Cosmetic products and applications

¶ … industry with which I have decided to get involved is the cosmetic and toiletries business. I have always had an interest in opening my own business: offering a product that is affordable and of good quality. The current products available to the consumer have a lot of room for improvement; most of the products are poor quality and mass produced, or too expensive for the return.

Certainly, there are a few exceptions in the industry: Bath and Body Works and the Body Shop are models by which I would consider patterning my business.

In 2002, Wilson Select published a report discussing how new product development in several markets is expected to drive margin growth for the cosmetic and toiletries industry in the future.

Product quality is relegated to improving in the future due to the recent discovery of beneficial ingredients. This refers to those products with multiple benefits when it comes to the effectiveness of the product. (Wilson Select Overview of the U.S. cosmetics and toiletries market, 1997).

The Body Shop

The Body Shop is a company with an understanding of what it means to change to fit the customer's needs, and take advantage of current technological and available research. Entrepreneur Anita Roddick who, in 1976, began retailing homemade products with minimal packaging founded the company. By 1982, there were Body Shop stores opening at the rate of two per month. Now, the Body Shop is operating in 50 countries with over 1,900 outlets spanning 25 languages and 12 time zones. Consumer trust in the product is also very strong. The pursuit of innovation and able to conform to the needs of loyal customers has enabled the Body Shop to grow since they opened in 1976 (Biesada, 2004).

Bath and Body Works

The Bath and Body Works Company has 1,600 stores throughout the U.S. The company sells natural body and hair care products, personal care products, and fragrances. They also have a line of aromatherapy and at-home spa treatments. The success of this company is due to the consistent quality products offered at an affordable price. The constant changing product lines is similar to the Body Shop; they are not afraid to try something new. (Biesada, 2004).

Companies like Wal-Mart, grocery stores, and other large retailers are a threat to some of the smaller toiletry businesses. They buy large amounts of product for a minimal price - and usually poor quality - and then sell it at for a very inexpensive price.

Teenagers have become a new target for color cosmetic companies and products are being launched specifically for preteens. People are also interested in products that have natural ingredients in them. The push for products that are not tested on animals is also on many consumer's minds.

The cost to effectively market multifunctional products employing new ingredients combined with the need to generate a greater return on investment has led personal hygiene companies to consolidate their range of brands - eliminating smaller or slow-selling lines - and focusing on their biggest names. This migration has prompted manufacturers not normally involved in these product categories to develop brand extensions into the area. This "mega brand" strategy depends on conveying a similar image to existing products under the same brand name. Customer loyalty to products is diminishing, however, and the company providing a product must be equally worried about the quality they are offering to the public. (Koser, 2001).

It is difficult to believe that cosmetics will fail to thrive, in Asia or anywhere else. Three years ago, Asia Info Services published a report noting that even Chinese herbal medicine cosmetics were gaining market share, however small at that point, because of their all-natural character, which appeals to buyers globally (Green cosmetics, 2001).

Two years ago, China displayed a booming cosmetics market, as evidenced by visitors to Cosmoprof Asia, a trade show held at the Hong Kong Convention Center in November, 2002. A report in a trade journal - Soap, Perfumery & Cosmetics Asia - noted that cosmetics "clearly act as an effective tool for creating business ties between Asia and the rest of the world (2003)," thereby making an investment in a Body Shop or similar company a perfect one for the coming decade.

Manufacturers would arguably not have been interested in exhibiting if they had been unsure that the market for cosmetics in Asia will expand in the coming years. The Cosmoprof show hosted a total of 750 exhibitors from 33 countries. The show attracted 35,071 visitors, which was a 13% increase over 2001 attendance. It also demonstrated a very vibrant market for cosmetics from European companies selling to the Asian market. "We have had a very good response in terms of companies coming from the U.S., and there has also been very good performance from Spain, Italy and France. These countries are participating at this show more and more," according to Laura Zaccagnini, marketing director of Cosmoprof Asia (Quoted in Soap, Perfumery & Cosmetics Asia, 2003).

As examples of how growth has expanded in Asia, the Korean market grew by 10 to 13% in 2002, with the Chinese mainland growing at 7 to 8%; that market was expected to grow 13-15% by 2010, reaching U.S. $9.76 billion. Zaccagnini noted that the Chinese expansion was greater than in most other Asian nations (Soap, Perfumery & (Cosmetics Asia, 2003); causative factors are possibly due to pent-up demand. The entire Pacific Rim was seen, however, as a growth area.

While the current project is specifically a Body Shop franchise, the wealth of interest in Thai cosmetic products shown at Cosmoprof Asia is a good indicator of the substantial interest in cosmetics in Thailand. "The Bangkok Herb

Company was looking for a distributor for its new breast enlargement skincare product, Beauty Breast Lotion, which contains dimethicone, isopropyl palmitate, soya extract, ginseng extract and horsetail extract" (Soap, Perfumery & (Cosmetics Asia, 2003). The product holds promise as something which might be added to the Body Shop merchandise for the Thai market.

A spokesman for another company noted: "Asian women want to be 20% slimmer than the average woman. They particularly want slimmer faces, they do not want the chubby cheeks that Asians have which gives the impression that they are fatter than they really are. The Japanese spend three times more on beauty products than U.S. women," (Soap, Perfumery & Cosmetics Asia, 2003). Body Shop cosmetic products and the accompanying cosmetic application instruction will be an added advantage in marketing to this demand in the Thai marketplace.

Soap Perfumery & Cosmetics noted the potential for growth in the Pacific Rim nations as early as 1993. At the time, the publication noted, "Body Shop expects to boost its 25 outlets in the region to 150 via its local franchise agent, concentrating on Indonesia, the Philippines and Thailand" (Soap Perfumery & Cosmetics, 1993).

My concept of a successful business would be a product that could be compared to the products that are offered at Bath and Body Works and the Body Shop. Finding my own niche in the cosmetic and toiletry industry will be the biggest challenge that will need to be overcome.

Many types of businesses that are not highly successful saturate the cosmetic industry due to a lack of creativity. I believe that I have a very good idea on how to introduce my product to the market. The most important part - other than name recognition - is the ability to catch the consumer's eye and peak their interest in what new products are available. Personal advantages on the side of creativity would align with my personal experience with products, and what other people think about different products. My main target would be toward female consumers; most women would want product they could leave in their bathrooms and use at their convenience, but also not having to worry about how it will affect the look of the area that they have devoted so much time toward decorating.

The products would be lotion dispensers, soap dispensers, and the containers in which they are packaged. Certain items could be more creative by using different color variations, and would reside in the bathtub or shower. Although not typically as noticeable to people entering the restroom, product color schemes which are versatile and blend well with the differing decorative styles used in home decor today, are a major consideration that must be weighed and factored into the business scope.

Strengths

My strengths for entering this business are a lifelong interest in beauty and achieving it through the most gentle and cost-effective means possible. I have studied the subject on my own; I also plan to take basic cosmetology courses, either online or if I can locate some available to non-degreed students, at a college of cosmetology. I have an excellent history of financial education; my current job requires that I keep accounts both to comply with government demands and allow the business to know where it stands financially so that it can plan accordingly. I also have a good sense when it comes to networking and have been researching some of the most popular brands of body lotions and soaps, noticing that most of them are not manufactured by the company that is marketing them to the public. I think that proper networking and research on who is making quality products, and finding a vendor with a good track record of customer satisfaction would be crucial in getting a positive consumer reaction.

Networking

Networking is invaluable when you do not miss opportunities that are available just from people talking about your product. Some of the smaller stores are involved in fairs and events where products can be introduced to the public without the burden of larger brand name competition.

Additionally, my variety of personal strengths will help me succeed when I launch my new business. I am not intimidated by the possibility that my business might fail. I know that I will work very hard to make my business successful, and if the business is not successful, I will know that I would have done everything possible to make the business succeed.

I am not afraid or intimidated by required changes within the business. I will be able to adapt to different situations that may occur when the business starts to grow. The best way I have found to get any information about different makers of products is the Internet. Information about the production of the product as well as the ingredients is openly available through this medium. It is important to be able to research the ingredients because if you have a vendor that uses cheap ingredients to cut corners, your product will not be successful.

Another thing to plan for is whether the ingredients that are used can cause allergic reactions with customers. The Internet does have its drawbacks because a large amount of information that is available cannot be used due to outdated reporting. Subsequently, I have located a great deal of timely and useful information which will be of use to my business plan and fledgling enterprise.

Some manufacturers offer free samples of their product, which for me would be perfect because I can give people samples and see what they prefer and why; test marketing at the expense of the larger manufacturers is an intelligent use of resources.

Test Markets have communicated to friends about my idea of starting my own business, intent on determining the reactions; all have been positive. When I ask them why they think it would be a good idea, everyone to whom I have spoken says that I am very persistent and do not give up once I have made up my mind to do something. I am very proud that people think that I am persistent and will not give up, and they do not see this goal as something that is unreachable for me. This also helps motivate me because I do not always realize the good qualities that I possess which would help me succeed with opening my own business.

Areas for Improvement

The part of my future business that I will have to improve on is my ability to compete. The market in toiletries and cosmetics is flooded with product not only from the United States but also all over the world. My idea is to market my product in the U.S. As well as other countries. In Thailand, where I am from, there is a great demand for anything that is made in the U.S. because there are very few things in the retail market available to people from the U.S. Consumers will spend as much money in Thailand for anything made in the U.S. As Americans spend on things from Italy, France, and England.

A also have friends that would be willing to work for me and sell my product; this would make it easy for me to keep my business going because it will probably require a long time to gain a strong consumer following in the U.S.

Required Changes

The things that I will have to change when running my own business will be my skills at time management. Time management with my regular work schedule, family life, and running a successful business will be a challenge for me. Time management is sometimes a problem for me now because I take on too many responsibilities at once. This can be very self-destructive for me because I get burned out and have a hard time concentrating and prioritizing those things that are the most important and need to get done first. I will need to ensure that I have a plan in action every time I add something to my schedule. Furthermore, I have not run a business on my own before, and it may well be more demanding than I anticipate, although I do anticipate at least a year of 18-hour days.

Personal Challenges

My challenge will be finding the physical, mental, and emotional resources to meet that demand for a long period of time. I might try to look at the aspect of getting someone to help me with my business if it gets to hard to manage myself. This would be a good alternative than stressing myself out over too many tasks, and would also be a good sign hiring someone to help because it would mean my business is growing.

Burgeoning Opportunities

My opportunities, however, are so great that they warrant taking the risk. While the market alone, as described above, supports the idea that this is an excellent opportunity for me, the general tenor of the industry is also practically palpable in its offer of a bright future. An industry report in Soap Perfumery & Cosmetics (2000) noted that there was "plenty of opportunity for innovation and expansion. Increasingly, consumer demand is driving the industry, with companies seeking to meet, rather than dictate, market needs, with a particular sensitivity to local diversity." That is specifically what I intend to do as a Body Shop entrepreneur: meet the market needs for cosmetics and skin care in Thailand.

Threats to Success

The threats to my success are the usual ones: lack of independent business experience, and, notably, the lack of abundant start-up cash. One threat that probably does not exist in cosmetics is the economic climate; in all economic climates, people want and need - for personal and business purposes - to look and feel good, and cosmetics provides a relatively inexpensive means to do that, affordable to many even when the economy is declining. The fact that I am starting from the bottom with very little money will make it difficult for me to create a business and succeed.

The other problem I face is the expenditure to market such products, especially with the competition already in all of the large department stores. I will have to start in the U.S. with privately owned businesses and specialty stores, most of these stores do not have any ties with big name brands. With the ingredients of the products changing, the manufacturing costs are becoming more expensive because the vendors using the newer ingredients know they can charge more money than the product is actually worth. This threatens my future business even more because money will be an issue when I start my company, and this could possibly take more money than expected.

Anticipating Failure

Should I fail to succeed in a career as a Body Shop owner, I will be able to fall back on skills I have already honed in financial control, with the goal of moving into a position as Controller in a major corporation. I am close to finishing my Master's Degree, which will be helpful if that should become my career path; frankly, it will be helpful in securing the financing and other assistance I would need to open a Body Shop. However, even the research to open a shop will help me if my career path is detoured and I choose, instead, to seek fulfillment in a corporation's financial departments. Having a broad understanding of how business operates generally is always valuable; having more specific experience with small business, being globally responsible for employing more people, it is thought, than large corporations, should also serve to make me a more attractive candidate for high corporate achievement in finance.