Deodorant In Australia and PharmaCare Laboratories Pty Ltd - Assignment Example

Marketing - Deodorant in Australia Executive summary This paper will be sub-divided into two sections. Section one will primarily center on market analysis through exploring the background of the market and the history of the industry. In addition, it will analyze the tenets of market size and growth as well as the environmental factors that have shaped the deodorant industry in Australia. The second part of this paper will explore PharmaCare Laboratories Pty Ltd which is one of the most prominent deodorant manufacturing firm in Australia. Established in 1985, this company has evolved to become a major player in the manufacturing and wholesaling of pharmaceutical products in Australia as well as wholesaling of cosmetics and toiletry in Australia. This success has long been attributed to extensive innovation and flexibility as well as healthy incentives for the employees. Nonetheless, it is worth noting that immense competition both in the Australian and international market has resulted in the market share of this company being threatened. Both of these tenets will be analyzed in the SWOT analysis later in this paper. Table of Contents Marketing - Deodorant in Australia 1 Executive summary 1 Introduction 3 Part one: Market analysis 3 Industry history and Market background 3 Market share 4 Environmental factors 5 Part 2: Company analysis 6 Company History and background 6 Company operations 8 Mission statement 9 SWOT Analysis 9 References 11 Roy Morgan Research, 2010, ‘ Rexona deodorant the choice for men and women but Lynx is 12 catching up’ Retrieved 23 July 2012, . 12 Introduction From a generic perspective, a deodorant can basically be defined as substance which is primarily produced and used for the purposes of concealing or removing unpleasant smells particularly bodily odours (Oxford dictionary, 2012). From this definition, the deodorant industry can be viewed to be comprised of producers of these deodorants, the various outlets of these products as well as the final consumers of these products. This paper is a profound attempt to analyze this industry in Australia and divided into 2 parts. Part one will primarily focus on the market analysis while part two will focus on company analysis. Part one: Market analysis Industry history and Market background 1988 has been pointed as the year when the first commercial deodorant, Mum was developed and eventually patented in the US. In the Australian context, this industry has evolved within the larger chemical sector (cosmetics, perfume and Toiletries production industry), accounting for 2.8% of the rudimentary chemical and chemical products manufacturing sector in Australia in 2009-2010 (IBS World, 2012a, p. 1). Historically, this industry has been perceived to have a relatively medium level of intensity in terms of capital, with approximately 5 units of labor being employed in each specific unit of capital. This is typical with the larger chemical production sector where the capital cost for establishing and maintaining the industry is higher when juxtaposed with other industries like retail industry due to the nature of the needed machinery in the operations as well as the establishment of the plant itself (IBS World, 2012a, p. 1). Nonetheless, the deodorant industry in Australia has been projected to experience increased growth in future based on current statistics in terms of market growth analyzed in a subsequent section. Market share Source: Roy Morgan Research (2010). In regard to market size, the above graph reveals that the diversity of the deodorant markets in the market has played a key role in widening the portfolio of the deodorant industry. Against this backdrop, this has played a major role in expanding the market size in the country. This is bound to increase the overall compound annual growth rate in future which will continue to inflate the market size. This trend has also influenced the market growth whereby the diversity of the portfolio has heightened in recent years. It is projected that the market will continue to grow in an upward trend as a result of this despite the fact that years 2008 and 2009 showed constant market growth. Environmental factors There are diverse environmental factors which are affecting the Australian deodorant industry. Article 1 One of the environmental factors is based on the divergence taste and preference of colognes between the male gender and the female gender, as well as across different age groups and socio-economic classes. This is best epitomized by Roy Morgan Research (2010, p. 1) who determined that from a comprehensive analysis of the rexona users among male consumers reveal that they are more liable than the average Australian male who has a higher socio-economic orientation to be aged between 35-49 years. This is founded on the fact that this class of consumers is likely to be more sporty and athletically active. This is a similar trend among women whereby those users who prefer rexona tend to be younger than the average female in Australia and have a lifestyle which is more sports oriented. On the contrary, the users who predominantly prefer lynx tend to be younger, single men aged between 14 and 24 who mostly prefer team sports or playing computer games at home. Thus, divergences in physical activities, socio-economic class as well as gender preference are major environmental factors that affect the deodorant industry. Article 2 Another major environmental factors is associated with strict regulatory mechanisms on this industry. In Australia, deodorants and antiperspirants are under strict regulation as cosmetics under the National Industrial Chemicals Notification Scheme (NICNAS) which is entrenched within the Australian Government of Health and Ageing. These stringent regulations, for instance, the mandatory labeling condition for all cosmetics as stipulated under the Trade Practice Act 1974 scare off potential investors in this industry which has negative impacts on its growth. Secondly, recent researches which have tried to link the usage of deodorants to breast cancer among women is another factor that has detrimental effects on this industry. Despite the belief by NICNAS that further research need to be conducted to this effect aimed at ascertaining the causal relationship between the parabens in most cosmetic products and breast cancer, these information has already affected the consumer base of these products since most of them might fear purchasing the products in case the above hypothesis is viable. This poses diabolical impacts to the growth of this industry in Australia, both in short and long-term. Part 2: Company analysis The company which will be explored in this analysis is Pharmacare laboratories. Company History and background According to Pharmacare laboratories website (2012, p.1), this company began its operations in a small warehouse in the northern beaches of Sydney in 1985. By 1989, this company employed 16 full time employees and shifted to a more conducive and spacious premises. This was followed by widespread acquisitions. The latter fact is best epitomized whereby in 1989, the company acquired KP24, Pharmacy Private Label, Invite-e and Pyrenel in 1989. In addition, year 2000 saw Pharmacare acquire the Nature’s way brand from Roche which shot up into becoming one of the largest and fastest growing health supplement range in Australia. In 2001, the company continued with its impressive record of portfolio expansion which was marked by the acquisition of the Myadec and Medi brands from Pfizer and eventually relocated to larger premises aimed at accommodating the swelling workforce (Pharmacare laboratories website, 2012 p. 1). Recent times have also seen the extensive internationalization of this company aimed at enhancing its market share, for instance, amid the economic slump in 2008, the company acquired TNC UK and established Pharmacare Europe. This was followed closely in 2009 where the company acquired Sambuco, the all-natural solution which has the most enormous consumer based across the US and in Europe and in the same year, Pharmacare laboratories established an office in the US following the acquisition of Real Health Laboratories, USA (Pharmacare laboratories website, 2012 p. 1). According to Butcher (2011, p.1), PharmaCare Laboratories Pty Ltd has been releasing between 70 and 90 new products each year, propelling it into becoming a manufacturer of numerous healthcare products which are globally acclaimed in the contemporary market. This is based on the fact that the consumer base of this company span well over 40 countries and currently, PharmaCare Laboratories Pty Ltd is enhancing the lives of many people through promoting worldwide support for alternatives in natural healthcare. Company operations According to IBS World (2012b, p. 1), the operations of this company revolve around manufacturing and wholesaling of pharmaceutical products in Australia as well as wholesaling of cosmetics and toiletry in Australia. The chief outlets of the products include supermarket outlets, pharmacies and variety stores throughout Australia. Some of the most prominent brands from this company include Carotino, KP 24, Nature’s way, Norsca, Fefol, Bioglan, Skin Doctors, Aquasun, Rosken, Brut, Invite and Maseur (IBS World, 2012b, p. 1). All these products have been subjected to an efficient distribution channel whereby they can be found in 4,200 pharmacies, more than 2000 supermarket outlets and department stores in Australia. In terms of resources, this company had expanded its human capital from 16 full time employees in 1989 to 236, 20, 4, 2 employees in Australia, Europe, USA and Asia respectively by 2011. This shows the expansion of the company’s capacity to engage in manufacturing as well as meeting the dynamic consumer needs. On the other hand, PharmaCare Laboratories Pty Ltd has continued to expand its infrastructural capability as a response to emerging opportunities as well as being in a position to absorb the increasing workforce. These efforts are best epitomized whereby the company moved into a 15, 000 m2 warehouse and a new office facility which was purpose built at 18 Jubilee Avenue in Warriewood in 2010 (Pharmacare laboratories website, 2012 p. 1). Against this backdrop, it is evident that Pharmacare laboratories Pty Ltd has continued to expand in terms of international presence as well as human and infrastructural capital which will be key in its future heightened performance in the manufacture and distribution of deodorants with their focus of complimentary medicines and an all-inclusive approach to life catching on in recent times (Butcher, 2011, p.1). Mission statement The mission statement of PharmaCare Laboratories Pty Ltd is based on the core values that propel their business to the complete satisfaction of their consumers and staff. These include but not limited to the creation of a positive working environment which will facilitate the success and growth of the employees towards achieving their goals, to manufacture products of the best possible quality which will enable the consumers to live a more healthy, better and rewarding life. Lastly, the company aims at taking advantage of every product and market opportunity in order to maximize its growth with products which are both entrepreneurial and innovative. This mission is good since it addresses the three rudimentary tenets of a good mission statement. These tenets are ‘who we are, what we do and for whom we do it (Ehmke, 2011, p. 2). SWOT Analysis Chapman (2006, p. 1) determined that SWOT analysis is fundamental and an extremely useful tool in the efforts towards a comprehensive understanding and making decisions for any kind of situation in all sorts of businesses or organizations. The underlying idea in this approach is to match the distinct resources and competencies in a firm with the market with the sole aim of creating a match between the firm and the external environment (Miles and Snow, 1984, p. 12).This is an acronym for Strengths, Weaknesses, Opportunities and Threats. Strengths: PharmaCare Laboratories Pty Ltd is endowed with extensive strengths which are primarily embedded in innovation and flexibility as well as healthy incentives for the employees. In regard to flexibility and innovation, Butcher (2011, p.1) noted that novel ideas in this company do not necessarily using a top-down approach but rather, creativity and innovation is encouraged throughout the company. This is coupled with the capacity to learn from trial and errors as well as practicing a fearless approach towards new acquisitions and marketing mechanisms. On the other hand, the employees are extensively involved in the decision making process resulting to overall satisfaction, commitment and motivation. Interplay between both of these factors has been core to the exemplary performance of this company over the years towards sustained competitive advantage. Weaknesses:In regard to weaknesses, in adequacies in communication channels and networks between the headquarters of this company in Australia and the outside branches in different continents which have been born out of extensive internationalization pose a detrimental effect in the realization of the set objectives. Opportunities:Nonetheless, PharmaCare Laboratories Pty Ltd is endowed with extensive opportunities in the contemporary market which is primarily characterized by immense consumer dynamism as a result of consumer diversification and consumer polarization. In this regard, the robust innovative approach of this company towards meeting the consumer needs will give it a favorable niche in the market, mostly in some unexploited, high potential markets in Africa, South America among others. Threats: The major threat to PharmaCare Laboratories Pty Ltd is based on cut-throat competition from other established companies in the deodorants industry, both locally and internationally, for instance, Unilever. In addition, new entrants in this industry pose significant threat on the market share of this company. References Bellis, M., 2012, ‘The History of Commercial Deodorants’ Retrieved 25 July 2012, < http://inventors.about.com/od/dstartinventions/a/deodorants.htm> Butcher, E, 2011, ‘PharmaCare Laboratories Pty Ltd: PharmaCare Focuses on Healthy Living’ Retrieved 23 July 2012, Chapman, A., 2006, ‘SWOT analysis’, Retrieved 23 July 2012, . Ehmke, C 2011, Developing Vision and Mission Statement, Purdue University, West Lafayette, Indiana. IBS World, 2012a, ‘Cosmetics, Perfumes and Toiletries Manufacturing in Australia: Market Research report’ Retrieved 23 July 2012, . IBS World, 2012b, ‘Pharm-a-Care Laboratories Pty Limited - Profile Company Report Australia’Retrieved 23 July 2012, . Miles, R & Snow, C 1984, ‘Fit, Failure and the Hall of Fame’, California Management Review, vol. 26, no. 3, pp. 10-28. Oxford dictionary, 2012, Retrieved 23 July 2012, < http://oxforddictionaries.com/definition/english/deodorant>. Pharmacare laboratories website, 2012, Retrieved 23 July 2012, . Roy Morgan Research, 2010, ‘ Rexona deodorant the choice for men and women but Lynx is catching up’ Retrieved 23 July 2012, . Read More