Industry With Which I Have Decided Term Paper

Pages: 10 (3675 words)  ·  Bibliography Sources: ≈ 10  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business

¶ … industry with which I have decided to get involved is the cosmetic and toiletries business. I have always had an interest in opening my own business: offering a product that is affordable and of good quality. The current products available to the consumer have a lot of room for improvement; most of the products are poor quality and mass produced, or too expensive for the return.

Certainly, there are a few exceptions in the industry: Bath and Body Works and the Body Shop are models by which I would consider patterning my business.

In 2002, Wilson Select published a report discussing how new product development in several markets is expected to drive margin growth for the cosmetic and toiletries industry in the future.

Product quality is relegated to improving in the future due to the recent discovery of beneficial ingredients. This refers to those products with multiple benefits when it comes to the effectiveness of the product. (Wilson Select Overview of the U.S. cosmetics and toiletries market, 1997).

The Body Shop

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The Body Shop is a company with an understanding of what it means to change to fit the customer's needs, and take advantage of current technological and available research. Entrepreneur Anita Roddick who, in 1976, began retailing homemade products with minimal packaging founded the company. By 1982, there were Body Shop stores opening at the rate of two per month. Now, the Body Shop is operating in 50 countries with over 1,900 outlets spanning 25 languages and 12 time zones. Consumer trust in the product is also very strong. The pursuit of innovation and able to conform to the needs of loyal customers has enabled the Body Shop to grow since they opened in 1976 (Biesada, 2004).

Bath and Body Works

Term Paper on Industry With Which I Have Decided to Assignment

The Bath and Body Works Company has 1,600 stores throughout the U.S. The company sells natural body and hair care products, personal care products, and fragrances. They also have a line of aromatherapy and at-home spa treatments. The success of this company is due to the consistent quality products offered at an affordable price. The constant changing product lines is similar to the Body Shop; they are not afraid to try something new. (Biesada, 2004).

Companies like Wal-Mart, grocery stores, and other large retailers are a threat to some of the smaller toiletry businesses. They buy large amounts of product for a minimal price - and usually poor quality - and then sell it at for a very inexpensive price.

Teenagers have become a new target for color cosmetic companies and products are being launched specifically for preteens. People are also interested in products that have natural ingredients in them. The push for products that are not tested on animals is also on many consumer's minds.

The cost to effectively market multifunctional products employing new ingredients combined with the need to generate a greater return on investment has led personal hygiene companies to consolidate their range of brands - eliminating smaller or slow-selling lines - and focusing on their biggest names. This migration has prompted manufacturers not normally involved in these product categories to develop brand extensions into the area. This "mega brand" strategy depends on conveying a similar image to existing products under the same brand name. Customer loyalty to products is diminishing, however, and the company providing a product must be equally worried about the quality they are offering to the public. (Koser, 2001).

It is difficult to believe that cosmetics will fail to thrive, in Asia or anywhere else. Three years ago, Asia Info Services published a report noting that even Chinese herbal medicine cosmetics were gaining market share, however small at that point, because of their all-natural character, which appeals to buyers globally (Green cosmetics, 2001).

Two years ago, China displayed a booming cosmetics market, as evidenced by visitors to Cosmoprof Asia, a trade show held at the Hong Kong Convention Center in November, 2002. A report in a trade journal - Soap, Perfumery & Cosmetics Asia - noted that cosmetics "clearly act as an effective tool for creating business ties between Asia and the rest of the world (2003)," thereby making an investment in a Body Shop or similar company a perfect one for the coming decade.

Manufacturers would arguably not have been interested in exhibiting if they had been unsure that the market for cosmetics in Asia will expand in the coming years. The Cosmoprof show hosted a total of 750 exhibitors from 33 countries. The show attracted 35,071 visitors, which was a 13% increase over 2001 attendance. It also demonstrated a very vibrant market for cosmetics from European companies selling to the Asian market. "We have had a very good response in terms of companies coming from the U.S., and there has also been very good performance from Spain, Italy and France. These countries are participating at this show more and more," according to Laura Zaccagnini, marketing director of Cosmoprof Asia (Quoted in Soap, Perfumery & Cosmetics Asia, 2003).

As examples of how growth has expanded in Asia, the Korean market grew by 10 to 13% in 2002, with the Chinese mainland growing at 7 to 8%; that market was expected to grow 13-15% by 2010, reaching U.S. $9.76 billion. Zaccagnini noted that the Chinese expansion was greater than in most other Asian nations (Soap, Perfumery & (Cosmetics Asia, 2003); causative factors are possibly due to pent-up demand. The entire Pacific Rim was seen, however, as a growth area.

While the current project is specifically a Body Shop franchise, the wealth of interest in Thai cosmetic products shown at Cosmoprof Asia is a good indicator of the substantial interest in cosmetics in Thailand. "The Bangkok Herb

Company was looking for a distributor for its new breast enlargement skincare product, Beauty Breast Lotion, which contains dimethicone, isopropyl palmitate, soya extract, ginseng extract and horsetail extract" (Soap, Perfumery & (Cosmetics Asia, 2003). The product holds promise as something which might be added to the Body Shop merchandise for the Thai market.

A spokesman for another company noted: "Asian women want to be 20% slimmer than the average woman. They particularly want slimmer faces, they do not want the chubby cheeks that Asians have which gives the impression that they are fatter than they really are. The Japanese spend three times more on beauty products than U.S. women," (Soap, Perfumery & Cosmetics Asia, 2003). Body Shop cosmetic products and the accompanying cosmetic application instruction will be an added advantage in marketing to this demand in the Thai marketplace.

Soap Perfumery & Cosmetics noted the potential for growth in the Pacific Rim nations as early as 1993. At the time, the publication noted, "Body Shop expects to boost its 25 outlets in the region to 150 via its local franchise agent, concentrating on Indonesia, the Philippines and Thailand" (Soap Perfumery & Cosmetics, 1993).

My concept of a successful business would be a product that could be compared to the products that are offered at Bath and Body Works and the Body Shop. Finding my own niche in the cosmetic and toiletry industry will be the biggest challenge that will need to be overcome.

Many types of businesses that are not highly successful saturate the cosmetic industry due to a lack of creativity. I believe that I have a very good idea on how to introduce my product to the market. The most important part - other than name recognition - is the ability to catch the consumer's eye and peak their interest in what new products are available. Personal advantages on the side of creativity would align with my personal experience with products, and what other people think about different products. My main target would be toward female consumers; most women would want product they could leave in their bathrooms and use at their convenience, but also not having to worry about how it will affect the look of the area that they have devoted so much time toward decorating.

The products would be lotion dispensers, soap dispensers, and the containers in which they are packaged. Certain items could be more creative by using different color variations, and would reside in the bathtub or shower. Although not typically as noticeable to people entering the restroom, product color schemes which are versatile and blend well with the differing decorative styles used in home decor today, are a major consideration that must be weighed and factored into the business scope.

Strengths

My strengths for entering this business are a lifelong interest in beauty and achieving it through the most gentle and cost-effective means possible. I have studied the subject on my own; I also plan to take basic cosmetology courses, either online or if I can locate some available to non-degreed students, at a college of cosmetology. I have an excellent history of financial education; my current job requires that I keep accounts both to comply with government demands and allow the business to know where it stands financially so that it can plan accordingly.… [END OF PREVIEW] . . . READ MORE

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