Target Market, Segmentation and Positioning in China
In China, the cosmetic market is significantly growing, influenced by Chinese culture in the beauty industry. Fenty Beauty can anchor its marketing strategies on the Chinese beauty ideals and represent a standardized marketing approach (Mihajlovic, Pontiggia & Vescovi 2017). Thus, Fenty Beauty can build on differentiated marketing by segmenting the market based on gender, demographics, and geography. Demographic segmentation considers the income, gender, age, educational levels, and cultural orientations of different people in the target market. Since Fenty Beauty will focus on the urban location, the segmentation will take the geographic dimension (Camilleri 2018). The company can improve its traditional marketing segmentation where it divided its markets into skin and sun care products, deodorants, hair care products, and fragments and cosmetics. While demographic marketing enhances the effectiveness of the company to develop products for people based on their gender, Fenty Beauty will develop exclusive men’s beauty products, female products, and unisex products.
Fenty Beauty’s marketing strategy in China will be differentiation. The company needs to identify customers with other beauty and skin care needs. Therefore, the company will tailor its cosmetic products and produce unique products that enhance the beautiful feeling. According to Keegan and Green (2015), segmentation allows the organization to align its products to different tastes and thus engage strategies that treat customers differently, thereby satisfying their needs. For this reason, Fenty Beauty will segment its markets around working adults, sportspeople, beauty queens, and the general public in need of its different products. Notably, the company will identify with women because of their lifestyle and demand for beauty products that propel its growth. Therefore, women will extensively consume skin and sun care products, makeup, and general cosmetics.
The cosmetic market in China is diverse. Hence, Fenty Beauty must identify and profile its market and focus on the customers to target (Mihajlovic, Pontiggia & Vescovi 2017). Various customers in China have different expectations, and thus, Fenty Beauty should choose a given target market, identify its needs and adequately meet their needs. The most likely target market for Fenty Beauty is young people for deodorants, fragrances, makeup, and cosmetics. The company will also target the older population for skin and sun care products. Notably, all these people require beauty products for their day to day needs
Fenty Beauty should identify the most profitable target market. After distinguishing the separate segments of the market, Fenty Beauty will target men and women from 25 to 50 years of age. The target group requires different cosmetic products because of distinct needs. From this perspective, it is evident that Fenty Beauty can target a specific group of customers by producing products that serve the needs of men, women, and the unisex group. Tapping into these diverse needs of the customers requires that the company employs a differentiated marketing strategy (Camilleri 2018). Hence, the target group reflects past purchase behavior and other demographic variables that promise incremental sales for Fenty Beauty.
Fenty Beauty needs marketing strategies that would help it maintain its competitive advantage in the Chinese beauty and cosmetic industry. The focus is on customer perception, which has a significant impact on the brand performance in the market (Keegan and Green 2015). Fenty Beauty would use functional positioning by producing products that fulfill the desires and needs of customers. Fenty Beauty will utilize sensory marketing, advertising, and marketing communication to promote diverse skin care, beauty, and cosmetic products to the Chinese market. The launch of the products in the market will use the principles of public relations. As a result, Fenty Beauty will use different approaches, including internet marketing, print and broadcast media, and endorsement. The marketing communication will increase brand relationship, employ effective promotional strategy, and aligning its sales strategy on the marketing objectives. The company will use the positioning approach that stimulates the communication of the market with its products. A combination of positioning types helps Fenty Beauty increase its competitive edge and communicate differentiated products to the consumers.
Industry Analysis
The cosmetic industry in China is one of the most competitive in the whole world. The high level of product development, innovation, and high market entry defines the industry. The Chinese cosmetic market is highly growing. Therefore, there is a high level of competition for both local and international brands. Most foreign entrants have emerged competitively by holding the financing and corporate resourcing models, among other marketing opportunities. Companies operating within the cosmetic industry face different aspects of the economic stability of such countries. Fenty Beauty will face interest rate fluctuations, tariffs and taxation in the import and export market, exchange rate, and other local charges like customs duty in China, among other product clearance costs.
The industry analysis shows that China has a high political interference, with tax regimes that affect the business’s success. Since the county is culturally conscious, all these political, economic, and socio-cultural factors influence the entry of Fenty Beauty in the Chinese market alongside the current market trends, market intelligence, and the changing market dynamics. Therefore, the variance of policies regarding the cosmetic industry and export of fashion products will significantly affect Fenty Beauty Company. Besides, politics regarding taxation, employment, and quality of products are likely to affect the company. Therefore, the company should ensure it understands the political background on imports or exports from which it seeks to source materials, manage production units, and seek product marketing.
In China, the cosmetic market covers different products ranging from skincare, fragrance, hair care, and products for beautifying the human body. Several cosmetic companies sell different products, which primarily include skincare, beauty products, and color cosmetics. Therefore, the beauty and cosmetic industry are among the fastest-growing in China. Ma (2021) indicates that by 2020, China’s cosmetic and beauty industry grew to unprecedented levels, occupying the second market across the world. Social media and the forces of globalization have influenced this growth. As a result, most Chinese enjoy a growing purchasing power, increasing the demand for beauty care products. Notably, the cosmetic market is facing a booming demand for premium cosmetic brands of high quality.
The forecast shows that there is a growing trend with e-commerce increasing retail sales. In 2019, China’s cosmetic market recorded a retain revenue of 74 billion Yuan. In 2020, the value grew to 340 billion Yuan (Ma 2021). Alibaba accounted for the majority of the products that the company sold (Ma 2021). The appetite for cosmetic products in China gravitates towards foreign brands over local ones. China relies on importing its cosmetic products, which mostly come from Singapore, France, U.S, and Japan. Therefore, the leading player in the industry includes Lancome, L’Oreal and Estee Lauder. The majority of global fashion companies have the advantage to access competitive labor that significantly influences their pricing strategies and leads to improve customer quality and value positioning.
The dominant product segment that dominates the Chinese cosmetic market includes the skincare product. In 2019, this market accounted for over 250 billion Yuan (Ma 2021). Comparatively, the retail trade for hair care predictions stood at 55 billion Yuan while the color cosmetics recorded a growing sales trajectory (Ma 2021). In addition, younger consumers have started utilizing face makeup, and demand recorded increasing demand for decorative cosmetics.
The direct competitors for high-end cosmetic brands are international companies. Fenty Beauty will compete with major players, such as Guerlain, Lancome, Estee Lauder, Helena Rubinstein, and Dior. The Chinese market comprises a beauty-conscious population and would want to utilize various beauty products to sustain their faces and bodies. The purchasing decision for these target consumers depends on the prices and the quality of the cosmetic brand. Therefore, the cosmetic retail market competition focuses on the parameters of quality products and competitive pricing strategy.
Distribution Strategy
Distribution Channels
Modern-day beauty consumers in Chinese are more loyal to an international brand. The reason for this is the growing curiosity about niche brands. Accordingly, female consumers are paying attention to the quality, timely delivery, and price issues of skincare products. An effective distribution strategy resonates with the dynamics of the competitive landscape (Li 2019). Therefore, Fenty Beauty can choose from the mainstream distribution channels for its cosmetic products in China. These include supermarkets, hypermarkets, departmental stores, pharmacies, online stores, and beauty parlor. The company would use departmental stories because they provide a variety of reputable merchandise. Thus, more wealthy people are more likely to shop from the departmental stores. Overall, Fenty Beuty would benefit from the importance of departmental stores to build its brand.
Moreover, hypermarkets and supermarkets allow for differentiated selling. Most consumers in China visit these stores to buy everyday products like groceries. Most consumers will find its products on the shelves and are more likely to purchase them (Li 2019). Therefore, they do not have much money to spend. Fenty Beauty would distribute its products in supermarkets and hypermarkets to manage the price competition.
Fenty Beauty will operate physically in retail stores offering clothing brands. The trend in China’s cosmetic market is that physical retail stores allow companies to handle various cosmetic brands in multiple qualities. All these would meet the diverse needs of customers and build brand reputation. According to Keegan and Green (2015), the strategy is likely to enable the company to achieve efficiency in distributing its products in the Chinese market. Therefore, Fenty Beauty will emerge as a reliable cosmetic distribution channel. For this reason, Fenty Beauty will gain sufficient space to operate its beauty and cosmetic products.
Fenty Beauty will extensively use direct marketing. The principles of direct marketing in the cosmetic industry allow the company to create space utility and add value by arranging for the delivery of the product to customers (Keegan & Green, 2015). Therefore, Fenty Beauty should control the cosmetic products through delivery. The message in communication should differentiate the unique nature of the products compared to the other products to attract and stir up interest in the various people targeted. Since most stores will be in convenient locations, the company will partner with wholesalers and retailers.
Transportation Modes
Fenty Beauty will implement innovative solutions in its transportation modes that its logistic chain will belong to. According to Jurczak (2019), the transportation process will begin in the manufacturing plant, focusing on production, packaging, and transportation. Therefore, Fenty Beauty will focus on the short transportation time. The focus will be on preserving the product for shipment. The transportation vans will be helpful to produce means of transport that allow Fenty Beauty to carry its products and deliver them to the stores in the shortest time possible.
The company will have a contingency plan. For instance, in case of emergencies, Fenty will follow the provisions of law to store and transport finished products in an appropriate condition, as suggested by Jurczak (2019). Therefore, Fenty Beuty will ensure that the differentiated cosmetic products reach the market in the best conditions maintaining their smell, consistency, appearance, and properties. In addition, Fenty Beauty will use logistic solutions that allow for 24-hour transport to different points throughout the country. Furthermore, traceability in the supply chain is a solution that protects the business in case of any irregularities. All these solutions would maintain the required temperature and offer to track cargo.
Fenty Beauty will have warehouse management. Cosmetic products require refrigeration since they are perishable. Also, the Chinese cosmetic industry operates on high regulation. Therefore, logistics will employ on-site pharmacists in the warehousing operations to oversee health conditions, packaging, hygiene, and product shelf-life. For this reason, the warehouse management will ensure that Fenty Beauty complies with regulatory statutes.
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