Term Paper on "Industry With Which I Have Decided"

Quoted Instructions for "Industry With Which I Have Decided" Assignment:

I would like to do a research (Dissertation) about costmetic. (Starting my own business).

1. Introduction:

a) The purpose

b) Why it is important.

2. Review of the literature-This will include the opinions of those already published.

3. Methodology: how you go about answering the research question in your paper is your methodology. It is your strategy for discovering the answer systematically. Define terms, review of the literature, describe the setting, time pbserved, survey if interviews who, etc, and indicate the focus of your observation.

4. Bibliotraphy-see the example on the Web site : http://aabss.org/journal2003/Mefleh.htm.

Please do a research and use this information for my business ideal. I would like to have my own business and export to Southeast Asia. I would like to know the possibility.

Please make sure you Include all infomation as follow :

Paper Assignment : This paper will form the beginning portion of your MBA project. The assignment should be 10 to 12 pages (typed, double-spaced, 12-pt font- Times New Roman). It should be written in the third person and include the following:

1. Introduction:

a. The purpose.

b. Why it is important.

2. Review of the literature—This will NOT include your opinion, but rather, the opinions of those already published. An example of the review of the literature will be available at the following Web site written by me at the Journal, fall 2001: http://iba-website.org/

3. Methodology: how you go about answering the research question in your paper is your methodology. It is your strategy for discovering the answer systematically. Define terms, review of the literature, describe the setting, time observed, survey of interviews—who, etc, and indicate the focus of your observation.

4. Bibliography—see the example on the Web site: http://aabss.org/journal2003/Mefleh.htm

A copy of the MBA Project Handbook that describes what is expected of students in preparing for the project class (MGT 610C/EXE696) can be obtained from the following Web site: http://www3.nu.edu/schools/SBIM/syllabiList.html

Here is the source:

MKT 602

Marketing Management

Dr. Alex P. Pacheco

Strategic Personal Marketing Plan

By Nuttawipha Burk

National University

School of Business for Information Management

29 Palms, Ca

22 October 2004

Abstract

With global commerce in a shakeout phase, it is difficult to find a business to begin that offers an excellent chance of success, but yet has a relatively low start-up cost. Cosmetics is one possibility, and, despite the competition in the industry, offers several advantages, especially for a young businessperson in the Pacific Rim nations. Cosmetics is an ever-changing field, so that there are always new products and services to offer. In addition, cosmetics is an industry that has historically survived economic upheavals very well, making it relatively attractive to financing companies. It demands a skill set that combines both the organizational (planning, accounting) and the interpersonal (sales and service), but I have experience in both of those areas. There are, to be sure, threats to such a venture, but in relation to the low entry fee, the growing popularity of Western-style cosmetics in Asia, and the skill set I bring to the venture, it seems to be the best possible choice right now.

The industry I have decided to get involved in is the cosmetic and toiletries business. I have always had an interest in opening my own business offering a product that is affordable, and of good quality. The current products that are available to the consumer have a lot of room for improvement; most of the products are poor quality and mass produced, or just too expensive for what you are actually getting. There are a couple of exceptions in the industry, Bath and Body Works and the Body Shop are what I would consider modeling my business after.

A report that came out in 2002 from Wilson Select talks about how new product development in several markets is expected to drive margin growth for the cosmetic and toiletries industry in the future. The reason why the future is improving in the quality of products is that there are ingredients that were never used because the benefits were never known until recently. They are referring to these products as having multi benefits when it comes to the effectiveness of the product. (Wilson Select Overview of the U.S. cosmetics and toiletries market, 1997).

The company the Body Shop has an understanding on what it means to change to fit the customer’s needs, and take advantage of the research that is available with current technology. The company was founded by entrepreneur Anita Roddick who, in 1976, started retailing homemade products with minimal packaging. By 1982, there were Body Shop stores opening at the rate of two per month. Now, the Body Shop is operating in 50 countries with over 1,900 outlets spanning 25 languages and 12 time zones. The consumer trust in the product is also very strong. The pursuit of being innovative and able to conform to the needs of their customers has enabled the Body Shop to grow since they

opened in 1976 (Biesada, 2004).

The Bath and Body Works company has 1,600 stores throughout the U.S. the company sells natural body and hair care products as well as personal care products and fragrances. They also have a line of aromatherapy and at-home spa treatments. The success of this company is due to the consistant quality products at an affordable price. The constant changing of product lines is similar to The Body Shop, they are not afraid to try something new. (Biesada, 2004).

Companies like Wal-Mart, grocery stores and other large retailers are a threat to some of the smaller toiletry businesses. They buy large amounts of product for a minimal price, and usually poor quality, and then sell it at for a very inexpensive price. Teenagers have become a new target for color cosmetic companies and products are being launched specifically for preteens. People are also interested in products that have natural ingredients in them. The push for products that are not tested on animals is also on several of consumer’s minds. The cost to effectively Market multifunctional products utilizing new ingredients and the need to generate greater return on investment has led personal hygiene companies to consolidate their range of brands-getting rid of smaller or slow-selling lines, and focus on their biggest names. This prompted manufacturers not normally involved in the category to develop brand extensions into the area. This “mega brand” strategy depends on conveying a similar image to existing products under the same brand name. However, with customer loyalty to products diminishing, the company providing a product must be equally worried about the quality they are offering to the public. ( Koser, 2001).

It is difficult to believe that cosmetics will fail to thrive, in Asia or anywhere else. A report three years ago form AsiaInfo Services noted that even Chinese herbal medicine cosmetics were gaining market share, however small at that point, because of their all-natural character, which appeals to buyers globally (Green cosmetics, 2001).

Two years ago, China displayed a booming cosmetics market, as evidenced by visitors to Cosmoprof Asia, a trade show held at the Hong Kong Convention Center in November, 2002. A report in a trade journals, Soap, Perfumery & Cosmetics Asia, noted that cosmetics “clearly acts as an effective tool for creating business ties between Asia and the rest of the world (2003),” making an investment in a Body Shop or similar company a perfect one for the coming decade.

Manufacturers would arguably not have been interested in exhibiting if they were not sure that the market for cosmetics in Asia will expand in the coming years. That show hosted a total of 750 exhibitors from 33 countries. The show attracted 35,071 visitors, which was a 13% increase over 2001. It also demonstrated a very vibrant market for cosmetics from European companies selling to the Asian market. “We have had a very good response in terms of companies coming from the US, and there has also been very good performance from Spain, Italy and France. These countries are participating at this show more and more,” according to Laura Zaccagnini, marketing director of Cosmoprof Asia (Quoted in Soap, Perfumery & Cosmetics Asia, 2003). As examples of how growth had expanded in Asia, the Korean market grew by 10 to 13% in 2002, with the Chinese mainland growing at 7 to 8%; that market was expected to grow 13-15% by 2010, reaching US $9.76bn. Zaccagnini did note that the Chinese expansion was greater than in most other Asian nations (Soap, Perfumery & Cosmetics Asia, 2003), possibly because of the pent-up demand. However, the entire Pacific Rim was seen as a growth area.

While the current project is specifically a Body Shop franchise, the wealth of interest in Thai cosmetic products shown at Cosmoprof Asia is a good indicator of the substantial interest in cosmetics in Thailand. “The Bangkok Herb Company was looking for a distributor for its new breast enlargement skincare product, Beauty Breast Lotion, which contains dimethicone, isopropyl palmitate, soya extract, ginseng extract and horsetail extract” (Soap, Perfumery & Cosmetics Asia, 2003), something which might be an item added to the Body Shop merchandise for the Thai market.

A spokesman for another company noted that “Asian women want to be 20% slimmer than the average woman. They particularly want slimmer faces, they do not want the chubby cheeks that Asians have which gives the impression that they are fatter than they really are. The Japanese spend three times more on beauty products than US women,” (Soap, Perfumery & Cosmetics Asia, 2003). Body Shop cosmetics products and the accompanying cosmetic application instruction will be an added advantage in marketing to this need in the Thai marketplace.

The potential for growth in the Pacific Rim nations was noted by Soap Perfumery & Cosmetics as early as 1993. At the time, the publication noted, “Body Shop expects to boost its 25 outlets in the region to 150 via its local franchise agent, concentrating on Indonesia, the Philippines and Thailand” (Soap Perfumery & Cosmetics, 1993).

My idea of a successful business for myself would be a product that could be compared to the products that are offered at Bath and Body Works and The Body Shop. Finding my own niche in the cosmetic and toiletry industry will be the biggest challenge that I will have to overcome.

The cosmetic industry is saturated by many types of businesses that are not very successful because of their lack of creativity. I believe that I have a very good idea on how to introduce my product to the market. The most important part other than name recognition is the ability to catch the consumer’s eye and peek their interest into what kind of new product I have to offer. The advantages that I have in the creativity side of the business would do with my personal experience with products, and what other people think about different products. My main target would be toward women consumers, most women would want a product they could leave in their bathrooms and use at their convenience, but also not having to worry about how it will affect the look of the area that they have taken so much time in decorating. The products would be lotion dispensers, soap dispensers and the containers that they come in. There are items that could be more creative by using different color variations, and would be in the bathtub or shower. These are not as noticeable to people walking into the restroom. I have to be able to find products color schemes that are versatile with the different styles that are used in home decorating today.

My strengths for entering this business are a lifelong interest in beauty and achieving it through the most gentle and cost-effective means possible. I have studied the subject on my own; I also plan to take some basic cosmetology courses, either online or if I can locate some available to non-degree students, at a college of cosmetology. I have an excellent history of financial education; my current job requires that I keep accounts both to comply with government demands and to allow the business to know where it stands financially so that it can plan accordingly. I also have a good sense when it comes to networking, I have been researching some of the most popular brands of body lotions and soaps, and noticed that most of them are not manufactured by the company that is marketing them to the public. I think that proper networking and research on who is making quality products, and finding a vender with a good track record of customer satisfaction would be crucial in getting a positive consumer reaction. Networking is invaluable when you do not miss opportunities that are available just from people talking about your product. Some of the smaller stores are involved in fairs and events that you can get your product introduced to the public without the burden of the larger brand names to compete with. In addition, I think I have a variety of personal strengths that will help me succeed when I start my new business. I am not intimidated by the chance that my business might fail. I know that I will work very hard to make my business successful, and if the business is not successful, I know that I would have done everything possible to make the business succeed. I am not afraid or intimidated if things in my business have to change. I will be able to adapt to different situations that may happen when the business starts to grow.

The best way I have found to get any information about different makers of products is the internet. Information about the production of the product as well as the ingredients is openly available on the internet. The ingredients are very important to research on the internet because if you have a vendor that uses cheap ingredients to cut corners your product will not be successful. Another thing to worry about is if the ingredients that are used can cause allergic reactions with customers. The internet does have its drawbacks because a large amount of information that is available cannot be used because it outdated. There is still plenty of information available that I have found that I will be able to use. There are some manufactures that offer free samples of their product, which for me would be perfect because I can give people samples and see what they prefer and why.

I have passed the word around to friends about my idea of starting my own businesses too see what their reaction would be, and it has been positive. When I ask them why they think it would be a good idea, everyone I have talked to says that I am very persistent and I do not give up once I have made up my mind to do something. I am very proud that people think that I am persistent and will not give up, and they do not see this goal as something that is unreachable for me. This also helps motivate me because I do not always realize the good qualities that I possess that would help me succeed with opening my own business.

The part of my future business that I will have to improve on is my ability to compete. The market in toiletries and cosmetics is flooded with product not only from the United States but also all over the world. My idea is to market my product in the U.S. as well as other countries. In Thailand, where I am from, there is a great demand for anything that is made in the U.S. because there are very few things in the retail market available to people from the U.S. Consumers will spend as much money in Thailand for anything made in the U.S. as Americans spend on things from Italy, France and England. I also have friends that would be willing to work for me and sell my product; this would make it easy for me to keep my business going because it will probably take along time to gain a strong consumer following in the U.S.

The things that I will have to change when running my own business will be my time management. Time management with my regular work schedule, family life and running a successful business will be a challenge for me. Time management is sometimes a problem for me now because I take on too many responsibilities at once. This can be very self destructive for me because I get burned out and have a hard time concentrating and prioritizing the things that are the most important that need to get done first. So I should make sure that I have a plan in action every time I add something to my schedule. Furthermore, I have not run a business on my own before, and it may well be more demanding than I anticipate, although I do anticipate at least a year of 18-hour days.

My challenge will be finding the physical, mental and emotional resources to meet that demand for a long period of time. I might try to look at the aspect of getting someone to help me with my business if it gets to hard to manage my self. This would be a good alternative than stressing myself out over to many tasks, and would also be a good sign hiring someone to help because it would mean my business is growing.

My opportunities, however, are so great that they warrant taking the risk. While the market alone, as described above, supports the idea that this is an excellent opportunity for me, the general tenor of the industry is also practically palpable in its offer of a bright future. An industry report in Soap Perfumery & Cosmetics in 2000 noted that there was “plenty of opportunity for innovation and expansion. Increasingly, consumer demand is driving the industry, with companies seeking to meet, rather than dictate, market needs, with a particular sensitivity to local diversity.” That is specifically what I intend to do as a Body Shop: meet the market needs for cosmetics and skin care in Thailand.

The threats to my success are the usual ones: lack of independent business experience, and, notably, lack of abundant start-up cash. One threat that probably does not exist in cosmetics is the economic climate; in all economic climates, people want and need, for personal or business purposes, to look and feel good, and cosmetics provides a relatively inexpensive means to do that, affordable to many even when the economy is declining. The fact that I am starting from the bottom with very little money will make it difficult for me to create a business and succeed. The other problem I face are the cost it will take to market such products, with the competition is already in all of the large department stores. I will have to start in the U.S. with privately owned businesses and specialty stores, most of these stores do not have any ties with big name brands. With the ingredients of the products changing, the manufacturing costs are becoming more expensive because the vendors using the newer ingredients know they can charge more money than the product is actually worth. This threatens my future business even more because money will be an issue when I start my company, and this could possibly take more money than expected.

Should I fail to succeed in a career as a Body Shop owner, I will be able to fall back on skills I have already honed in financial control, with the goal of moving into a position as Controller in a major corporation. I am close to finishing my Master’s Degree, which will be helpful if that should become my career path; frankly, it will be helpful in securing the financing and other assistance I would need to open a Body Shop. However, even the research to open a shop will help me if my career path is detoured and I chose, instead, to seek fulfillment in a corporation’s financial departments. Having a broad understanding of how business operates generally is always valuable; having more specific experience with small business, globally responsible for employing more people, it is thought, than large corporations, should also serve to make me a more attractive candidate for high corporate achievement in finance.

Things that I should avoid in my business are, getting into the habit of only selling things that only I prefer. I should always look at the new products offered by my competitors and see why they are marketing these items, and what kind of a consumer groups they are targeting. This is very important to do because it is easy to say that you do not like something, but that does not mean that there is not a strong consumer base to support different products that I may not like. Therefore, keeping an open mind to other people’s opinions is a very important quality to have. I must also continue to do research about the different products that are available to the public. I must also Research on what new fragrances that are offered from vendors that manufacture my product.

The good opportunities that I am facing are the ability I have to try to find my own niche in the market and having a lot of fun doing it. I will be able to go oversees to Thailand and start selling my product on a very small scale. Since I grew up in Thailand, it will be easy for me to understand the way the general consumer will react to my products. I will also have a new outlook on things and not have to fit my product into any specific mold that many other companies are forced to do because the people with new ideas are not always the ones that own the company.

The newest trends that are currently on the market are anti aging products. These products are the future in the industry because they are made with ingredients that are not as harsh on the skin as the traditional products that are on the market. Not everyone can use the older generation of products that are still being used. People with sensitive skin or allergic reactions cannot use these products, which opens up an opportunity to create a product for them. Older products also caused premature aging of the skin because of the ingredients that are used are mixed with harsh chemicals. People’s lifestyles have changed where they want the same type of quality that they had before without the after affects of the harsh ingredients.

Many things have to be done in order to be successful in starting my new business. I will have to be able to target the right consumer groups with quality products. I must also be willing to change my product line with new trends that are available to the consumer. This is what I believe I will be able to do as long as I stay focused, and do not expect to be successful overnight. The more I continue to look at products that are currently available in stores I realize how flooded the market is with toiletry items. If I expect to succeed, I must be persistent and willing to change my product for the consumer.





References

The Body Shop. (2004) Where we come from. Retrieved October 2, 2004, from

http://bodyshopinternational.com/web/tbsgl/about_where.jsp

Bath & Body Works, Inc. (nd). Retrieved October 2, 2004, from

http://www.hoovers.com/bath-&-body-works/--ID__104462--/free-co-

factsheet.xhtml

Biesada, A. (2004) Hoovers Online. The Body Shop International PLC.

Retrieved October 1, 2004, from http://www.hoovers.com,body-shopmetics

WilsonSelect (2002) Overview of the U.S. cosmetics and toiletries market. Retrieved

October 2, 2004, from http://datel144.nu.edu:2263/WebZ/FSFETCH?fetchtype

=fullrecord:sessionid=sp07sw04-

Koser, G. (2001) Skin Deep. Retrived October 1, 2004, from http://www.globalcosmetic.com/articles/91668.html

Catching the wave. Soap Perfumery & Cosmetics, May 1.

Close encounters. (2003) Soap, Perfumery & Cosmetics Asia, March 1.

Symonds, Peter. (1998) Thailand: A bonanza for international investors. World Socialist Web site. Retrieved 20 October 2004, from http://www.wsws.org/news/1998/mar1998/thai-m26.shtml