COMPETING WITH THE BIGBRANDS

Gurpreeet Singh Ujjwal Mehta

Rishab Pankaj

INDUSTRY OVERVIEW

• P83 billion in 2004

• Projected to grow at a rate of 5% each year

• Beauty products at fifth globally(Nielson)

• Facial care products(60% revenue)

INTRODUCTION • Founded in 1985(Philippines)

• Personal care products

• Bagong Pilipino, maka-Pilipino, kayang tumapat sa buong mundo

• Brand that endures

• Hortaleza’s father owned a chain of 21 beauty supply stores

RIVALS

MARKET SHARE (SKIN CARE)

Splash Unilever J& J Sara Lee0

2

4

6

8

10

12

14

16

18

2001

2002

2003

TARGET MARKET

MASA• C1 and C2(Middle class)

• D(Lower class)

• E(Extremely low class)

CONTINUE…

• Concept of hiyang

• Metrosexual trend

• Heavily influenced by brand endorsements by national celebrities.

BRANDS

• RBH COSMETICS(1985) Distribution

• BIG HAIR(1987) Became a fashion craze(P1 mn.)

RESEARCH INSTITITE• Established in 1997

• State-of-the-art facilities and equipment

• Began by hiring a lone chemist

• Growth and innovation strategy

• Innovative packaging/products

EXTRACT FACIAL CLEANSER

• Launched in 1989• First facial cleanser based on natural

ingredients • Two variants: Avocado-for dry skin,Cucumber

for oily skin.• Low-budget television advertisements• Nationwide awareness for the first time.

CONTINUE….

• P40 mn.(sales)• Lost competitive advantage.

MARKET RESEARCH• Primary research

Consumer safaris Focus groups

• Secondary research Research reports on the domestic and foreign markets published by other sources

Potential gold mine(AC Nielsen)

MARKETING STRATEGY

• Rational approach rather than personal approach

• Advertisement on popular “telenovelas”• Below-the-line marketing• Guerilla marketing.• Continuous innovation

DISTRIBUTION

• Hired 24 distribution companies

• General trade accounts(78% revenue) Small retailers(50,000 sari-saris)

• Modern trade accounts(22% revenue) department stores and supermarkets

CONTINUE….

• Highest discount comparison multinationals(8%)

GENERAL TRADE(DISCOUNT)

Splash organisation

17.5%

(List price)

Retailers

Distributors

17.5%

10%(List price)

DISTRIBUTION(MODERN TRADE)

• Transportation costs was borne by Splash• offered 40 per cent of the list price for margin,

trade spend, promotional spending payment for shelf space

SARI-SARIS• Variety store

• Operated in shopkeeper's house.

• basic commodities low costs.

• buy units of the product

• Allows credit purchases from its "suki“

• Strong social contact

EXTRADERM EXFOLIANT

• Launched in 1991• Cleaning skin by removing dead cells and

emege new cells• C1 and C2 market• recording growth of 211 per cent in 1997• domestic competitor developed 20%less Hired a celebrity

CONTINUE….

• Defensive mode Product was not registered with the Philippines Bureau of Food and Drug Safety Strategy failed Competitor wins market share

MAXI-PEEL

MAXI-PEEL

• Hired more famous celebrity endorser.• Small quantitis• Low price-D market segment

CONTINUE….

• Unilever and Sara Lee introduced facial cleansers• Competition Alternative product toner Positioned as a safer alternative and convince consumers to switch. Below the line advertisemet and Over the line advertisement

To suggest the skin peeling process induced by exfoliants caused long-term skin damage.

SKIN WHITE

SKIN WHITE

• Launched in 1996• variants for the whole body not only face• C1 and C2 market Competition Unilever,P and G, others local competitors introduced whitening products Silka introduced 15 per cent lower than competing products from Unilever.

CONTINUE….

• Introduced underarm whitening cream• Filipino used liberal amounts of underarm

deodorant(hot country) • Wear sleeveless shirts and tube tops• 29 % share whitening market by 2005.

BIOLINK

BIOLINK• Orange papaya-Hiyas(Mid 1990’s)

• Innovated a new green papaya as Biolink(2004)

• SRI scientists discovered that the papaya enzyme that stronger in unripe, green papaya.

• Hired professional advertising firm • Priced 10% higher than multinationls

CONTINUE….

CompetitionSpent huge money on advertisingSimilar products by competitorsnew entrants as competitive threat(2005)

CONTROL AND TRICKS

• Styling gels(2005)• Teenagers market• price-sensitive market(sachets)• 10% revenue(2004)• price 20 % lower than Dep Competition Dep from Schwarzkopf & Henkel

KOLOURS

• hair-coloring• primary consumers(adult women)• Price(30-50% lower) Competition L’oreal

FUTURE STRATEGY

• More focus on hair care products

• To launch more hair care products (shampoo and conditioner) next 3 years.

Competition• Pantene and Rejoice,Palmolive shampoos,

Sunsilk shampoos and Creamsilk conditioners.

CONTINUE…Splash Corp.

2004 2005 2006(F) 2007(F)

International

246 650 780 1008

Indonesia 157 400 480 576

Pharma 250 400 800 1000

Total 403 1450 2060 2584