Business Environment for Industry/Competitors – Nars Cosmetics in Argentina
Executive Summary
Market demand for beauty and cosmetic products in Argentina is on an increasing trend despite the recuperation process the country has been going through since the 2001 economic crisis. Nas Cosmetics plans to expand its markets to Argentina by offering a wide range of beauty and cosmetic products collection like the orgasm brush, lipgloss, multiples, illuminators, and nail polish. With a growth rate of 24 percent since annually 2002, the Argentina cosmetic market is definitely a niche for growth. Traditionally, marketing of beauty products has been done through exclusive distributor one with a nationwide distribution network. Recent trends show the print media as the most commonly used form of advertising with a current trends increasingly turning to television, radio, and internet. The total sales for beauty products in Argentina in 2013 was about US $ 1,955 million and is expected to grow by over 12 percent this coming year. With a 40 million population, Argentina offers a significant opportunity for business in this sector.
- Introduction
Market demand for beauty and cosmetic products is currently increasing in all the aspects of this sector in Argentina. Argentine men and women spend millions on cosmetics in pursuit of personal enhancement. The desire to improve one’s appearance through the use of cosmetic products has heightened in the recent past. Cosmetics boosts the ability to deter skin maladies of all kinds and to stop aging. The two main areas pushing cosmetic market are products in the fragrance market that are dominated by young people and products with the ability to slow or stop the aging effect by protecting from the UV rays, cellulite, and pollution.
- The Product
Nas Cosmetics bringing a new array of products in to the Argentine market with wide range of beauty and cosmetic products collection like the orgasm brush, lipgloss, multiples, illuminators, and nail polish.
- Evaluate the product as an innovation as it is perceived by the intended market
- Relative Advantage
The love blush is a new product in the market which can only be described as the ultimate authority in blush. The award winning blush is the industry’s most iconic shades for cheeks.
- Compatibility
The love blush produces a natural, healthy-looking color that enlivens complexion of the users.
- Complexity
It has a silky texture in shimmering shades and matte with its micronized powder.
- Trialability
The products have been tested and approved. Customers’ reviews and feedback are positive and encouraging.
- Observability
The blushes look pretty and natural with a vast range of colors to choose from.
- Major Problems and Resistance to Product Acceptance
There are no major possibilities of resistance to product acceptance in the Argentina market. The beauty and Personal Care (BPC) market is growing despite the high inflation. Greater consumer awareness is the major drive to positive attitude towards the acceptance and consumption of a new product among Argentine men and women (Kroll 24).
- The Market
Despite the recuperation process the country has been going through since the 2001 economic crisis, Argentina’s cosmetics market has been defeating records. With its 24% growth rate since 2002, the Argentina cosmetic market is definitely a niche for growth. There is a rising increment external consumption as well as that of cosmetics manufactured in Argentina (Sun 1).
The leader companies in the cosmetic industry in Argentina are Unilever as the market leader with other like Colgate-Palmotive, Procter & Gamble, and Avon. The cosmetic products are sold through retail channels like specialty stores, which sell make-ups, skin care, fragrances, and other toiletry products (Kroll 24).
- Geographical Regions
We have Buenos Aires, Catamarca, Chaco, Chubut, Cordoba, Corrientes, Entre Rios, Farmosa, Jujuy, La Pampa, La Rioja, Mendoza, Misiones, Neuquen, Rio Negro, Tierra del Fuego, Santa Fe, Santiago del Estero, and Tucuman provinces in Argentina (Sun 1).
- Forms of Transport and Communication Available
Transport in is Argentina mainly by bus or road, as well by air, since the country has several national and international airports. Long-distance train is mainly used for cargo. Buenos Aires has an underground metro system (Kroll 24).
- Consumer Buying Habits
- Product-Use Patterns
Argentine women are well known for their preference in grooming with the trend showing potential for excellent growth as the consumers become more and more willing to try out on new beauty products. However, the story is different with their male counterparts; the Argentine men still largely reject the culture of “Metro-sexual” and more grooming routines. Most sales for men are limited to the traditional offer of deodorants and razors (Sun 1).
- Shopping Habits
There is some trending issue in the small supermarket and self-service share as well as that of the hard discount stores (Sun 1).
- Distribution of the Market
- Typical Retail Outlet
Major retail outlets are Marko Argentina, Maxiconsumo owns the greatest number of stores, Fravega, Garbarino, Ventura, Saturno Hogar, Electronica Megatone, Marquez Group, Easy, Barugel, and Blaisten (Make-Up 1).
- Product Sales by other Middlemen
Unilever de Argentina 2,010, Procter % Gamble 1,120, Avon 681, SC Johnson % Son 410, Kimberly Clark Argentina 390 (Gross Sales in ARS m) (Make-Up 1).
- Advertising And Promotion
- Advertising Media applied to Reach the Target Market
The traditional ways of marketing products is through exclusive distributor one with a nationwide distribution network. An alternative is the use of a manufacturer representative who takes orders and then forwards them to the country of origin or one who connects retailers directly with the supplier in U.S. marketing has now increasingly been focused on direct sales through door to door campaigns. This is done either through contact person to person in work environments, clubs, place of study, and homes, as well as party plans through group meetings specially organized for the sale. In addition, television is an authoritative means of advertising (Hand 1).
- Sales Promotions Customary Used
The use of coupons is common in Argentina’s cosmetic industry. The customers present their coupons to the retailers and get products at a reduced price. Companies are also introducing the use of prize contests where customers are given slogan writing or problem solving quiz rewards for creative thinking (Make-Up 1).
- Pricing Strategy
- Types of Discounts Available
Major cosmetic companies like Unilever carry occasional discounts on their products by reducing prices and offering other gifts when customers purchase expensive products (Hand. P 1).
- Compare And Contrast Nas Cosmetic’s Product and the Competition’s Product
- Competitor’s Product
- Brand Name
Creams –Unilever (pond’s), Fragrance- Avon (Cosmeticos Avon), Make-up – Avon (New Revlon), Hair products – Unilever (Sedal, Dove) and Procter & Gamble (Pantene) (Make-Up 1).
The Brand Name Nas Cosmetics is superior to other as compared to Unilever and Avon in the cosmetics Industry although Unilever is an established brand in Argentina.
- Features
Hair products, Shampoos, intensive treatments, fasteners, dyes and oxidants, rinses and conditioners,
Creams, sun products, hand and body lotions,
Frangrances, extracts, perfumes, colognes, water perfumes,
Makeup, foundations, eye shadows, eyeliners, pencils, enamel, nail polishers, hardeners (Make-Up 1).
Nas Cosmetics has equally competitive products such as orgasm brush, lipgloss, multiples, illuminators, and nail polish.
- Package
The Nas Cosmetics product packaging is the more outstanding of the other companies.
- Competitor’s Prices
Unilever, Action hydrating toner $34, Luminous Moisture Travel $138, Purifying foam cleanser $30, Attitude brush $40, Final cut brush $28
Avon, Total replenishing eye $55, Aqua gel luminous $40, Gentle cream cleanser $30, optimal brightening concentrate $72, Contour brush $40 (Hand 1).
Most of the major competitor’s prices are quite competitive but when compared with those of Nas Cosmetics they are generally high for most of the products.
- Competitor’s Promotion and Advertising Methods
Marketing has now increasingly been focused on direct sales through door to door campaigns. This is done either through contact person to person in work environments, clubs, place of study, and homes, as well as party plans through group meetings specially organized for the sale. Advertising goes through management consultants and agencies, which are part of the Argentine Association of Advertising Agencies. The print media is the most commonly used form of advertising with a current trends increasingly turning to television, radio, and internet. Argentina has 2000 FM stations, 46 television broadcasting stations, 200 cable companies and an over 20 million audience for both radio and television (Sun 1).
- Competitor’s Distribution Channels
Major distribution channels are supermarkets, wholesalers, pharmacies, and direct sales (Make-Up. P 1).
- Market Size
- Estimated Industry Sales for the Planning Year
Total sales of about US$ 1,955 million and is expected to grow by over 12 percent this coming year. With a 40 million population, Argentina offers a significant opportunity for this sector. The beauty and cosmetics sector is composed of three main subsectors; cosmetics such as makeup, skin creams, and depilatories, personal hygiene products such as oral hygiene, deodorants, soaps, hair care, shaving products, and powders, and perfumes such as cologne, eau de toilette, perfumes, and aromatic essential oils. Consumption has risen by over 20 percent (Hand 1).
- Estimated Sales for your Company for the Planning Year
Estimated sales for Nas Cosmetics in the year 2013 is U.S$ 0.455 million
- Government Participation
Institutions key to international business are Federal Public Revenue Administration and Department of Foreign Affairs and Trade. Foreign direct investment in Argentina is not restricted and remittances of dividends abroad are not prohibited. Companies are allowed transfer of funds or pay services. However, transfers exceeding USD 2 million require prior authorization. Leasing regulations are complex and real estate and retail industries are subject to extensive zoning and building regulations by municipal, state, and federal agencies. Tax for corporations currently stands at 35 percent (Sun 1).
Works Cited
Kroll, Cristina. “Investment In Argentina.” Global Cosmetic Industry 177.2 (2009): 24.
“Sun Care Industry Profile: Argentina.” Sun Care Industry Profile: Argentina (2011): 1.
Make-Up In Argentina.” Make-Up Industry Profile: Argentina (2010): 1.
“Hand & Body Care Industry Profile: Argentina.” Hand & Body Care Industry Profile: Argentina (2009): 1.
Nas Cosmetics. Retrieved from: http://www.narscosmetics.com/
