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					  E-Business
Case; reflect.com


Maryam Keyarsalan
     PRESENTATION PLAN
• PREFACE
• COSMETIC INDUSTRY OVERVIEW
    • Online Consumer Trends
    • Competition
• PROCTER & GAMBLE
    • Project Mirror
• REFLECT.COM
    • Independence Day—"Burn the Ships”
    • The Site
• CROSSROADS
• EPILOGUE / COMPETITIVE ADVANTAGES
PREFACE

• an e-commerce site that allows women to customized
  beauty products.
• needed a capital infusion from its original investors, which
  included the consumer packaged goods leader Procter &
  Gamble.
• The funds were needed to redesign the website and
  improve the consumer purchase process.
                                                  Ginger Kent,CEO of reflect. COM


     “Your state-of-the-art skin care, hair care and cosmetic
    products don't exist until you create them.”

      “Simply create your beauty profile and our scientific
    process then blends your requests with the best technology
    to custom make your products.”                          reflect.com


       “Delivered free. Unconditionally guaranteed.” !!!
COSMETIC INDUSTRY OVERVIEW
• $24 billion market
• the fastest growing and most profitable sectors in the U.S.
• online beauty sales : $360 million by 2003.
• The total cosmetics market (app.$10 billion in sales) comprised two
  segments:
   – The mass market: Mass products were sold through drug stores,
     grocery stores, health and beauty stores, and mass merchandisers.
   – The prestige market: Prestige products were sold through
     department stores and upscale retailers. Market sales were $6.5 bill.

• Online Consumer Trends
   – half of Internet users in 1999. (27 million women online in the U.S.)
   – Approximately 58 percent of new Internet users were women
   – The most popular purchases were in the bath and body category,
     least-purchased category was color cosmetics.
   – Buyers were not very experimental, 6% of buyers bought things they
     had never tried before.
COSMETIC INDUSTRY OVERVIEW
• Competition: Chaos in Online Cosmetics
   - shakeout

• Traditional manufacturer competitors:
   - Procter & Gamble
   - L’Oreal
   - Estee Lauder

• Online competitors :
  –Beauty.com
  –Beautyjungle.com
  –Beautyscene.com
  –Eve.com
  –Gloss.com.
  –Sephora.com
PROCTER & GAMBLE
• started in 1837 as a soap manufacturer in Cincinnati
• offered over 300 brands of consumer packaged goods in nearly 140
countries
• is a global leader in the industry with sales topping $38 billion annually
• 's beauty care segment included three cosmetic labels;
    # Cover Girl(1960),      # Max Factor(2002),           # Oil of Olay
• The Beauty category included noncosmetic brands, such as hair care,
including VS Vidal Sassoon, Pantene, and Physique

• Project Mirror
  A corporate known for innovation and brand marketing prosess, leader in
  new product development. Changes product development process as;
− new collaborative technologies to promote sharing ideas and info. (video
  conference) "collaboration [chat] rooms.“
− Global e-mail systems (93,000 users). (creating virtual libraries)
− Developing an internal innovation fund.
− 10 brand managers came up with a plan, developed tech. to customize
  products, and created a prototype website.
− The idea of Project Mirror was born, by P&G's Interactive Marketting Team
REFLECT.COM
• Project Mirror was born:
• a mass customization website that would allow
  women to make their own formulations of :
   - make up
   - shampoo
   - fragrance
• Reflect.com was financed with $35 million from P&G and $15 million from
  Institutional Venture Partners (IVP)
• Independence Day, “Burn the ships”
   –On October 1, 1999, to make the Web venture more authentic, P&G
   forced employees to resign from the consumer goods giant, a team of 15
   people left P&G to join Reflect.com
   –Denis Beausejour has presented each team member's spouse with one
   share of Reflect.com stock.
   –They don't have a lifeline back to P&G, have only Reflect.com stock and
   their teammates.

                                         (P&G's worldwide VP of marketing for beauty care)
REFLECT.COM

• The Site
−The Reflect.com launched in December 1999 as a personalized line of
beauty products and services, using a patent-pending system for a mass
customization model,
−Capability to create more than 300,000 different products and packages,
−By asking the consumer a series of questions and letting her control the
experience,
−Company was able to produce product in very small lots, and reduced
changeovers to 5 to 7 min. The industry average was 90 min.
− Reflect.com also enjoyed the benefits of lower inventories and reduced
cost of sales,
− Customer's order was shipped, first time buyers received a live orchid as
a thank you,
−Browsers who registered on the site and created a product but did not buy
it received a surprise "delight sample" with their name on the bottle,
−If a customer was not satisfied with the product, Reflect.com would
customize it until she was. However, did not accept returns.
 SUMMARY
 BUSINESS MODEL
• PROFIT SITE: B2C, on-line retailer
• SCOPE: The firm targets all people, who needs beauty
product, have different type skin, hair, expectations.
• CUSTOMER VALUE:
   • By Differentiation:
      • Product Features; reflect.com allows user to
      create their own formulates
      • Product Mix: It presents all kind of beauty product.
      • Brand Name Reputation: The firm sells the P&G’s
      products.
 SUMMARY
 BUSINESS MODEL
•CUSTOMER VALUE:
   • Low cost; Prices are not expensive than its
   competitors.
•PRICE: Menu Pricing; Prices changes according to your
choice. Ever you can buy or leave your product.
         Affiliative Program; over certain purchasing in a
month, you will not pay for posting.
•REVENUE RESOURCE:
   •Directly from the product that firm sold.
• SUSTAINABILITY:
   • By Customer feedback, innovation, promotions.
COMPETITIVE ADVANTAGES
• P&G had long been a leader in product development
(innovation & brand making skill)
• Project Mirror; a mass customization website that would allow
women to make their own formulations. (Women want and
deserve individualized attention),
•Affilliate Program; It's easy, generate revenue, free to join.
• Structure of site; easy access, navigation bar,
• P&G was more interested in information, than sale. (Customer
feedback) Use an interactive question-and-answer.
• Promotions; buyers received a live orchid as a thank you.
Thank you

				
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posted:5/31/2011
language:English
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