The Philippines Market

• Per capita GDP US $ 5100, 2005 (130th globally)

• 40% Pilipino live BPL (US $ 1 /day)

• Rising oil prices- inflation

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Cosmetic and Toiletry Industry

• Total sales= P83 bn, 2004• Projected to grow @5%/year • Will reach P107 bn by 2009• According to Vanity index Philippines is 5th

globally and first regionally• The industry is marked by the frequent

redesigning, repackaging and relaunching of existing products

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Splash in Cosmetic and Toiletry Industry

• Only domestic company in top 10• Company name closely associated for offering

high value for money• It deals in two categories:-1. Skin Care

- 2. Hair Care• Skin Care: Important Category contributing

about >P17 bn• Projected growth rate 9%/yr

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Market Share of The two Skin care products

40%

60%

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Top 5 skin care companies by market share, 2003

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Branding, Marketing and distribution of Splash

• Market research: Consumer safaris - potential gold mine.• General branding: Multi-brand strategy-lead brand.• Advertisement: Rational perspective --------Emotional perspective

As against only emotional advertisements by MNC’s because they have brands which have reached mature stage in life cycle.Brand name speaks product action and potency.Creative television ads in telenovelas and various shows.Guerilla marketing

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Pricing and distribution

• No low prices• Distribution of products

# General trade accounts: 78% of total revenue#Modern trade accounts

• Used network of 24 distribution companies.#17.5% discount from list price to distributors#Margin to retailers by 10%

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• Hair Care: Largest Category (contributing P19

bn, 2004)

• Slow growth rate (projected @ 4%/year to

reach P24 bn by 2009)

Splash in Cosmetic and Toiletry Industry contd.

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Filipino Consumer

• 6 Socio Economic group

A and B Upper class (5-10%)prefer premium brands

C1 and C2 Middle class

D Lower class

E Extremely Low class

Splash’s Target

Market- Masses/ Masa!

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• Consumer loyalty- “Hiyang”• Changing Consumer Preferences:- Earlier men

use to purchase hair gels only but metrosexual trend is coming in and hair colours and skin care products gaining share

• Consumers heavily influenced by national celebrities

Filipino Consumer contd.

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Splash Establishment and EvolutionYear Event

1985 RBH cosmetics- Acetone Cuticle Remover

1986 Renamed Company as Hortaleza Cosmetics

1987 Renamed Company as Splash CosmeticsHair Sprayer*

1989 Extract facial Cleanser Avocado(dry skin)

1997 Splash holding Inc. (Umbrella for several products)

1990-2000

Developed and Launched string of new skin and hair care products

Cucumber (oily skin)

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Brand Portfolio

• Facial Care and Exfoliants– Extraderm • Exfoliant category• Annual sales grew by 211% in 1997!• Imitation by domestic company (at 20% less price)

– Maxipeel• More potent• Acquired 65% share of exfoliant category, 2005• Priced roughly 10% more than competing brands• Now a lead brand

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• Whitening Lotion– Unintended whitening effects in exfoliant products – This property used to launch product under

extraderm brand– Block and White, the competitor!– Skin White, new brand in whitening lotion– Many local competitors– Sara Lee purchased Block and White– Under arm whitening cream– Splash gained market share of 29% in 2005

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Brand Portfolio contd.

• Natural Soaps– Natural ingredients preferred over chemicals– Ripe orange colour papaya fruit enzyme used as

natural whitening agent (Safe guard papaya and Hiyas as leading brand)

– Green unripe papaya more efficient (SRI scientist)

DC MNC Splash

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Brand Portfolio contd.

Hiyas (Ripe papaya)

BioLink (Unripe papaya)Competitive threat by local companies with green papaya products

• Hair care– 10% revenue in 2004– Styling gel- 1. Control (20% lower priced than Dep)

2. Tricks– Kolours brand- Hair colouring agent– Gels for teenagers with low disposable income

and dyes for adult women with more money– Main rival in hair colouring category- L’Oreal

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Brand Portfolio contd.

Emerging Competitive Forces

• Low Cost products from China and Taiwan

Low prices

Lagging economy

• Private labeled skin care products

#Watsons personal care stores-77

# Could nt lead the market with their own products

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StrategiesS.No. Product Constraint Strategies

1. MaxiPeel Alternative Product, Toner launched advertising that exfoliant cause long term skin damage.

Advertisements by experts and dermatologists standing in favour of MaxiPeel with concrete justifications.

2. Biolink Domestic Companies Selling their own green papaya products at lower prices.

Low Price SKUs

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Strategies contd.

S.No. Product Constraint Strategies

3. Hair care Products

Competition with dominant hair care companies.

Foray in R&D of Shampoos and Conditioners with capital harvested from Cash cow products of hair care category and come up with innovative products.

4. In Focus Brands

- 1. BIOLINK- Patent green papaya agent2. MAXIPEEL

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