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The Product Development Team
By: Art Rich, Ph.D.
Posted: November 3, 2011, from the November 2011 issue of GCI Magazine.
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This is the basic meat and potatoes question around which the entire new introduction will revolve. If you are a makeup brand, do you want a new lipstick colors, new lipstick performance or go in a different direction entirely. In most cases the marketplace will determine what the next introduction will be, either in the form of new activity from competitors or trends emerging from other categories. Because the beauty industry is so closely linked to fashion, you can get some clues from fashion and color trends being shown in the new fashion shows. There are also broader social trends that impact a consumer’s demands, such as increased awareness of the harmful effects of the sun, natural vs. synthetic, etc.
Determining Brand Positioning
“You need to find s brand identity that can be yours for years to come,” says Katja Bartholmess, founder and brand strategist at Copy Gold. “That can be tricky, as what is a unique corner of the market today may border on the generic tomorrow. There was a time when MD-backed skin care lines were very few and far between—or natural skin care brands or mineral-based color cosmetics. But look at the shelves today. If 'mineral,' or 'natural,' or 'dermatologist' was all you had planned for in terms of differentiation, it wouldn’t be much.”
Determining Where to Market the Product/Line
“Previous history is always the guide, evaluating where the product will sell best," says Donna Barasch. Cost of goods must be aimed at the class of trade. The distribution direction must be decided before the packaging, ingredients, displays, etc. are chosen so the product is profitable.”
Determining the Price Point
One factor to consider is the competitors’ price points. Finished product costs will also influence the price point. Prestige market will allow for a higher price point than mass or "masstige."
Kellie Como, VP fragrance and product development, InterParfums, points out that costs will, among other factors, depend on where the product will be positioned. High-end formulations will have a higher price point and therefore can allow for a higher cost of goods (COG). It will also be most important to maintain a decent margin of profit. Garment points out that minimum production order requirements and component costs often provide a challenge to achieve optimal COGs.