Introduction
The Company, is exposed to very aggressive competitors such as Bonjour, Sasa, Wanning, and Sephora. The company has had to change its way of doing business severally so as to stay relevant in the industry. It has had to introduce new products and change its advertisements in order to compete favorably and increase the sales among all the demographics. The increase in the population of Singapore over the last couple of years, is a major fact that the company has worked hard to take advantage of. The company is specially set on taking advantage of the market that constitutes the younger generation as it constitutes the highest percentage of the population. This has been made possible through the launching of consumer products that are especially appealing to the younger generations. It has creative personnel that can create, new products that can compete favorably in the market and industry.
Situation analysis
Most of our sales share are anticipated to be as a result of impulse buying. This will require a strong point of sale support in all the stores (Kotler & Keller 2009, p56).At least eighty percent of the market constitutes brands from rival companies such as Bonjour, Sasa, Wanning, and Sephora. The company's experience in the production of high-quality health and beauty care products will be one of the strategies that it will use to beat its competitors. Moreover, it has experience in the distribution of its products to outlets in Singapore and the whole of the Asian region. Sales margin has declined significantly to the current five percent per annum. It is the company's expectation that growth in current markets will be negligible; thus the launch of the new Watson's herbal skin care product, will help improve the profit margins enjoyed by the company (Grewal & Levy 2010, p50).
Market Summary
The Watson's herbal skin care product will compete with other leading brands already established in the market. The demand for beauty-related products is bound to increase. These statistics are based on a recent survey that was carried out on the market that indicated, it is bound to increase to 524 million dollars in the coming three years. Growth rate per year is foreseen to overtake our current growth rate of five percent. The market is subdivided as follows concerning age (Westwood 2006, p55).
Demographic
The population above thirty-five years, makes purchases of health and beauty care products of over 40%, as indicated in the table above. The age group from twenty-five to thirty-five years buys the most health and beauty care products of all the age groups in the market. The order of purchase is expected to vary among the various genders and age demographics in the market (Scarborough & Scarborough 2008, p90).
Psychographics
Women from the ages of nineteen to forty-five are expected to be very fashion conscious thus are expected to make a lot of the purchases than the males. There is also evidence, of regional imbalance in the buying of health and beauty care products, with particular regions buying more health and beauty care products than others. For instance, as indicated in our table two, sales are above the mean in the north central region, northwest region and the central regions of the Singapore. Based on this numbers, these regions are going to be the primary target (Kotler & Keller 2009, p43).
Competition
The Company has several competitors with strong names and presence in the market. They also exhibit Strong marketing and advertising skills, good and established distribution networks and have a good reputation in the fashion industry. The aspect of manufacturing herbal skin care products with good fashion sense is new in the market. Therefore, this provides an opportunity for growth of the product (Westwood 2006, p109).
Company analysis
Watson's currently holds eighty-five percent market share, in the health and beauty care industry. The production of herbal skin care products is swiftly taking over the industry, as customers are switching to less chemical use. This is, therefore, a better venture to take advantage of as compared to current brands that are on offer. The experience of the company in distribution, marketing, and production, will be of great help as it launches the new product in the Singapore market (Sandhusen 2008, p85).
SWOT Analysis
Internal Environment
Strengths: It has the know-how, having been in the industry for a while. This coupled with good networks, and good partnerships will see it take over the market. It targets the women folk between the ages of eighteen to thirty-five who are the most ardent buyers of its products. This particular group represents women that are very experimental and love life. For this reason, they easily try out new things. They are also very keen on the image they present to their peers (Scarborough & Scarborough 2008, p35).Therefore, they are always switching beauty products in an attempt to find the one that will enhance their image best. Watsons makes full use of the own brand strategy to achieve differentiation. The company employs excellent salesmanship. It has a membership plan that allow shoppers to get credits for gifts and coupons. Through bundled sales strategy, the company can attract new customers to take advantage of the favourable prices. Through the use of such strategies, Watson can maintain customer for longer periods and ensure an increase in profit margins (Hill 2013, p76).
Weaknesses: Currently Watson, is not connected to all departments in Singapore. The fashion industry is a new aspect both to the market and to the company. Watson's products tend to be expensive. The quality of the product is not standardized due to use sub-manufacturers. Watson does most of its advertisement through print media. This is a disadvantage as most of their customers are not ardent readers of most of these print media (Cadogan 2009, p56).
External Environment
Opportunities: the market for its products is bound to grow. This is because their customers are mainly women. The numbers of women going into fashion trendy, health and beauty care products has increased. Their purchase rate has also increased significantly, therefore, providing a constant source of market.
Threats: The risks to the company are due to competition from rivals in the industry. Also, most of the business conducted by the company occurs offline, yet, most of its customers are switching to online shopping. The chance of new market entrants also poses a threat to the company's business (Hill 2013, p46).
Pestle analysis
Political analysis: Many nations in which it has its outlets are affected by civil conflict, which may be due to governmental changes thus leading to limitations that arise due to the inability to move capital across states. Political unrest may come in the form of terrorism which significantly affects the business of the company (Mcdonald & Meldrum 2013, p107).
Economic analysis: The economic environment of a company is influenced by the fiscal and monetary policies of a country, prevailing inflation rates which mostly make the cost of goods expensive, interest rates which make the cost of borrowing expensive and government policies that can either be favourable or unfavourable. There is also stiff competition from its main competitors in the market.
Social analysis: The social elements that affect the performance of Watson's products are those to do with the lifestyle preference and cultures of the people that constitute the given market. For instance, most ladies are switching to beauty care that are herbal produced (Cadogan 2009, p96).
Technological Analysis and Factor: Some of the technical factors that influence the company's performance include; how effective the company is advertising products, in the available platforms; using the new technology. For example, utilizing online shopping in the available markets. The company has to acquire new production equipment continually as the old ones become obsolete (Bowman & Gatignon 2009, p33).
Legal Analysis: Watson is subject to the laws of the country in which it operates. The governments of these countries have different accounting standards and policies. The company has to follow them just as stipulated.
Environmental: Watson stores are subject to Occupational Safety Acts, Health Acts, and international environmental regulation that apply in the countries where they are base. The practices and products of the company have to be environmentally sound as required by the laws of the state (Lamb 2010, p87).
Purpose.
The combination of high-quality herbal health and beauty care products and an aggressive distribution campaign will see it breakeven in three years. The company should have acquired a market share of at least 4% in the first two years this represents sales of 10 million dollars. The company will recoup its investment in the project next three years.
Marketing strategies
Watson's will introduce the new herbal skin care product into the market through an aggressive and well-planned distribution campaign. The health and beauty care products will sell at affordable prices and will promise high-quality service. This will increase revenues earned, thus facilitate the growth of both the brand and the firm (Lamb 2010, p67).
Product: The Watson's herbal skin care product stands out among all the current health and beauty care products in the market. It will be introduced in varieties suitable for both genders and all age demographics. The product will come in perfumed models, different colours, and sizes. The packaging will vary depending on the age group being targeted (Mcdonald & Meldrum 2013, p107).
Distribution: Our present distribution has coverage of about 55% of the market share. At this stage, the company will not target the other stores but instead will, hire marketers and a marketing instructor to add gusto to the marketing plan. The plan is to distribute the herbal health products in the whole of Singapore across all demographics (Sandhusen 2008, p34).
Promotion: Advertising worth half a million dollars is intimated so as to add clout to the unique range of health and beauty care products on offer and to better emphasize on the quality and price of the health and beauty care products. This will be centred towards print and point of purchase displays. Telecast advertising campaigns will take approximately two-thirds in the first quarter of the campaign (Bowman & Gatignon 2009, p73).
Price: The price of the herbal product will be affordable. There will be several types of discounts that will be offered to the frequent buyers and new customers. The price will be such that it matches the quality of the product (Grewal & Levy 2010, p90).
Conclusion
The major business of Watson company, is the production of health and beauty care products. These are offered in many different varieties that will be custom made for both the female and male genders. More than half the consumers of Watson are between the ages of eighteen to thirty-four. This particular group purchases the most health and beauty care products. Therefore, they are the primary market segment. Watson health and beauty care products are purchased more by those who dwell in the Southeast, Eastern and Northern regions of Singapore. These products range from food items, personal care products garment accessories, skin lotions, and medicine. Watson employs among the best strategies for displaying its products in its retail shops. The new herbal product is bound to be a big hit in the market, because, it has coincided with the current trend in the market which is that ladies, are responding to the need to use products that are as naturally manufactured as possible.