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In a new video released by the market research company, Euromonitor International analyzed market opportunities for beauty and personal care companies. In the video, Oru Mohiuddin, senior company analyst at Euromonitor, notes, “Beauty and personal care companies have been releasing their results from 2012, and a dichotomy in marketing schemes is becoming increasingly clear.”
Identifying companies including Unilever, Church & Dwight, L’Oréal and Estée Lauder as “top performers,” Mohiuddin comments that they have been, “proactive in determining market opportunities, but it is becoming increasingly clear that different manufacturers aim for different types of opportunities. For example, manufacturers with a more concentrated beauty presence such as L’Oréal and Estée Lauder tend to focus on cutting-edge product innovation and development while manufacturers such as Unilever and Church & Dwight—mostly present in personal care—have been seen to pursue growth more aggressively through wider present coverage.”
She goes on, explaining, “It is the price margin of the product category that determines the type of growth strategy a manufacturer is likely to adopt. Personal care categories have a lower margin than beauty. Consumers are seldom willing to pay a high price for these ranges of [personal care] products. Hence, manufacturers in personal care tend to place a strong focus on price and retail coverage.” This has not negated innovation in personal care, however, with Mohiuddin citing more professional-type oral care products and the “motion sense” technology appearing in deodorants.
“Beauty categories such as skin care, color cosmetics and fragrances have a higher price in margin and consumer demand is driven by product sophistication. Manufacturers therefore need to invest in research and development. In addition, greater investment in R&D allows the manufacturers to extend category boundaries to help a more in-depth presence in the market,” she explains.
The bottom line, Mohiuddin notes, sees diverging paths for beauty and personal care. “The margins of unique operating methods lead us to believe that we will be seeing more and more clear distinction between these two types of players,” she says. “Manufacturers need to develop a clearly defined market segment in the industry to help drive strong growth.”