WRITING REPORT OF WATSON COMPANY

BACKGROUND OF THE PREFERRED COMPANIES

History of the business start-up:
Established in Hong Kong in 1841, A.S. Watson Group is the largest international health and beauty retailer in
Asia and Europe with over 13,300 stores in 25 markets. Each year, over three billion customers and members
shop with our 13 retail brands, both in stores and online. In Hong Kong, we operate more than 600 stores
under four retail brands – Watsons, PARKnSHOP, FORTRESS, and Watson’s Wine. In addition, we manufacture
and distribute high quality drinking water brand Watsons Water, as well as the famous juice drinks Mr. Juicy
and Sunkist. For the fiscal year 2015, A.S. Watson Group recorded revenue of HKD151.9 billion. We have over
130,000 employees worldwide, including 12,900 in Hong Kong. A.S. Watson Group is also a member of the
world-renowned multinational conglomerate CK Hutchison Holdings Limited, which has five core businesses ‐
ports and related services, retail, infrastructure, energy and telecommunications in over 50 countries.

About Watsons Malaysia Watsons Malaysia currently operates more than 500 Watsons stores in the
country serving more than 4 million customers every month. Watsons continues to set the standards in the
health, wellness and beauty market, providing personalised advice and counselling in health, beauty and
personal care on top of its market-leading product ranges, making customers LOOK GOOD, FEEL GREAT
every day. Since 2009, Watsons has been the No.1 pharmacy/drugstore brand in Asia Pacific for the 9th
year running*. Watsons is the flagship health and beauty brand of A.S. Watson Group.

Company’s Vision, Mission and Values:

VISION:
We, Watson Health, aspire to improve lives and give hope by delivering innovation to address
the world’s most pressing health challenges through data and cognitive insights.
MISSION:
Help people around the world to “Look Good, Feel Great and Have Fun”.
VALUES:
For more than 20 years, Watsons has worked with leading experts and researchers from around
the world to create Own Brand products of variety and diversity that bear the Watsons heritage
that guarantees outstanding quality, value and trust. The extensive product ranges cover your
everyday needs to LOOK GOOD, FEEL GREAT, including Baby; Bath & Body; Face; Hair Care;
Health; Oral; Paper and Cotton; Feminine Hygiene and Travel & Accessories. Watsons Own
Brand quality is assured, with products developed based on intensive research, customer
feedback and independent testing on products to the highest regulatory standards, backed by
stringent quality control processes right through to the store itself.
Industry: Industry of Pharmacy, Health care and Beauty care.
Product/ Services offered:
Watson provide many product such as body care, hair care, makeup and so on. In the meantime,
Watsons has also partnered with businesses and partners with brands such as La Juiceria, Fish Bowl,
Cake Sense, Carlo Rino, Komugi, Dave's Deli, Crocs Shoes, Aquaria KLCC, Poney, Yeast Café,
MOG Eyewear, MPH, Borders, Sanook, Blunnis and Cres Wellness. Most of these brands are already
known in Malaysia. Watson company has also issued its own brand by offering affordable prices to
customers. Watson also provides a lot of promotions to customers with various daily discounted items.
For service, Watson provides delivery from the warehouse to the home directly by placing orders
through the supplied page and the price charged is subject to the day you ordered. In addition, Watson
also provides pay-per-credit service with card credit and online banking for the convenience of
customers who forget to carry cash or for personal safety.
Business uniqueness:
For costumer, To save money on customer spending, Watson has provided a special service is a
Watson VIP card or another name is Watson member card where the card can collect points every
time the customer is spending time on the product. If you want to save money because with this VIP
card, customers will get lots of discounts and when the collected points are enough you can redeem
your products at Watson store or online. In addition, the member card also has other uses such as
Touch & Go Watson card, so customers can use this Watson member card such as Touch & Go cards
and customers need to add value and use as usual, can be used to pay tolls, pay parking etc.

Competitors:
WATSON STORE
Watsons Your Personal Store is the leading health and beauty retailer chain in Asia operating
over 1,600 stores in 10 Asian markets and 2 European markets - Hong Kong, Taiwan,
Mainland China, Macau, Singapore, Thailand, Malaysia, the Philippines, Korea, Indonesia,
Turkey, and Estonia. Building on its long-standing reputation for quality and innovation, plus
a high degree of consumer confidence, Watsons caters to a variety of lifestyles with an
unrivalled diversity of products. In recent years, Watsons evolves its brand by giving a new
bright, contemporary feel to its stores, providing customers with an all-in-one store concept
combining health and beauty, and professional consulting services. In 2009, to remind
everyone to take good care of their unique bodies, Watsons incorporates "Love Your Body" as
our corporate vision. Watsons is the flagship health and beauty operation of the A.S. Watson
Group (ASW), a wholly owned subsidiary of Hutchison Whampoa Limited. ASW is the largest
health and beauty retailer in the world, with outlets in 34 countries operated by over 87,000
staff. More than 25 million customers are served by ASW brands per week worldwide. As the
largest beauty and personal care retailer and pharmacy chain in Hong Kong, Watsons
currently has over 150 stores and 2,000 employees.

GUARDIAN STORE
Guardian is the largest health, beauty and personal care chain in Malaysia, with more than 400
stores nationwide. The Guardian brand name is widely recognized by Malaysian consumers and
trusted for offering quality products at affordable prices. The strong branding, extensive range of
health and beauty products and Guardian customer-driven focus approach have enabled
guardian to maintain their position at the top of the market. As a testament to Guardian success,
Guardian has received many industry accolades. In 2000, Guardian had listed as the largest
pharmacy chain in the Malaysian Book of Records. Following that, Guardian also recognized by
the Malaysia Design Technology Centre, which awarded Guardian the National Award for
Creativity and Innovation 2003. Guardian’s creativity and innovation in outstanding brand
development were singled out by the judges for contributing to the overall image of Malaysia as
a country that produces quality products and provides distinctive service.
CARING PHARMACY

With 60 outlets and more than 100 pharmacists, Caring Pharmacy is now a household name.
This dynamic pharmacy is ever ready to listen to your needs and provide suitable solutions. A
friendly pharmacist is available at all times, even late in the day on public holidays.

After opening up 13 high street outlets, the team knew it was time to expand into a different
location and market. Their next area to conquer was shopping malls. Besides, Caring Pharmacy
uses the joint venture (JV) concept of offering equity to individual pharmacists who are
committed and in long service with the company, as a career opportunity. Also, the one of the
major benefits of the JV model is allowing the people working for you to have increased
ownership over a business. This means that they’re more willing to go all out, as they now have a
stake in the company. Besides, With their focus on community pharmacy services, Caring
pharmacy has traditionally been a very face-to-face and in-store business. However, with the
rise of e-commerce, Malaysians are slowly getting used to the idea of buying their medical
products online, and Caring pharmacy has had to evolve in order to keep up with that. A past
report stated that their online sales only contributed an average of only 1% to the group’s
revenue. They also used tech and partnerships to reach and retain their customers. As a
company, they have to remain sensitive to their customers’ wants and needs.

SWOT MATRIX ANALYSIS

Strengths:
Watson’s Personal Care Stores has a few remarkable strengths. The first strength is the store has
wide products offering which provide a broad range of products so that the consumers have
more purchasing choices. The following strength of Watson’s Personal Care Stores is it has
consistent revenue growth and it has many chain stores in Malaysia and other countries. The
next strength of Watson’s Personal Care Stores is online services is provided to the consumers.
Consumers can purchase the products easily and is very convenience for them. Apart from that,
Watson’s Personal Care Stores has also offering special member rewards to their customers who
sign up their Watson VIP Card which allow them to redeem prizes based of the amount of points
they had collected for their purchases. Wide geographical presence is being known as one of the
strength of Watson’s Personal Care Stores as consumers around the world are expected to know
about the existence of the stores.
Weakness:
The largest weakness of Watson’s Personal Care Stores is the product sold is not specifically
branded and well known in the market. The consumers who seek for branded products probably
would not buying products from Watson’s Personal Care Stores. Furthermore, the space for
products assortment is limited could be a weakness of Watson’s Personal Care Stores as it will
make the customers feel uncomfortable when they search for the products. The not-changing
promotion offered would also be a weakness of Watson’s Personal Care Stores. These not-
changing promotions offered at a long period cannot attract the attention of consumers to shop
at Watson’s Personal Care Stores. Besides that, lack of training staff could be a weakness for
Watson’s Personal Care Stores. Staff that lack of training cannot serve their customers well and
this will make they feel uncomfortable with staff standing beside and glancing at them when
they choosing the products.
Opportunities:
with the growing Watson business in the world, it seems that the opportunity to open many
branches across the country is wide. This is because, for the future there will be more new
products going to Watson store. so, it's no wonder that the Watson branch is everywhere
because it is a high demand by everyone and satisfies customers who come to buy because of
what the customer wants.
Threats:
The first threat of Watson’s Personal Care Stores comes as it has to rivalry with its competitors
such as Guardian’s Stores and Face look’s Stores. As for reference, when there are more players
or companies walked into that particular industry which Watson’s Personal Care Stores was in,
the market share for Watson’s Personal Care Stores will be affected hence reducing. Therefore,
the business gross margin of Watson’s Personal Care Stores will decrease as the consumers are
attracted by the promotions offering by other players. Recently, teenagers are in favour of
buying and using Korean’s beauty care products. This could be a threat for Watson’s Personal
Care Stores as it barely sell beauty care products made from Korea. Moreover, another threat is
there is other shops and malls which selling similar products with Watson’s Personal Care Stores
and this will affect the customers to purchase that particular products from other shops rather
than Watson’s Personal Care Stores.

TARGET MARKETING

Segmentation approach:
Demographic

Look into Watson Store, the Demographic market segment was successful as they managed to
attract customers to buy. Most customers who come to buy are women who are mostly from
adolescents to adults. In addition, the living circle involved is all the living groups who come to
buy whether for infants, children, families, friends and others. This is because, the Watson store
sells a wide variety of products to clients regardless of men or women but often is much more
focused on women because of their nature. So, the Product Specialist Customer service is in line
because it is to make sure the Watson can be avoided from poor service.

Geographical
Looking into the geographical bases of Watson company they have established their business all
over the world like Hong Kong, Taiwan, Mainland China, Macau, Singapore, Thailand, Malaysia,
the Philippines, Korea, Indonesia, Turkey, and Estonia. So, Watson store want to set up the new
service to implement a vertical growth strategy and began expanding their stores more that. The
Watson store also sells its product and has offered a service that can help the customer to solve
the problem of the right product choice and appropriate to skin. Watson store also will inform
new services made on their website so everyone knows.
Behavioural
For Watson store behavioural, The service offered is for anyone who comes to the Watson store
regardless of gender. If and as long as you need help from the services offered so long as the
Watson will upgrade the service to ensure that customers get the right choice and use.

Target marketing:
Target marketing for Watson Store is sure for woman. It is because women buy things on
impulse – they might be convinced after trying a product at the counter, or if they see celebrities
using it. There is plenty of potential. It just depends on whether you are competing in what’s hot
in the market.
MARKETING MIX STRATEGY
PRODUCT:
Product refers to the service a company wishes to sell it. So, Watson store will provide the new
service such as Product Specialist Customer Service and it is could be the good service for all
customers who come buy any product at Watson store. Because services are intangible it can
help to think of services as being a Watson company asset plus the processes around it. If you
don't know how to make decision to choose the best product or you confuse what the best
brand to use for your skin, so you can refer at Product Specialist Customer Service when you
buy any product at Watson.

PRICE:
This is the amount of the consumer is expected to pay for using the product. The pricing of a
product will impact greatly how the product sells in the market with the service provide.
Besides this, for Watson store, costumers will buy the product if their provide the Product
Specialist Customer Service. This is because they can convince customers to buy a variety of
products from Watson store and customer will be attracted to the product after lighting the
good of the product as well customer can also get advice and how to use the products safely by
using Product Specialist customer Service at Watson store.

PROMOTION:
This involves all the marketing techniques and strategies out there. These include sales
promotions, advertising, public relations, special offers etc. Every marketing channel used needs
to be suitable for the product, the price of the product as well as the consumer the product is
being marketed to. Basically, promotion is the communication part involved in the whole
marketing equation Therefore, for the promotion of Watson stores, they use special offers such
as when customers buy any kind of goods or products, they will get a discount on the additional
items provided behind the cashier counter rack. Watson members will also give a limited
promotion of the products that are early sold out in stores such as cosmetics, healthcare,
personal care and other items with low discount on the original price per day.

DISTRIBUTION:
Distribution in case of services determine where is the service product going to be located and
refers to the ease of access that customers have to a service. So that, The best place to open up
the Watson health and beauty store is in the mall shopping and any place that have many
customer attraction. Besides, distribution is achieved by using one or more distribution
channels. So, for Product Specialist Customer Service Watson store, it is necessary to increase
the service by exploring the medical knowledge and also to know all the uses of the product. So,
it's easy for customers to come forward asking them to explain the badness and goodness of the
product and can also give an opinion to the customers and help make the right product choices
for them.