Introduction: Cosmetics Industry In Pakistan

Chapter 1: Introduction

Overview:

Cosmetics sector is not an organized one in Pakistan because there is no formal trade
association and unavailability of statistics. The government includes cosmetics in the
“cosmetics and toiletries industry.”

In Pakistan the concept of Beauty lies in a fairer complexion, hence the predominant
strategy of the cosmetics industry in Pakistan is to attract women by promoting each
product as a miracle that will make them fair and beautiful. The product range for males
is very limited.

Traditionally the cosmetic products they could use just included shaving creams, after
shave lotions and perfumes. Now the society is accepting the use of cosmetic products by
men and manufacturers are coming up with products targeted at men too. Now even
shampoos for men are being sold. In 1976, Esteé Lauder was the first women’s cosmetic
company to create a line specifically designed for men and was named “skin supplies for
men”

Current State of the industry:

According to the government, Cosmetic and Toiletries market is approximately $ 77

million. The total population of Pakistan is around 150 million and the per capita income
is USD 652. With rise in per capita income and standards of living consumption of per
capita income is expected to increase. The market is also unsaturated for the introduction
of new products.

The products offered in the Pakistani market are lipstick, nail

polishes, face powder, talcum powder, face cream,
deodorants/sprays, etc. The most popular brands For Hair care
include Procter & Gamble’s Vidal Sassoon, Pantene, Rejoice, Head & Shoulders,
Neutrogena and Revlon.

The most widely used sunscreen and skin whitening cream is “Fair and Lovely.” It is very
affordable and is manufactured by the well respected Unilever. In the Lipsticks sector,
the lead is taken by Revlon and Maybelline.
 Red Earth

Overview:
Red earth is a chain of international stores selling cosmetics. It was founded in 1989 in
Australia and positioned itself distinctly from the mainstream brands as an
environmentally active. The major brand operating in this segment was the body shop.
Its first shop was opened in Melbourne from where it has expanded into other
international markets.

• In 1993 it entered into the Asian market by opening store in Hong Kong and
Singapore. Since then, Red Earth has expanded into Canada, Thailand, the
Netherlands, the United Kingdom, the United Arab Emirates, Pakistan, China,
USA, Canada and Japan.

• Red Earth is currently present in over 20 countries with more than 1000 stores.

The brand Esprit is an international lifestyle fashion brand name applied to an extensive
range of 12 lines, covering women's, men's and children's apparel, footwear and
accessories. Its main line, “women’s casual” covers the largest segment of the brand’s
portfolio, appealing to most consumers because of its casual and sportswear for everyday
lifestyle. It constitutes the most competitive division of the portfolio.

In 2001 it was purchased by Esprit, a publicly owned manufacturer of apparel, footwear,

accessories, jewellery and house wares. It started off in 1960 and by the early 70s, the
company was incorporated as 'Esprit de Corp.' and 7 product lines had been developed,
each with its own label. In 1979 John Casado designed the spirit logo which is one of the
most valuable possessions of the company. The logo is well recognized in the fashion
world. In 1980s the company started expanding internationally. By 1996 the company
was present in 44 countries world wide.
Company Strategy:

The company has followed a strategy of “Penetrating existing markets while entering into
new ones”. The group has been increasing its penetration in the existing markets and
entering into new ones by wholesale and distribution channels. The red earth cosmetics
store in Pakistan can be seen as an example.

Brand Identity:

It is a well recognized brand over five continents and targets people with a youthful
attitude no matter what their age is. Majority of their consumers are women ranging
between the ages of 15-35. They are looking for youthful stylish items that will never go
out of fashion. Its customers put quality first. They want their makeup to say something
about their personalities such as reliability, honesty, credibility, a combination of
seriousness and playfulness and trustworthiness.

Vision:
Red Earth's subsequent success can be attributed to its clear and simple vision that makes
it different from other cosmetic brands. It is the promise of "premium beauty made easy."

"We try to enable consumers to achieve very professional makeup,

all the latest trends, looks, in very easy ways. We want to be
accessible and uncomplicated,"

- Red Earth cosmetics president

Stephan Borchert
The brand’s truthfulness and its vision serve as a source of customer satisfaction. It is an
honest brand that doesn’t’ try to sell anything that is not suitable for the customer. Its
outlets are attractive yet not flashy, keeping in mind that in addition to teenagers, they are
also catering to older consumers.

Strategic Marketing as a tool to develop and innovate brands:

By using customer surveys, competitor surveys and other environmental factors’ data, the
company can make sure that they adapt themselves to the market that they’re about to
enter.

It helps companies to overcome the potential problems that it might have in a new market
that it is entering. It would help them to develop strategies to help them become
successful and to increase their customer base and eventually, their profits.

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 Competitors: Estee Lauder

Overview:

The company began its operations in the year 1946. It sells

cosmetics in over 100 countries all over the world. Estée
Lauder’s Skin care line includes products for various skin types
for both men and women such as moisturizers, creams, lotions,
cleansers, sun-screens, and self-tanning products.

Brand Identity:

The Estée Lauder collection of skincare, makeup and fragrance exemplifies the best that
art and science can achieve. The Estée Lauder name on a product is recognized in over
100 countries for quality maintained.

Prominent Brands:

It owns 15 well known brands including Clinique (skin care), Aramis (fragrances),
Prescriptives (makeup and skin care), Origins (skin care and aromatherapy), Tommy
Hilfiger (fragrances), M.A.C (makeup), Bobbi Brown (makeup), LaMer (skin care), Jane
(cosmetics for young consumers), Donna Karan Cosmetics (licensed for products’
development, marketing, distribution, and sales), Aveda (hair care), Stila (makeup), Jo
Malone (skin care, fragrances, and hair care), Bumble and Bumble (hair care), and Kate
Spade Beauty.
Operations:

• Estée Lauder became the first women's cosmetic company to introduce a second
line for men when, in 1976, they began a separate line of skin supplies named
"Lab Series".

• In 1981, the company achieved another breakthrough when their products became
available in the Soviet Union.

• The company now has stores all over the world with 20,000 employees1.

Cosmetic portfolio

• It includes lip, eye, face makeup, nail color, nail care products, and beauty tools.

• Fragrances for men and women include Eau de perfume sprays, colognes, lotions,
powders, creams, and soaps with distinctive and unique scents.

• New product lines such as bath and aromatherapy products are also available.

• Hair care products include Shampoos, conditioners, styling gels, hair coloring
products and hair sprays

Vision:

In order to build a loyal customer base the company still follows the vision inspired by its
founder. This vision has its foundation in the provision of high quality services and
products. The marketing programs primarily focus on promoting the features and benefits
of the products.

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Strategic Marketing as a tool to innovate and develop brands:

It would help the business to plan for the growth of the business by deliberately investing
in resources that will add value and strategically dovetail with goals and objectives. It
helps to define the anticipated income and expenses for each fiscal quarter as related to
specific initiatives. Each of these initiatives must have an action plan including
responsible parties, a timeline for completion, an ROI model and a contingency plan in
the event that the initiative needs to be abandoned prematurely.

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Competitors: Loreal
Overview:

L’Oreal group is the largest cosmetics company in the world, was founded in1909.
Guiding principle for the firm over the years has remained innovation for the interest of
beauty. Today the company has around 2,000 research teams and five research centers. It
started off with hair care products but expanded the line gradually. Now the firm owns
around 500 brands in various segments. Their products are found in all distribution
channels, from hair salons to hyper- and supermarkets, health/beauty outlets, pharmacies
and direct mail. It operates 42 manufacturing plants throughout the world, which employ
14,000 people2.

Brand Identity:

L'Oreal Paris is a name known throughout the world that has no equal in the world of
beauty. It focuses on avant-garde technology and anticipating consumers' needs. The
major strength of L'Oreal Paris and also the key to its success is unquestionably its
research and the resources devoted to this area.

Prominent Brands:

L’oreal categorizes brands according to the target segments. L’oreal features some of the
most prominent brands such as Kerastase, L’Oreal, Professionnel, Garnier, Maybelline
New York, Softsheen-Carson,, Biotherm, The Body Shop, Cacharel, Diesel Perfumes,
Giorgio Armani etc

Operations:

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 • The company spends a large amount on advertising for example in 2002 it spent
$1.33 million on advertising.
• The company regularly advertises the products on television and radio, upscale
magazines, prestigious newspapers, direct mail, and billboard. In addition to this
it also conducts various beneficial promotion programs.
• The company is also involved in online sales.
• The company believes that when a customer makes an online purchase he will
visit the store in order to feel the entire experience.

Vision:

Present in 120 countries, L’oreal Paris is based on the vision: INNOVATE and offer the
largest number of consumers the most effective products at the best price. A philosophy
practiced since the very beginnings of the company.

Its major strength and also the key to its success is unquestionably its research and the
resources devoted to this area.

Strategic Marketing as a tool to innovate and develop brands:

Strategic planning represents a process rather than an event. The outgrowth of a strategic
planning process can contribute to the long term success and survival of a business
enterprise. More importantly it is “becoming skillful” with this type of planning process
which is the first step in building a business that has value and equity which extends far
into the future and which can out live even the company itself.

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