Demand Forecast for Park Avenue Beer Shampoo in Australia

This report provides a demand forecast for Park Avenue beer shampoo in Australia for the next two years. It includes an analysis of the micro and macro environment, competition, target market, and SWOT analysis.

Running Head: Marketing management 0
Marketing management
student name
4/15/2019

Marketing management 1
Contents
1. Introduction..................................................................................................................................2
2. Product brief................................................................................................................................3
3. Product demand environmental audit:.........................................................................................3
3.1 Meso audit (3 competitors)....................................................................................................3
3.2 Micro audit.............................................................................................................................4
Target Market..........................................................................................................................4
SWOT analysis........................................................................................................................4
3.3 Macro audit (pestle analysis).................................................................................................5
Political....................................................................................................................................5
Economical..............................................................................................................................6
Social.......................................................................................................................................7
Technological..........................................................................................................................7
Legal........................................................................................................................................7
Environmental..........................................................................................................................7
4. Forecast demand for the next two years......................................................................................8
5. Conclusion.................................................................................................................................11
6. References..................................................................................................................................12

Marketing management 2
1. Introduction
Going international is a decision that is to be considered after research of various aspects like
major competitors in the host nation, product demand of the product in the host nation.
Understanding demand is an essential aspect of business expansion plan for a company. The
demand forecast is estimating demand for upcoming years in a particular area for business. The
product demand can be estimated after analysing the micro and macro environment of the
company in the host nation. The demand forecast would be included in the report further for Park
Avenue beer shampoo. Park Avenue is an Indian company offering personal care products and
would be expanding business in Australia, for which the demand would be estimated for next
two years in report further (Aas & Rubin, 2015).

Marketing management 3
2. Product brief
The product offered Park Avenue is beer shampoo targeting men in general. The company has
two ranges of the shampoo that is damage free hair and anti-dandruff shampoo. The personal
care products are a very competitive industry. The product specialty would be its ingredients
like barley and hops and natural form of proteins. The company claims to reduce hair fall by
eighty-five percent (parkavenuegrooming, 2019).
3. Product demand environmental audit:
3.1 Meso audit (3 competitors)
The competition in this industry would be very high some of the most popular global brands are
offering some of the best range of shampoos across the globe like
1. L’Oreal – L’Oreal is the top company in the beauty and health sector. The company is
providing various products across the globe. In addition, considering the haircare market
in Australia is found to be among the top five players who are providing professional hair
care. The demand for the hair care products is increasing with time especially the demand
for the professional shampoos has been increased by time (loreal-finance, 2017).
2. Nak hair – It is an Australian based company, which is growing very fast (nakhair, 2019).
This is another major competitor of Park Avenue, which could be a threat for the
company. As per the research, the professional hair care market of Australia expected to
reach by 2013 up to 285.48 million dollars (einnews, 2019).
3. Procter and Gamble (Pantene) – the company is offering another popular brand that is
Pantene shampoo. The Pantene is not as competitive as L’Oreal, but the products would
be a large competitor to Park Avenue in Australia. According to a news article,
Australian aging population has driven the demand for hair care (pantene, 2019).
As per the statistics, the hair care market of Australia had revenue of US$947.8million in
2019 and is expected to increase annually by 0.7 percent from 2019 to 2023. This reflected
the increase in demand for the hair care products in the upcoming years in Australia
(einnews, 2019).

Marketing management 4
3.2 Micro audit
Target Market
The target segment for which would be useful for the development of specific 7Ps for Park
Avenue in Australia would be middle to aging group considering the demographic factors. The
reason being the damage in hair is found to be maximum in young people and the issue of hair
loss is found to be maximum in aging people, which reflect that the demand for the shampoo’s
product would be higher in case of these age groups. Another target segment based on income
and the social class group would be middle-upper class group (Pyka, 2017).
SWOT analysis
Strengths
 Price – The price offering by the customer would be targeting the middle-income group,
which could be helpful for the company to increase in demand for goods over other
professional product brands like L’Oreal.
 High-quality product – The quality of the product is the core strength of the company.
Moreover, the company had considered the choice of ingredients to be barley and other
such ingredients that are helpful in damage control of hair (Hunt & Bicen, 2017).
Weakness
 Product range – The company is only offering two varieties of shampoos, which could
be one of eth weakness while competing with companies like L’Oreal, who has a large
range of shampoos.
 Low brand awareness – When compared to its competitors like Procter and Gamble, and
Nak in Australia, and L’Oreal is the globally recognized and popular brands. However,
the brand awareness of Park Avenue is to be built, which would take time and aggressive
promotional strategies used by the company (Bull & Sitas, 2016).
Opportunity
 Increase in hair styling goods – the increase in the use of styling tools in the hair would
provide the opportunity for the company to provide customers the goods to help them

Marketing management 5
control their hair damage, which would cause by heating tools or coloring fashion, which
could be responsible for the increase in customer demand for professional shampoos.
 Product innovation – The Company could have the gain opportunity by introducing
innovative products like oil plus shampoo that will target the working men and women
who do not have time for oiling or spend time in SPA’s, this would result into increase
the demand for the brand (Song, 2017).
 Target salons – The Company could have target salons of Australia to increase the
demand for the products. This could be the part of placing a strategy of the company.
Threats
 The threat of new entrants – The Australian companies or new companies entering into
the market could be a large threat to Park Avenue as the entry to the market does not
include very large investment and there are no specific entry barriers to the industry,
which could result into a decrease in demand for this product.
3.3 Macro audit
Political
 Australia is the sixth largest nation worldwide, which could be beneficial for Park
Avenue to target the market and increase the demand for the product from this nation.
 Political risk considering Australia is high; this could be said through the decreasing level
of political stability of the nation. This could be that for the business to perform activities
safely (Read, 2013).

Marketing management 6
Figure 1: (Source: (theglobaleconomy, 2019)
 Corporate tax is stable for many years that is thirty percent, which means that the profit
margin of the company would not be decreased in the future (Findlay & Garnaut, 2017).
Economical
Figure 2: (Source: (theglobaleconomy, 2019)
 From the above figure, it can be said that the GDP has been found to be increased in the
previous years, which reflect that the demand for the products could have increased due
to increase in consumption level of the residents of the country.

Marketing management 7
Social
One of the major aspects of social factor includes the population size of the country. From the
figure below, the population rate has been increasing since years, which would result in an
opportunity for the company to increase the customer demand for the goods by targeting a larger
group of people.
Figure 4: (Source: (theglobaleconomy, 2019)
Technological
Australia is said to be one of the technically advanced nations, which would be introduced to
technically advanced products like styling tools, which would eventually become an opportunity
to increases the customer demand for Park Avenue in Australia (Judith & Steven, 2002).
Legal
The legal laws incorporated with Park Avenue include international laws while entering into the
nation, health and safety law as the cosmetic product could include chemicals. These rules have
to be abided by the company to safely run business in Australia and gain the opportunity to gain
customer demand for beer shampoo (Frankel, 2015).
Environmental
The environment of a nation affects the business to a large extent, as for which Park Avenue
adopt the sustainable practice in Australia and acknowledge its responsibility towards society.
The main elements that affect the environment depend upon the geographic area like water
scarcity, energy consumption, and climatic change (Ma et al., 2016).

Marketing management 8
4. Forecast demand for the next two years
According to reported research by IndustryARC 2018-2023, the hair care market is considered to
have a growing demand for professional products in this range. The growing urbanization and
people consumption willingness to spend money on professional hair care products are the major
factors that would be responsible for the growth of this market and increases in demand for such
goods (einnews, 2019).
The conditioner and shampoo goods held the major portion in Australia’s professional hair care
market and are also projected to reveal the fastest growing. Consumers choosing for hair
amenities like straightening, hair coloring, and hair styling has caused in hair damage because of
numerous application of substances. This outcome in robust demand for professional shampoo
products beside with scalp and hair care treatments alike hair smoothening and moisture
restoration. Styling products demands are predictable to upsurge due to accumulative customer
demand for altered stylish appearances (einnews, 2019).
From the demand environmental audit of Park Avenue beer shampoo, it can be analyzed that the
demand for the product for the next two years would be analysed through a market experiment
method of demand forecasting. One of the recent studies included “global hair shampoo market
research report 2019” conducted by HTF MI, which included to evaluate the major opportunities,
and risk factors were analysed. It increases in hair loss cause of the people, due to the
environment and changed eating habits had increased the use of professional goods by the
customers, which has the estimation of increase in demand by 2025 (onlinehairclinic, 2019). The
estimated demand from analysing is presented through the graph below

Marketing management 9
2019 - 2020
2020- 2021
0 5 10 15 20 25 30 35 40 45 50
Demand (In million)
Column1
Column2
The elasticity of demand for park avenue:
Considering the demand elasticity, it can be said that the demand quality would have an inverse
relation with the price of the product. The demand curve for Park Avenue beer shampoo would
be inelastic demand. This indicates that initially when the price was P1 was increased to the price
P2, the demand would reduce by Q1 to Q2 but the decrease in demand would be not too much.

Marketing management 10
This means from the above diagram it can be said that it is inelastic demand for Park Avenue
beer shampoo. The reason for the same would be:
 The usage of the product is not reduced with an increase in the price of the product,
which means that that demand would not be majorly effected with the price factor.
 As already discussed the need for professional shampoos has increased with the change
in environment and social factors that accelerated the hair loss and hair damage, so the
quantity demand would not decrease as such (Adam & Kotler, 2014).

Marketing management 11
5. Conclusion
From the report, it can be concluded that the demand forecast is estimating demand for upcoming
years in a particular area for business. The product demand can be estimated after analysing the
micro and macro environment of the company in the host nation. The product offered Park
Avenue is beer shampoo and would be expanding business in Australia, for which the demand
was estimated. The top three competitors of the company include L’Oreal, Nak hair, Procter and
Gamble (Pantene). Among these the sales and demand for these products have increased for
many years.
The target segment for which would be useful for the development of specific 7Ps for Park
Avenue in Australia would be middle to aging group considering and another target segment
based on income and the social class group would be middle-upper class group. The growing
urbanization and people consumption willingness to spend money on professional hair care
products are the major factors that would be responsible for the growth of this market and
increases in demand for such goods.

Marketing management 12
6. References
Aas, T.H. & Rubin, T.H., 2015. Knowledge flow in technological business incubators: evidence
from Australia and Israel. Technovation, p.11.
Adam, S. & Kotler, P., 2014. Principles of marketing. Australia: Pearson Australia.
Bull, J.W. & Sitas, N., 2016. Strengths, Weaknesses, Opportunities and Threats: A SWOT
analysis of the ecosystem services framework. Ecosystem Services, 17(1), p.99.
einnews, 2019. The Australia Professional Haircare Market is expected to reach $ 285.48
million by 2023. [Online] Available at: https://www.einnews.com/pr_news/445108507/the-
australia-professional-haircare-market-is-expected-to-reach-285-48-million-by-2023.
Findlay, C. & Garnaut, R., 2017. he political economy of manufacturing protection: Experiences
of ASEAN and Australia. London: Routledge.
Frankel, S., 2015. Limits of Free Trade Agreements: The New Zealand/Australia Experience. In
Intellectual Property and Free Trade Agreements in the Asia-Pacific Region. In MPI Studies on
Intellectual Property and Competition Law. Springer, Berlin, Heidelberg. pp.315-33.
Hunt, D. & Bicen, P., 2017. The FREE (Firm Resources and External Environment) Framework
as an Alternative to SWOT: An Abstract. In Academy of Marketing Science Annual Conference,
p.49.
Judith, R. & Steven, R., 2002. Information Technology Service Delivery: an International
Comparison. Information Systems Management, 19(1), pp.62-70.
loreal-finance, 2017. LOreal_Rapport_Annuel_2017. [Online] Available at: https://www.loreal-
finance.com/en/annual-report-2017/LOreal_Rapport_Annuel_2017.pdf.
Ma, W., Rasul, M. & Liu, G., 2016. Climate change impacts on techno-economic performance of
roof PV solar system in Australia. Renewable Energy, p.430.
nakhair, 2019. Who-We-Are. [Online] Available at: http://www.nakhair.com.au/77/Who-We-
Are.
onlinehairclinic, 2019. global-hair-loss-products-market-research-report-2019. [Online]
Available at: http://www.onlinehairclinic.com/hair-loss/global-hair-loss-products-market-
research-report-2019/.
pantene, 2019. en-au. [Online] Available at: https://www.pantene.com.au/en-au.
parkavenuegrooming, 2019. hair_shampoo. [Online] Available at:
http://www.parkavenuegrooming.com/hair_shampoo.aspx.

Marketing management 13
Pyka, A., 2017. Innovation, structural change and demand evolution: does demand saturate?.
Journal of Evolutionary Economics, p.337.
Read, G., 2013. A political, economic, social, technology, legal and environmental (PESTLE)
approach for risk identification of the tidal industry in the United Kingdom. Energies, 6(10),
p.5023.
Song, X., 2017. Research and development of animation derivatives marketing strategies based
on the analysis of consumer demand. Journal of Interdisciplinary Mathematics, 20(5), p.1319.
theglobaleconomy, 2019. Australia/gdp_current_local_currency. [Online] Available at:
https://www.theglobaleconomy.com/Australia/gdp_current_local_currency/.
theglobaleconomy, 2019. Australia/Population_size. [Online] Available at:
https://www.theglobaleconomy.com/Australia/Population_size/.
theglobaleconomy, 2019. Australia/wb_political_stability. [Online] Available at:
https://www.theglobaleconomy.com/Australia/wb_political_stability/.