Dermatologic Cosmetic Laboratories in the UK - Case Study Example

DERMATOLOGIC COSMETIC LABORATORIES By Dermatologic Cosmetic Laboratories INTRODUCTION Since 1980, Dermatologic Cosmetic Laboratories (DCL), has consistently delivered doctors with a wide range of superior quality nonprescription hair and skin formulation for direct dispensing (DCL 2015, para. 1). Over the past few decades, DCL has been one of market leaders in the cosmetics industry due to its ability to offer a wide range of products. For instance, DCL offers an extensive selection of the Alpha Hydroxyl Acids (AHA) formulations and forms which may include Cleansers, Toners, Scrubs, Creams, Gel, Sun-care and Packs among others that contain Glycolic Acid that can be used to step-up the dispensing process. Equally, DCL is not only a pioneer in the cosmetic market, but it also employs various medical practices to ensure that its broad product line accomplishes various factors. For example, DCL’s product line has been proven to complement the medical acumen, guarantee the patient’s compliance as well as providing value and service to the patients. Therefore, DCL upholds its mission which is focused upon optimizing the doctors’ analytical and medical skills through stepping up dispensing, as well as offering a broad product line that is effective and guaranteed. Thus, the organization’s commitment to quality production enables it to supersede the industry standards, and for this reason therefore, DCL has continually led in advanced skincare technology, providing comprehensive systems and quality performance. To cement its position and increase its market share, the company aims at introducing its products and services in new markets such as the United Kingdom (UK). TARGET MARKET The apparent target market for DCL is the UK, a market that is already packed with a high number of natural facial products from other giant companies such as Nivea and L’Oreal. This implies that there are several well established corporations who have already tapped into the UK market and thus DCL is bound to face a relatively high competition in this market. Generally speaking, the UK is a well-recognized, developed nation that possesses a high number of trading facilities such as trading policies, communication, market exposure, and transportation among others. It is also worth noting that due to the existence of numerous beauty product available in this market, the consumers are highly aware of the different features of each products and for that reason, they are highly sensitive to any slight change in a product. The consumers are also huge spenders of these products and chances are high that they would try new products from established brands such as DCL. MARKETING According to the American Marketing Association (AMA), marketing can be defined as the process of planning and executing an idea or concept through the determination of different factors such as pricing, distribution and promotion of products and services so as to achieve the objectives and goals of the organization (qtd. in Pride & Ferrell, p. 4). Therefore, for DCL to ensure that it successfully penetrates the UK market, it should make appropriate use of the various marketing tools, so as to ensure that the right product is delivered to the right people and at the right cost and place. To determine the right marketing strategy, it is important to look at the consumer analysis, SWOT analysis, as well as the Ansoff’s Product-Market Growth Matrix among other techniques. SWOT ANALYSIS STRENGTHS As a company, DCL has a number of strengths that it can use to ensure that it successfully penetrates the new UK market. For instance, apart from manufacturing natural products which are non-toxic, the company also offers products that are highly unique in terms of their packaging and features. Furthermore, the company has a fully trained and experienced set of employees that have the ability to determine the market’s need, and develop products that will effectively meet those needs. In addition, offers products that are of relatively fair prices and higher quality compared to the existing companies, and thus this could attract more customers towards purchasing the company’s products. WEAKNESSES Besides having a several strengths, DCL possesses a number of weaknesses that could hinder its successful penetration into the UK market. For example, although the company’s products are very famous in various nations such as America and Pakistan, the UK consumers are barely aware of the products, let alone the company. Besides, the company’s staff is not trained to perform in the UK market and thus would most likely face a challenge to work in this region which is highly competitive. To repeat, the company’s products will face stiff competition from those of other established firms such as Nivea and L’Oreal. OPPORTUNITIES The consumers in UK are highly sensitive about their general health and safety, more so whilst using the cosmetics. Therefore, Since DCL offers Natural products that have been proven to be safe and healthy, it would be easy to convince the consumers to purchase their products. In addition, there is a rapidly rise of market for cosmetics and in particular, natural beauty products, in the UK, and thus DCL has a possible bright future in this market. Also, it is worth noting that the company’s product are relatively cheaper but of similar or superior quality, and thus the UK consumers are more likely to adopt the use of these products. Moreover, starting a business in UK would help DCL to be able to easily expand to other European nations in future since most of the European markets are similar. THREAT First, the company faces a threat in terms of the UK governmental policies such as tax payment that are quite different to the Company’s hometown policies. Therefore, adopting these policies may be a big challenge to DCL. Equally, the UK market requires that any company that engages in business in that market should actively involve itself in social corporate responsibility. This could highly affect the revenues of the company thus decreasing its competitiveness level. Furthermore, this market is already tapped by other “big” competitors such as Nivea and L’Oreal and thus there is a very high competition in this market. Lastly, the change in the geographic regions may also negatively affect DCL and its overall employees thus posing as a relevant threat. CONSUMER ANALYSIS According to Ramaswamy and Namakumari, one of the major reasons for new product failure is the lack of the product to satisfy the needs of the consumer (2013, p. 438). Therefore, DCL should ensure that the product it offers in the new market, in this case the UK market, have the ability to meet the various needs of the consumers. Factors such as situational, social, and marketing can influence the consumers’ decision making since the decision making process depends upon the degree of these psychological influences. As Hodgson and Willows point out, effective marketing begins with recognizing the various needs of the consumer, after which the management should work backward to develop the products and services that would satisfy the recognized needs (2010, p. 22). Hence, Product introductions which satisfy the consumer needs are more likely to generate considerable consumer acceptance thus increasing the company’s market share as well as the brand reputation. Besides, in order to estimate the performance of new products in a foreign market, it is essential for the management to consider the trend of purchases in the new market. It is therefore important that managers examine the overall market so as to determine and maximize on the available strength and opportunities, whilst putting measures in place to reduce the available threats and manage the weaknesses of the company. For that reason, the competitive environmental factors play a huge role in determining the success or failure of new products in a market and therefore DCL should carry out a comprehensive SWOT analysis to ensure that its products successfully penetrates the UK market. THE ANSOFF’S PRODUCT-MARKET GROWTH MATRIX The Ansoff’s Product-Market Growth Matrix is a marketing tool that allows marketers to objectively determine how best to expand their businesses through existing or new products in the new or existing markets (Proctor 2002, p. 268). Under the Ansoff’s Matrix, there are four possible combinations of the product or market and thus DCL should examine the combinations to determine what the ideal course of action will be. The Ansoff’s matrix is composed of four strategies which are discussed below. (a) Market Penetration DCL can use the Market penetration strategy to penetrate the UK market with the current company’s products. The most appropriate way of achieving market penetration is by winning over the competitors’ customers, attracting new users and/or convincing the current users to increase their use of the existing products with ways such as promotion and advertisement. Therefore, although it would be hard to win over new customers, Market penetration is the most appropriate strategy that can be used by DCL since it is the least risky. (b) Product development It is where a firm with an existing market develops new products intended to cater for the same market. (c) Market development This is where a firm uses a recognized product in a specific market to target the consumers of different segments in order to increase the firm’s revenue. (d) Diversification Of the four strategies, diversification is the most risky since it is a combination of both market and product development and thus it would be inappropriate for DCL to adopt this strategy. It is however worth noting that this strategy can pay off if the high risk is compensated by a high chance of high returns. Marketing Objectives Simply put, a company’s objective refers to what the organization wants to achieve whereas the strategy refers to the company’s plan to achieve the objectives (Orcullo 2008, p. 4). DCL’s main objective is therefore to expand its market by penetrating the UK market with its natural and non-toxic products. Therefore, through market penetration strategy, DCL can effectively boost its revenues, increase its market share as well as introducing a natural product into a relatively new market. Marketing Strategies The marketing strategies are the different plans that can be used by DCL to achieve its various objectives and can generally be represented with the 4 Ps of the Marketing Mix. These 4 P’s are as discussed below and they include Product, Price, Place and Promotion. Product The company has a wide range of natural and safe products which are highly popular across the globe and thus DCL can use its well-recognized products as the basis for penetrating the market. Furthermore, the company’s products are also of relatively high quality thus giving it an edge in the UK market penetration. Price Equally important, DCL company products are relatively cheaper as compared to those of its main competitors such as Nivea and L’Oreal and thus this factor can enable DCL to compete effectively. Since DCL’s products are of similar or even high quality compared to its key competitors, then the company can use pricing as a way to effectively penetrate the UK market thus increasing its competitiveness. Place DCL places its various products in its various outlets, in shopping malls and major supermarkets such as Tesco, as well as with its partners. However, in order to reach most customers, DCL should also focus on providing information to the UK based consumers through its website. Promotion Promotion is an important factor in getting customers to purchase a company’s product (Gopal 2007, p. 337). DCL can employ the use of promotional strategies such as TV, Website and newspaper advertisements in order to increase customer awareness thus increasing the company’s sales. Besides, DCL can also provide free trial products for their consumers as one way of promoting future sales. Moreover, DCL can use sponsorship to provide for various marketing campaigns that will help to display the company’s products for the purposes of customer satisfaction. RECOMMENDATIONS Soon after DCL launches its product in UK, there should be collection of customer feedback to help the company to know how it could meet other needs that the users have. Besides, the company should also ensure that it has an up to date technology that is advanced in order to ensure that it actively competes with other established firms such as Nivea and L’Oreal. Furthermore, DCL should consistently engage itself in multiple sponsorship events such as the gaming competitions to increase customer awareness as well as brand reputation and loyalty. CONCLUSION Since the success of the introduction of a product in a new market is dependent upon good marketing plans and strategies, DCL should ensure that it formulates ideal objectives and strategies that will ensure its effective penetration of the UK market. Equally important, DCL should consistently provide its customers with multiple promotional offers whilst still increasing the quality of its product to create customer satisfaction as well as customer loyalty. Besides, DCL should examine other factors such as the UK cultural practices, demographics, the purchasing patterns and competitors’ strategies among others so as to increase its competitiveness. In a nutshell, to be successful in the “new” UK market, DCL should ensure that it has formulated and implemented efficient objectives and strategies that would enable it to penetrate and compete actively in the market. Works Cited Dermatologic Cosmetic Laboratories 2005, About DCL, East Haven, retrieved 02 March 2015, . Hodgson, A., & Willows, D., 2010, Effective marketing, communications and development, Melton, Woodbridge, John Catt Educational. Orcullo, N. A., 2008, Fundamentals of strategic management, Manila, Philippines, Rex Book Store. Pride, W. M., & Ferrell, O. C., 2010, Marketing, Australia, South Western Cengage Learning. Proctor, T., 2000, Strategic marketing an introduction. London, Routledge. Raja Gopal, 2007, International marketing Global environment, corporate strategy, case studies, New Delhi, Vikas Publishing House. Ramaswamy, V. S., & Namakumari, S., 2009, Marketing management: global perspective, Indian context, Delhi, Macmillan. Read More