Global Cosmetic Industry - Essay Example

Introduction What are cosmetics? Cosmetics are substances utilized by both men and women to improve or maintain the physical outlook or smell of not only the face but also other parts of the body. Cosmetics are supposed to be poured, sprayed or sprinkled after that they can be rubbed or massaged. The use of cosmetics started in around 4000 BC in Egypt. Modern day cosmetics comprise of various ingredients like Talc, Carmine, Bismuth Oxychloride, Paraben Preservatives, Mica, Zinc Oxide, Titanium Dioxide etc. Many of these ingredients are harmful in one or more ways. However, the cosmetic industry is still growing with ever-increasing sales fueled mainly by women’s obsession to look better. For such reasons the cosmetic industry has been under strict monitoring and regulations. Global Cosmetic Industry Cosmetics are being manufactured by a few dominant multinational corporations that came into existence in the early 1900s. However, the supply of cosmetics is widely distributed between both developing and developed countries. Cosmetic industry is valued at approximately US $40 billion. Those cosmetic products which have "Made in France" written on their labels are highly valued on the international market. Since cosmetics are popular among women who are fans of TV and movie actresses and women who want to be like those actresses, many cosmetic products specifically perfumes are endorsed by actors and singers. The global cosmetic industry appears to be changing rapidly. Various known companies sell cosmetics both online and in retail outlets. As far as the marketing tactics used are concerned they include sponsoring fashion shows, getting brand ambassadors to do ads and other forms of conventional advertising. As life expectancy has increased cosmetic industry has modified its products from beauty enhancing to anti-ageing or beauty sustaining products. As globalization happens more consumers are using standardized cosmetics rather than affordable and low quality local products. As a result cost of production has been minimized tremendously by the firms. Europe and North America continue to be the major markets for cosmetic products while Asian countries specifically India, China and Indonesia are growing markets due to high population growth rate and increase in media exposure. Major cosmetic companies “Names and sales in Billions of US Dollars of the top 20 cosmetic companies in the world 1. Procter & Gamble– $26.3, 2. L’Oreal - $25.8, 3. Unilever- $16, 4. Avon- $7.6, 5. Beiersdorf- $7.5, 6. Estee Lauder- $7.3, 7. Shiseido- $6.9, 8. Kao- $5.9, 9. Johnson & Johnson–$5.6, 10. Henkel- $4.4, 11. LVMH- $3.7, 12. Coty- $3.5, 13. Chanel - $3.0, 14. Limited Brands– $2.7, 15. Mary Kay– $2.6, 16. Yves Rocher– $2.5, 17. Natura- $2.1, 18. Alticor - $1.9, 19. Kose- $1.8 and 20. Oriflame - $1.7” (Perry). Ethical issues involving the cosmetic industry Before one starts discussing what is ethical or unethical one must understand the meaning of the word ethics. Ethics is the study of morality. It deals with what is the right thing to be done and what is wrong. Ethical principles can vary between groups and individuals, however, certain moral principle are universal. These include being honest in business dealings, respecting elders and respecting the laws. There are people or firms who are doing something which is legal yet unethical. Currently, the aforementioned statement is the biggest dilemma the world faces when discussing and implementing ethical behavior. As far as the cosmetic industry is concerned it has been accused of unethical practices on multiple occasions. The reason behind unethical practices is almost always profit maximization at the expense of customers and other stakeholders. Main ethical issues are the following: 1. Animal testing: Many cosmetics are tested upon animals like mice, pigs, monkeys and rabbits. This results in noticeable suffering and pain for the innocent animals. Animal testing is done to measure the level of skin irritation, damage caused to eye tissue, and toxicity in cosmetics (In Defense of Animals (IDA)). Although, campaigning has been done by People for the ethical treatment of Animals (PETA) against animal testing (many firms continue to do so with the excuse of animal testing to be a way to protect humans (PETA). Moreover, laws have been made to prevent animal testing. For instance testing cosmetics on animals is unlawful in the European Union since September 2004, also testing individual ingredients of cosmetics on animals has been made unlawful since March 2009 (European Commission Consumer Affairs). In America the Food and Drug Administration (FDA) makes laws regarding cosmetic industry within the US. Alternative testing methods include genomic and computer-sculpting tactics, complex in vitro and examination of human patients and paid volunteers (PETA). Such methods are cheaper than animal testing and result in relevant and reliable findings. 2. Deceiving advertisements: In many advertisements especially those which are put up on billboards and in newspapers misrepresentation have been done. This misrepresentation is done using photo-shopped pictures. For instance in anti-wrinkle cream ads actresses look younger not because of using the anti-wrinkle cream alone but also because of airbrushing, plastic surgery, buttock fillers and a unique diet. Some time back UK’s Advertising Standard Authority (ASA) banned Lancome ad showing digitally altered Julia Roberts and Maybelline ad as showing a digitally altered Christy Turlington (Poulter). Such digitally altered ads make women who appear “ordinary” compared to the women in ads feel bad about their bodies. As a result women’s self-esteem decreases and their productivity levels both at workplace and in their homes fall. Photoshop is not the only tool used for misrepresenting ads. By using latest studio tactics which include lighting and wind machines models can be made to look more beautiful than they actually are. Furthermore, dermatologists are paid to advertise off-label cosmetic products in their clinics or offices without mentioning risks. There are also TVCs in which fake evidence is shown to the viewers in labs which do not exist. In the same ads dermatologists are paid to speak well about the cosmetic product. There is a higher probability that a female customer will react to an advertisement having a sultry model since she thinks that there will come a time when she will attain the same level of beauty as the model in the ad. The mentality behind becoming more beautiful is that by attaining an improved physical appearance women become favorites of men and are able to become related to rich and powerful men. In other words, ads are deliberately using beautiful models to make females think they can become dependent on males for favors and resources rather than themselves becoming capable enough to provide for themselves. Women are being cheated by making them believe that one day they can all be as beautiful as those digitally altered models. 3. Hazardous ingredients in cosmetics: example of hazardous ingredient is Talc. Talc is obtained by mining talc rocks. Studies have shown that it is used in multiple cosmetics such as baby powders and its particle formation is linked to the potential cancer causing (carcinogen) asbestos. Such ingredients are never mentioned on the package of the cosmetics since customers might be aware of the side effects of using such substances. However, there are firms which are unaware of the hazards associated with talc-containing cosmetics and so they market baby power as Talc or Talcum powder. Often cosmetics are sold with term “cosmeceutical” on the packaging which is ethically wrong. Since this term is used for implying that the product has medicinal effects. Whereas, the cosmetic industry legislator in the US, FDA explains that cosmetics are products meant for application on body for the sake of beautification, cleansing, increasing attractiveness or changing appearance, without impacting body chemistry. If a cosmetic does affect body chemically then it is a drug and hence it is subject to the same strict reviewing and examination drugs are subjected to before they are approved by the FDA for sale in market. 4. Providing low quality goods and the wrong quantity of goods: In the developing countries there is much less regulation of pharmaceutical industry so one can imagine how much less regulated is the cosmetic industry. Local manufacturers are accustomed to make fake copies of world-renowned brands like Medora and Olay. If manufacturers are caught doing so then all they do is bribe the inspection officers sent by regulating authorities. Sadly, consumers of cosmetics in the developing countries have less knowledge and ability to identify brands since they have been using fake brands since their teenage or even childhood. They think that since nothing wrong has happened with them since childhood/teenage the cosmetic items are safe for use. However, the truth is that the side-effects of such cosmetics do not become apparent within 20 years. One must remember that Cancer is a disease which can form tumors which are often detected at the last stage when tumor cells have spread throughout the body and nothing can be done to save the victim’s life. Key stakeholders affected by ethical issues Customers are the most affected by poor quality cosmetics. They can suffer from diseases and think about things which can never happen for them. Eventually, when customers will get to know the truth from investigation agencies and regulatory bodies they will avoid buying from certain cosmetics manufacturers. As a result, their profits will fall and so their investors will be displeased on receiving fewer dividends to the extent of selling away their share of the business to somebody else. When profits will fall employees will have to be fired in order to minimize expenses. Furthermore, employees with good moral character will feel guilty to work for a firm having unethical practices and so the productivity level of current employees can get so low that company’s efficiency might fall and sales targets might not be achieved. As a result of such disastrous potential consequences, all stakeholders should demand cosmetic firms to conduct only ethical practices. Examples of few Cosmetic firms which have shifted to more ethical practices Keeping in mind the unethical of misrepresentation in ads L’Oreal showed females of all ages posing for cosmetic products in an ad. With this ad L’Oreal wanted to show that beauty is a concept free form the reins of aging. Furthermore, L’Oreal along with UNESCO gives awards to women who excel in a male-dominated filed like science. This is L’Oreal’s way of showing that it is against stereotyping of women and their promotion as “beautiful objects”. Moreover, despite problems L’Oreal became the fifth firm to stop animal testing of cosmetics. Alexami Cosmetics is another cosmetics company that has decided to not use animal testing or include toxic and unsafe substances like Talc, synthetic dyes, Paraben preservatives, Carmine and Bismuth Oxychloride in its cosmetics. Conclusion and recommendations I conclude that cosmetic industry has developed a lot, however, ethical practices are still there. If stance is not take against unethical practices consumers will be harmed while absence of laws condemning and restricting unethical practices will allow firms to be never sued. Therefore, I recommend all ads in which models appear to be much different from who they actually look like must be checked for digital modification. If modifications are found then the cosmetic manufacturer should be heavily fined and such news should be disclosed to the news media in order to disgrace the model and the cosmetic firm. Disgrace will prevent unethical cosmetic firms from gaining repeat sales or new customers hence causing their profits to decline tremendously. Seminars can be held by marketers to explain ethical issues revolving around the global cosmetic industry. These seminars will ensure that people are not foolish enough to buy fake products. Just like USA has FDA while UK has PETA and ASA such pressure groups and regulatory bodies must also operate in developing countries to prevent people from being deceived. Bibliography European Commission Consumer Affairs. Ban on animal testing. 14 August 2012. 25 October 2012 . In Defense of Animals (IDA). Cosmetic testing facts. 11 December 2011. 25 October 2012 . Perry. The 20 Biggest Cosmetic Companies in the World. 30 November 2009. 25 October 2012 . PETA. Alternatives to Animal Testing. 1 January 2012. 25 October 2012 . —. Cosmetics and Household-Product Animal Testing. 1 January 2012. 25 October 2012 . Poulter, Sean. Because Julia Roberts wasn't beautiful enough: Star among celebs whose ads were banned over airbrushing. 27 July 2011. October 25 2012 . Read More