MN2306K - Cosmetic Industry Marketing Strategy in the Singapore Market

This essay provides an overview of the cosmetic industry in Singapore, focusing on market trends, competitive landscape, and marketing strategies. It analyzes dominant economic features, conducts a PESTLE analysis, and examines Porter's Five Forces to understand the external environment. The report identifies key success factors for companies like La Mer and discusses consumer trends driving the industry's growth. It highlights the importance of e-commerce and social media in shaping consumer behavior and the challenges faced by businesses due to increasing competition and globalization pressures. Desklib offers a platform for students to access this and other solved assignments.

Running Head: MARKETING STRATEGY
MARKETING STRATEGY (ASSESSMENT 1)
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1MARKETING STRATEGY
Executive summary
The report present the growth and trend of cosmetic industry in the Singapore market. From
the study, it has been found that the major trend that will drive drive the growth in cosmetics
products as the consumer are highly enjoying the increased disposable income level and the
growing affluence of the normal population. It has been found that Singapore has a highly
competitive market, which has been assumed to grow. Based on these affluent and resilient
economic cycles of the industry the report focus on the marketing strategy that is needed for
expanding the business in the country. Moreover, the study provides an insights in the
business environment that be threatening for the industries and the political and legal factors
that may influence the activities of the industry.

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Table of Contents
Introduction................................................................................................................................4
Competitor analysis....................................................................................................................4
Competitor strategy pursuit....................................................................................................5
Dominant economic features......................................................................................................6
External environmental analysis................................................................................................8
PESTLE analysis....................................................................................................................8
Porter five forces....................................................................................................................9
Segmentation........................................................................................................................10
Consumer trends...................................................................................................................11
Key success factors..................................................................................................................11
Reference list............................................................................................................................12
Appendix..................................................................................................................................15
Appendix 1: Cosmetic trade flows.......................................................................................15

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Introduction
The overall market is highly characterised by the dramatic growth of new brands, new
location for the markets and new sub classification all accelerated by global implementation
of digital technologies. However, the foundation of success have changed for the leading
brand organisation the challenge has turned in to one of the most influencing and innovative
industry. In this context, marketing is most essential element that would help the company to
promote and sale their products in the global market. Therefore, in order to establish
successful strategy for marketing, it is necessary to understand the market in which the
company is competing. Based on this the strategy of marketing the study presents marketing
opportunities and strategies. Moreover, the study illustrates the strategies by highlighting the
dominating economic factors influencing the market, the external analysis of the environment
and major success factors for the La Mer Company, beauty and skin care industry in
Singapore as, in relation to their competitors.
Competitor analysis
Cosmetic and beauty skin care are one of the most competitive market in Singapore.
Along with the emergence of technology, researching on new cosmetic products and
combination to develop products has become comparatively easier. As a result of which, skin
care products are being developed as faster pace (Digitaljournal.com. 2018). However,
Singapore is increasingly growing as one of the most favourite destination amongst the south
East Asian countries as international cosmetic platters with high expenditure on cosmetic
products. It is due to the increasing concerns for beauty amongst both men and women that is
further accelerating growth in the Singapore cosmetics industry (Musa 2014). Therefore,
emergence of the new cosmetic brands collaborating with the newly launched products is
creating an exceptional competition for the cosmetic sector within the industry. Moreover,
some of the leading international cosmetic producer have developed their market in

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Singapore such as SK2 (P&G), Shu Uemera (L’Oreal) cle De Peau (shiseido), La prairie (lux
Asia).
In this aspect, there are almost over 70 business listed organisation that both imports
and produces cosmetics and toiletries products in Singapore, including the mass market to
premium products of luxury brands (Rncos.com 2018). However, since Singapore is high
cost producing location, most of the organisation have products produced in the lower cost
countries in that region. Therefore, these helps the country to take the benefits of the strategic
location and its close proximity to low cost manufacturing countries. In this, the high-end
retail stores features international brand image including Estee lauder, Lancôme, MAC,
Christian Dior and Shiseido that are dominating in the market. On the contrary, the mass
brand of markets mostly the top most brands including Olay, L’Oreal, Nivea, Biore build up
the massive marker of the retail industry. These segments are observed in almost all the major
districts of shopping and malls. In a whole they constitute almost 85% of the market in
supplementary with the smaller chain stores such as small beauty stores and Venus with
almost 25 stores and 16 stores in the market (Euromonitor.com 2018).
These competitive markets are usually segmented through e commerce platform,
which is fast growing industry with the traditional retailer confirming the online presence in
the market. In accordance to the local distributor, the challenges are observable in the strong
sector of logistics where increasing number of consumers are purchasing skin care and
cosmetic products from the international ecommerce websites, which are offering low prices
for the products.
Competitor strategy pursuit
From the perspective of competitor strategy of pursuit, it can be said that if the
globalisation pressure are string in Singapore, the organisation may face larger challenges.

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However, if its assets operate are at only home location, then its consistent independence may
hang on its capability to over its new competitors, by redeveloping around the particular
circle of supply chain. In order to sustain the competition in the market, the emerging
organisation in required focusing on the competitor within the industry and needing to stress
upon the competitive position of industry’s strategic group (Marketanalysisnews.com 2018).
The smaller organisation are needed to focus on the expanding the value of the product and
service provisions within the boundary of the industry.
Dominant economic features
The Singapore market value for the beauty and cosmetic care products accounted for
growth in value in the year 2014, although the growth was slower in the year 2014.
According to the sources made by the industry and accessible published research in the
market, it can be attributed for a more challenging economic environment and increasing
competition from the travel industry. From the reported sources, it has been found that
Singapore beauty industry market size is huge which segments in the industry with
specifications such as skincare fragrance, hair care and cosmetic and skin care products.
However, the assumption for the cosmetics market in Singapore is anticipated to grow at a
CAGR with an average of 5% from the year 2016 to 2020 (Export.gov 2018).
The business of beauty and cosmetic industry is highly resilient to growing economic
cycles that consistently drives the production in Singapore, in this context, the sources of the
industry reports that almost five new markets enters the market each of the year which is not
always necessary to encourage the potential growth of the customer base. In order to sustain
economic competition, top most brands needs to highly invest in advertising, promotions and
marketing along with investment in research and development (Alden and Nariswari 2017).
Moreover, the product life cycle may be short for the emerging new brands and the
distinguished products, which are introduced in the market at a regular basis. In this aspect,

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the revenue in the cosmetic industry in Singapore accounts to almost US$178m in the 2018.
However, the market has been expected to grow yearly by almost 1.8% by the year
2023(Rncos.com 2018). From a global comparison, most of revenue is generated in
Singapore.
The features of economic competition shows that Singapore has a fast emerging and
prolific industry that are built upon products and services on the beauty salon industry. Most
of the economic productivity are now driven by changing trends in social media that resulted
in the evolution of the concept of grooming and beauty for both males and females.
From the growth rate of the industry within the industry life cycle it can said that it
has been found that with more than 2000 women surveyed, the reports show that the study is
statistically significant. This is because amongst the entire population of almost 2 million
most of women consumer belonged to the age group 15-25 years of age who preferred
cosmetic skin care products in Singapore (Heng 2018). Amongst the entire industry, skin care
has the most share of the market, where the growth potential of the beauty salons are reliable
on the several factors such as dem0graphics, growth of population, and latest techniques of
skin care. Singapore has consistently developed their beauty market industry since the year
2010, but the growth in the year 2014-15 was slower due to lazy international economy and
Singapore’s weak industry of manufacturing. The government as well is making an effort to
redevelop the economy by limiting the dependence on the foreign employment and increasing
productivity in several sectors (Westjohn et al. 2017). In order to boost FDI growth the
country also offers the concessions of tax, easy loans and foreign firm’s majority within a
local company. The liberal laws of the country also makes it easier for the foreign nations to
purchase real estates. However, the major challenges of conducting business in Singapore are
high taxes on excise based on some of the products.

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External environmental analysis
PESTLE analysis
Political
The political challenges in Singapore is relatively low. In fact, according to the
political and economic risk consultancy the country enjoys most limited amount of political
risk within the entire continent. However, the emerging companies in the cosmetic industries
mat face problem while importing the raw materials while manufacturing the products.
Moreover, there have been reports found there are increasing fear of legal suits that may limit
the import activities of business (Mordorintelligence.com 2018). Therefore, the political
scenario within the industry is changing regularly with increasing number of new entrants
thereby giving concession on tax.
Economic factors
From the economical perspective, it can be said that Singapore is a vibrant free
economy in the market, which is developing rapidly. The per capital income of the country is
high amongst the ASEAN provided with a corruption free environment that supports the
sector of business, thereby making it the most competitive countries. From the industrial
perspective it is evident that most of imports of the cosmetic products are done from US
which shows that cosmetic trade flows is almost $340,554 with almost 15% of the imports
that are being sold in Singapore and 85% of the ignores are as well exported to other
countries (Statista 2018).
Social
From the social perspective, Singapore is similar to other eastern economy, which
follows traditional values of the family. However, younger generation may be more attracted
to western culture. Moreover, the residents works hard to increase the productivity of nation.

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Therefore, cosmetic industry can as well expect higher rate of purchasing power from the
consumer.
Technological
Ecommerce platform and social media plays a major role in the advancement of
Singapore, which has helped making communication easy thereby increasing connectivity
with the consumers (Ang 2018). Therefore, the residents living in Singapore and people from
other countries could easily connect with the business sectors for buying the products.
Legal
The government of Singapore thinks that growth of ecommerce is reliable on the
transparent and favourable legislation in the market. Therefore, in case of ecommerce
platform of the beauty and cosmetic industry there might a problem that the industries have to
face while setting up business in the country (Kunhadi et al. 2017). In this context, Singapore
has launched certain policy initiates such as commerce laws and policies to support the
business such as Electronic transaction Act, Intellectual property rights, tax issues and import
and export procedures.
Environmental
The ministry of environment has been working effective to sustain the business and
environment from growing population and other factors of the environment, as a result the
demand for a green skin and cosmetic products are increasing which may be major problem
for the urban areas.
Porter five forces
Cosmetic care industry is one of most competitive market in Singapore provided with
the modernisation of technology, and researching on new products and different combination
that has helped in development of skin care products,

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Competition amongst exiting organisation:
The skin care industry has developed several brands such as SK2 (P&G), Shu Uemera
(L’Oreal) cle De Peau (shiseido), La prairie (lux Asia) that may take up most of the share in
the market.
Threats of the merging companies:
Skin care and cosmetics is a lucrative industry which as well highly profitable when
the appropriate product is introduced. This may be helpful for the industry that is planning to
bring diversification in the products.
Threats of being replaced:
Skin care and beauty products may have huge number of substitute and may get
replaced owing to chemical and raw materials used in producing these products the scenario
today is such that business organisation are constantly moving towards organs and green
products that are eco-friendly in nature (Khuong and Duyen 2016).
Buying power:
If the companies sells high priced products customers in that case may tend priorities
products with high quality. Therefore, as long as the quality of products in maintained the
purchasing powers of the purchaser will remain low.
Supplier power:
In case the organisation produces its own products utilising, raw materials needed for
the productions may influence the supplier less comparatively.

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Segmentation
Singapore market value for the most premium and mas products of skin care and other
cosmetic is almost US$514 million that makes up almost 5.3% from the year 2013. It has
been found that almost five new brands enter in the market each year. In order to maintain the
business the topmost highly invest on advertising, promotion as well marketing practices to
enter in the international market. The domestic retail market is highly sophisticated with
several segments within the market that are inclusive of customers with high disposable
income who are seeking premium and standards products whereas some are giving local
occupant population
Consumer trends
The trends nowadays are more progressed towards green product that are naturally
made up of organics materials. Moreover, social media is highly force the business
organisation to advertise and promote their products through social media.
Key success factors
 In order to capture the attention of the consumer and to outgrow the competitor it is
necessary for the organisation to leverage the value of innovative strength while
expanding corporate investment in the year 2018-2019
 The skin care products may offer a improved value for the customers by taking
advantage of the competitor’s products particularly within a higher rate
 Expanding the growth by 5% before the competitor switches to other products.

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Reference list
Alden, D.L. and Nariswari, A., 2017. Brand Positioning Strategies During Global Expansion:
Managerial Perspectives from Emerging Market Firms. In The Customer is NOT Always
Right? Marketing Orientationsin a Dynamic Business World(pp. 527-530). Springer, Cham.
Ang, A.G.U., 2018. The Recruitment and Training Practices of a Health and Beauty Network
Marketing Company in Singapore. Ascendens Asia Theses and Dissertations Digital
Archives Abstracts, 1(1), pp.255-255.
Digitaljournal.com. 2018. Chemicals for Cosmetic Market Analysis 2018, Industry Updated
Manufactures, Application Analysis, Regional Outlook, Business Opportunity and Global
Forecast 2025 - Press Release - Digital Journal. [online] Available at:
http://www.digitaljournal.com/pr/4055160 [Accessed 5 Dec. 2018].
Euromonitor.com. 2018. Beauty and Personal Care in Singapore. [Online] Available at:
https://www.euromonitor.com/beauty-and-personal-care-in-singapore/report [Accessed 5
Dec. 2018].
Export.gov. 2018. Global Market Insight: Singapore Cosmetics Skincare and Toiletries
Overview | export.gov. [Online] Available at: https://www.export.gov/article?id=Global-
Market-Insight-Singapore-Cosmetics-Skincare-and-Toiletries-Overview [Accessed 5 Dec.
2018].
Heng, E. 2018. Singapore's beauty consumer behaviour 2018: Report to help you market
better - Daily Vanity. [Online] Daily Vanity. Available at:
https://dailyvanity.sg/news/singapores-beauty-consumer-behaviour-2018-report-to-help-you-
market-better/ [Accessed 5 Dec. 2018].