Executive Summary
Beauty products have portrayed a booming growth propelled by the increasing economic growth, specifically in developing countries. Beauty masks represent a cosmetic category comprising of serum, cream, lotion, gel, or sheet which contain active ingredients for improving skin appearance. It represents a niche of the cosmetic market which is gaining popularity owing to various anti-aging products which are in use by many individuals. Just like any other business, the cosmetic industry also needs to do proper promotion of its products to maximize sales. Though the process of developing an effective selling approach for skincare may be challenging, the industry has the capability of doing it. This is simply because if one wants the business to grow, a successful positioning and marketing strategy is the key. Identifying the target audience is the first step in product advertisement and entry. One needs to understand the demography being targeted and the kind of customers that should be reached. Determining the unique attributes of the products, i.e. what makes the business stand out is another significant area. For a business person to make sales, they must ensure that their products are more valued compared to those of the competitors. The products should be made to appear as desirable as possible through the utilization of digital platforms. What follows is the definition of the sales channels that will be used – how the products are going to reach the target customers, online, or mortar store. The last consideration entails the identification of a suitable country for export in case one wants to diversify the products beyond the national border. The aim of this market research is to analyze the Sand and Sky skincare business, its position, and differentiation tactics of entering the Indian market, as well as the possible social and cultural barriers and regulatory and legislative codes it is likely to encounter.
Introduction
Natural ingredients, chemicals, and minerals are the main raw materials used in manufacturing cosmetic products. Consumers utilize these items in enhancing their beauty through skin rejuvenation and shining or smoothening of hair. The advancing technology, especially in the manufacturing industries of cosmetics, has been a key driving factor for the market of the aforementioned products. The application of the goods has been increased further by the current economic expansion in the developing countries, owing to the amplified disposable income of consumers. The products are classified into hair and skincare, color cosmetics, and fragrances. Department and drug stores, pharmacies, and supermarkets are some of the distribution channels targeted to offer an array of products for convenient selection by clients (Morganti et al., 2019). They are manufactured and labeled while considering the specifications for product safety. In this market research paper, the Australia-based Sand and Sky skincare business are examined to underscore its potential markets and positioning strategy. India is recommended as its possible country of export, and the associated social and cultural barriers, as well as the regulatory and legislative codes, are underlined.
Potential Markets and Positioning Strategies
Sand and Sky skincare is an Australian-based Beauty Company that is recognized for its pink clay mask. The venture has extended its sales globally and has launched other items, such as hydrating products (serum and moisturizer). It is aggressively going after the clean category and is on the verge of joining the Conscious Beauty Program anytime. The market for cosmetic products is usually segmented based on the type, geography, and distribution channel. Products are included on the basis of product type: skincare, personal hygiene, hair care, bath and shower, sun care, fragrances and deodorants, soaps, and oral hygiene (Morganti et al., 2019). The market segmentation, which is basically the distribution channel, includes department stores, supermarkets, pharmacy and drug stores, specialty stores, beauty salons, and internet retailing.
Almost all companies have a common goal of assuring that the marketing strategy they employ connects well with their target audience in a unique way that initiates the purchasing behavior. Many enterprises in the beauty and cosmetic industry prefer development strategies that may include launching new products or merging to enhance product portfolio and increase global presence (Narayanan and Sharma, 2020). Hence, the top players in this sector change fashion trends, embrace innovations, and offer products with regard to customer preferences. They emphasize multi-functionality, advancement, safety, and any other desired property of the product.
Careful modification of content production and distribution starts with an intensified research of the audience. Similarly, in the cosmetics business where smaller and newer brands are bound to threaten the existing global brands, detailed audience research makes a difference. The unique way in which consumers define a particular product according to its important attributes is what is referred to as positioning. Normally, it is the place that the product occupies in the minds of customers in comparison to the competing products. Clients have an intricate set of impressions, feelings, and perceptions towards a specific product that does not develop randomly (Narayanan and Sharma, 2020). Thus, beauty companies should work thoroughly to influence their target customers to differentiate their products from others.
To better position itself, a company needs to first identify its target audience before it enters the market. This is where market segmentation plays an important role, involving the division of a big market into small groups consisting of potential purchasers with the same psychographic and demographic characteristics. Positioning, therefore, involves the selection of the correct competitive advantage and employing the necessary steps to communicate the selected position to the public (Narayanan and Sharma, 2020). For Sand and Sky skincare to lead the industry, it should aim at attaining sufficient uniqueness to its products. This can be achieved by differentiating the goods, image, services, and personnel of the company.
Product differentiation is done on the attributes of consistency, innovation, and reliability. Making a service unique, on the other hand, is achieved by focusing on the speed of delivery once the product is on-demand and reduction of prices. Training people and hiring constitute personnel distinction, which enables a company to gain a competitive advantage over its rivals (Narayanan and Sharma, 2020). The staff is trained to show courtesy, friendly reaction, patience, and respect to the customers. Brand image is another important aspect of the way consumers perceive a certain product. Sand and Sky skincare should, therefore, work towards establishing an image that differentiates them from other beauty products (image differentiation). The company should also provide unique products and services to help establish and maintain customer loyalty.
Suitable Country for Export and Positioning Strategy for the Venture
Australia views the Indian market as the best for its beauty products due to the increasing consumer demand attributed to the growing disposable income and aspirations for makeup. Customers in India are constantly looking for new cosmetic brands that have the ability to demonstrate a strong concept and exclusive constituents. Moreover, a noteworthy proportion of the population is composed of the young characterized by a strong desire for fashion. The cosmetics sector in this category has been divided into several segments, including hair and skincare, color, and fragrance cosmetics. The cosmetic market in the country is steadily developing and is expected to absorb roughly 5 percent of the total global sales in beauty products in the next 5 years (Pathak and Nichter, 2018). Being the world’s fastest-growing marketplace, it is becoming an organized point of detail that is suitable for Sand and Sky skincare products.
More specifically, personal care and cosmetic products are the categories that are growing fast and offering strong potential for Australian beauty items. The evolving Indian beauty market offers Australia a long-term opportunity for international trade. Sand and Sky skincare exports will be promoted by the company’s image of clean and green environment considerations in production. Indians are brand conscious and are, thus, likely to prefer the premium brand of Australian goods, though generally, imported and branded goods are regarded as quality. Moreover, the openness of Indian consumers to boutique brands will provide Australian labels with a potential entry into the market (Pathak and Nichter, 2018). The online channels which are exclusively made for fashion and cosmetics have made it possible for industries to enter the market without a physical showroom.
The efficient way of penetrating India is by working with the local distributors and agents. The aforementioned groups play a great role in contributing to sales and marketing, brand building, and sustaining brand development in the market. Online and e-commerce channels are also key platforms that do well in marketing beauty products. The promotion of beauty products is an essential way of ensuring the success of a firm in an already competitive market. Certain strategic applications need to be applied, especially in India, to promote the success of the products in the market. For instance, e-marketing is a trend that is currently acquiring the interest of many consumers (Pathak and Nichter, 2018). India, being in the heart of possibilities, has many rivals who constantly compete for beauty products. Posh cosmetics and brands seek to take advantage of the market by utilizing digital advertising platforms.
Brand positioning is the best market venture which Sand and Sky skincare should adopt to make a grand entry into the Indian market. This is because a branded business is believed to deliver to its customers with excellent coherence. This kind of positioning summarises the company’s core promise, the benefits, the problem to be solved, and the target audience. For example, one can determine the core promise by making use of the emotional benefits pyramid. It aids in designing and delivering the extended promise for different internal and external touchpoints (Fayvishenko, 2018). Essentially, brand positioning acts not only as a guide for effectively communicating products but also as an internal guide for Sand and Sky business to communicate to its target clients in Australia.
Perceived Social and Cultural Hindrances
When a particular firm decides to diversify beyond its national border, it has to eventually adjust to a foreign culture. Ignoring the prevailing cultural differences results in low and sometimes negative returns, weak market share, some missed opportunities, productivity losses, reputational damage, legal challenges, and premature termination of contracts (Roy, Sekhar, and Vyas, 2016). The biases, misunderstandings, and tensions which are usually caused by cultural differences lead to an outright failure.
While Australia is argued to be an egalitarian society, India, on the other hand, is a more class-oriented country. Australia comprises diverse groups of people who can freely collaborate and share products, unlike in India where the class a person is born in remains crucial. In such a scenario where a country is influenced by class, business operations are mainly grounded on the economic exploitation of the various class clusters, and often, the international labor standards and laws are violated (Roy, Sekhar, and Vyas, 2016). The attitude towards appointment is a cultural trait that varies between the two countries. The appointment is confirmed whenever the appointee shows up in India because they consider a refusal rude, while Australians value each other’s time. The latter would rather call to cancel than make the other person keep waiting.
The language barrier is another barricade to international trade between the two countries. Indians speak Hindi as their first language alongside other languages, while Australians speak English. Language barrier leads to poor communication, misunderstandings, and fear resulting in business risk (Roy, Sekhar, and Vyas, 2016). In terms of personal privacy, there is a marked difference existing between the two countries. Whereas Australians value and guard privacy, Indians do not. A clear and concise understanding of these social-cultural differences will give Australia a good grasp of the market upon entry.
Regulatory and Legislative Codes in India
Australian industries which need to export their products to India must be aware of the taxes and import duties in place, including tariffs and other regulations to which they are expected to comply. Understanding the prevailing regulatory and legislative codes will give a business ample time of promoting its products in a foreign country. A tariff is a tax that is usually applied to a country’s imports while duty is a tax applied to domestic products. In India, a rate of 30 to 50 percent tariffs is applied on imported products (Roy, Sekhar, and Vyas, 2016). These tariffs and import regulations are revised regularly and are subject to change without any prior notice, thus, Sand and Sky business must reconfirm these before they export goods to India.
In respect to the above, all cosmetic products should be registered in the office of the Drug Controller General of India (DCGI), with the special office of the Central Drugs Standard Control Organization (CDSCO). The work of DCGI is to administer the Indian Drugs and Cosmetic Act of 1940, which is in charge of the manufacture, import, sale, export, and clinical research of various cosmetics and drugs in the country (Roy, Sekhar, and Vyas, 2016). Each cosmetic brand is registered at US$ 250, which is inclusive of color, pack sizes, or any number of variants. The time frame allowed for the registration of the certificate is three years dated from the day it was issued; an exception applies when there is a case of suspension or cancellation (Roy, Sekhar, and Vyas, 2016). Only specified ports of entry are certified to allow cosmetic import in India. Provisions on the ban of animal testing in India cut across all cosmetic products imported into the country.
The Central Board of Excise and Customs is a part of the Department of Revenue in the Ministry of Finance, and it controls the export and import policy. This includes taxes, levies, and duties which are placed on goods imported into the country. Before imported goods are allowed to enter the retail market, they are inspected by the Indian customs to ensure that they are labeled correctly (Roy, Sekhar, and Vyas, 2016). Though international players, including Australia, are likely to face high import duty challenges and stiff competition from the domestic manufacturers, India remains a long-term suitable export target for Australian beauty products.
Conclusion
The beauty market has been driven by current economic development experienced in emerging markets. Cosmetic products are becoming more essential in people’s day-to-day lives. In the beauty industry, strategic positioning is the key if one wants to make successful sales. Therefore, in penetrating the Indian market, Sand and Sky business needs to identify the target audience, understand the demographic profile which is targeted, and communicate the selected position effectively to the consumers. Understanding the social-cultural differences and the regulatory codes in India is also important for the company’s success in diversifying beyond its national border in Australia. This is because these act as blocks to international trade, and the only way to overcome them is by undertaking market research and having a clear comprehension of all factors (drivers and barriers) prior to entry.
Reference List
Fayvishenko, D. (2018) ‘Formation of brand positioning strategy’, Baltic Journal of Economic Studies, 4(2), pp. 245-248.
Morganti, P., Morganti, G., Chen, H.D. and Gagliardini, A. (2019) ‘Beauty mask: Market and environment’, Journal of Clinical and Cosmetic Dermatology, 3(2), pp. 1-10.
Narayanan, R. and Sharma, S. (2020) ‘A review discussion of marketing technique in cosmetic product’, Journal of Critical Reviews, 7(7), pp. 1030-1036.
Pathak, G. and Nichter, M. (2018) ‘Cleanups, confidence, and cosmetics: Marketing beauty in India’, Journal of Consumer Culture, 11(4), pp. 133-141.
Roy, A., Sekhar, C. and Vyas, V. (2016) ‘Barriers to internationalization: A study of small and medium enterprises in India’, Journal of International Entrepreneurship, 14(4), pp. 513-538.