (Jones 2010). Lastly, the societal marketing concept believes in giving back to the society what it had obtained from it.
Ere Perez Natural Cosmetics
Ere Perez Natural Cosmetics’ orientation towards marketing is that of the marketing concept. This concept not only demands that the organization’s strategic decisions consider the customer, but strive to make the customer experience better products. Ere Perez Natural Cosmetics’ knows that the market needs and anticipates from it as an outcome of which organizations applying the marketing concept need to conduct more market research (Tuten & Solomon 2014). Following the rise of Australia’s economy, consumers are now more knowledgeable and picky. This means that organizations can no longer focus on what it is selling, but rather on what the customer desires to purchase. The marketing concept as a type of orientation towards marketing by Ere Perez Natural Cosmetics has been identified because the organization has managed to formulate better marketing strategies which fulfill the needs of its consumers.
The very initial product that was launched was Natural Almond Oil Mascara which became an instant success. This product was developed from Perez’s belief that eyelashes need nourishing similar to how an effective shampoo keeps one’s hair healthy (Drucker 2007). Other Ere Perez Natural Cosmetics’ products offered in the market include skin care and baby products, cosmetics, hair products and body products. The organization understands that its brand is more than simply its logo, slogan, or name; it is the wholesome experience its customers have with the organization, service or product. Branding is quite significant for services and/or products sold in large consumer markets such as the beauty and cosmetic. Ere Perez Natural Cosmetics’ brand plays a key role in its marketing strategy in that it brings the organization’s competitive positioning to life, working to position it as something unique in the minds of potential customers.
One of the major strengths that Ere Perez Cosmetics enjoys is the fact that its products are natural and contain healing properties. The organization also employs staff who understand the functioning of the products’ ingredients, and are thus in a position to assist customers who may have any queries regarding the products (Drucker 2011). Secondly, the ingredients used in the products are not hazardous to the user’s skin. Ere Perez Natural Cosmetics is the only cosmetics organization in Australia incorporating rice, corn and beetroots into its production process. Moreover, these products come with instructions and descriptions of how it can enhance the user’s skin, making it better.
Similar to any other organization, Ere Perez Natural Cosmetics also has a few weaknesses, for instance the mere fact that the cosmetics industry is quite wide and big internationally. Currently, Ere Perez is not the only cosmetics organization in Australia. Other competitors claim to also offer natural ingredients within their products that have been triumphant since it is exactly what the public wants to hear (Kottler & Armstrong 2006). Therefore, the organization’s products would be rather difficult to promote given that most customers tend to trust bigger and more successful cosmetic organizations. Furthermore, customers usually go for products they are familiar with and make it harder to compete with popular cosmetic name brands such as L’Oreal.
Ere Perez Natural Cosmetics’ Orientation to Marketing
Considering that Ere Perez Natural Cosmetics has already established its presence in the Australian cosmetics market, it has a chance to expand internationally. It also has an opportunity to advertise and have huge promotions of its various products once in a while, similar to what a larger organization would do. On the other hand, the organization’s biggest threat is its competition. Brand names such as Nutrimetrics and Napoleon Perdis are in similar business of manufacturing natural beauty products (Elliot, Rundle-Thiele & Waller 2012). Secondly, the economy can be an unforeseen threat to Ere Perez Natural Cosmetics’ business in that if it gets too low, it will be difficult to find individuals who are willing to spend their money on the unique natural makeup.
The organization generally serves women and children as its main customers. Consumer purchasing behavior is behavior that customers tend to display while looking for, buying, utilizing, and assessing services, products and concepts which they anticipate will fulfill their different needs. The type of behavior that is typical from customers at Ere Perez Natural Cosmetics is complex purchasing behavior where customers are highly involved in the buying and there are key distinctions between brands (Jones 2010). Here, a customer tends to gather all relevant information regarding the product features, and the marketer is expected to provide complete detailed information about product attributes.
Ere Perez Natural Cosmetics does not have any suppliers, distributors or other partners that assist the company to deliver their products to the market because they do that using their staff. They also have all the ingredients they need within the company. Furthermore, they have already established an online presence where customers can place their orders and have them delivered at their doorstep by the company’s transportation team (Tuten & Solomon 2014). Once the organization has ventured internationally, then it will need additional distributors, suppliers and other partners.
As already indicated, Ere Perez Natural Cosmetics main competitors are Nutrimetrics, Napoleon Perdis, Sugar Baby, and SelfCare Corporation (Drucker 2007). The beauty and cosmetics industry is a rather competitive one and is thus more likely to attract various companies which strive to capture a given market. This also means that there are potential threats and new entrants for the marketplace. However, for Ere Perez Natural Cosmetics to continue enjoying long term benefits, it needs to develop customer loyalty within its industry. As a result, it will ensure that although new organizations enter the beauty and cosmetics industry, their market share remains unaffected since customers will have faith on their products (Drucker 2011). Notably, this particular industry currently has a low threat of new entrants since the huge competition tends to discourage new entrants.
The Role of Branding in Ere Perez Natural Cosmetics’ Marketing Strategy
A number of factors can affect Ere Perez Natural Cosmetics such as political, legal, technical, socioeconomical, environmental, legal, and economic factors. These cannot be ignored because they provide a broader understanding about the business environment and helps the company to predict future hindrances and find safety measures for them. Possible political factors would be the extent to which the Australian government intervenes in the economy of the country (Kottler & Armstrong 2006). This may include pricing regulations, legal structure for agreement enforcement, and taxation. Economic factors may affect the buying power of customers. For instance, the more customers demand for the company’s product, the more profit it will enjoy, and vice versa. Socioeconomical factors are determined by the customers’ affordability to purchase an organization’s products.
Current trends and preferences also determine whether or not an organization’s products and/or services will sell. With regards to technological factors, Ere Perez Natural Cosmetics has already embrace technology and is using it to reach customers nationally, and possibly internationally. Legal factors, on the other hand, incorporate competitive regulations, product regulation, health and safety regulations, and employment regulations. These factors determine how Ere Perez Natural Cosmetics operates, its numerous costs, and the demand for its products (Elliot, Rundle-Thiele & Waller 2012). Lastly, environmental factors have to do with how the company’s product is affecting its surroundings. Issues of pollution and waste management arise in relation to these particular factors. Ere Perez Natural Cosmetics deal with natural ingredients, thus do not pollute or affect the environment within which it operates.
Market research involves gathering valuable information to assist an organization find out if there is a market for its product and/or service (Jones 2010). The information collected from this research assists upcoming businesses to make wise and beneficial business decisions. Initially while starting up, Ere Perez Natural Cosmetics made the mistake of thinking that they understood what their potential customers wanted without even enquiring from them. There are different types of market research for instance, primary, secondary, qualitative and quantitative (Tuten & Solomon 2014). The organization learns about what customers want and which competitors pose a threat by conducting primary and secondary market research. Here, it is able to gather first hand information through polls, questionnaires, statistics, or reports. This information can also be presented in tables, charts, or graphs and carefully evaluated.
Market intelligence refers to the external information gathered by an organization about a given market which it wishes to venture into, to make decisions. Such information may include population age in the region, spending habits of potential consumers, government or state regulations, or infrastructure facilities (Drucker 2007). Ere Perez Natural Cosmetics utilizes market intelligence to understand the role that their collaborators, if any, play in the process.
Strengths and Weaknesses of Ere Perez Natural Cosmetics
Potential market segments which are available to the chosen organization. Recommend and justify a choice of target market(s), a value proposition for the target market(s), and a positioning statement for the target market(s)
Based on the market analyses, there are a few potential market segments available to Ere Perez Natural Cosmetics. The global market is partitioned based on mode of sale, group, geography, and gender. One of the potential market segments available is the category segment which constitutes sun and skin care products, color and makeup cosmetics, hair care products, fragrances, and deodorants (Drucker 2011). Secondly, the mode of sale segment involves online and retail sale where departmental stores, brand outlets, and supermarkets are included. Geographically, the global market which is partitioned across Asia Pacific, North America, and Europe is also available. Notably, the cosmetics market is generally and initially partitioned into cosmetics for women, children, and men. Socioeconomic partitioning tends to involve separating the consumers in terms of level of education, income, and occupation (Kottler & Armstrong 2006). Psychographic segmentation is founded on personality or lifestyle characteristics of the consumers. These are some of the market segments which are available to Ere Perez Natural Cosmetics.
Target marketing refers to partitioning a market into categories and then focusing marketing efforts on one or a few main groups consisting of customers whose desires and needs closely resemble an organization’s service or product. Ere Perez Natural Cosmetics can use target marketing to aim its marketing efforts at specific consumer groups to ease the process of promotion, distribution, and pricing (Elliot, Rundle-Thiele & Waller 2012). A customer value proposition for the target market is a description of the experiences a target group will realize once they buy and utilize an organization’s product. To Ere Perez Natural Cosmetics, value proposition is considered to be the most significant instrument in the product marketer’s toolset. If implemented, it would assist the company to understand how its product will logically be valued by the target market(s).
A positioning statement refers to an instrument utilized in business to identify how a given brand will be positioned in a given market. By implementing a positioning statement to the target market(s), Ere Perez Natural Cosmetics can better understand what makes its brand significant and differentiated so that it stands out to those who need to be aware of it. Having a positioning statement would mean that the organization will not be walking blindly in its marketplace. It combines competitive insight, product valuation, and customer intelligence (Jones 2010).
Expansion and Threats of Ere Perez Natural Cosmetics
Marketing mix is all about putting the right product and/or service in the right place, at the right time, and at the right price (Tuten & Solomon 2014). This approach is commonly linked to the 4Ps marketing or 7Ps of service marketing. Ere Perez Natural Cosmetics acknowledge that marketing mix is a significant instrument for obtaining firm positioning in the concerned markets. The organization’s products are all about innovation, color, and sophistication. So far, it has various distinct products in its portfolio with the inclusion for items for eyes, lips, and face (Drucker 2007). It has also managed to establish itself nationally. However, it is recommended that it further develops and expands internationally, similar to how L’Oreal and other competing cosmetics companies have done. Given that it has an online presence Ere Perez Natural Cosmetics will not experience much difficulty entering international markets.
Ere Perez has exhibited itself as a brand that is not only stylish, and charming, but also quite trendy and has a contemporary chic stance. Its main target market is women, children and men and its products are quite accessible throughout Australia. What lures these individuals to the organization’s products is its pricing. Although quite affordable, those of lower income still cannot afford to purchase Ere Perez products. Therefore, the organization should consider targeting this particular population group in its effort to expand (Drucker 2011). Ere Perez Natural Cosmetics need to focus more on promoting its products through campaigns.
Conclusion
From what has been discussed above, Australia has about 20 million residents, and the cosmetics industry is rapidly growing. Among the most important market trends that have been witnessed, anti-ageing cosmetic products are quite popular with the Baby Boomer generation. Research has also shown that organic or natural products are among the strong points of the Australian cosmetic industry. Notably, the dynamism of the cosmetics market is affirmed by the brands themselves. The paper has focused on one of the major local Australian cosmetic companies, Ere Perez Natural Cosmetics which has successfully implemented its marketing management and marketing mix despite the existence of aggressive competitors such as Nutrimetrics, Sugar Baby, and Napoleon Pardis.
References
Drucker, PF 2007 The practice of management, Butterworth-Heinemann.
Drucker, PF 2011 Management challenges for the 21st Century, HarperBusiness, New York.
Elliot, G, Rundle-Thiele, S & Waller, D 2012 Marketing, John Wiley and Sons Australia, Milton, Qld.
Jones, G 2010 A history of the global beauty industry, Oxford University Press, Oxford.
Kottler, P & Armstrong, G 2006 Principles of marketing, Pearson, Upper Saddle River, NJ.
Tuten, T & Solomon, M 2014 Social media marketing, 2nd Edition, SAGE, Boston.
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