Group Assignment on Marketing Management
ESSAY ON KORRES NATURAL PRODUCTS CASE STUDY
1.How would you segment the cosmetics industry? What segment is Korres targeting?
Cosmetics are products which are used to enhance one’s appearance and odour. It is this human need to be liked and accepted by people around us that makes the cosmetics industry a truly universal market both in terms of influence and overall sales with only a few exceptions, mainly religious, cultural and belief based. In fact, the cosmetics industry is among the largest in the world with an annual turnover upwards of 17(0) billion dollars (Eurostaf – May 2007), whilst Worldwatch reports that worldwide annual expenditures for cosmetics total U.S. $18 billion; the estimate for annual expenditures required to eliminate hunger and malnutrition is $19 billion (National Geographic). The largest cosmetics markets are in Europe (Germany’s is third in the world, with France and Italy being major markets), after the United States and Japan, which hold the first and second places respectively. (Wikipedia, haha Guys can we have any citations for this?????). China, with disposable incomes on the rise, is the world’s eighth largest and Asia’s second largest cosmetics market (after Japan), according to the China Association of Fragrance, Flavor and Cosmetics Industry. From the top three largest markets we can adduce that the cosmetics market is more prominent in developed, industrialized and urban societies.
In Greece, much like any other developed country around the world (you think Greece is developed????), cosmetics are an every-day part of life and more of a necessity than a luxury. Cosmetics can vary from products as mundane and inexpensive as shampoo to expensive products such as designer perfumes. Aside from the functions or end use of these products other factors can and do play a crucial role in segmenting this vast market such as geography, demographics (age, sex, income etc.), psychographic and behavioural patterns. For the purpose of segmenting this market, therefore, all of the above need to be taken into consideration. The Greek market in short can be segmented into the following categories; the Metrosexual, the Health Freak (see note below), the Fashion Victim, the Cheapskate and the Picky Pat. The Metrosexual
Although the overwhelming majority of the cosmetics market is made up of women, in recent years there has been a significant increase in consumption of cosmetic products by men. Traditionally, since the majority of cosmetics for men were purchased by women, men were seen more of a consumer of cosmetic products than a customer. In recent years, however, men have become more involved in the decision making process of buying cosmetics. This segment of the market is mainly urban men in their mid twenties to early forties. They are generally white collar professionals who look after their appearance and aside from the traditional “male” choices such as shaving cream, cologne, and deodorant they use other “feminine” products such as skin care products and body care products. A notable example and the poster boy of the Metrosexual male is David Beckam, Health Freaks (just a quick note, for me a health freak is someone who exercises and is on a diet at all times, in general terms. Suggest changing the category to Animal and Environment Conscious or Ecologists) Another category of cosmetics customers is that of Health Freaks. These are customers, both men and women, who are sensitive to issues concerning the environment and animal rights. In the past, the cosmetics industry has been subject to heavy criticism for the practice of animal testing and the use of chemicals and has spent a lot of money and resources to restore its image and reverse the consequences it had to this particular segment of the market. The typical Health Freak would be a younger, educated and affluent woman who would rather not use cosmetics at all than allow...