The Internationalization of Natura
Next step in the internationalization of Natura • Natura was a well recognized personal and cosmetic brand (native brand of Brazil) • Have high brand loyalty and retention rate in cosmetic industry • It is premium, high-margin sold to middle and upper class segment • Internationalization in Latin America was not as successful as expected
Natura Operation and Philosophy • Natura is driven under concept of well-being • Promote the harmonious and pleasant relationship of individual with him/her body, with others and with nature • Use direct sales force • Company believe in its natural ingredients from Brazil biodiversity • 177 million units sold in Brazil and abroad in 2004 (33.5% increased on 2003) and cumulative growth over previous 3 years was 117%
Cosmetics Market • Cosmetic and personal care products industry has grown significantly since 1998 when a wave of acquisitions began leading to global organization. • Ten largest companies controlled 54% of the market (Exhibit 1) • The strategic priority for most players was to develop and promote global mega brands, ex. Olay of P&G and Nivea of Beiersdorf to expand market share through acquisition and joint venture. R&D is the key. • Industry is divided based on sales channel and price which are 1) premium brand sold in dept.store and specialized boutiques; 2) the mass-market brands sold in drug stores and supermarkets; 3) the direct sales brands targeted the low-end, mass customer, sold door-to-door
The Premium Sector • L’Oreal is the largest player • All players focus on selling products that imply certain status and technological innovation. • Focus on massive marketing investment and promotion to the niche. • Distribute through outlets including perfumeries, dept.store, beauty store.
The Mass-market Sector • With the rise of globalization, mass-retail market becomes the most important segment in the
Natura Operation and Philosophy • Natura is driven under concept of well-being • Promote the harmonious and pleasant relationship of individual with him/her body, with others and with nature • Use direct sales force • Company believe in its natural ingredients from Brazil biodiversity • 177 million units sold in Brazil and abroad in 2004 (33.5% increased on 2003) and cumulative growth over previous 3 years was 117%
Cosmetics Market • Cosmetic and personal care products industry has grown significantly since 1998 when a wave of acquisitions began leading to global organization. • Ten largest companies controlled 54% of the market (Exhibit 1) • The strategic priority for most players was to develop and promote global mega brands, ex. Olay of P&G and Nivea of Beiersdorf to expand market share through acquisition and joint venture. R&D is the key. • Industry is divided based on sales channel and price which are 1) premium brand sold in dept.store and specialized boutiques; 2) the mass-market brands sold in drug stores and supermarkets; 3) the direct sales brands targeted the low-end, mass customer, sold door-to-door
The Premium Sector • L’Oreal is the largest player • All players focus on selling products that imply certain status and technological innovation. • Focus on massive marketing investment and promotion to the niche. • Distribute through outlets including perfumeries, dept.store, beauty store.
The Mass-market Sector • With the rise of globalization, mass-retail market becomes the most important segment in the