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Market environment summary

Discuss about the Consumer Responses to Sexual Advertising.

In the current scenario, globalization has increased at a rapid pace. The marketers have to stay competitive and look for overseas opportunities to increase their customer base and market share. The report aims to discuss the opportunities and challenges that are to be faced while expanding the business at an international level. In the light of given company, Sodashi, the marketing analysis of two countries, namely South Korea and Singapore, is to be ascertained.

Sodashi is a leading skincare product company that deals in supplying products using the purest botanical extracts (sodashi.com.au. 2018). The report will highlight the marketing strategy that is to be implemented while doing business in the preferred countries. With the help of 4P’s of marketing mix- Product, price, place and promotion, the marketing strategy will be evaluated. Furthermore, the mode of entry and market readiness for the Sodashi’s product in the international market will also be ascertained.

The objective of the organization is to increase the sale of its product by building awareness about its brand globally. The increase in sales of the product should more importantly increase the marketing cost (Skarmeas, Zeriti and Baltas 2016). Sodashi aims to target the new customers by entering the new market at an international level. This would help enhance the company’s relationship with its potential customers. Sodisha wants to expand it business and secure maximum return in the long-run.  The company wants to gain competitive advantage in the countries. The competition is high due to similar products being sold at a massive rate. Moreover, the company aims to assist the developing countries like Singapore by eliminating the gap between the developing and developed countries.

Political

·       Political stability

·       Wars and conflicts

·       Corruption

·       Bureaucracy

Economical

·        Growth of economy

·        Rate of inflation

·        The local as well as the overseas economies and trends

Social

·        Health

·        Education

·        Social mobility

·        Population growth

·        Religious and ethnic factors

Technological

·        Technology access, patents and licenses

·       Rate of  the technological changes

·        Communication and information accessibility 

Environmental

·        Natural products

·       Very least impact on the environment

·       Environment friendly products

Legal

·       Health and safety law

·        Employment law

·        Consumer law


Table 1: PESTLE analysis of South Korea

South Korea: South Korea is the main centre of innovating cosmetics and beauty products in the world. Various products such as cushion market and BB creams have originated here, which was later widespread to the rest of the world. The country has an immense thriving cosmetics manufacturing industry and deals in increasing and large quantity of cosmetics products being exported to other countries. The South Korean cosmetic product marketed can be segmented according to the basis of various products into hair care, skin care, oral care, soap, fragnances, shower gels and sun care products. The market is divided into supermarkets, specialty stores, e-commerce, departmental stores, and various other pharmacies (Mathews et al. 2015).  Due to instability in economic condition the overall sales is affected but the sales of cosmetics is always high. This leads in maintain the overall volume of the product. This further contributes to the increase in the usage of the cosmetics products by all the men and women. South Korea is ranked among the top ten countries in the Asia-Pacific region. Though the country has a high level of corruption scandals but has allowed economic freedom in the form of regulatory efficiency and market openness. In the year 2016, the government of South Korea also made it easier to start business by eradicating all post-registration procedures. Moreover, the labor force is also dynamic in nature.

Political

·        Employment laws

·        Labor Laws

·        Political stability

·        Trade restrictions and the tariffs

·        Tax policies

Economical

·        Economic growth

·        Exchange rates

·        Interest rates

·        Unemployment rates

·        The inflation rate

Social

·        Career attitudes as well as emphasis on the safety

·        Rate of population growth

·        Typical regional demographic trends in the country

·        Cultural aspects and the health consciousness among the people

Technological

·        Rate of  the technological changes

·        Automation

·        New method of production

Environment

·        Natural products

·        Very least impact on the environment

·        Environment friendly products

Legal

·        Employment law

·        Consumer law

·        Health and safety law

Competitors analysis


Table 2: PESTLE analysis for Singapore

Singapore: Singapore is one of the most appropriate destinations for all the global cosmetic companies in the Southeast Asian region. The increasing concern for beauty awareness and personal care issues is one of the major driving forces that are behind the growth of cosmetic industry in Singapore. In addition to this, the increasing per capita of the disposable income for females are accelerating the sales for cosmetic products in Singapore. The foreign cosmetic brands are very dominating in nature in this segment. The company invest a huge amount in the research and development for launching new branded products. It becomes highly important for the new company to survive in such a fierce competition. The cosmetic market is expected to rise at a CAGR rate of 5% during the year 2016-2020.

Natural cosmetic products are gaining momentum in the Singapore market. the people os Singapore are generally having a high demand for all the women and therefore accelerating sales for the cosmetic products.  In the recent times, online shopping is also an increasing trend in Singapore. Aligned with all the national policies of the counyry Singapore provides an equal access for education to both men and women. Majority of women in the country are employed therefore growth for the cosmetic industry is rising. Consumers in Singapore purchases mostly all the branded products online as there is no fear of quality (Surdu, Mellahi and Glaister 2018).

South Korea: the beauty or cosmetic products in the world is a sector that still remains impervious to the changes in the world economy. Some major competitiors in South Korea are the branded cosmetic products such as, L’Oreal, Unilever, MAC, Revlon, Olay , Maybelline, Avon and Neutrogena. Famous popular brands that are within the middle income bracket of South Korean people are Skin Food, Laneige, Etude House and SK II. The premium products that are offered by Dior, Clarins, Lancome, Praire, Clinqiue and Shieseido are also high in demand due to the high purchasing power. South Korea is now the birthplace of beauty products for men as well. This further represents the growth area in the nation’s market place.

The recent trend for beauty and skincare products involves lasting power wth new colour palettes. Thus, increasing the market share related to the ethnic products and also has high preferences for organic, vegan as well as natural beauty products. This products are improved by the usage of other important ingredients that mitigate the negative effects of pollution, dust, sun and other harmful products, which are a part of the cosmetic products. Moreover, threats of substitute products in South Korea is very high. It would be a challenge for Sodisha to make its oqwn niche in such a competitive business environment.

Singapore: the market condition is highly competitive due to the existences of major branded companies within the country. The intensity of existing rivalry is huge and the government policies and regulations further makes it difficult for the emerging countries. The major competitors are Loreal, Estee Lauder, Procter & Gamble and Shieseido Singapore Co.  Due to the changing work style of people and increase in internet usage, the shopping culture in Singapore is mostly done online. The online retail shopping culture has provided the people an outstanding experience by delivering high quality products and excellent customers services.

The bargaining power of the customers is very high due to the availability of cosmetic products from the various manufacturers. Various substitutes are available in the market, which makes the customers to force the manufacturing company to decreasing the product prices by purchasing it with their competitors. It is challenging for Sodisha to launch its company in Singapore. The bargaining power of the suppliers in the competitive market is also very high, which influences the change in the price of the products. This is done by using advanced technology like, marketing manipulation in the form of restraining supply and hoarding.  If the consumers would not be satisfied by the products they could easily opt for similar products that are present within the market.

Strengths

·        There is a sturdy support from the liberal leaning Jeolla region

·        There is a political expandability in the country because of it has become a leading centrist figure

Weaknesses

·        It has absolutely no experience in the field of state governance

·        Its support rating is still at half of that of the Moon’s.

·        Its centrist stance often seen as a political ambiguity.

Opportunities

·        There is an alternative choice for the voters

·        It can play a major role in the ‘anti-moon’ solidarity

Threats

·        The company could be overshadowed as because of the progressive conservative match

·        The conservative appeal of the company could backfire among the voters resulting in their desire for change


Table 3: SWOT analysis for South Korea

South Korea: it is one of the fastest growing economies in the world. South Korea is a high labor intensive economy and has considerably grown with huge capital and updated technology. The irregular forces in the economy are the major driving factor from the economic recovery in the year 2008. The market openness, regulatory efficiency and the government willingness to allow foreign investment would be a perfect choice to do business in South Korea. The market condition of South Korea is favorable for the expansion of business and foreign investors. The South Korean marker is also expected to witness a high growth rate in the medium to the long-term future.

Strengths 

·        High skilled workers

·        Comprehensive infrastructure

·        Stable as well as efficient government

·        Well-structured regulation

Weaknesses

·        Difficulty in the recruitment process

·        There is some quality issue in the products

Opportunities

·        High needs for something extra

Threats

·        Online retailers

·        Competition


Table 4: SWOT analysis for Singapore

Singapore: It has a free market economy that is highly developed and successful in nature.  Unemployment condition is relatively low as compared to other countries. Singapore has a corruption free market environment with stable prices. It has attracted huge investment in all kind of technological production and advanced manufacturing (De Mooij 2015). Singapore will continue to strengthen its position as the leading hub in entire South-East Asia for foreign companies to expand their business. Singapore has taken effective measures to encourage entrepreneurship and promote innovation. The government of Singapore attracts foreign talents by issuing various employment passes and permits. The government of Singapore has opened or in the verge of opening facilities like, telecommunications, financial services and retailing services to all the foreign investors.

South Korea: Establishing and retaining strong business relationship is crucial. The organization should visit South Korea in a frequent manner so that they could create contacts with the people easily. This would help them to understand the business condition in a more appropriate manner. Keeping a manufacturer’s distributors, representative and should name a registered organization as an agent. Furthermore setting up a branch sales office can also prove to be useful. Recently, the Commercial services are assisting the foreign companies to develop a effective connection through diligence and marketing services. Sodisha can enter the South Korean market in the form of partnership arrangements with the domestic companies based on mutuality (Moon and Oh 2017).

Singapore: while entering the Singapore market, using distributors or agents who can serve the people residing their and the firms to gain competitive advantage will prove to be quiet helpful to serve the people. The firms within the country are quite aggressive when it comes to represent new or innovative products and actually acts enthusiastically to all the new available opportunities. In Singapore, the crucial three elements that are considered while buying by the people of Singapore are price, services and quality. The Australian based company Sodisha should be aware about the fierce competition in the market. Moreover, the buyer expects after sales services from each of the existing brands.

Marketing segmentation usually refers to combining all the prospective buyers into groups and segments. They have common needs that respond similarly to the marketing actions. This segmentation makes the organization to targets the various categories of customers that perceive the full value of all the services and products from each other in a different manner. Market can be usually segmented into number of ways such as, geographically by region or demographically by age, gender, income and family size. The market is also segmented psychographically in the form of social class, personality and lifestyle. The objective is to make the organization to differentiate their products as well as messages according t the common area of the market segments.

In South Korea, the cosmetics companies are highly becoming popular in their own market. They are highly becoming popular in their own market. International competitors like the calculator the L’Oreal in the hair care segment. The market is segmented in two different parts for male and female.  The main key players in the market are Unilever NV, Procter & Gamble, L Brands. In Singapore, products are further segmented in the basis of products such as face, body, nails and hands. The South east Asian countries is expected to retain  a market share of $4.2 billion by the year 2022.  The cosmetic products are also segmented by mode of sale in the form of retail and online process.

Targeting in marketing is such a strategy that breaks the large market into smaller segments so that they can concentrate on a particular group of customers within that particular group of audiences. Targeting actually defines a customer’s segments that are based on special characteristics and focus mainly on serving the targeted customers (Choi and Yeniyurt 2015).  Targeting in a market is highly crucial because it is a vital element of holistic marketing strategy. This leads to create a impact on operational activities of business, customers experience, advertizing and branding of the products or services. Using targeting serves both the brands and customers in marketing.

Sodashi deals in natural beauty care products so the target market will include all such customers that would like the natural and organic beauty products. In South Korea, the combination for natural ingredients and low price is the main priority. Women use plants and herbs as a result of the business culture. The main target customers both in South Korea and Singapore would involve the upper class and upper middle class people that gains in affluence. The working and females between the age group of 15 to 50 years. In Singapore, the target market includes both male and female as they are highly attracted to such products.

Market positioning helps in establishing an image and creating such an environment that helps in creating utility of the products among all the target customers. Though the products have various uses and differences in quality but the positioning of the products in the business market will helps in determining all the demands that would be generated from the consumers. The end result from the positioning of the product is the creation of a customer forced value propositions (Sousa and Tan 2015)

In South Korea and Singapore, it would be essential for Sodashi to create their own brand value and  identity through high quality, performance and reasonable pricing.  The marketing plan should include the positioning statement by define the goals of the organizations. It is highly significant to communicate the organization’s brand positioning  to the people.  Price quality can be used as an effective strategy for the company to expand its business in the foreign countries. The positioning of the products should be made in such a manner that it would be easier to gain competitive advantage over other firms.

In the current scenario, differentiation can lead to gain competitive advantage over the other company.  It is one of the most vital marketing strategy that is important to differentiate the brand with the other competitive products. The best way to effectively implement differentiation strategy is in the form of innovation (Radulovich, Javalgi and Scherer 2018).  By adding unique and additional features to the existing beauty products Sodashi can successfully differentiate its products in the foreign market.

In South Korea, Sodashi can imply the strategy in the form of product differentiation it would easily help to customers to differentiate the product in the eyes of the customers.  In Singapore, the company can use the pricing strategy to increase market share. Moreover, by raising the price the affluent section of the society will be attracted to the products. Pricing differentiation would also lead to create effective branding strategy.

Marketing mix refers to the certain set of tactics or actions which a company makes use of in order to promote its products and brand in the existing market (Olson et al. 2018). There are 4Ps that altogether makes up the complete marketing mix and they are product, price, promotion and distribution. It is to note that each and every elements of marketing mix influence each other and they make up the entire business plan for certain company. If handled in the correct way, it could result in huge success but if it is handled in a wrong way, it could take many years to recover. The concept of marketing mix needs in-depth understanding, consultation and market research with different people, right from  the users, trade, the manufacturing and several others.

The products are the ones that are actually being sold by the company. Sodashi was introduced in the market as a white fluid packaged in a heavy black colored bottle. With the passage of time, the company has diversified into different items in order to meet with a wide range of skincare needs based on the different skin type, product line and the requirement of the product. Some of them are as follows:

  • Eye concerns- Bags under eyes, Dark circles, Under-eye Wrinkles, Crow’s feet
  • Facial concerns- Acne, Anti-aging, dull skin, sensitive skin, pores, dry skin, sun protection
  • Body care- beauty bars, body lotion, in-shower body lotion and body wash
  • Skin type- Oily skin, sensitive skin, combination skin, dry skin and normal skin
  • Treatments- Specialty treatments, masks and primers
  • Facial cleansers- facial toners, foaming cleansers, cleansing brushes, cream cleansers, facial toners, cleansers and exfoliating scrubs, face wash.
  • Facial moisturizers- Daily moisturizer, serums, CC and BB creams, , lightweight lotions, SPF protection, night creams
  • Sodashi eyes- rollers, serum and creams

As because of the fact that Singapore is a well developed country with people living a high standard of life, therefore, the company has chosen to distribute premium products there so that it can earn huge revenue. In South Korea, although the country is one of the main regions of innovating cosmetics and beauty products in the world; most of the people living there are not that economically stable (Kim and Hong 2017). Hence, the company has decided to distribute its products at comparatively low prices as that in Singapore.

The term price refers to the value that is to be set for a particular item or product. The pricing of a product depends on the cost of product production, the segment that is to be targeted, and the potential of the market to pay, the supply demand as well as a host of other indirect and direct factors associated with it. There are many types of pricing strategies and each of them is tied in with an overall business plan (Stadtler 2015). The activity of pricing could also be used as a demarcation for differentiating and enhancing the products’ and brand’s image. As stated above, Singapore is hailed as one of the richest nations of the world and the people living there live a standardized life. Hence, the company would set its products price keeping this in mind. It has mainly targeted the women as its potential customers who belong from the age group of fourteen to forty five years and from upper to upper middle classes of the society. It is to state that the pricing strategy greatly depends on the perceived value of the products. It would be projected as one of the premium brands in the customer market and would also adopt a very premium pricing policy in both the countries. However, in the South Korean region, it would keep its product prices comparatively low as it would consider the fact that most of the people there belongs to middle class families.

The term promotion of certain product refers to activities when a business or a company decides the form of communication that it wants to make use of in their marketing plan (Stark 2015). It is inclusive of the activities of press reports, advertising, word of mouth promotion, commissions, incentives, awards to the trade etc. With the same, in some of the business, it might also include the consumer schemes, contests, prizes and direct marketing. Sodashi has started its marketing policy through projecting all its products as unique along with special properties. With the passage of time, the company started using different advertising mediums in order to gather positive and constructive brand visibility. It promotes its products through television advertisements. It also makes use of Social media platform to promote its products. It has different social media pages such as Instagram, twitter and facebook where it advertises about its current products as well as make people aware of its upcoming cosmetics and services as well. Its products are also advertised through beautiful and creative campaigns which are well equipped with all the necessary descriptions of the products that are required to know by the people in radio, billboards, newspapers, portals in social media and magazines. Its recent tagline includes- “Sodashi is pure nourishment for beautiful skin”. Sodashi has realized the strong influence of the star power and has ropes in the famous and widely known personalities for the celebrity endorsements. In the international market, its brand ambassador is Nick Tobias.

In today’s world, the distribution process by a company could be of an enormous competitive advantage to the companies (Porter and Kramer 2019). Most of the companies target their customers wide and far. As because of rise in the prices, the companies all over the world are trying to expand in different markets in order to make sure that they have high turnover along with high margin as compared to the their competitors and other companies. In order to reach far, the Sodashi too have adapted different innovative distribution strategies in place. Sodashi has started its operations from Australia and has spread its business in other international markets as well. At present the company is planning to introduce itself in the South Korean region and in Singapore. The brand makes use of very strong network of distribution and includes the services of distributors, agents and retailers in order to reach the potential customers via efficient logistic companies. The products of the company are all available at the convenient stores, hypermarket, discount stores, malls, different supermarkets and the beauty product shops in both the countries (Singapore and South Korea) so that people could easily available the items there. It also has its own online stores where the customers could order their desired products and get it sitting at their home alone.

Conclusion

The demand for the brands of cosmetics is on the rise in the current era, as more number if people in the market settle for the aesthetic body and beauty care. From the above analysis it can be concluded that Singapore and South Korea both have effecting marketing condition for the beauty products. The company, Sodashi, can further expand its marketing conditions and expand its business in the international markets. Moreover, through effective segmentation and targeting Sadashi can create its own niche in the market. Therefore, it can be concluded that through branding and implementing proper pricing strategies, the firm can increase its market effectiveness at the international level.

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