Analysis of Priceline Pharmacy Makeup Product Range

This report analyzes the external and internal business environment of Priceline Pharmacy to develop a marketing mix for their makeup product range in Australia. It includes a situation analysis, SWOT analysis, target market and positioning, and a marketing mix analysis. The report also discusses the background of Priceline Pharmacy, macro and micro environmental factors, and provides recommendations for the company.

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5/23/2019

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Executive Summary
Priceline pharmacy is the Australian based companies that are part of the beauty and health
industry. Company is offering various brands of makeup products like Revlon, Maybelline and
many more. The reported purpose was to analyze the external and internal business environment
of the company to develop a marketing mix for the product in Australia. After analyzing macro
environmental factors, it can be said that political and legal factors are key threats to the
company. Nevertheless, technological, socio-cultural factors can be a great opportunity for
Priceline in Australia.
Key competitors of Priceline are other retailing companies like Amazon, iconic, Woolworths and
other competitors would be the brand's showroom that Priceline is offering. The key suppliers of
the company are the manufacturers of the brand that the Priceline are offering to the customers.
The company is having more than 300 employees and the company has to integrate the
operations among offline and online stores.
The target market for Priceline makeup product range included Considering the age factor, the
company is targeting women of age 16 too old age women with their makeup brands suitable for
various skin types. Priceline is even offering makeup product under $10 with brands like
Covergirl, Rimmel. The target customer would be considering lifestyle as the major category;
this would include women spending time at leisure. The business women would also be targeted
by Priceline makeup product range. The key recommendation to Priceline includes Increase
online presence through promotion, and New Technology use.

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Contents
Executive Summary.........................................................................................................................1
Background to Priceline Pharmacy makeup product range.............................................................4
Situation Analysis............................................................................................................................4
Macro environmental factors.......................................................................................................4
Political factors........................................................................................................................4
Economic factors.....................................................................................................................6
Socio-cultural factors...............................................................................................................6
Technological factors...............................................................................................................7
Environmental factors..............................................................................................................7
Legal factors............................................................................................................................7
Micro environmental factors........................................................................................................7
Competitors..............................................................................................................................7
Suppliers..................................................................................................................................8
Distributors..............................................................................................................................8
Customers................................................................................................................................8
Public.......................................................................................................................................8
Priceline Pharmacy..................................................................................................................8
SWOT Analysis...............................................................................................................................9
Strengths......................................................................................................................................9
Weakness.....................................................................................................................................9
Opportunity................................................................................................................................10
Threats.......................................................................................................................................10
Target Market and Positioning......................................................................................................10
Target market.............................................................................................................................10
Positioning.................................................................................................................................11
Marketing Mix Analysis................................................................................................................11
1. Product...................................................................................................................................11

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2. Price.......................................................................................................................................13
3. Place.......................................................................................................................................14
4. Promotion..............................................................................................................................14
5. Physical evidence...................................................................................................................15
6. Process...................................................................................................................................16
7. People....................................................................................................................................16
Recommendations..........................................................................................................................16
References......................................................................................................................................18

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Background to Priceline Pharmacy makeup product range
Priceline pharmacy is the Australian based companies that are part of the beauty and health
industry. The company is a large beauty and health retailers established 450 stores of Priceline
by July 2018 in Australia. The parent company of Priceline is Australian pharmaceutical
industries. The retail industry in the nation is very competitive. For the marketing plan of this
company, makeup product range would be discussed specifically for this report. Company is
offering various brands of makeup products like Revlon, Maybelline and many more. The
reported purpose is to analyze the external and internal business environment of the company to
develop a marketing mix for the product in Australia (priceline, 2019).
Situation Analysis
Macro environmental factors
Political factors
Political factors are directly affecting the retail industry and Priceline overall. The government
support is essential for an organization to run in a country. The Australian factor included the
political stability of the nation. From the figure below it can be said that the nation is not so
stable, which can be a threat for the Priceline.

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Figure 1:(Source: (theglobaleconomy, Australia/wb_political_stability, 2019)
Another key factor included corporate tax rate that will affect the profit margins of Priceline. The
corporate tax of Australia is somehow stable and 30 % that denotes that the company profit
margin would not be fluctuating due to the tax rate of the nation (theglobaleconomy,
Australia/corporate_tax_rate, 2019).
Figure 2:( Source: (theglobaleconomy, Australia/corporate_tax_rate, 2019)

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Economic factors
The economy of the nation also affects the business to be conducted in a country. For instance,
the purchasing power of the customer depends on the disposable income in the nation and can be
presented through the GDP of Australia. From the graph, it can be said that the GDP of the
nation seems to be increasing, which indicates that the company has a great opportunity to
increase sales and attract more customers.
Figure 3:(Source: (theglobaleconomy, Australia/gdp_current_local_currency, 2019)
Socio-cultural factors
Considering the cultural factors, the western culture when regards to Make up usage, they use
makeup for the various occasion like a corporate meeting, wedding, night parties, get together. It
can be said that the people in the nation use make up for most of the time, which can act as an
opportunity for Priceline to offers various product range for various purposes. Moreover, the
population of the country is increasing rapidly which indicates that this factor is an opportunity
for the company (Gong & Yi, 2018).

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Technological factors
Australia is one of the advanced technological nations with people adapting to technology at a
rapid rate. This indicates that Priceline would have an opportunity to integrate technological
innovation to the company to attract maximum customers (Ho, 2014).
Environmental factors
The company various environmental factors that are associated with energy use, water scarcity,
and climate change. For this purpose, Priceline Pharmacy has been considered corporate social
responsibility in Australia. Some of the initiatives taken by the company include children first
foundation, Panda, Victor change, and fight Alzheimer’s (theglobaleconomy,
Australia/Energy_use_per_capita, 2019).
Legal factors
The legal factors associated with Priceline are privacy act, health and safety act that needs to be
abiding by the legal rule and regulation of Australia that can be a threat for the company. The
company is conducting business online too, which makes privacy and security act to be
considered specifically (williams, 2017).
Micro environmental factors
Competitors
Key competitors of Priceline are other retailing companies like Amazon, iconic, Woolworths and
other competitors would be the brand's showroom that Priceline is offering. Moreover, the
competition is very high in the retailing industry where the various online and offline store of
various retailers are offering makeup products (aboutamazon., 2018).

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Suppliers
The key suppliers of the company are the manufacturers of the brand that the Priceline are
offering to the customers. Through this, it can be said that the bargaining power is in hands of the
supplier to a large degree.
Distributors
The key distributors of the company would include online distributing partners to reach out to
the customer with a product at their doorstep. However, the company is conducting business
offline through retail stores in Australia.
Customers
The customers of the company for makeup products are individual women in Australia. These
could be from any age especially from young to old age (Gong & Yi, 2018).
Public
Priceline pharmacy is affecting the general Australian public and affects the lives and lifestyle of
the customers there. This would also include the industrial relation of the company that is quite
strong, the reason being the company would be able to associate with maximum makeup brands
to offer to the public.
Priceline Pharmacy
The company is having more than 300 employees and the company has to integrate the
operations among offline and online stores (priceline, 2019).

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SWOT Analysis
Strengths
 Various brands makeup products – Priceline pharmacy is offering various brand which
seems to be the strength of the company as the company is able to offer a variety of
products because of strong relations.
 Online retail services – The company is able to serve the customer through online
services that are reaching to the customer at the door step and providing them various
other features like filtering the products as per their needs, price, brand or all the of use of
the online services.
 Effective promotional activities – The company has been using good promotional
activities like loyalty programs to retain maximum customers.
Weakness
 High competition – the competition is being increased with the increase in the online
presence of brands as people can purchase goods from the brand‘s official site.
 Not accurate with product demand forecasting – This is one of the reasons that the
company has high days inventory when compared to other competitors.
 Need for new technologies Australia is a technologically advanced nation, which makes
the company to regularly update technology and need to invest additional amount for the
same (Judith & Steven, 2002).

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Opportunity
 The decrease in transportation cost to the company – Priceline can make its distribution
system more effective in order to decrease the cost to the company and increase the profit
margin.
 Product differentiation – This would include an increase in the category of the products
by the company through an increase in brand association and offering people with
maximum possible makeup brands (Hunt & Bicen, 2017).
Threats
 Increasing customer concern about their skin
 Change in interest towards more natural products (Bull & Sitas, 2016)
Target Market and Positioning
Target market
Target market can be classified into various segment bases that is
1. Demographic basis
Considering the age factor, the company is targeting women of age 16 too old age women with
their makeup brands suitable for various skin types. Considering income level, the company is
offering various ranges of products that are the company targets all income group. Priceline is
even offering makeup product under $10 with brands like Covergirl, Rimmel.
2. Psychographic basis

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The target customer would be considering lifestyle as the major category; this would include
women spending time at leisure. Moreover, modeling companies would be targeted to use the
makeup products. Moreover, the business women would also be targeted by Priceline makeup
product range.
3. Behavioral segmentation
This would include the usage level of the employees, which would be high and regular users for
Priceline to target the market. In the case of cosmetics, the company generally targets women
using makeup on a daily basis.
Positioning
The company position as the makeup product range through quality products at the effective
price range. Moreover, in the case of cosmetics, people are very concern regarding the originality
of the product. Priceline Pharmacy is positioning the brand as the original and best quality
product in order to retain customer trust over the company. Moreover, the company is also
positioning the product range as to get at discounted prices and at best offers by Priceline to
target individual women.
Marketing Mix Analysis
1. Product
Priceline pharmacy is offering various products, however the product line considered for the
discussion in this report included makeup product range. The product mix includes the makeup
considering various bases that is eye makeup, face makeup, lips makeup, and nails, body, and
makeup accessories. Moreover, the company labeling includes the labeling of the brand as

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original and the other labeling is of Priceline, especially in case of online product delivery.
Considering the product strategy the company has been adopted price differentiation strategy that
is offering various ranges of products and of various brands to be offered to the customers
(Adam & Kotler, 2014).
Considering the Ansoff product strategy matrix, it can be said that the company has been adapted
product development strategy as Priceline is offering the customers of the existing market and
being target the existing market. However, Priceline with makeup product range is offering
various product from various brands and trying to increase the brands to be offering to the
customer in order to attract new customers and retaining existing customers (Armstrong &
Giardina, 2016).

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2. Price
Price is one of the main elements, which Priceline is focusing to target the customer, and is a
threat of losing the customers due to the pricing of the products. The pricing strategy of the
company can be analyzed using a pricing strategy matrix. According to the matrix, the company
can follow four alternative pricing strategy that is economy pricing, skimming pricing, premium
pricing, and penetration pricing (Chu & Liu, 2017).
Pricing pharmacy current pricing strategies per the matrix would be a combination of penetration
strategy and premium pricing. The reason being Priceline is offering various range of goods that
reflect that the company also offers the price differentiation strategy. The company in makeup
products offering products ranging from 5$ to 100$. However, one of the fixed factors is the high
quality offered by the company (Balmer & Abratt, 2016).

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Moreover, an additional focus of the company is promotional pricing that is reducing the price
through various offers. This will attract major customers as the discounting percentage attracts
customer rather than the fixed prices of the products (Craig & Douglas, 2015).
3. Place
The placing strategy of the company is consideration of the distribution strategy of Priceline. The
two major distribution channel used by Priceline include
Retail chains – This is the offline mode of distribution. Priceline has a large number of stores in
Australia established by mow for distribution of products and service of makeup products, as
discussed in the previous section of the report. The distribution of the goods is from
manufacturers or the official brand's agents to the company stores or among the stores in case of
shortage of products (Bach, 2017).
Online mode – Another distribution channel include e-commerce or online platform. The
company is selling the make-up product range through an online website. This has also included
various online offers and specialized service to the customers like delivery services, etc (Craig &
Douglas, 2015).
4. Promotion
Promotion is a major aspect of the marketing mix strategy of the company, the reason being
increasing competition in the retail sector of Australia and an increase in online relating. The key
promotional tools used by Priceline include
 Social media marketing – This is one of the major marketing tool used by most of the
companies and Priceline too to garter extent. The reason being youth is spending most of

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the time on social media and it has become the easiest approach for a company to reach
to them with promotional message. Priceline has considered most of the social media
platforms for attracting a customer that is Facebook, Instagram, Snap chat, and twitter.
Moreover, Priceline is analyzing customer needs and expectations through feedback at
these sites (Chung & Fiore, 2017).
 Sales promotion
This is one of the most relevant promotional tools used by the company. The reason
being, the company is using a promotional pricing strategy that is offering makeup
product is lower price through sale promotional activities. For instance, the recent activity
is a hot pink sale, reflecting the sale of makeup products to attract maximum customers
and increase the sale of the products for a limited period. Moreover, loyalty programs are
also the key tool used by the company to retain existing customers of Priceline for this
product range (Finne, 2017).
 Advertisement –
Advertisement is one of the traditional methods used by Priceline that is advertising, to
attract new generation women through television advertisement (Doole & Lowe, 2008)
5. Physical evidence
The Priceline has considered the interior of the store to a great extent like adding pink color to
attract girls to the store and align with the sign of the company. Moreover, Priceline has
considered the alignment of the makeup product line separately for customer convenience and
increase the customer experience at the store (Chung T. , 2015).

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6. Process
The process strategy of the company is majorly focused in case of online sales, which would
include delivering the goods to the customer at the doorstep. Moreover, the company in order to
increase the processing method uses a tracking system with the package to reach to the
customers. This would indicate the customer the real time of the package and time for reaching
to the customers (Feng & Chari, 2018).
7. People
As already discussed, Priceline has more than three hundred employees. These are responsible
for increasing customer satisfaction through effective service to the customers. This includes
helpful staff at the store to make the customer experience comfortable. Moreover, the increased
number of delivery person has increased the speed to reach to the customer with packets to their
doorstep to increase the satisfaction level (Duggan, 2018).
Recommendations
 Increase online presence through the promotion
One of the recommendations for Priceline considering placing strategy is the increase in
the online presence of the company. The reason being the company objective includes
reducing the cost to the company and the cost of warehouse, store expense can only be
decreased when the company will increase the online sale instead of offline sales. Other
advantages of an increase in online sales would include lowering the maintenance cost of
goods. The company can do so by increasing promotional offers through online shopping
or online purchase (Pappas, 2016).
 New Technology use

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Technology plays a very important role in an advanced nation like Australia. The
company can improve the technology in the form of ecommerce activities, and
operational process of the company in order to make the resources more effectively used
and optimization of the assets of the company through advanced technology use. For
instance, One of the challenges of the company includes inefficient demand forecasting
by Priceline, which can be improved through the use of better and new technology in
order to reduce the day’s inventory. Moreover, the technology can be used by Priceline to
reduce the days to reach to the customer. In order to gain a competitive advantage over its
biggest competitor that is Amazon, the company needs to improve the delivery system
(Whitaker, Ekman, & Thompson, 2017).

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