Marketing on Internet - Pretty Girl Cosmetic Company
MARKETING ON INTERNET
Written Assignment Prettygirl Cosmetics Company
Instructor : Group Members :
Clare Sham Ng Kwok Chuen, Dominic Poon Shing Kuen, Alan Tsang Nga Ki, Fonita Wong Wing Kwan, Winnie
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Marketing on Internet - Pretty Girl Cosmetic Company
Table of Contents
Executive Summary………………………………………..Page 1 1. 2. 3. Introduction Mission ……………………………………..Page 2
…………….……………………………..Page 2
Current Position Analysis 3.1 3.2 SWOT Analysis ……………………………….Page 3 PEST Analysis ……………………………….Page 6
4. 5.
Positioning and Marketing Objectives ……………Page 8 Marketing Strategies 5.1 5.2 5.3 5.4 Product strategy……………………………….Page 9 Price strategy………………………………….Page 10 Promotion strategy……………………………Page 11 Place strategy………………………………….Page 14 ……………………………………..Page 15
6.
Conclusion
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Marketing on Internet - Pretty Girl Cosmetic Company
EXECUTIVE SUMMARY
This report develops a marketing plan for our company - Pretty Girl - to expand offline selling to online selling. Pretty Girl is not only a company with outlets selling cosmetics but also a successful brand name. We have attained remarkable net profit last year. We have kept a loyal and ever-growing customer base ranging between age 18 to 35. As Internet usage has been an irresistible trend, we consider is time for our company to include online selling of some of our products at competitive price as compared with our competitors, Shiseido and MaxFactor. We have set a target to be the market leader of online cosmetics industry within 2 years and get 20% to 30% of market share in online selling.
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Marketing on Internet - Pretty Girl Cosmetic Company
1.
INTRODUCTION
Over the past 20 years, Pretty Girl has built an empire on knowing what women want – to look and feel like themselves, only prettier, more confident. Along the way Pretty Girl continues to address their beauty needs with understanding, innovations and integrity. Owing to high quality of the products developed by our dermatologists and facial care experts, we have successfully built up a brand name in Hong Kong and got the ―Ten Successful Brand Names Award in Hong Kong‖. ―cosmetics‖ with ―PrettyGirl‖. We have linked
Throughout the years, by selling our Pretty Girl products in our extensive retailing outlets at competitive prices accompanied by good services has enabled us to attain a net profit of HK$35,000,000 last year, an increase of 10% compared with 1999. We are able to maintain the loyalty of our customers and the customer base ranging from 18 to 35 has ever been expanding. Into the millenium, as Internet usage has been irresistible trend, we are contemplating to expand our business mode from outlet selling-offline to online, providing our customers with an online method of shopping around, obtaining consultation, placing an order and payment and so on.
2.
MISSION
To expand our business format from offline selling to online selling To be the market leader of online cosmetic industry within 2 years
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Marketing on Internet - Pretty Girl Cosmetic Company
3.
3.1
CURRENT POSITION ANALYSIS
SWOT Analysis
―Know yourselves, know your competitors, you can always win‖, the Chinese proverb says. Whether we shall succeed in our diversification in business mode to online selling depends on: the internal issue - our company’s relative strengths and weaknesses; & the external issue - ability to face the identified threats and opportunities. 3.1.1 Strengths We are one of the most famous cosmetics companies in Hong Kong with own production line and extensive sales outlets also named Pretty Girl . We have already established a successful and well-known business selling high quality cosmetics products at competitive prices and providing good customer service. Therefore to
start online business is just tapping a new service channel to our old and potential customers. The old customers already know us and like us because they are loyal. For those potential customers, online shopping is an e-magazine for them to know our products if they only know our names but never step into our outlets to buy. The age of our online customer base ranges from age 18 to 35. They tend to try innovations and are more willing and able to spend more on cosmetics. They are already internet users in school, at home and in office. Therefore through online shopping and buying, they can buy our products and obtain consultation services any time and anywhere even though it is at midnight or when they are on business trip. Just a ―click‖, the shop is open. More clicks , more you can get. We believe that our customers who are sophisticated internet users can enjoy browsing our web site and even taking orders In this aspect, we come to the following conclusion: Our products are appropriate to be sold over the internet because our products fall into the categories of recognizable commodities or brand name products. Pretty=>
Cosmetics / Skincare => Pretty Girl. A successful brand name like us is essential. Customers and potential customers already know our company and our products. They may not doubt that a product purchased from our web site will be delivered to
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Marketing on Internet - Pretty Girl Cosmetic Company
their home or office. Our company fit into the commodity and brand name category. Internet selling is just a provision of additional service channel. Our customers will certainly like it. Hereunder is a questionnaire for the appropriateness of our products to be sold online Question Checking
Is our product or company a brand or Yes—We can use our known name ―Pretty known name? Are people familiar with Girl‖ to provide potential online customers our company? with the security that they are buying from a reputable company. We can use our
company to provide credibility. Can we clearly identify the Yes – Our customer base ranges between It facilitates our
demographics of the people who may 18 to 35 in age. use our products
advertising our cosmetics using niche portals.
Would people find it more convenient to Yes – Online shopping and buying can buy our product from their desk at home encourage our existing customers to spend or in their office? more when clicking around our web site. On the other hand, non-customers who use internet will have interest on our products when browsing our web site. Are we capable of reaching our potential Yes- We already have a good distribution market? Are there people who would channel- our extensive selling outlets. We buy our product if they could access to a can use online selling to augment this distribution channel? channel and provide an easy-to-access service for our customers.
3.1.2 Weakness This is the first time we set up our web site and we are a freshman in online selling. IT experts on establishing web site for e-commerce will have to be recruited. The following technology must be addressed and successfully tested before launch:
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Marketing on Internet - Pretty Girl Cosmetic Company
Choice
Technology
Simple online shopping service including HTML FAQs and text-based product overviews Extranet Site customization, product configuration Mailing list Online shopping Password protection through HTML Gateway program to access database Gateway program to access database Secure software, applications server, encryption, with merchant existing
integration
It takes time and coordination to develop procedures to integrate our internal infrastructure with online purchasing. We need to modify our internal procedures and processes in order to expedite products purchased from our online site. connection, the following areas will be addressed: Existing computer systems Accounting Systems Customer Services Logistics Shipping departments Large capital outlay will be expensed during the setting up and subsequent maintenance of our web site. 3.1.3 Opportunity Internet is New Paradigms of Online Selling and Marketing. In 1990s and into the millenium, communication through Internet has become more and more popular. Most large companies selling commodities and services through their retail outlets have built up their web sites to provide online selling services to their customers to increase sales and enhance customer service. Pretty Girl has the following competitive advantages in expanding our business mode to online selling in this epoch making era: a successful brand name
In this
stable and loyal customer base
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Marketing on Internet - Pretty Girl Cosmetic Company
3.1.4 Threats We are facing competition from Shiseido and MaxFactor. Online shopping is still not popular in Hong Kong especially in cosmetics industry. Some people have no confidence in online purchasing because they have reserve as to the security in payment and doubt that whether the products they chose can be collected at the shops in due course or be delivered to their office or home. 3.2 PEST Analysis
3.2.1 Political factors Government support in promoting e-commerce and marketing activities can be seen in the following aspects: Trade Development Council provides free consultation services in e-commerce. Legislative Council approved the ordinance on e-commerce in April 2000. 3.2.2 Economic factors Hong Kong has gradually recovered from financial turmoil in 1997. HK Government and private enterprises have announced the first time salary increase since 3 years ago. Our customers aged from 18 to 35 benefit from the economy recovery. They can then afford to spend more on cosmetics- PrettyGirl. 3.2.3 Social factors Makeup is a polite manner in social life. When you go to office, you will use some cosmetics to show your respect. Recent survey have shown that an office lady with appropriate make up when attending an interview has greater chance to get her job than the one go with plain face. Economic recovery will help social life become more active. People earning more will tend to go out to have functions, dining at restaurants, hotels and shopping more frequently. Active social activities will induce ladies to buy more dresses and of course, cosmetics.
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Marketing on Internet - Pretty Girl Cosmetic Company
Young ladies tend to learn their idol in most aspects, e.g. dresses, accessories and using cosmetics. 3.2.4 Technological factor Internet becomes more open and popular. Also, as the cost of having a computer and the Internet Service from ISP is getting lower, people can afford to buy a computer and get into Internet. The technology to build up the web site tends to be more open and easy to learn. The graphics and multimedia technologies become more mature than before. To create attractive graphics is not a difficult task. So, to build attractive, eye-catching web site for Pretty Girl is possible. Moreover, fast-access broadband provides a platform to build up Internet applications such as database-driven on-line selling application through payment gateway. Also, search engines enable internet users to search useful web sites more quickly. More people will know our web site through search engines.
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Marketing on Internet - Pretty Girl Cosmetic Company
4.
POSITIONING AND MARKETING OBJECTIVE
4.1
Positioning
Through perceptual mapping, we have identified Shiseido and MaxFactor as our competitors selling similar products to same targeted customers. Our products are priced at about 5% lower than that of our competitors. 4.2 Marketing objectives
To get 20% to 30% of market share in online cosmetics industry
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Marketing on Internet - Pretty Girl Cosmetic Company
5. MARKETING STRATEGIES
Nowadays, the social status of female becomes more important. Increasing of social position and economical power, women can build up selfhood and self-confidence by dressing up themselves whatever they want and whenever they do. This is one of the reasons that Pretty Girl can survive and maintain profitable. Since e-commerce will be the trend for next decade, we have the following marketing strategies to promote the new concept of online selling:
5.1
Product/Services strategy
There are totally three product lines in our company i.e. cosmetics, skin care products and accessories. 5.1.1 Cosmetics Our cosmetics mainly serve for eye, lip, and face. And we will focus on fresh, shiny, and trendy look this year especially for the product used by eye and lip. 5.1.1.1 Eye
All of our eye shadows will be waterproof with shimmer powder. It gives a vitality feeling. When customers use it at night, under the lighting, it gives out a trendy feeling. It is more suitable for ladies in disco. In order to attract more customers, we will have a new design in our product packing. Prettygirl’s new packing is the combination of 5 shadows and 3 eyebrow compacts put together as a trendy eyes color collection. From one compact, you can have different effects by using colors that blend, harmonize or contrast. Besides, our curl mascara gives an exquisite coverage and color through the power of new luminous technology.
5.1.1.2
Lips
We will more focus on the shiny look. Moisturizing lipstick can prevent dry lips from cracking. Our lip gloss will not only be colorless as traditional package but have different colors for the customers to choose in order to give a lining to their dressing.
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Marketing on Internet - Pretty Girl Cosmetic Company
We also introduce new packing in our lipstick, which is two-ended. One end is lipstick, and the other side is lip gloss. It will be easier to carry than the traditional lipstick and lip gloss.
5.1.1.3
Face
One focus point of our products for face is foundation. We would like to introduce waterproof foundation in the coming summer, which give a translucent feeling after use. Our soft and feather-light foundation has oil-absorbing property that assists in keeping skin matte and colors true. Besides, our SPF 25 foundation provides coverage, concealment, and protection. All our foundations contain moisturizing ingredients such as Vitamin E, Aloe, and Ceramides to protect and nurture the complexion On the other hand, we also provide blush with a variety of colors and will be suitable for different occasions. The new trend of blush for this summer is natural in color.
5.1.2 Skin care products Skin care product is another product line for our company. Although it is not as well known as our cosmetics, there are still a lot of customers purchase our skin car products. Our skin care products contain variety of choices and take care of every part of your face. Our product include cleanser, toner, eye cream, lotion, night cream, mask, body lotion and so on. 5.1.3 Accessories In company with our cosmetics, we also provide different kinds of accessories for our customers. We have eyebrow brush, blush brush, eyeliner, sponges, cosmetic bag, etc.
5.2
Price strategy
As we mentioned above, Max Factor and Shiseido are our main competitors. We are now offering a price for the products sold in our retail outlets at about 5% lower than our competitors. On the other hand, we have a different set of pricing strategies for the products sold online. The following are the three main strategies we used.
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Marketing on Internet - Pretty Girl Cosmetic Company
5.2.1 Offer discount within promotional period We decided to offer a discount from 10% to 15% for all products sell online in the first six months. In order to maintain good relationship with our retail outlets and do not affect the profit of them, we set short period for the promotional period. Since the mark-up for cosmetics is so high, we are confidence that such a discount in a short period will not affect our profit online severely. It is just a gimmick to induce customer purchase online.
5.2.2 Set a lower price for a bundle of products sold. We will offer a bundle of products that sell at a price 10% lower than buy them separately. Such bundle we offered online is totally different from which sell in our retail outlets. So that we can attract more customers consume online while not affecting our existing channels.
5.2.3 Provide discount for bulk buying We also provide a discount from 5% to 10% of the retail price if the customer purchase at one time of a single products for 3 or more. All these pricing strategies are gimmicks to induce first time and repeat purchase. By attracting more customers buy online, our sale then will increase. So we are expected to gain profit steadily even thought we provide a lot of discount.
5.3
Promotion strategy
5.3.1 Advertising Our main advertising channel is through magazines. It is because our targets are female aged from 18 to 35 and they are more willing to spend on magazines. The message that we want to convey to our targets is the function and the variety in our products together with our web site. In order to reach our teenage customers, the advertisement will be on some gossip magazines e.g. Weekend Weekly, Monday. On the other hand, we also place our advertisement on some fashion magazines like Cosmopolitian, Elle, etc. in order to reach the mature group. We expect the hit rate for our site will be increased after the advertisement is launched.
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Marketing on Internet - Pretty Girl Cosmetic Company
5.3.2 Image Building We will sponsor the cosmetics used for the College Fair Ladies Context and provide our site for online voting. By sponsoring this kind of activities held in Colleges, we want to build a high-class image. And we can attract well-educated person to buy our products.
5.3.3
Sales Promotion
5.3.3.1 Leaflet We will distribute leaflets that promote our web site and online selling through the retail outlet at the point of sale. By distributing leaflets in the stores, we can make sure that our target customers can get the information we want to convey. It is also a costsaving and more effective way to promote our web site than distributing leaflets on the street. 5.3.3.2 Loyalty program We would like to provide VIP cards or member cards to our valuable customers. They can get bonus points from every purchase and redeem the accumulated bonus points for our products. This loyalty program helps to induce purchase and then increase our sale. Besides, it gives us a chance to get the personal information and e-mail address from application form they submitted. We can make use of these valuable data to generate statistics and analysis the needs of our customers more accurately. It also enables us to provide tailor-made promotion to members visit our web site. 5.3.3.3 Joint credit card We would offer joint credit card with bank e.g. HSBC. It helps us to increase the number of customers and makes our products and brand name more popular through the customer base of the bank. We also provide a discount for customers who paid by our joint credit card. 5.3.3.4 Joint Promotion We select 50,000 customers from bank’s customer base by setting criteria like annual consumption amount, credit limit, age, and sex, etc. We provide with our promotional leaflet and invitation card, promoting our products and web site, to bank for distributing to their customers together with the credit card statement. In return, we offer a discount of 20% to 30% for all products to customers who have the invitation card and make consumption within a certain promotional period, i.e. 7 to 10 days.
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Marketing on Internet - Pretty Girl Cosmetic Company
5.3.4 E-Marketing 5.3.4.1 Free sample To increase the attractiveness of our web site, we would like to provide a free sample for those first-time registers as our site members. They can download the redemption coupon and get their free sample in out retail outlet. It is not just increase our attractiveness but also give us another chance to collect the information of our potential customer through the registration form they submitted. 5.3.4.2 E-coupon We will send e-coupon to our members through e-mail periodically to induce repeat purchase. They can redeem the coupon when they purchase online or in our retail stores. For non-member, we will provide e-coupon in our site seasonally or in company with our promotional items in order to induce trial. 5.3.4.3 E-mail Since we gather the e-mail addresses and personal information from the application form they submitted, we would like to make use of the e-channel to promote our site and products. We are going to e-mail newsletter and tailor – made promotional items to our member periodically. So that we can make customers feel that our promotion is personal and be loyal to our company. 5.3.4.4 Dynamic advertising (customer profiling) As we collected quite a lot data of our customers from different sources, we will analysis all these data and classify our members into different categories. We provide them with tailor-made promotional items or new products after they login 5.3.4.5 Image girl campaign To increase the popularity of our site, we are going to hold an image girl campaign. All the interested parties, members or non-members, are welcomed to upload their photos and request to be the nominee. Everyone who visits our site will have the chance to vote. People have to fill in their name and e-mail address in order to vote. It is because we have a prize (one of our promotional item) for the one who has vote for the champion. And the winner in this campaign will be appointed as our house model. 5.3.4.6 Upload photo for consulting People can upload their photos to us for consultation on the style of make up that they are suitable. Our consultants will give them suggestion on which kind of make up styles will be more suitable for their hairstyle and dressing.
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Marketing on Internet - Pretty Girl Cosmetic Company
Besides, there will be a questionnaire asking some simple questions about your skin colour, style of dressing, and the preference of colour, etc. After you complete and submit the questionnaire, our consultants will give you suggestions on the make up style and the products you can choose. Actually, it is a gimmick to promote our products to the target customers. 5.3.4.7 Affiliate program We make compromise with www.cwow.com to be the partner under our affiliate program. People can visit our site through the partner under affiliate program and make consumption. We will give them 1% to 2% commission on the gross sale generate from customers purchase on their site. 5.3.4.8 Makeup skill We will provide the latest makeup skill in our site in order to attract more people to visit our web site. Such makeup skills will change form time to time according to the trend in order to keep it fresh. In conclusion, all the promotion tools used in offline are use to promote our web site and online selling. It also gives us a chance to gather e-mail address and some personal information from our target customers.
5.4
Place strategy
The main distribution channels for our business are online and offline.
5.4.1 Online People can buy the products from our web site and our joint partner www.cwow.com which is under our affiliate program.
5.4.2 Offline Customers can buy their favorite products in our extensive retail outlets.
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Marketing on Internet - Pretty Girl Cosmetic Company
6.
CONCLUSION
We can make use of the offline promotion tools to promote our web site and through our online marketing, we expect to induce online sale as well as increase offline sale.
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