Market Dynamics in Health and Beauty

Section A: Desk Research Results

Introduction

Marketing study includes a study that focuses on analysis of the market demand for a specific product or service. It largely insists on the activities present in the market with regards to significant influences such as demand, competition and locations which can have an impact on the value of the product, brand or even property. The market study, in this context, takes into consideration the health and beauty industry with the market expressing interests in face creams, face scrubs and even face masks. It is worth noting that most of the UK consumers have showcased polarized beauty habits as far as shopping is concerned. A significant segment is largely enticed by premium brands and low value alternatives at the same time. This squeezes the midmarket which is constantly found in a continuum. The discounters and value players are however putting more interest in the market. For those looking for deeper insights, seeking marketing dissertation help can provide valuable guidance. Based on this preamble, the section focuses on the PESTEL analysis of the market and industry, and also establishes a list of the competing brands in the health and beauty industry.

PESTEL

Political Factors

Political factors that seem to influence the performance of the health and beauty market are not limited to policies, rules, legislations and laws introduced by the government. One of the political factors in United Kingdom that has a direct touch on health and beauty industry is product safety. The latter is openly discussed across the cosmetic segment due to the fact that the relevant products are essentially designed for the skin-to-skin contact. Skincare is ultimately the highest growth category with expenditure anticipated to go up by approximately 22.8% in the next five years (Hammad 2015). While the demand stays promising, ingredient transparency remains a paramount factor in the political spotlight. This is also aligned to the demands of FDA which compels companies to report the ingredient statements, register and even recall the manufacturing units. UK, as well as the larger Europe, is said to have had harsher ingredient requirements. This prompted it to ban over 500 out of the 1328 ingredients.

Economic Factors

Some of the economic factors that are put into consideration include economic stability, the exchange rates, GDP and taxes which have a direct impact on the industry. Commonly, the health and beauty industry is essentially resistant to the economic recessions. In the face of the 2008 Great Recession, consumers are said to have become more price conscious. At the same time, health and beauty products are consistently becoming part of the necessities given that consumers would always want a soap or shampoo in their bathrooms. There are still market drivers as well as inhibitors in the industry with consumer demand inclining towards the optimal health and wellbeing believed to have gone mainstream in UK. In the face of balancing the industrial forces, value dupes are constantly threatening the midmarket retailers in the industry.

Socio-cultural factors

Some of the factors under consideration in this section include the ethnicity, environmental engagement, mentalities, traditions and lifestyle among others. Other factors include demographics, education level, attitudes, culture and the class structure. Massage parlors, hair removal, nail salons, plastic surgery clinics, hair styling, perfume bottles and even medical spas are all essential to the industry. Customers are commonly forced to assort before finding the brand of their taste and they eventually become loyalists (Gegg and Wells 2019). Most of the consumers are attracted to the “treat yourself” mindset. Based on this attitude towards skincare products, the luxurious or prestigious facial skincare is said to have accounted for around 71% of the total launches in the year 2018 across the United Kingdom. This is higher than 54% of the total launches realized in the year 2008. At the same time, the mass and budget for the facial skincare seems to be losing out. While beauty and health products were largely seen to lean towards the female segment, the male market is equally taking a significant share of the skincare products in the 21st century.

Technological factors

Significant technological factors aligned to the health and beauty products include product exploration, plant studies, product packaging and active ingredients. Other observable factors include diffusion rates of technology, technological impact and technological developments in the course of the growing industry (Hammad 2015). In United Kingdom, internet is believed to have revolutionized the industry. Most of the netizens can easily get most of their products from online platforms and websites. Most of the retailers would also make sales with the help of e-commerce. Beauty companies such as Unilever and L’Oreal have essentially made fortunes as a result of the try-on apps as well as social media presence. As much as technology has the greatest potential of boosting growth, its application in health and beauty market is said to be at the nascent stage. Apparently, home devices is said to attract high efficacy and affordable luxury.

Environmental factors

Significant factors under consideration include animal testing, toxicity of ingredients, sustainable development and environmental policies. Other factors include climate change, weather and waste management. The health and beauty industry in United Kingdom is putting more focus on going green. The packaging processes are adopting the eco-friendly process while trying to put less stress on the immediate environment (Hammad 2015). UK has equally paid significant attention towards the clean beauty movement which is shifting from skincare to color cosmetics. This implies that UK is in the course of adopting a holistic approach towards lifestyles and clean makeup. Clean beauty is beyond a trend and has a convincing position at the centre of the future market. However, microbeads are currently landing in the headlines. The beads are known for exfoliating the dead skin cells but the area of concern is that they are made of plastic, which can be horrid to the surroundings. FDA has equally put stringent measures on the ingredients entering the market with standards ensuring safety of the consumers.

Legal factors

Significant legal factors associated to health and beauty market include the cosmetic regulations, chemical regulations and environmental regulations. Additional factors include data protection, employment law and tax regulation. In relation to health and beauty market, it is quite challenging to handle the ingredients of beauty. Some of them can be FDA regulated without necessarily being FDA approved. Significant regulations are not limited to Fair Packaging and Labeling Act (FPLA) and Federal Food, Drug and Cosmetic Act (FD&C Act). The FD&C largely controls as well as monitors ingredients on the basis of their use. In case of any issues, then it stands out that the product may never reach the market. Therefore, most of the legislations embraced in UK aid safety for the consumers of the health and beauty products.

Main Players

Boots UK Limited

It is a health and beauty retailer which also handles the pharmacy chain across the United Kingdom and other regions like Thailand and Ireland. The company was established in the year 1989 by the famous John Boot (Boots 2008). The company has over 2500 stores which range from commonly known local community pharmacies to the large destination stores. The company is the leading brand and takes advantage of its online presence. The innovative omnichannel retailer further attracts customers to a range of means that helps them access the Boots App among other services.

The Body Shop

This is a skincare, cosmetics as well as perfume company that was founded in the year 1976 in Brighton UK. The company was found by Dame Anita Roddick and currently runs almost 1000 products that essentially sell in almost 3000 stores on an international platform (Chun 2016). The shop is however confirmed to have started with around 25 products but realized significant growth as time went by. The company takes advantage of the multilevel marketing network which was established in the year 1994. The resulting program from the network strategy was dubbed “The Body Shop Direct” which has seen the firm grow with subsidiaries spread across the world.

The Fragrance Shop UK

The shop was established in the year 1994 and it is regarded the largest independent fragrance retailer in United Kingdom. It runs a total of 175 stores and has showcased around 130 sought-after brands. Some of these brands include Yves Saint Laurent, Hugo Boss, Calvin Klein, Armani and Paco Rabanne (Livingston Designer Outlet 2019). The shop prides itself for delivering the most outstanding customer service. It is also regarded as a Feefo Gold Trusted Merchant. The Livingstone Designer Outlet became handy in finding the right fragrance for the customers in UK.

Glamglow

Glamglow was established by Glenn and Shannon Dellimore in the year 2010. In the year 2010, the brand was made available for retail and shocked the world when it spread out to 86 countries with around 6500 retail stores, luxury hotels, Spa Back-Bars, Cruise and Airlines (Glamglow 2019). The brand was established based on the need of skincare products that would make the skin ready for camera, ensure pore refining, reduce fine lines, produce a glow and diminish the visible imperfections. While the brand looks like the youngest in the market, it is taking the health and beauty market by storm.

Section C – Segmentation

High-end facial care market

In United Kingdom, the skincare market is dominated by the significant facial care category. This segment comprises of 76% by value. However, the market only carries a volume of 63%. The facial care products are believed to be more expensive compared to the rest of the categories with consumers willing enough to spend more. The female segment of this market takes 72% of the shares by value as far as the facial care market. The market value for facial care products is believed to be significant with female population only recording half of the total UK population. Female consumers are regarded as traditional users with the scale of men users expected to increase in the near future as far as personal grooming is put into consideration (Muhsin 2019). Consumers under this segment are regarded as brand loyal and closely attracted to the private label products. Statistics indicate that British women spend around £1.15 billion in the year 2017 on facial skincare. The expenditure is believed to have gone up by 3% in the year 2015 to hit a total of £1.18. Forecasts have gone ahead anticipating the rice.

Skincare market, medium users

In United Kingdom, the skincare market is regarded as the medium segment with forecasts showing that the value attached to it can hit $24.37 billion before the end of the year 2024. This would be a remarkable growth of CAGR of 5.2% with reference to the revenue realized in the year 2019. The UK skincare market essentially reflects the significant augmentation of the entire European market which is characterized by increased focus on brand presence and quality. The empty nesters and the middle-aged women dominate this segment given their attention to personal care. Surveys conducted in United Kingdom on the Spa creators indicated that the medical as well as the health clubs only accounted for 4% and 27% of the entire Spa market respectively (Muhsin 2019). This is a remarkable growth as a result of increased buyer awareness noted in the market. Most of the domestic consumers are said to have become more knowledgeable regarding the skin’s properties as well as the side effects of particular treatments. Unlike the high end users, this segment focuses on general facial care treatment, body care as well as other ranges of the skincare products such as foot care and hand care. This market is heavily supported by the convenience stores, hypermarkets, specialist stores and online retail stores.

Price Sensitive, lower end users

This segment is largely attracted to hand, foot and body care based on the 2018 Mintel Report. This market largely constitutes the male segment that is more attracted to the cleansers such as washes, scrubs and wipes. Other specialized products aligned to this segment include the eye care, lip balms, moisturizers and masks among others. The market is characterized by mass products which are likely to be priced lower, and can be sold in self-serve formats such as the retail outlets, discount stores, chemists and even supermarkets. Men’s skincare market is anticipated to shrink with a decline settling at £92 million from a possible £97 million realized in the year 2017. This segment has a tendency of shrinking the skincare regimes following the unawareness of the skin aspects. The segment would instead focus on the affordable options than the value or quality that can be derived from a product.

Natural and organic consumers, the organic users

Over the recent years, United Kingdom has noticed a growth of special segment sparked with awareness on the side effects of using artificial ingredients in the beauty products. Most of the consumers are turning towards the green cosmetics. The trend has been consistent for the past ten years with the market value rising to $14.8 billion in the year 2017. The premium market is essentially driven by the young female professionals as well as the male metrosexual counterparts who are nurturing the popularity of natural ingredients such as the fruit extracts, herbs, plant extracts and aromatherapies (Morganti et al. 2019). Due to such attention, the premium cosmetic brands have gained traction over the recent years with more innovations changing the consumption angles of the beauty products. It should be noticed that even the high end users, medium users and the lower end users are increasingly falling under this segment. However, this is likely to take more time and more research on the plant characteristics that can boost the organic segment.

Section D – Chosen Brand (Boots UK Limited)

Section D-A: Pricing Strategy

Boots UK Limited is one of the most dominating health and beauty brand in the United Kingdom market. However, in the competitive landscape, Boots has been attracted to different pricing strategies that have seen the company survive in the market. The first pricing strategy is the promotion pricing strategy which appeared relevant when it the company was only competing with the grocers. But the strategy kept becoming meaningless in the face of such strong competitors like Lidl, Savers, Poundland, Aldi and Amazon. For most of the Boots shoppers, loyal points and promotions looked more welcoming but this became irrelevant with time as the strategy could not counter the escalating non-promotional prices (Boots 2019). With budget cut-offs, the brand chose a fallback plan that saw it adopt the economy pricing as one way of staying in the market. However, this would only work when Boots intents to embrace lower overheads as well as costs compared to the competitors. While economy pricing is likely to be convenient in the market, it might largely attract the lower end users who only account for a trivial percentage of the total market share in the United Kingdom. This leaves out the high end users, medium users and the organic users (GlobalData Retail 2019). Based on the recent measures and efforts displayed by Boots, it is more reasonable and more profitable if the brand can adopt premium pricing. The proposal comes handy in the light of high production costs met by Boots and the unique quality assigned or appended to the products. Boots is essentially geared towards ensuring absolute transformation of the stores in an effort to challenge the high street conditions. The revolutionary comes in the light of changing the glamour with life-changing moments focused in showcasing the value of the brand through festivals.

Section D-B: Branding Strategies

Most of the established brands would commonly be attracted to three main branding strategies. The three include brand positioning, brand name selection and brand sponsorship. For Boots, Brand positioning strategy has been the most appropriate. This comes in the light of beauty proposition while trying hard to overhaul the bricks and mortar stores. The company intends to bring fresh brands in the market while trying hard enough to retain the burgeoning market. The decision to position the brand in the market comes after claims of an outdated 170 years heritage, which cannot be enough for the modern customer (Stewart 2019). This has compelled Boots to reinvent the in-store beauty hall experience while refitting the 24 flagship spaces. The move is accompanied with the replacement of the beauty counters with the commonly known discovery areas and the trending zones where customers can experiment the product, browse the products and also get involved in the live demos (GlobalData Retail 2019). Brand positioning still remains the most recommendable branding strategy for Boots. This comes in the light of the normal and almost causal understanding of the brand name selection, which is more traditional and almost basic. On the other hand, brand sponsorship only foster the essence of private brands, co-branding and licensing, which are simply avenues that may not bridge a new taste in the market.

References

Boots, U.K., 2008. limited. Measurement Of UVA: UVB Ratios According To The Boots Star Rating System.

Chun, R., 2016. What holds ethical consumers to a cosmetics brand: The Body Shop case. Business & Society, 55(4), pp.528-549.

Hammad, A., 2015. Strategic Change and Its Management to Expand Business Through Implementation of Models: A Case Study of Boots UK. Available at SSRN 2676800.

Gegg, P. and Wells, V., 2019. The development of seaweed-derived fuels in the UK: An analysis of stakeholder issues and public perceptions. Energy Policy, 133, p.110924.

Muhsin, M., 2019. Mapping Awareness of Halal Cosmetics Brands in the Teenagers Segment of Bandung City. International Journal of Nusantara Islam, 7(1), pp.18-33.

Morganti, P., Morganti, G., Chen, H.D. and Gagliardini, A., 2019. Beauty Mask: Market and Environment. J Clin Cosmet Dermatol, 3(2).