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Executive Summary
Now Malaysia BaoLiLai Company is in the process of diversifying. As the business development manager, I have
done much marketing research for several months, I suggest our company will be engage in skin care industry, we
will research and manufacture two kind of moisture creams to target high end and low end market. Why choice
these? What positions our products should occupy? I can analyze from these aspects.
In recent years, skin care industry develops stability; sales of skin care products are expected to be stable over the
next few years. There are many manufacturers in skin care industry. Most of them are international company,
including Estee Lauder, Christan Dior, L'Oreal etc; they occupy 90 percent of market share. Follow Me and Ginvera
are belong to local company. Skin care products are available at different kind of stores. In skin care industry,
competition is fierce, and each of competitors adopts different strategy to earn more profit in market. From
marketing investigation, I find moisture cream is in great demand for consumers, so our company can produce
moisture cream to target consumer market.
There are many brands of moisture cream in consumer market. Most of consumers evaluate moisture cream from
two criteria: the degree of protecting moisturizing and nourishing. In existing products, Christan Dior moisture
cream is high nourishing and high moisturizing. It is positioned on best quality and high price. POND'S is low
nourishing and high moisturizing; it is positioned on middle quality and middle price. L'Oreal is high nourishing and
low moisturizing; it is positioned on the best value for money. Follow Me moisturizing cream is relative low
nourishing and low moisturizing, it is positioned on low price and low class.
Gender and income segmentation has long been applied in skin care industry. From consumer income level, the total
market can be divided into high-end market, middle-end market and low-end market.

I suggest our company will research and manufacture 'Ister' moisture cream to target high-end market. Because
nowadays more and more women become high-income class, they spend a lot of money on taking good care of their
skin care. They always stay at air-conditioned room, premium moisture cream has a great demand. From market
investigation, Estee Lauder moisture cream occupied the largest market share in high-end market, although its
quality is not the best one. Estee Lauder is positioned on superior quality and high price. I suggest 'Ister' moisture
cream can be positioned on higher quality and lower price than Estee Lauder.
We can create Ister moisture cream image from produce itself. We use an exclusive ingredient that can highly protect
moisturizing and nourish in Ister moisture cream. We can design a unique and elegant packaging for it. Meanwhile,
our company performs relative low price. We try to convince consumers that Ister moisture cream is a good enough
product at an acceptable price. Our company is a local company, we can use heavy advertisement to persuade high-
income consumers that Ister is specially designed for them.
Our company can use marketing strategy to achieve Ister position. In product aspect, Ister moisture cream contains
special ingredient to keep moisturizing and nourishing for long time, its packaging is unique and elegant. We can set
'Ister' moisture cream price according product costs and competitors price, we fix Istermoisture cream price lower
than Estee Lauder does. Ister moisture cream can be distributed in large-scale shopping center. We will use heavy
advertisement in TV, newspaper and high quality magazine to boost Ister moisture cream. We can present free
sample as gift to attract consumer attention.

In low-end market, women increase the demand of low price moisture cream, so our company can produce 'Cherro'
moisture cream to target low-end market. From market research, Follow Me moisturizing cream occupies the largest
market share in low-end market, it is the leading product in it. I suggest 'Cherro' moisture cream will compete with
Follow Me in low-end market. Cherro moisture cream can be positioned on low price. We also create Cherro image
from product itself, we design beautiful packaging for Cherro moisture cream, we try to convince consumer Cherro
moisture cream is a good enough product. We emphasize Cherro moisture cream is lower price than other
competitors.
We can perform market strategy to achieve 'Cherro' position. In product aspect, we design a good packaging. We set
Cherro moisture cream price according product costs, we use low price strategy to attract more consumers. We can
distribute Cherro moisture cream anywhere which consumer can buy conveniently. Our company can use heavy
advertisement in newspaper and popular magazine to build and support Cherro brand. In the beginning of selling, we
can offer 20% more moisture cream for the same price to attract more consumers.

Part I Purpose of the Report

Malaysian BaoLiLai Company produces many chemical appliances, including shampoo, soap and body shower
foam. Now the company is in the process of diversifying. As the business development manager, I have done much
marketing research for several months. I am to advise the managing director that our company will be engage in
moisturizing crème market in skin care industry, because today more and more people pay more attention to health
and beauty. Moreover, skin care industry has a big potential profit. I suggest that our company will research and
manufacture two brand moisturizing crème products to target high end and low-end market. Facing fierce
competitors in skin care industry and many externals various factors in marketing; we must analyze different
external and internal factors and know how to be firmly positioned in market, so I write this report.

Part II Current Situation Analysis

2.1 An overview of skin cares industry in Malaysia
In recent years, due to economy recession in Malaysia, skin care products price has declined almost 10 percent, but
the marketing demand is still increasing. Totally skin care industry develops stability, so sales of skin care products
are expected to be stable over the next few years. Skin care industry can be divided into many categories, including
cleansers, masks, lotions, essences, moisturizers, eye care and body care, etc. There are many manufacturers in skin
care industry. Most of them are international companies, including Estee Lauder (Appendix 1), Clinique, Christan
Dior, POND'S, L'Oreal, Hazeline etc; they occupy 90 percent of market share in skin care industry. The local
companies include Follow Me (Appendix 2), Biodermie and Ginvera, they just occupy a small proportion of market
share. In market, some brands products have built good reputation and earn large profit. For example, Estee Lauder,
it has won a reputation for innovation, research and quality (Appendix 3). Skin care products can be sold through
large-scale shopping center, supermarket and retailers. Some of famous brand skin care products like Christan Dior,
Clinique, Estee Lauder etc; they are distributed in the large-scale shopping center (Jusco, British India, Sogo, Isetan,
KLCC etc). Other brands including L'Oreal, POND'S, Follow me, Ginvera, customers can buy them from large-
scale supermarket (Carrefour, Jusco), middle-scale store (Guardian, Apex, and Kiosk) and many other retail shops.

2.2 Competitors Analysis

Competition is fierce in skin care industry; each of the manufacturers adopts different strategy to earn more profit in
market. Christan Dior, Estee Lauder, Clinique, Kose and Macys are main manufacturers, which produce high quality
and high price products with excellent design and very high service to customers. They have strong financial
resources and use new technologies to innovate products. They spend a large amount of money in advertising and
promotion in boosting its products and earning brand loyalty. L'Oreal, Johnson & Johnson, POND'S offer medium
quality products at medium prices and medium services. Follow Me, Ginvera, Biodermie and Hazeline offer
products with low price and low service. They adopt cost leadership strategy to earn more profit.

2.3Product Description
From marketing investigation, I find moisturizing crème is in great demand for consumer, so our company intends to
produce moisturizing crème to target consumer market.

Part III The Positions Occupied by Leading Existing Products

3.1 Perceptual map - moisturizing crème brands
There are many different brands moisturizing crème (Appendix 4,5) in consumer market. From marketing research,
I find the main criteria for consumer to evaluate moisturizing crème are the degree of protecting moisturizing and
nourishing. From these, consumers judge the similarity of alternative brand, then I can draw perceptual map from
these two criteria.
Figure 1 Perceptual map of perception of moisturizing crème brands
High moisturizing
· · Christan Dior
POND'S * Ister
· Estee Lauder
· · Clinique
Oil and Olay ·Shiesido

· Elizabeth Arden

· Kose
·Clarins
Low * Cherro · L'Oreal High
Nourishing · Follow me · Nourishing
Johnson & Johnson
· Biodermie

· Hazeline
· Ginvera

Low moisturizing

3.2 The position occupied by leading existing products

From perceptual map, different brands of moisturizing crème in first quadrant are relative high nourishing and high
moisturizing, Christan Dior (Appendix 6) is the leading product in it. Christan Dior has been positioned on best
quality, high price and best brand in skin care industry. It offers very high service to customers, and customers
always associate it with good social image. In second quadrant, moisturizing creams are relative low nourishing and
high moisturizing, POND'S is the leading product in it. POND'S emphasizes its high moisturizing, it is positioned on
middle quality and medium price.
In third quadrant, moisturizing creams are relative low nourishing and low moisturizing, Follow Me (Appendix 7) is
the leading product in it. Follow me is positioned on low price and low class, it emphasizes that it is a homemade
brand in skin care industry. Its quality is relative high compared with other brand products in third quadrant.
Moisturizing creams in fourth quadrant are relative high nourishing and low moisturizing; L'Oreal is the leading
product in it. L'Oreal is positioned on the best value for the money; it's advertising emphasizes, "Because I'm worth
it". The price list of all brand products in perceptual map can be referred in Appendix 8.
Part IV Evaluatethe Situation -- Suggest 2 Positions to Target
Our company wants to produce two kinds of moisture creams to target some segments of consumer market, so we
must segment consumer market, evaluate situation and select segments to target. We also need evaluate the existing
products positioning, and then we can select which positions our products will occupy.
4.1 Market Segmentation
Gender and income segmentation has long been applied in skin care industry. According consumer income level,
consumer market can be divided into high-end market (consumer income is above RM 3,000 per month), middle-
end market (consumer income is between RM 1,200 and RM 3,000 per month) and low-end market (consumer
income is below RM1, 200 per month).
4.2 Evaluating situation and selecting the market segments
In recent years, more and more women take part in jobs, they play an important role in working, and their income
has increased rapidly. A large proportion of them become high-income class, they have much disposable income.
Moreover they pay more attention to health and beauty; they spend a lot of money on taking good care of their skin
care. They can select high quality, high price and famous brand of skin care product. Premium moisture cream has a
great demand, because they stay in air-conditioned room, moisturizing and nourishing have become very important.
Facing these, our company can produce 'Ister' moisture cream to target high-end market.
In low-end market, women increase the demand of low price moisture cream. Most of them live in small town and
village, Price is an important factor for them to select moisture cream. Facing these, our company can produce
'Cherro' moisture cream to target low-end market.
4.3 Evaluating existing products positions and selecting 2 positions to target
There are many competitors in high end and low-end market. Our company is a newcomer in skin care industry, so
we must analyze competitor positions in high end and low-end market, we will select 2 positions to target at.
Estee Lauder moisture cream is positioned on superior quality and high price. It has an excellent brand image,
consumer always associate it with good social image, so it targets at high-end market. Estee Lauder performs 4 Ps to
achieve its position. In product itself, the ingredient contains exclusive BioMineral water with over 70 fossilized
plant mineral (Appendix 9). Its design and packaging are excellent. Estee Lauder is distributed in large-scale
shopping center (Jusco, KLCC etc). Estee Lauder uses heavy advertisement in TV and magazine (Appendix 10) to
attract consumer attention, it is often exhibited in large shopping center. Its price is high, but it always associates
with high quality and good brand image.
Our company wants to produce "Ister" moisture crème to compete with Estee Lauder in high-end market. Although
Estee Lauder moisture crème is not the best products in high-end market (from perceptual map), it occupies the
largest market share in high-end market (Appendix 11). Moreover, Estee Lauder has won good reputation for
innovation and quality. We can position 'Ister' moisture cream that quality is higher than Estee Lauder is and price is
lower than it is.
Follow me moisturizing cream is positioned on its low price and low class. It is a local brand in Malaysia. It targets
at low-end consumer market. Different marketing strategies have been used to achieve its position. Follow Me
moisturizing cream is formulated with an advanced formula containing AHA, its design and package are good.
Follow me is distributed in supermarket, minimarket and sundries shops. It uses heavy advertisement in magazine
(Appendix 12), newspaper and billboard to boost its sales. Its price is keeping lower than other competitors.
We can produce 'Cherro' moisture cream to compete with Follow Me in low-end market. Because Follow Me is the
leading product in low-end market (Appendix 11). Cherro moisture cream can be positioned on low price in low-end
market.

Part V Marketing Strategy - High End Market

5.1 Marketing positioning -- Suggest the image 'Ister' should have to be firmly positioned
Our company wants to position 'Ister' moisture crème on higher quality and relative lower price than Estee Lauder
does in high-end market. What image 'Ister' should have to be firmly positioned? We can create Ister image for
product itself, our company uses new technology and new method to make a high quality product. Ister moisture
cream contains an exclusive ingredient that can highly protect moisturizing and nourishing. In packaging, Ister
moisture cream uses a unique and elegant style and packaging. Meanwhile, our company performs relative low
price. We try to convince consumer that Ister moisture cream is a good enough product at an acceptable price.
Before Ister moisture cream is put into market, we use heavy advertisement to build and strength Ister brand. Our
company is a local company in Malaysia, we can emphasize that Ister know more about consumer than other
international brand of products, we try to convince high-end consumer that Ister is specially designed for them.

5.2 Outline marketing strategy to achieve 'Ister' position in high-end market

Product 'Ister' moisture crème contains special ingredient to keep moisturizing and nourishing for long time. Its'
quality is superior. 'Ister' moisture cream uses a unique and elegant packaging, it adopts fruit flavor. Our company
offers very high sales service and performs returning policy (if customer does not satisfy with product, they can
return in one month).
Price We can set 'Ister' moisture cream price according product costs and competitors price. Because Ister moisture
cream is a new product in market, it wants to earn more competitive advantage than Estee Lauder does in market.
Our company must think about Estee Lauder retailing price, then we can fix Ister moisture cream price lower than
Estee Lauder.
Place We can select "manufacturer wholesaler retailer customer" channel to distribute 'Ister' moisture
cream in market. We can distribute Ister moisture cream in large-scale shopping center to attract more consumers.
Promotion Our company can use heavy advertisement in TV, newspaper and high quality magazine to boost Ister
moisture cream and create excellent brand image in consumer mind. In the beginning of sale, we can exhibit ' Ister'
moisture cream in large shopping center and present free sample as gift to earn more customers.

Part VI Marketing Strategy - Low End Market

6.1 Marketing positioning - suggest the image 'Cherro' should have to be firmly positioned
Our company wants to position 'Cherro' moisture cream on low price in low-end market. What image 'Cherro'
should have to be firmly position in market? We can build its image from product aspect, we can use new
technology and methods to improve product quality and reduce cost. We design beauty packaging for 'Cherro'
moisture cream in order to let consumer like it. We will use heavy advertising in newspaper and radio to boost
'Cherro' moisture cream, we emphasize Cherro is lower price than other competitors.

6.2 Outline marketing strategy to achieve 'Cherro' position in low-end market

Product Our company use new technology and new method to produce a relative high quality product. We can
design a very good packaging for Cherro moisture cream.
Price we can set 'Cherro' moisture cream price according product costs. As price is an important factor for low-
income consumer to choose moisture cream, we can use low price strategy to attract more consumers.
Place We can select "manufacturer wholesaler jobber retailer consumer"
channel to distribute 'Cherro' moisture cream in market. Because Cherro targets at low-income consumer, we can
distribute it in supermarket, minimarket and other sundry shops.
Promotion We can use advertisement in newspaper, radio and popular magazine to build and support 'Cherro'
brand. In the beginning of selling, we can offer 20% more moisture cream for the same price to promote 'Cherro'
moisture cream sales.
Appendix 8

Brand NameChristan DiorEsteeLauderCliniqueElizabethArdenShiseidoKoseClarinsPond's

Vol. orWeight 50g 1.70z 30g 2.50z 50g 40g 1.0z 118g
Price(RM) 168 171 114 178 140 124 89 25.80

Brand NameFollowmeBiodermieHazelineGinveraJohnson &JohnsonL'OrealOil of Olay

Vol. orWeight14ml 12ml 100g 12ml 75ml 50ml 50g
Price(RM) 9.8 8.6 11.25 6.9 21.3 23.8 15.25

Appendix 11
Recently I did some investigation about moisturizing crème. I visited 300 women in KL, among them 100 women
are belong to high-end stratum, their incomes are above RM3, 000 per month; the other 100 women are belong to
middle-end class, their incomes are between RM 1, 200 and RM 3, 000 per month; another 100 women are belong
to low- end class, their incomes are below RM1, 200 Per month. I asked some question about these aspects: which
brand they like to use, how much they buy, what criteria they use for buying product: quality, brand awareness, and
price etc, what fragrance they like.
In high-end stratum, among 100 women, 95 percent of them can select famous brand products, like Christan Dior,
Estee Lauder; they pay attention to high quality, high price and good fragrance products. 32 percent of them buy
Estee Lauder, 18 percent of them buy Christan Dior, 15 percent of them buy Clinique, 13 percent of them buy
Shiseido, 10 percent of them buy Kose, 3 percent of them buy Elizabeth Arden, another 11 percent of them buy
another brand. Most of them are brand loyalty.
In middle end class, among 100 women, 90 percent of them can select medium quality and middle price
moisturizing crème, 10 percent of them can select high quality, high price brand products. Among 90 percent of
them, 29 percent of them select L'Oreal, 26 percent of them select Pond's, 18 percent of them select Oil and Olay, 15
percent of them can buy Johnson & Johnsom, 12 percent of them can select other brands.
In low-end stratum, Among 100 women 98 percent of them can select low price and middle quality moisturizing
crème. Among them, 40 percent of them buy follow me, 20 percent of them buy Haziline, 18 percent of them select
Ginvera and 10 percent of them buy Biodermie. 12 percent of them can buy other brands.
They all think fragrance is an important factor for them to choose moisturizing crème, 42 percent of them like fruit
flavor, 25 percent of them like original odor, 23 percent of them like delicate fragrance, 10 percent of them like
strong fragrance.