Cosmetics - Target Market Today\'s

Cosmetics - Target Market

Today's economic agents strive to increase their competitive positions by developing and implementing the most adequate strategies relative to all of their categories of stakeholders, including employees, customers, purveyors, intermediaries and other governmental and non-governmental organizations, such as environmental institutions. The key to succeeding in this highly dynamic market is that of properly identifying and addressing the target market.

The Company

ABC Cosmetics was established five years ago in the Kane County, Chicago Metropolitan area, Illinois, where the organization is still headquartered. The founder and chief executive officer is a former fashion model and her experiences with wearing makeup have materialized in a line of successful products, to be used by both women at home, as well as professional saloons. ABC Cosmetics employs 80 individuals, organized as follows: 10 employees in research and development, 30 employees in manufacturing, 10 administrative staff and 30 employees in sales. The company ended fiscal year 2008 with a net profit of $7 million, revealing a constantly ascendant trend. The financial crisis revealed at the international level has only limitedly impacted the economic agent in the meaning that its growth rate shrunk by 2% relative to fiscal year ended in December 2007. This is mainly because the cosmetics industry develops independently of other industries and that the demand for such products tends to remain constant despite fluctuation in economic conditions. The product lines of ABC Cosmetics include lipsticks and lip glosses, nail enamels, eye shadows, skin foundations, body milks and moisturizers.

3. The Product

After conducting intensive market research, the managerial team at ABC Cosmetics decided upon the creation and promotion of a natural product line. The research and development team was allocated a budget of $30,000 and they came up with a solution in two months. The new product line includes a moisturizing face cream, a body milk and a hand cream, all made entirely from plants, without added chemical compounds. In creating the scent of the items, the team used lavender. Based on the response received to this line, the company intends to develop additional products of diverse perfumes, such as lilies-of-the-valley or hyacinths.

The presentation of the products will be a dual one. The first strategy sees that the three items will be individually packed in cart boxes of bright colours and tasteful design. The second approach sees the packing of the tree items is a single box and the sale of the entire pack. Whenever an individual product is being purchased, the customer will pay its full price; when purchasing the three item pack, the customer will be offered a 15% discount.

In both cases, the boxes will contain information on the producer, the components used in the making of the creams and a picture of the lavender plant. The company has also come up with a logo for their new product, which is aimed to attract attention to the fact that the products are made entirely from plants - Bio Beauty and Comfort.

The bio product line is expected to generate successful outcomes due to the intense emphasis placed on the protection of the environment. Foremost, more recently, being bio has become not only a preference of the environment-friendly consumers, but also a trend. The marketing strategy in launching and placing their items onto the market will revolve around these specifications.

4. The Target Market

The new creams developed by ABC Cosmetics will be available for sale for all interested consumers. However, it necessary to identify those categories which are most likely to be interested in purchasing the items. There are two such categories: the individual female consumers and the corporate consumers. The market of individual consumers is composed mainly of mature women, between the ages of 30 and 55 and who register medium and above medium income. The age limitation was given by the fact that women younger than 30 and older than 55 seem to reveal a reduced interest in bio products, as their priorities fall into different categories. The income limitation was given by the fact that the manufacturing of the bio creams implies more costs than the manufacturing of the chemical-based creams, generating as such a higher retail price.

The Kane County has a population of 501,021 individuals (estimations for 2007), out of which 49.3% are female. 53.4% of the total population is aged between 18 and 65. The median household income in 2004 was calculated at $61.246 (U.S. Census Bureau). As a comparative note, the per capita income in 2008 at a global level was of $10,500 and in the United States it was of $48,000 (Central Intelligence Agency). More detailed information is undisclosed to the public, but an estimate of the actual target market of individual female consumers could revolve around the figures of 120,000 women.

The second target market is formed from corporate customers, including basically the beauty and spa saloons, modelling agencies or fashion designers. They would use the products to increase the satisfaction of their own individual customers, in the case of the saloons, or to enhance the image created by their products, in case of the fashion designers. The segmentation criteria used in identifying this target market are less restrictive than those for the target market formed from individual clients due to the following reasons: first of all, it is generically implied that the spas and the fashion designers will purchase and use the best products in order to sustain their cause; secondly, they often possess the required financial resources. As a result then, ABC Cosmetics will promote its new bio items to all identified potential corporate customers in the region. Planet Discover (2009) reveals a total of 80 organizations in the filed of beauty and spa in the Kane County and only two fashion designers. While the number of spas could make for a satisfactory customer base, in terms of fashion designers, this segment is rather inefficient.