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Working paper: SWOT (abstract from article) Internal Strength Largest cosmetic manufacturer in the world (worldwide branding)

g) Extensive R&D, resulting product innovation and introduction of new products

Weakness Research center only in France, product innovation is only limited to France local preference. Unable to cope/suit to local preference of other regions (Netherland). Local subsidiary has no direct input to R&D. Product short life cycle lead to limited introduction of new products to worldwide markets. Less choice to worldwide market New product line need to be financed by local operations (high introductory cost eg advertising cost, etc) Same sales force to sell Loreal and Garnier products internal conflicts as sales team do not know which product to focus emphasis. (insufficient workforce) Internal product rivalry leading to product cannibalization (eg. Recital)

External Opportunity Threat Changes in demographic Dutch working women increase, resulting higher disposable income for cosmetics purchase. (Potential new market segment) Skin care is one of the second largest market in Netherdlands, with fast growing at an annual rate of 12% - signifies potential market for Synergie Dutch women prefers natural skin care plus point for Synergie as it is made with natural ingredient Belle Colour targets working women segment which have no time for saloon hair color treatment

Netherland is relatively a small market (about 15 mill ppl) high competition between local vs foreign products. Dutch consumers lack of brand awareness towards Garnier products - difficult for product introduction success Stringent competition from competitors products are quickly copied by competitors Dutch consumers are loyal to their current brands, high resistance to switching new products. High advertisement cost required to develop brand awareness and brand preference Dutch consumers only purchase once or twice facial creams a year low frequency. (low product turnover, resulting low sales) Although 73% of Dutch women colored their hair using permanent colorant, recent statistics shows a declining stage and preference has been shifted to semi-permanent colors limited market penetration - increased preference to alternative product Consumers perception towards permanent hair color high risk will affect sales volume Belle color consumer buying intention declined once price was revealed. Dutch women color preference they like natural lighter hair color (which the product cant provide as it was produced and mcg in France for France market)

Decision making: What if scenario 1. Sell only 1 product either Synergie Skin Care or Belle Colorant A. Synergie Skin Care Facts:

Skin care is one of the second largest market in Netherlands, with fast growing at an annual rate of 12% - signifies potential market for Synergie Local demographic has changed, increasing number of women workforce - led to higher disposable income potential market Dutch women prefers natural skin care plus point for Synergie as it is made of natural ingredient Refer to exhibit 1:

From the above we know that Synergie is in the middle price range, faced with high competition from few other brands, especially internal rival, Plentitude (Loreal). In terms of pricing, Synergie is priced highest in the middle range category, nearly on par with Upper End product Yves Rocher, which also offers natural ingredients! Recent market research indicates lower buying intention, in price known trial consumers vs consumers who used Synergie for a week. It indicates lack customer value generated by Synergie.(Product is not good as compared to others not value for money) See Exhibit 2 On the other hand, certainty to buy for other brand users increased reflects stiff competition in skin care line.

If Synergie is being introduced into the Dutch market, the management need to take note of the product positioning below: Product differentiation Synergie needs to be unique by itself so that it can compete with other brands, thus creating customer value, trust and build up customer loyalty.

B. Belle Couleur Facts: o Belle Couleur targets working women segment which have no time for saloon hair color treatment o To position Belle Couleur as covering gray with natural colors could be outdated due to changes in coloring trend. Recent studies shows the trend to use colorants more for fashion and less for covering gray, evidenced by the increase in hair coloring by consumers aged less than 35 yrs old. See table 5 from article

Belle Couleurs market studies indicates the following: Consumers prefer semi permanent colorants as compared to permanent colorants (Belle is a product of permanent colorant) Dutch woman prefers lighter shades where Belle gives darker hair color effect. (products mismatch with consumers needs evidenced by the declining buying intention by after usage consumers.

If Belle Couleur is being introduced into the Dutch market, the management need to take note of the product positioning below: Belle Couleur product need to be formulated to suit local preference it they want to succeed in Netherland market. As Dutch consumers are quite skeptical towards new products, package labeling and information must be clearly stated and store personnel must be given sufficient training to explain and promote the usage of Belle Colorant. Avoid product cannibalization internal rival with existing Loreal product (Recital). Belle Couleur needs to be strategized so that its target market does not coincide with Loreal Recital market segment.

2. Launch both products simultaneously o Mass introduction of Garnier products, will raise consumers curiosity and brand awareness Requires huge budget for rigorous advertisement to promote both products However, this can only be achieved if the new products are distinctive by themselves and that competitors are not able to imitate them easily. High risk with high return if both product can succeed, it will be a huge gain for the management and Garnier will be a famous brand. Vice versa if products arent doing well, it will damage the reputation for Garnier Sales team could be overloaded into selling and marketing the new products along with existing product. Additional workforce could be required to address this issue. Product pricing and distribution needs to be given high attention so that it creates pricing advantage and customer value.

3. Dont sell both why? o As Netherland is a small market, introducing new products in a highly saturated/established market is difficult. As products are manufactured in France, we know clearly they do not suit local preference, unfavorable sales is expected High cost required advertising cost. Cost may outweigh benefit (sales may be low as products are not unique to break through consumer brand loyalty) Management will face stiff completion from other products (as mentioned above)

Although Dutch woman now has higher disposable income, they only buy skin care 1-2 times a year, making it difficult to introduce Synergie brand in the market. Change in colorant trend from permanent to semi permanent (Belle Couleurs market positioning slogan may not be suitable need to restrategize)

FINAL DECISION Dont sell both o Overall based on the SWOT analysis, there are more threat and weakness as compared to strength and opportunities. Not a good choice to venture both market into Netherland with current position.