Case Analysis on Are They Ready to Put Avocado on Their Face?
I. Point of View The point of view of Mr. Ricky Bautista, president of Vive Chem Philippines (VCP), and Mr. Willy Tan, King Matches Corporation’s product manager, were considered since they can best tackle the problem, suggest and analyze proposals, decide, implement and follow-up the resolution that was chosen. II. Market Situation Analysis 1. Opportunities – threats analysis. A. Opportunities: • There a high market potential on herbal-based astringent. ? Since all the current brands in the market were chemical-based, the concept of herbal-based astringent is an innovation. Astringent users have the tendency to switch brand. ? Astringent users were looking for brand that will satisfy their requirements, until the requirements meet, they will try and use different brands to look for the qualities and attributes of their “ideal” astringent. • Market competition was not strong. ? Since the competition was not strong, a large part of the market was still not captured the market segments. • New brand entrants ? It will make the market to change and accept the concept of “natural” products. • Consumers don’t have product loyalty. Marketing efforts leads to switching behavior. B. Threats: • The market was not yet ready for “natural” products. ? Consumers didn’t have a strong grasp about the product being a natural. • Eskinol has a large share in the consumers’ mind. ? It will hard to make the users to shift from Eskinol to Provive since 61% of the market currently using it. • Current product has more reasonable price. ? Some astringent users were more concern about the price of the brands. Because Provive was in the introduction stage of the product life cycle it was expected to be costly. There is a possibility that a large multinational company with a market leader position in several hygiene categories was seriously considering entering the astringent market in the next five years. 2. Strengths – weaknesses analysis A. Strengths: • VCP has a long-term relationship with the KM group of companies. ? Having KMC as a possible carrier of the ProVive penetration in the market will be easier since KMC is a well known nationwide distributor of consumer products. • The Provive has a same attributes as the leading brand. If the product qualities and attributes were comparable to the leading brand, consumers will don’t care about what they will use because it’s the same. • The package and the positioning statement were completely accepted by the FGDs. B. Weaknesses: • VCP has no background in targeting consumer market. ? Since VCP was known as a manufacturing company that developing new product for industry use, it doesn’t have a strong impression to the consumer market. • FGDs have difficulties in equating “herbal” as having “no additives”. ? Among the FGD, using herbs were perceived as “not natural”. Provive is not yet positioned compared with Eskinol and other leading brands. ? Since the product is to be launched, it needs a unique selling proposition. • There is a perception about natural ingredients not effective. ? FGD participants believed that it will not enhance the efficacy of the products. • The idea of the flip-top cap made the participants worried. ? They are concern about flip-top which might accidentally open and spill inside their handbags. 3. Product Life Cycle Since the Provive is a new product to be launched, it is in the introduction stage of the product life cycle.
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In this stage, VCP expenditures as well as KMC’s are high because of the need for a high level of promotional effort to inform potential consumers of Provive, induce trial of the product and secure distribution in retail outlets. 4. Target Markets Provive’s target markets were facial care product users belong to income class B and C between ages 21 to 30 years. It will cater on the two market segments – users of astringent as recommended by dermatologist or other professional’s vis-a-vis users of over-the-counter (OTC) astringents.
Since most of the women care about their looks, facial care rituals were done at least twice a day involved a variety of product categories such as soaps, astringents, facial washes, moisturizers, facial scrubs, powders, creams, and skin whiteners. Promotions greatly affected the attitude of the consumers in buying the product and experiencing the product usage just elaborates what the packaging and advertisement of the products states. Packaging and promotions was the silent salesman that speaks for the product itself but the most important consideration was the proposed effect of the product to its user.
Having a proposed outcome would enable the consumers to choose the product that answers their desires. Still once the customer uses the product, this would make an impression that will determine what attitude he/she may tend to feel towards a particular brand because it was the best proof any product can offer. Needless to say, it was best to satisfy and give what your customers want and need. Satisfying the customers eliminated the idea of switching to another brand and strengthens the customer’s brand loyalty. 5. Product Positioning Figure 1. Product Positioning of Provive in the astringent industry.
Provive which is a product of Vive Chem Philippines (VCP) was conceptualized as a “natural” product. Since it specifically targeted the facial care product users, being an astringent, made up of natural ingredients and available only at relative price as leading brand, had greatly influenced the perception of the buyer about the brand. It also helped the consumer to decide which astringent to choose, because it would not compromise the quality and its effectiveness. Since it was in the introductory stage, it was position in quadrant II. 6. Current Marketing Mix or Marketing Strategies a.
Current product strategies Given that Provive is not yet introduce, most products currently in the market were primarily chemical based such as eskinol, ponds, splash, and tawas. Provive, which claimed an attribute of “relaxes stressed skin”, had six herbs as main ingredients and was conceptualized as a “natural” product. A bottle container with different sizes will be the packaging. The cap of the bottles is flip-top since all existing brands in the market used a screw caps. This kind of strategy made the product more attractive to customers and will give a new impression about astringent.
III. The Case Problem What courses of action should Mr. Bautista and Mr. Tan implement in order to successfully penetrate the market for astringent? IV. Case Objective The objective of analyzing this case is to design strategic actions to communicate the product to the current and potential consumer, and to establish their profitable position in the market. V. Alternative Solutions to the Problem 1. Modify the formulation of the Provive astringent. Reformulation will make the product aligned with current offered brands – chemically based.
This alternative will directly compete with other brands since the competition lies on the attributes it can offer to the consumers. Another advantage of this alternative is that it can capitalize already on the ideas of the products successfully launched and marketed by the market leader and the market challengers. However, the disadvantage of this alternative is that the market leader had already positioned itself in the market, which will make it harder to penetrate the market. 2. Modify the idea of emphasizing the “natural” concept.
This alternative will make it easier to communicate to the consumers that the Provive is a new product innovation of the astringent line with its additional add-ons –essential oil of the herbs. This alternative will not capitalize on being “natural” but on astringent that is with a distinctive feature that will as its platform edge over the existing products. 3. Do nothing about the product concept; retain its current formulation capitalizing on its uniqueness. This alternative suggests in capitalizing on being a new one, a better one that has additional and more beneficial features than the currently existing brands.
This alternative will enable the Provive be in the pioneer in the organic based astringents. Nevertheless, this is risky since the Eskinol brand seems to stay in its formidable position in the market for a longer time. Evaluation of Alternatives Decision Criteria Weight Effectiveness 30% Efficiency 20% Ease of Implementation 20% Cost of Implementation 30% TOTAL 100% Weights: 76 – 100 – most acceptable, most beneficial, easiest to implement, least cost of implementation. 51 – 75 – more acceptable, more beneficial, easier to implement, moderate cost of implementation. 6 – 50 – moderately acceptable, moderately beneficial, not that difficult to implement, moderately high cost of implementation. 1 – 25 – less acceptable, less beneficial, difficult to implement, high cost of implementation. Table 1. Analysis of Alternatives based on the given criteria. |Alt |Effectiveness |Efficiency |Ease of Implementation |Cost of Implementation |Total | | |(30%) |(20%) |(20%) |(30%) | | |Weights |Weights |Weights |Weights |Total | |1 |26. |14. 0 |15. 0 |3. 0 |58. 0 | |2 |28. 0 |17. 0 |16. 0 |4. 5. 0 |65. 5 | |3 |7. 5 |5. 0 |18. 0 |25. 0 |55. 5 | | VI. Recommendation Alternative 2: Modify the idea of emphasizing the “natural” concept. After the evaluation of alternatives, it is recommended that the VCP (Vive Chem Philippines) in cooperation with KMC (King Matches Corporation) implement the modification of the idea in emphasizing the “natural” concept. This alternative will make it easier to communicate to the consumers that the Provive is a new product innovation of the astringent line with its additional add-ons –essential oil of the herbs.
This alternative will not capitalize on being “natural” but on astringent that is with a distinctive feature that will as its platform edge over the existing products. In terms of cost it will not consume perhaps cash out. In terms of implementation it won’t be that difficult to perform, since will not consider any revision of the formulation, only on the not set emphasis on its “natural” concept. In terms of effectiveness, we believe that it will be easier for the VCP to communicate the Provive to the consumers since it won’t be capitalizing on “natural” concept which seems difficult to communicate in the current market.
VII. Proposed Strategies or Plans 1. Target Market The target market is still the facial care product users but this time it will be offered to the class D and E as well so that it can cater and focus on the larger bulk of the lower end class of the society – the masses. Also, 2. Product Positioning Competitor Positioning- the Provive is positioning itself as better than other existing brands of astringents since it contain natural ingredient, avocado, which contains essential oils that is good for the skin.
This was the chosen product position since we are to capitalize on emphasizing its additional benefits which is its edge over the other brands. 3. Marketing mix – Alternative 2 is a short term strategy. We categorized it short term since we are to modify it again, perhaps when the market positively respond to the idea of having organic/ naturally occurring ingredients. Subsequently, we are to introduce the concept the idea of being “natural astringent” when the market is already prepared with this idea. a. Products Not to capitalize on the “natural” concept. b. Price*
Its price will within the price range of the leading brand. c. Place of distribution Build an alliance with the intermediaries- supermarkets, drugstores and other distribution sectors that will be the agent for distribution and product promotions. This strategy will enable the Provive product to be in the selection in alignment with choices for the astringent users. The alliance will be an additional factor in promoting the product. d. Promotions* Distribute sample products on different areas where there are of potential market. This will directly promote the product to its potential consumers.
Advertise through television, radio and print ads with an endorser. By hiring a product endorser who is well known and appropriate representation of the product will affect the consumer’s preference in buying an astringent. A celebrity having a feature of flawless and fair complexion is one of the best ways to promote the product more intensely. For this, we can select Maricel Soriano as the product endorser. *Introductory product strategy: rapid penetration – low price (relative to the imported astringents; in line with the price range of the current market leader-Eskinol) : high promotions.
VIII. Future Trend The current market leader seems to be on its firm position for a longer time; this would be a negative influence to our alternative action since it will not give it a chance for the idea of innovation- natural astringent in the astringents line. The entry of the VCP into the astringent market was likely to trigger competitive reaction from existing players. It was also being rumored that a large multinational company with a market leader position in several personal hygiene categories – i. soap, shampoo, lotion, and cologne- was seriously considering entering the astringent market in the next five years. This could be possibly a threat for the company since it will be another big competitor for the company. The entrance of new astringent brands tend to change the market preferences and this could possibly positively influence the alternative actions that we have in order to attract positive response from the consumers and signifies that they are ready to embrace new innovations in the astringent line. IX. Contingency Plan
Considering the future trends, it is recommended that they must do more competitive actions to in order to in order to cope with the future trends. They might have to consider the second best alternative formulated – Modify the formulation of the Provive astringent. This could be alternative course of action that should be implemented when the market leader will still be on its firm position. This alternative of reformulation will make the product aligned with current offered brands – chemically based. This alternative will directly compete with other brands since the competition lies on the attributes it can offer to the consumers.
Another advantage of this alternative is that it can capitalize already on the ideas of the products successfully launched and marketed by the market leader and the market challengers. X. Marketing Management Lessons Marketers do not cater the whole market. This is because they cannot serve all customers in the market. The customers are too numerous dispersed, and varied in their buying requirements. So instead of serving the whole market they are positioning their selves to the most attractive market segment. They accomplished this by segmenting, targeting and positioning.
In doing this, they can formulate strategic plans. Aside from doing this, marketers must also know the product life cycle. Products and markets have life cycles that call for changing marketing strategies over time. Different stages need different attention especially in the marketing matrix. For example in the introduction stage, in launching a new product, marketing management can set a high or a low level for each marketing variable, such as price, promotion, distribution, and product quality. ———————– Low Market Share High Market Share Low Price High Price