Lina GnatyukMargarita Kostyuk

Oleg Lubarets

Kyiv National Economic University

The Market

The main trend at the market of beauty products is its active growth.

The sales volume was about 2,3 billion USD last year and 3 billion USD this year. The growth is 30%.

The overall potential of the Ukrainian market today is estimated to be 8-10 billion dollars.

At the same time, the situation at the world market of the beauty products for men is not so good.

Nowadays there are:− more than 5000 kinds of products;− and more than 290 product ranges.

They include:− аftershave products; − special products for bath and shower;− wipes, killing bacteria;− lotions;− shampoos;− hair coloring and styling products; − clear nail polish;− etc.

According to the results of the researches in Ukraine:

− 68,4% of the population use cosmetics;

− 88,2% of them are women;− 11,8% of them are men. The growth of the segment of male

cosmetics is about 13,5% per year in Ukraine over the past 5 years.

According to the results of the researches in Germany:

− 60% of men are interested in products for skin care and body care;

− 42% — in perfumes;− 10,8% — in decorative cosmetics.

Besides, the bigger amount of men is supposed to use it. They just refuse to admit it.

Men are:− loyal;− conservative.…to the cosmetics and producers they

like.

Visiting the salons:− young people;− older men think of salons being the

women’s only.

The differences between sexes concerning their using the cosmetics tend to disappear over the last years.

The growth of the market of male beauty products is expected to be 42% in 2012.

The Characteristics Of Distribution Channels

The distribution channels of L‘Oreal:

− direct distribution from the factory;− distribution through retailers

(supermarkets, chemists);− direct distribution to hairdresser-salons

through a network of sales-representatives;− distribution through specialist cash-and-

carry outlets (profess. hairdresser products);

− distribution intensity: intensive distribution — attempt to achieve market coverage via multiple distribution channels (direct distribution vs. indirect through intermediaries) + selective distribution for special brands.

L‘oreal is distributing its products to:− a large number of small customers

(ultimate consumers → households) → better to use channel intermediaries;

− fewer buyers who buy bigger amounts → service providers → professional hairdressers → better to use direct distribution;

− local and clustered customer base for certain brands;

− distribution only in given geographic areas and specially;

− chosen salons → better to use direct distribution.

The Consumers

It will be necessary to note that the men’s only barber shops don’t exist in Ukraine at all.

The situation with the hair salons is not much better.

Here is the details.

We analyzed the current market situation, using the questionnaires.

Our team have created on-line and paper questionnaires.

We analyzed the current market situation, using the questionnaires.

Our team have created on-line and paper questionnaires.

And here is the results. 31 respondents were polled.

Among them:− the frequent visitors at hair salons —

20%;− men who don’t go to hair salons —

80%.

Most of those who go to hair salons, do it about once a month.

These people explain their choice (meant they go to hair salons, not to barber’s or hairdresser’s) by the high quality of the services.

Most of them are completely satisfied with existing services and haven’t any especial requirements.

Most of those who don’t go to hair salons are completely satisfied with the services of barber’s.

Half of them declare that nothing can prompt them to go to hair salons.

But another half of them say that they will go to salons under certain conditions.

If we can make these men go to salons, we will triple (!) our income.

Now:− go to hair salons — 20%;− don’t go to hair salons — 80%, 50%

of them are ready to change their decision.

If we are able to do it, the situation will be completely different:

− go to hair salons — 60%;

− don’t go to hair salons — 40%.

It is evidently that we can change the situation drastically.

It’s necessary to say that the amount of men who go to hair salons tends to increase lately .

So it is really possible to attract more customers to hair salons and then sell more our products to hair salons.

The Competitors

Our main competitors:− Wella;− Schwarzkopf;− GOLDWELL;− Combe.

WellaBrand Positioning: professional hair care,

hair products.Our vision is to deliver Wella into a new and

exciting era — because where we walk, others will follow. That's why, from now on, you'll experience a newer, fresher Wella. Give your hair the expert treatment! Create healthy, beautiful looks with our collections . Specially formulated for intense shine and care between salon visits, our products help you style and maintain fantastic looks.

SchwarzkopfFor your salon we have Colour and Form

technical brands developed for professionals to give you high quality and consistent results.

For your clients we have modern and stylish over-the-counter Care and Finish products allowing them to continue the salon experience at home.

And for your business we have promotion & merchandising support to maximise your salon’s potential.

GOLDWELLWe are a company operating in the

international arena which develops hair products and services and exclusively supplies these products and services world-wide to hairdressing professionals.

Following the principle «better to offer a complete range to one type of client than one item to a range of clients», we focus all our energy on fulfilling the highest requirements regarding innovative effective technology and up-to-the-minute style of our products.

CombeWe work in 5 minutes, not 30 or even 45

minutes. And we target only the gray hair, for a natural look.

Every one of our brands, in every country around the world we sell in, has a unique and meaningful point of difference. We look different. We sound different. And we deliver different benefits.

When a brand meets a consumer need in a truly unique way, you can take it all over the world. And that's exactly what we've done.

The Targets

WellaOur fundamental principles remain

unchanged:− raising the benchmark of creativity

and technical skills for all hair professionals;

− empowering salon owners, through partnership, to grow their business;

− lnspiring the industry through bold leadership and innovation.

SchwarzkopfOur destiny is to develop innovative

technologies in products that create beautiful hair. Our goal is to enhance your individual style, simplify your beauty regime and ultimately exceed your expectations.

GOLDWELLWe want to create products based on

latest innovations and technology.We want to combine the energy and

capabilities of each individual to present one strong unified force.

Our business is geared towards achieving high level of harmony with nature and society at large.

CombeWe'll expanded our global category

leadership through product innovation and strategic acquisitions. We’re entering exciting new markets like India. And we’ll exporting our latest successful U.S. brand launches to Europe, Latin America, and every other market in the world where we can.

It's a great big world. And everywhere we look, we see new opportunities.

SWOT

Positive influence Negative influence

Internal environment

Strengths− experience and image of the company; − uniqueness of L’Oreal Professionnel Homme brand (analogues don’t exist);− awareness and positive attitude of the salons; − effective promotion;− positioning and image of the brand;− optimal prices.

Weaknesses− the «Man Perfect» made by Schwarzkopf is similar to «Cover’5» and excels it in some characteristics− not all the potential salons are enveloped;− small volume of the target group (meant actual customers i.e. men);− the product range doesn’t include the hair coloring products.

External environment

Opportunities− men are not informed of «Man Perfect» produced by Schwarzkopf, so they hardly will buy this product;− the products are not tested on animals and they are environmentally safe;− positive attitude of customers.

Threats− influence of competitors, especially their opportunities concerning hair coloring products;− the level of income isn’t high enough*;− cultural features*;− quality of services in salons (personnel, process etc.);− prices for salon services.

Strengths− experience and image of the

company;− uniqueness of L’Oreal ProfessionnelHomme rand (analogues don’t exist);− awareness and positive attitude of

thesalons; − effective promotion;− positioning and image of the brand;− optimal prices.

Weaknesses− the «Man Perfect» made by

Schwarzkopfis similar to «Cover’5» and excels it in

somecharacteristics;− not all the potential salons are

enveloped;− small volume of the target group

(meantactual customers i.e. men);− the product range doesn’t include thе

haircoloring products.

Opportunities− men are not informed of «Man

Perfect»produced by Schwarzkopf, so they

hardlywill buy this product i;− the products are not tested on

animalsand they are environmentally safe;− positive attitude of customers.

− loyalty programs for existing customers

and attracting programs for new customers;

− ability to position the range as theecologically safe products and which

have the optimal prices.

− «Man Perfect» has a web site. A consumer

can find there everything he needs;− there is a threat of creation the hair

colorproducts for men only by any othercompany.

Threats− influence of competitors, especially

theiropportunities concerning hair coloringproducts;− the level of income isn’t high

enough*;− cultural features*;− quality of services in salons

(personnel,process etc.);− prices for salon services.

− according to the research, the level of

Income isn’t a crucial factor, so the lowlevel of income can’t make the quantity

ofconsumers reduce;− products are easy to use, so low-

qualityservice in salon is impossible.

− cultural features of certain countries put

obstacles in the way of implementation of

abilities of the range;− personnel and process in salons are

out ofcontrol, so if they aren’t good, they willfrighten off the customers.

The New Product RangeIron Claw

Hair Care productsStrengthening shampoo for man - gently

cleanses & strengthens damaged or chemically-treated hair; Helps restore hair's vitality & elasticity;

This shampoo can totally bring dry, brittle hair back in shape without having to cut it all off. Use it for a month in conjunction and you will notice an incredible difference.

Mask Hair Loss Solutions — A mask conditions and nourishes your hair from the root to the tip of the hair folicle. It work’s fast you can use it only when you gets the shower.

New Hair color line for man is really amazing. This means hair color is quick and easy-to-use.

It discreetly and effectively blends away gray in minutes, fits perfectly to your natural haircolor. 20 different colours and tones will provide you needs to be satisfied.

Now you can colour not only hair but also mustaches, beards and sideburns. For making process easier in the set of coloration you can find convenient facilities.

Hair Colour

Hair Styling & Accessories

Hair MOUSsE — invisible and flexibility is the main advantages of this mousse. You’ll feel a natural volume and hair shine. This mousse could not lead to your hair looking crunchy and look artificial. Nothing can make more natural and soft look to the hair and at the same time provide a reliable hold.

Face Care Products

Aftershave lotion — If the man wants to Soothe, soften and moisturize his skin aftershaving using an easily-absorbed lotion with a clean, fresh fragrance. With this Aftershave lotion you can forgot about skin irritation.

Shaving cream — Shaving process can be easy and enjoyable with this shaving cream. Specifically engineered to soften tough, coarse facial hair. Is specially engineered to normal skin with a unique combination of natural ingredients which work together to prevent razor drag and reduce razor burn and nicks.

Salon Experiment

The involvement of new customers is one of the expensive problems. The segment of the cosmetics market of L’Oreal doesn’t cover the crtain part of the population. Certainly, it affects the profit of the company. In order to attract new visitors, we offer several ideas that may be implemented in beauty salons.

We offer some innovative services: - the cleaning of dandruff for a short period of time

(using special oils and massage brushes);- program selecting the hairstyles according to the

photos; - making photo before and after the haircut in order

to have an ability to compare; - the TV-sets for every customer. It can be mounted

into the mirror. The catalog of films, videos and music will be offered to every customer;

- a special working clothes for staff;- express date service: styling, skin cleaning,

manicure, shaving (when it’s needed).

Attracted customers should stay with us, so we must keep them. That’s why we offer a discount program for the customers using our products. Every visitor will get a discount card for the services provided with L'Oreal products if he has used it at least for five times.

Every client will be put into the database of the company. He will receive the newsletters about the current offers and the congratulations with his birthday and New Year.

We offer family discounts system. They will be even larger than the individual ones.

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