Analysis of Natural Perfume Industry and Five Forces

This assignment delves into the world of natural perfumes, examining their benefits, market value, and the impact of synthetic scents on human health. It also analyzes the five competitive forces - threat of new entrants, intensity of rivalry, bargaining power of suppliers, bargaining power of buyers, and degree of differentiation - that are driving the growth of this industry. By understanding these factors, one can gain insights into the opportunities and challenges facing natural perfume manufacturers and marketers.

DEVELOPMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
PROBLEM IN THE MARKET.......................................................................................................3
SOLUTION OF THE PROBLEM...................................................................................................3
MARKETING FRAMEWORK FOR ENVIRONMENT ASSESMENT.......................................4
CONTIGENCY PLAN FOR RISK.................................................................................................6
MARKETING PLAN .....................................................................................................................6
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Perfume is a liquid which is made of oil and use to make the body smells good. In the
present market it is observed that not everyone is comfortable with the type of present fragrance
which are offered by different brands. Therefore, coming up with a type of perfume which is
friendly for all is a great opportunity for me to have good business. For this report, Femme Fatale
is taken for discussion which deals in organic perfume which includes phthalates, paraben and
sulphate and specialised in Women category. This perfume will be launch for those people who
have problem of asthma or perfume intolerance so that they can also use perfume without
affecting their health in a negative way.
PROBLEM IN THE MARKET
The cosmetic industry is huge and is providing range of service in the market. People are
very particular with the type of perfume they use and do a proper comparison before selecting
one for themselves. In order to raise the sales for my own perfume brand an analysis in the
market was done from which different issues that are faced by the users were identified. There
are various problem which have been faced by the individual at the time of using synthetic
perfume like 95 % of the chemicals which is used in the ordinary perfumes derives from crude
oil, benzene derivatives, toluene etc (Dangers of Synthetic Scents Include Cancer, Asthma,
Kidney Damage and More, 2019). All these chemicals are the reason behind vary fatal disease
like cancer, birth defects, allergic situations. Moreover, more than 3000 unidentified ingredients
are find in the synthetic perfume which ends up in enhance respiration problem, neurotoxic
defects, endocrine disruptors etc (Dangers of Synthetic Scents Include Cancer, Asthma, Kidney
Damage and More, 2019). Apart from this, to increase the longevity of the fragrance on the
body, companies make the highly intensity fragrance perfume so that it will last longer. But it
affects the people who has asthma as strong perfumes triggers the attacks of asthma as it directly
impact the lung of the individual. More than 30% of the population struggle due to the fragrance
of synthetic perfumes as they are either asthmatic or as allergy with a particular type.
SOLUTION OF THE PROBLEM
In order to capture the market it is important to deliver a type of perfume in the market
which can be a solution for those who are presently not very comfortable with the synthetic or
other aroma products. To solve this, idea of making natural perfumes arises as perfume is now

becomes the daily part of the life which must be fulfil (Dayan and et. al., 2016). There are many
solutions which is mentioned below,
◦ Natural aroma: Aromas which is obtained from the perfume is natural in nature as
all the ingredients used while making perfume derives from the natural resources
only. But on the other, synthetic perfume has aromas which affect the people
suffering from asthma in a negative way.
◦ Free from chemical: All the perfume which is synthetic in nature has ingredients
like phthalates, parabens and sulphates which causes various problems like itching,
breathing problem etc to the problem. So to resolve this problem, So to resolve this
problem, I have ensured that all the materials used while making the perfume is
natural in nature so that it does not cause any harm to the people who has asthma or
fragrance intolerance.
◦ Natural ingredients: All the materials which are obtained through changing
chemical structure in the synthetic perfume is negative for health and body. To
resolve this problem, I have taken care of all the ingredients used in the product is
naturally produced so that it will only benefit them instead of harming.
◦ Customise: It must be important for me to consider all the factors which affect
customer buying behaviour. For instance, all the synthetic perfume sell by other
companies have specific aromas or fragrance which can not be changed according to
their needs and demands. So to tackle this situation and make mu customer happy,
our perfume can be alter according to the preferences of them with the aim of
enhancing customer experience engagement.
MARKETING FRAMEWORK FOR ENVIRONMENT ASSESMENT
Sociological factor
According to Guerrero and et. al., (2016), Sociological factor of the society is related
with the attitude people is having and their beliefs and values towards any specific thing . Now a
days, people living in every society is concerned about their body and skin as that's why they are
switching their beauty product to home remedies as it does not affect negatively to the human
body. For instance, individual are aware about the problem perfume is generating like usage of it
makes the skin sensitive in nature due to which it exposes to UV rays and sunlight directly. Thus
hampering the skin quality in a negative way (Is your perfume ageing you?, 2019) So to solve

this problem femme fatale has launched their perfume which is free from unnatural substance. It
will be made available in the market in 3 different fragrances which can be used separately and
also together which will give a different experience to the users. This is a daring fragrance
woven with jasmine, rose, ginger and lavender infused with gold and diamond particles. A floral,
spicy, sensual pure Perfume oil. These ingredients are mixed in a proportion that will create a
long lasting effect for the user.
Environmental environment
As mentioned above, our company is fully depend on the natural resources found in the
environment as they are the only source of their raw materials. But by using natural resources it
is affecting the environment negatively as it is depleting with higher intensity due to which local
authorities are imposing various penalties on the company (Hayter, 2016). So to cope up with
this, I have modify the products according to the environment as then only we would be abvle to
sustain for longer period of time.
Threat of entrants
According to Martin, (2014), Power of entrants is moderate in nature as this industry
does not requires high amount of investment in the starting. As there are a number of brands
already dealing in this industry and having good business it shows that it shows that to capture
the market it is important that your own product is different. Even if there are chances of many
new entries, once the customer is addicted to the fragrance of this particular brand it is rare that
they switch to another.
Competitive rivalry
According to James Wilkinson, (2013), Competitive rivalry is high in power as there are
large number of competitors who are producing the same product and targeting the same
customers. For instance, our company has to face many competitors in the same market like
Acorelle, L'Occitane Vanille & Narcisse, Liz Earle Botanical Essence, Melvita Roses Sauvages,
etc (best organic and natural perfumes, 2019). But on the other side, I have to compete with
various synthetic manufacture perfume companies like Nautica Voyage, Calvin Klein,
MONTBLANC etc (Ibrahim and Mas’ud, 2016). So it can be said that company has large
number of competitors due to which they have to regularly change their marketing strategies
according to the environment.
Threats for the company

 Perfume is more of a seasonal product as potential customers uses it at the time of heat or
summer. But this has a negative impact for our company as for few months they could
not be able to perform with their highest potential. So it must be essential for them to
change the perception of product so that continuous sales of perfume would be obtained
in the future.
 Branded or big players could be a threat for Femme Fatale as due to ample amount of
money in their balance sheet they could set their prices to the lowest so that all the
customer would be attracted towards them. But on the other side, we are a new company
with no experience in this industry so it would not be possible for them to fluctuate their
prices accordingly to the competitors (Lindh, 2017).
 Whole company is depend on the supply and availability of the natural resources as
without it, company uniqueness would be eradicated thus loss for the company. Natural
resources is limited in nature and would be depleted in the future.
Opportunities
There are vast number of opportunities which could be grab by Femme fatale if I have
been able to identify the solution of it. For instance, according to survey, fragrance industry
market value in 2017 was approximately two billion GBP which is huge in nature (Market value
of fragrances in Great Britain, 2019). It would be easier for every company in the industry to
grab their specific market. Apart from this, 4.2 million women used perfume on a daily basis
which implies that Femme fatale has million of customer to focus on as their target customers are
women only (Number of women using perfume, 2019)
Uniqueness of product
Main uniqueness which could be derived by the potential customers from the product is
that they provide three different bottles of perfumes which are different fragrance and intensity
(Malecki, 2018). Customer can make the perfume according to their preferences. So it can be
said that Femme fatale gives power to their customer to make their product accordingly which is
hard to find in the competitive market.
Target customers
 Only women are the focus of the it as all the fragrances which company has is related
with the women personality only like petal perfume etc.

 Those individual who are suffering from diseases like asthma are the target people as
synthetic perfumes affects ability of lungs in a negative way. Apart from this, those
women who has or are suffering from skin or any other type of allergies are also targeted
customers. As natural perfume did not cause any type of allergies.
 At last those women, who prefers to use natural product instead of synthetic products.
CONTIGENCY PLAN FOR RISK
MARKETING PLAN
RISK CONTIGENCY PLAN MITIGATION PLAN
Scarcity of precious supplies Natural resources are limited
in nature that's why problem
of scarcity of ingredients is
faced by us. To cope up with
that, I have to regularly
identify various vendors so
that if any individual is not
able to provide the raw
materials at time then they can
contact to other vendor with
the aim of smoothing the
business operations. Apart
from this, our company have
to increase their inventory at
the time of shortage of
materials so that at the time of
no supply, company can use it
and continue their operations
(Margalit and Alfasi, 2016).
But on the other side,
inventory stock will increase
the product cost of the
To tackle this situation, I have
to invest some amount of
capital in the research and
development department as it
must be essential for them to
modify their product according
to the environment.

company which will persuade
to less profitability in the
future. Still customer
experience engagement with
the company could not be
affected in a negative day as it
would hampered their brand
image in the market.
Regular supply of all the
necessary natural
ingredients.
To maximise the efficiency of
supply chain, I have to opt six
sigma approach as it decrease
the excess work which does
not make any effect on the
final product. Apart from this,
various factors which must be
considered while maintaining
proper supply of raw materials
is demand of the product,
quality of the product as it
would affect company
performance negatively if
they start using low quality of
product (Obschonka and et.
al., 2017). Depletion of
natural resources as usage of
high quantity of natural
resources would hampered
environment which is not a
positive sign for Femme fatale
balance sheet.
According to Martinez-
Martinez and et. al., (2015),
Profitability of the company is
directly depend on the supply
chain of it as efficient SCM
makes the production cost
lower thus better profitability
for them. So to lower the risk, I
have to design the supply chain
accordingly so that regular
supply of the product would be
attain.

Agricultural practices and
natural disasters
There are always high chances
of natural disaster or
agriculture as due to global
warming, farmers could not
be able to work with their
highest potential. To eradicate
this problem, I have to make
private agricultural land in
which all the raw materials
which company requires
would be grow in that. Main
benefit of conducting
agriculture in the premises is
that company does not have to
rely on the vendors from
which they are getting their
raw materials. Moreover, it
would enhance their
profitability to a certain level.
To tackle this, I should hire few
farmers and scientist as then
only it would be possible for
them to start agriculture
artificially.
High number of competitors In the beauty industry,
customers are price and
quality sensitive as they
would easily pay more money
to get the highest quality of
products. But on the same
side, if companies have same
quality of product then
customers will lean towards
the company who has lower
price as compare to other
competitors. So I have to
It must be essential for every
company in the competitive
market to tackle the
competitors as then only it
would be possible for them to
gain competitive advantage
over others. Femme Fatale can
extend their product range or
diversified their product so that
institutional risk would be
reduced to a certain level. For
instance, company can launch

focus on cost leadership or
product differentiations so
that they can tackle them with
highest productivity and
efficiency.
beauty products like organic
cream so that they can acquire
customers form different
market.

BUSINESS CANVAS MODEL
According to Dudin and et. al., (2015), Canvas model is a framework used by company
to launch their new or existing product in the market so that more sales and brand awareness
would be obtained by them in the future. How Femme Fatale can launch their product in to
market will be explained below with functional example,
Key partners
They are the one who
is in continuous
communication with
us as they have to
provide regular raw
materials to the
company.
 Product will by
sell through
supermarket
store so
Femme Fatale
has to be in
contact with
them so that
proper supply
and demand
would be
maintain by
them. It must
be important
for company to
motivate the
seller as then
only they
Key
activities
Our main
focus is to
make the
customer
experience
engagement
higher by
increasing
quality of the
product with
low prices as
compare to
competitors
so that other
company's
customer
would be
acquired in
the future.
Value
propositions
Main propositions
which customer
will be getting
from the product
is natural product
without any
negative side
effects. Along
with this, it will
also assist user to
make their mind
calmer and
cooler.
Customer
relationship
There are various
way through
which client
relationship
would be
maintain by
Femme Fatale
like customers
can contact with
the company with
the help of social
media accounts
(Yashkova and et.
al., 2016). Apart
from that, to
enhance the
customer
experience
engagement,
customer can
change the
product within 2
days of buying if
they did not like
Customer
segments
Natural perfume
targetted
customer would
be women of age
group of 16-60
years of age.
Apart from this,
other women can
also use the
perfume as it has
no side effect of
it. Apart from
this, Asthmatic
patients, those
who have
migraines or
stomach problem.

would be able
to earn more
profitability.
So perks like
bonuses,
foreign trips,
incentives etc
should be
given to them
according to
sales revenue.
 All the
information
and activities
which
company is
planning to do
in the future
must be share
with the key
shareholders
like
stakeholder,
board of
directors,
employees etc,
as they have
high interest
and power in
the Femme
Fatale.
it.

 At last,
vendors are the
one who
supplier raw
material like
oil, ookmass
etc as it is
essential to get
the properly
supply of raw
material.
Key
resources
There are
various raw
materials
which is
important
and
mandatory to
have in the
manufacturin
g plant like
flowers,
grasses,
spices, fruit,
wood, roots,
resins,
balsams,
leaves, gums,
and animal
Channels
Various channels
which would be
use by Femme
Fatale to launch
and distribute
their product is
online as well as
offline channel.
Their personal
site would be
made in which
customer can visit
and buy their
products
accordingly.
Apart from this,
product will be
sold in the super
market store also

secretions as
well (Dayan
and et. al.,
2016).
as chances of
getting high
footfalls are also
high.
Cost structure
The product would be
divided according to
the quantity of
perfume. For instance
cost of bottle of
perfume is as given
below, : 50ml is of
£30, 100ml is of £58
and 150ml is of £85.
Initiation cost: As per the view of Doshi and et. al., (2016), It refers to the cost which
would be incur at the time of launching product which consist of all the cost which is explained
below with the price details of the natural perfume which company is selling,
Particular Cost in GBP
Investment 20000
Land & Building Rent 6000
Promotion 1800
Salary to employees 16500
Cost on research and development 8000
Miscellaneous 1200
Total 53500

As, company is going to launch perfume in the market so it is necessary to introduce it in
various variant, It is can be classified in terms of cost and size of the perfume bottle. The three
different variant are 50ml, 100ml and 150ml. The cost of selling different bottle of perfume is :
50ml is of £30, 100ml is of £58 and 150ml is of £85.

CONCLUSION
Main idea of business is to provide the solution of the negative effect of synthetic
perfume used by people who has asthma or fragrance intolerance. To solve this, natural and
organic perfume is made by our team so that attractive smell could be obtained by the user
without getting any side effect from it. There are many difficulties which I faced at the time of
making presentation like it was difficult to set the mutual time for preparation as every one has
different schedule. Besides this, it was difficult to divide the work as there were more members
as compare to the work. So to tackle this situation in the future, better communication is required
while setting the time so that no problem would be faced by any team members while making
presentation. This opportunity is feasible is all the problems which are faced by the asthmatic
people and those individual who are fragrance intolerance will be solved with the help of the
perfume.

REFERENCES
Books and Journals
Ayoade, E. O. and Agwu, E., 2016. Employment generation through entrepreneurial
development: The Nigerian experience. British Journal of Economics, Management &
Trade. 11(3). pp.1-14.
Dayan and et. al., 2016. The effect of entrepreneurial orientation, willingness to change, and
development culture on new product exploration in small enterprises. Journal of
Business & Industrial Marketing. 31(5). pp.668-683.
Guerrero and et. al., 2016. Entrepreneurial universities: emerging models in the new social and
economic landscape. Small Business Economics. 47(3). pp.551-563.
Hayter, C. S., 2016. Constraining entrepreneurial development: A knowledge-based view of
social networks among academic entrepreneurs. Research Policy. 45(2). pp.475-490.
Ibrahim, N. and Mas’ud, A., 2016. Moderating role of entrepreneurial orientation on the
relationship between entrepreneurial skills, environmental factors and entrepreneurial
intention: A PLS approach. Management Science Letters. 6(3). pp.225-236.
Lindh, I., 2017. Entrepreneurial development and the different aspects of reflection. The
International Journal of Management Education. 15(1). pp.26-38.
Malecki, E. J., 2018. Entrepreneurs, networks, and economic development: A review of recent
research. In Reflections and Extensions on Key Papers of the First Twenty-Five Years
of Advances (pp. 71-116). Emerald Publishing Limited.
Malecki, E.J., 2018. Entrepreneurship and entrepreneurial ecosystems. Geography Compass.
12(3). p.e12359.
Margalit, T. and Alfasi, N., 2016. The undercurrents of entrepreneurial development:
Impressions from a globalizing city. Environment and Planning A: Economy and Space.
48(10). pp.1967-1987.
Obschonka and et. al., 2017. Entrepreneurship as a twenty-first century skill: entrepreneurial
alertness and intention in the transition to adulthood. Small Business Economics. 48(3).
pp.487-501.
Yashkova and et. al., 2016. Development of Innovative Business Model of Modern Manager's
Qualities. International Journal of Environmental and Science Education. 11(11).
pp.4650-4659.
Martinez-Martinez and et. al., 2015. Assessing the significance of wetland restoration scenarios
on sediment mitigation plan. Ecological Engineering. 77. pp.103-113.
Dudin and et. al., 2015. The innovative business model canvas in the system of effective
budgeting. Asian Social Science. 11(7). pp.290-296.
Doshi and et. al., 2016. High cost sharing and specialty drug initiation under Medicare Part D: A
case study in patients with newly diagnosed chronic myeloid leukemia.
Online
All Natural perfume. 2019. [Online]. Available Through:
<https://www.treehugger.com/slideshows/organic-beauty/12-companies-make-
luxurious-all-natural-perfumes/>