Radiant Cosmetics

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Executive Summery

Radiant Cosmetics, founded in the 1930s, had been one of the top five cosmetic companies in the U.S. for more than 60 Radiant’s product lines cover hair care, skin care, makeup, and perfume. Cosmetic is a highly competitive industry because of its huge market and lucrative profit. The number of cosmetics consumers have been increasing and is estimated to hit 161 billion in the U.S. by The same phenomenon happens global wildly. With the increasing income, more women get extra money to purchase cosmetics, which make themselves look younger and more charming. Major competitors for Radiant Inc. are L’oreal, Estee Lauder, Procter & Gamble, and Avon Products. Radiant used to occupy around 10% of the U.S. market, but Radiant’s domestic market share shrank more than 1% in Furthermore, the global market share of Radiant Inc. also has been shrinking since Huge economies such as the European Union, Japan, China, and South Korea consume $170 billion of cosmetics and perfume The potential profits are so attractive that Radiant Inc. plans to enter global market and join the competition with those large cosmetic companies. Radiant decided to crack France’s market first, because France is recognized as the center of worldwide fashion and beauty, and the victory of campaign in France’s market could also anchor Radiant’s global luxury brand. Once Radiant succeeds in entering France’s cosmetics market, it will probably be involved in the fight against counterfeits, which happened before when Radiant entered Japanese market. A study conducted in 2003 by the Centre for Economics and Business Research suggested that the cosmetic industry loses about $3.7 billion to counterfeits per

Main Issue

Margaret Clark, Radiant Cosmetics president and CEO, and Randall Bevington, Radiant’s chief marketing officer, were contemplating launch a new lip-plumping product called "Four Carat Pout" in 2008. It was an innovative product which could increase the visual and sensory perception of lip plumpness. Here are several major questions that needed to be figured out before the launch of "Four Carat Pout:" marketing and anchoring "Four Carat Pout" as a luxury brand or a mass product; finding a solution to position the product as a possible starting point for an expanded anti-aging line; and the way to market and distribute the product in the global market, especially in France. In addition, intellectual property (IP) issues are also important to the launch: Radiant has been involved in fights with cosmetic counterfeits in the past in Japan. With the launch of the new product, “Four Carat Pout,” Clark needs to decide whether to pursue patents, copyrights and/or trademarks for various aspects of the new product. The case focuses on the interplay between marketing strategies and intellectual property issues in international fashion products.

Challenges:
Although Radiant Inc. had been one of America’s top five cosmetic houses for over 60 years, its domestic and global market share kept shrinking from 2002 to 2007. In addition, the company’s net income had been negative during the same period, because Radiant loss ground to Procter & Gamble and Estee With the increasing income of females and changing of consumer behavior, the global cosmetic market developed at amazing speed. The huge “pie” drived Radiant to expand its international business, particularly in France, which is the worldwide fashion and beauty center. The cosmetic industry is really competitive in France, which is full of powerful competitors such as L’Oreal, Estee Lauder, Procter & Gamble, Shiseido, and Avon Products. These participants have been occupying the market for a long time, so the business circumference is pretty threatening for new entrants. Four Carat Pout, as an innovative product, could or could not receive consumers’ response. Radiant has to spend an amount of advertisement expenses to market the innovation, as well as tries to cultivate a new...
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