Marketing management maastricht university

Assignment môn Marketing Management được 87100 tại Maastricht University. Master in Management. Phân tích về Paulas Choice tại thị trường UK. Bài viết được điểm High Distinction, viết bằng tiếng anh.

This paper has a grade of 87% 87/100 HD.

Table of Contents

1 Executive Summary 1

2 Introduction 1

3 Situation Analysis 2

3.1 Market Overview 2

3.2 Macro Environment 2

3.2.1 Political Environment 2

3.2.2 Economic Environment 3

3.2.3 Social Environment 3

3.2.4 Technological Environment 3

3.2.5 Environmental Environment 4

3.2.6 Legal Environment 6

3.3 Micro Environment 6

3.3.1 Consumer Behaviour 6

3.3.2 Company 7

3.3.3 Competitors 7

3.3.4 STP Model 9

3.3.5 Product Life Cycle (Venon, 1960) 12

4 Marketing Plan 12

4.1 Value Equation 12

4.2 Marketing Mix (4Ps) recommendations 14

4.2.1 Product 14

4.2.2 Price 14

4.2.3 Place 15

4.2.4 Promotion 15

5 References 16

Figure 1 Sales Channels in the beauty industry 4

Figure 2 Sustainable Behaviours in the UK 2023 and 2022 by Deloitte 5

Figure 3 UK Skincare Market Leaders 8

Figure 4 Positioning Map 9

Figure 5 Paula’s Choice’s Product Life Cycle 12

MARKETING PLAN FOR PAULA’S CHOICE IN THE UK

1 Executive Summary

For Paula's Choice in the UK market, this marketing plan offers a strategic analysisand customized recommendations The company has strong growth potential in thebeauty and personal care sector, according to the scenario analysis, with a focus onGen Z and the 25–34 age group Key findings point to a high consumer value forproducts with science-backed and ethical sourcing The marketing mixrecommendations focus on improving the product line to better serve thesesegments, implementing a pricing plan that is both competitive and value-reflective,and optimizing the omnichannel presence—with a particular emphasis on digitalplatforms The promotion strategy is made to take advantage of social media andinfluencer partnerships in order to maximize the educational content for Generation Z

as well as the in-depth, informative content for millennials in the workforce Thecombination of these elements is expected to reinforce Paula's Choice's position as

a market leader in ethical and effective skincare solutions

2 Introduction

Paula's Choice, a leader in the skincare industry, has consistently delivered productsthat marry scientific research with consumer needs This paper delves into ananalytical journey to remark the brand's current standing in the UK market,identifying key customer segments and recommend marketing mix aligns with thesegroups' unique requirements These recommendations aim to reinforce the brand'sconnection with its audience, driving growth and customer loyalty in a competitivelandscape

1 Situation Analysis

1.1 Market Overview

In 2023, the revenue in UK’s Beauty & Personal Care market stands at $16.95 billion It’s anticipated to rise annually by 1.71% (CAGR 2023-2028) The Personal Care segment is the market’s most significant, accounting for $6.71 billion of the market’s value in 2023 Compared to global figures, the United States is the top revenue generator with $98 billion in 2023, but in the UK, the per person revenue is estimated at $250.20 in the same year Notably, online sales are expected to

contribute 24.2% of the total market revenue in the Beauty & Personal Care sector

by the end of 2023 (Statista, 2023)

1.2 Macro Environment

1.2.1 Political Environment

Brexit has markedly changed the political environment for U.S firms exporting goods

to the UK The departure of the UK from the EU introduced new customs and tariff structures, which complicated commerce and would have increased prices These companies must now manage different regulatory requirements for the UK and EU, which has an impact on compliance and product standards Currency volatility, particularly in the British Pound, further affects the economic feasibility of exports Furthermore, the overall market uncertainty surrounding Brexit negotiations creates

a challenging and unpredictable business climate for U.S exporters, impacting strategic decisions and operations (Gopalakrishnan et al., 2021)

Since UK’s Brexit in 2019, Exporting to the EU now involves significant costsincluding duties, shipping, VAT, and customs Brands have experienced extensivedelays and increased costs, with some reporting that logistics costs for raw materialsand products have doubled (Slater, 2021) These challenges affect Paula's Choice interms of supply chain management and cost-effectiveness in serving EU marketsfrom the UK

1.2.2 Economic Environment

In the UK, Paula's Choice is operating in a challenging social environment marked by

a cost of living crisis, which is negatively impacting the economy and the beauty sector, with 55% of the UK population feeling financially worse off than the previous

year (NIQ Beauty Buzz: Will the UK Beauty Industry Be Affected by a 2023

Recession?, n.d.) KPMG economists report that in 2022, the annual growth in consumption dropped to 4.3%, a decrease from the 6.2% observed in 2021 (Survey Highlights Impact of Rising Cost of Living on Consumer Spending - KPMG UK,

2022) This economic pressure has led to a mixed response in the cosmetics

industry, with some consumers turning to cosmetics as an affordable luxury, while others are cutting back on spending Despite a general slowdown in growth, certain segments like natural beauty products are expected to maintain their appeal among consumers (cosmeticsdesign-europe.com, 2022) due to a shift in consumer buying behaviours that favored environmentally friendly products, which could be

advantageous for brands like Paula's Choice that align with such trends

1.2.3 Social Environment

The beauty market is experiencing heightened competition due to the rise ofnumerous independent brands According to a McKinsey survey, a notable 42% ofconsumers express an eagerness to explore these new products Consumerpurchasing habits are changing as a result of this increased interest in learning aboutand testing out new brands; consumers are increasingly making purchases through

a variety of channels and at a wide range of pricing points This trend is driving bothestablished and emerging brands to adopt omnichannel strategies, which combineonline and offline shopping to meet the varied needs and tastes of modernconsumers (Marchessou & Spagnuolo, 2021) As a result, brands are drive on how

to innovate and differentiate themselves to capture and retain customer interest inorder to draw in and keep consumers in this fast-paced and changing industry(Mckinsey & Company, 2023)

1.2.4 Technological Environment

According to Statista data, the beauty industry is continuing to shift from a

dominance of physical storefronts towards a more digital and integrated shopping

experience, as evidenced by the compound annual growth rate The data shows a steady increase in the proportion of online revenue, with the mobile/desktop split indicating a growing trend of consumers purchasing through digital platforms By

2027, it's projected that 21.9% of beauty sales will be conducted online, marking a clear shift from traditional brick-and-mortar retail Paula's Choice must capitalize on this trend by optimizing their e-commerce platform, investing in mobile marketing strategies, and ensuring their digital presence aligns with consumer shopping

preferences This shift also underscores the importance of leveraging data analytics and AI to personalize the customer experience and streamline the online shopping process

Figure 1 Sales Channels in the beauty industry

(Statista, 2023)

1.2.5 Environmental Environment

The Deloitte UK report indicates that compared to 2022, a larger proportion of

consumers are adopting sustainable lifestyles, with many starting this practice at home through recycling and waste reduction, with 39% chosen brands that have

environmentally sustainable practices/values (Figure 1) The cost of living crisis has amplified this trend, with consumers favoring behaviors that allow them to spend less

—such as repairing items instead of purchasing new ones, buying second-hand, andchoosing longer-lasting products Ethical and sustainability concerns have also led to

a significant portion of consumers, one in three, opting not to purchase certain

brands or products, impacting categories including beauty (Sustainable Consumer

2023 - Sustainable Lifestyle, 2023)

Additionally, consumer demand for sustainable options is certainly on the rise - for example, 66% of consumers (73% of millennials) worldwide report being willing to pay extra for sustainable offerings (White et al., 2019) This shift presents an

opportunity for Paula's Choice to emphasize their commitment to sustainability and ethical practices to meet evolving consumer preferences

Figure 2 Sustainable Behaviours in the UK 2023 and 2022 by Deloitte

consumer safety Additionally, the UK has prohibited animal testing on cosmetic

products and their ingredients (The Use of Animals in Cosmetic Testing (Including REACH Regulation) | NC3Rs, n.d.) This restriction paves the way for natural and

cruelty-free brands to make significant inroads in the British beauty market

Paula’s Choice aligns with these regulations, holding a cruelty-free status confirmed

by CFK This means their products, along with their ingredients, are not tested on

animals, a policy that extends to their suppliers and third parties (ANIMAL TESTING and BY-PRODUCTS, n.d.) (Is Paula’s Choice Cruelty-Free & Vegan in 2023? THE TRUTH, n.d.).

1.3 Micro Environment

1.3.1 Consumer Behaviour

Consumer behaviour is the extent to which a person or group chooses, purchases,and uses some product or service to meet their needs and wants (Mansoor et al.,2022)

After the pandemic, there has been a significant shift in consumer behavior towardssustainable practices and health-conscious choice (Mansoor et al., 2022) Peopleare increasingly more likely to consider the environmental effect of the products theybuy (Valenzuela-Fernández et al., 2023), and they tend to support companies thatsupport sustainable sourcing and eco-friendly methods (White, Habib, et al., 2019)

The increased demand for goods that support individual health and well-being isanother indication of this paradigm shift, as consumers begin to associate lifestyledecisions with long-term health outcomes Brands that align with these values arediscovering that their consumer base is more involved and devoted, willing tosupport businesses that share their goals for a population and world that are

healthier (EY Future Consumer Index: Consumers More Concerned One Year into the Pandemic, 2021)

Additionally, customers tend to follow the schedule of home skincare and focus more

on their skin condition during the pandemic (Ścieszko et al., 2021) Moreover,people's interest in skin care has increased since COVID-19, and they are searchingthe Internet for information That led to a growing interest in information andguidelines on skin care that can be found on the Internet and obtained fromprofessionals (Ma & Kwon, 2021)

1.3.2 Company

In the beauty industry, Paula’s Choice sets itself apart by committing to sustainabilityand environmental friendly Paula's Choice demonstrates its dedication tosustainability by using a thorough approach that touches all aspects of the business.The brand ensures that its skincare products are as kind to the environment as theyare to the skin by using eco-friendly production procedures and sourcingcomponents that are obtained responsibly The selection of recyclable packagingmaterials minimizes its influence on the environment, and the product formulationsare free from harmful chemicals to protects consumer health and the environment.Paula's Choice's commitment to reducing its carbon footprint is also demonstrated

by its strategic alliances and continuous initiatives to promote sustainability in the

larger beauty sector (Sustainability | Paula’s Choice, n.d.).

This strategy focus is in line with the growing demand from consumers for goods thatare not only highly effective but also environmentally friendly

1.3.3 Competitors

According to the research (Mordor Intelligence, 2019), the five main players in the

UK Skincare Market are Clarins, SkinMedica, L’Oréal, Unilever (includes Paula’sChoice) and P&G (SKII)

Figure 3 UK Skincare Market Leaders

(Mordor Intelligence, 2019)

In the shift of consumer behavior, Paula’s Choice has listened carefully to what consumers have requested while it has been on the market to launch products

tailored to their needs (Paula’s Choice - Success Case Study, 2021) The brand

emphasizes how they have positive impacts on the environment, produce

environmental friendly products and strategy The brand does not test its skincare products on animals, which aligns with the growing consumer preference for cruelty-free and ethical beauty products This commitment to cruelty-free practices is an essential part of Paula's Choice's brand identity and resonates with consumers who prioritize ethical and sustainable skincare choices (🤔 Is Paula’s Choice Cruelty-Free

& Vegan in 2023? THE TRUTH, n.d.)

Otherwise, Clarins and SK-II continue to conduct animal testing for their skincare products, which is at odds with the growing consumer demand for cruelty-free and ethical beauty brands This practice contrasts with Paula's Choice's commitment to

ethical and sustainable skincare, which avoids animal testing and aligns with

evolving consumer preferences for cruelty-free products Paula's Choice's stance on this matter can attract more consumers seeking ethical and eco-conscious skincare options

Figure 4 Positioning Map

1.3.4 STP Model

The formula - segmentation, targeting, positioning (STP) - is the essence of strategicmarketing (Kotler, 1994)

1.3.4.1 Segmentation

Demographic Segmentation Historical Now

(Robert, 2021) (Similarweb, n.d.)

Geographic Segmentation

International Base

Psychographic Segmentation

Values truth and transparency

Prefers no-frills, science-backed products

Environmentally conscious

(Robert, 2021)

Behavioral Segmentation

Engages with brands on digital platforms (e.g., TikTok)

Seeks effective skincare solutions online

Care about being informed about product ingredients and their benefits

(Robert, 2021)The updated demographic segmentation reflects Paula's Choice's strategic shifttowards a younger audience because of its visibility on platforms like TikTok, wherecreators have highlighted the brand's educational content and effective formulas.This has not only broadened its customer base but also resulted in a significant181% increase in new customers from the Gen Z segment compared to previousyears This shift indicates the brand's successful adaptation to the changing digitallandscape and consumer behavior (Robert, 2021)