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status for their corporate operations they are still working hard to develop
this status for their products as well. Such a process has to begin way
back at the design and packaging stage and can be a huge challenge,
even for businesses as committed to sustainable business practices as
Trilogy.
Sarah and Catherine want their customers to make ethical purchasing
decisions so they are continually pushing the boundaries to improve
Trilogys ability to do this. A recent example of this is the introduction and
use of new recyclable cardboard pallets in their manufacturing and
freight-forwarding processes.
Global markets
From the outset, Trilogys strategy was to take Trilogy to the world.
Global compliance
Should an inquiry come from an international market, Sarah and Catherine
wanted to make sure their products conformed to European and US
standards from day one. Conforming to EU directives ensures a company
has global compliance straight away. An example of EU compliance
requirements includes listing all ingredients thoroughly in order of their
inclusion from biggest to smallest quantities. This is not necessarily the
case with all markets with variations applying from one to another.
New markets - successes and challenges
As opportunities to expand beyond New Zealand came their way, Sarah
and Catherine would follow them up. Early on they felt there was potential
in Australia, the United Kingdom and Ireland. They undertook their own
research and engaged with a client manager from New Zealand Trade and
Enterprise (NZTE) to develop a deeper knowledge of the markets they
were exploring. NZTE were also able to meet with them in these markets
and broker relationships with potential partners and others who would
assist them in the process.
An important factor in Trilogys success internationally can be attributed to
the distribution outlets they have partnered with. The more distribution
outlets there are, the better the market coverage of the product. In
Australia the Myer department store chain has 62 outlets and the Priceline
Pharmacy chain 350 stores, which offer the brand huge market coverage.
In the United Kingdom, partnering with large chains such as Boots and
John Lewis and, in Ireland, partnering with Unicare pharmacy has enabled
Trilogy to develop a significant brand presence in these markets also.
This exposure in turn has generated interest and led to many enquiries
from outlets interested in becoming stockists of the Trilogy range. Trilogy
has set up a dedicated section of their website specifically to capture
trade enquiries.
Trilogys experience has taught them that the importance of identifying
suitable channels to market is a crucial factor in the potential long-term
success of new markets. Some markets have been particularly challenging
in this respect. Countries such as Taiwan, Singapore and Hong Kong, for
example, tend to offer very limited channels suitable for a niche brand
such as Trilogy to become established. Japan, Korea and Malaysia, on the
other hand, offer more advanced choices around niche and natural
products so could be models, offering an accessible solution into the Asian
market in the future.
Understanding the cultural norms of doing business in a new market cant
be underestimated. The success of Trilogys expansion into Ireland can
partly be attributed to the fact that the Irish do business in a very similar
way to New Zealanders. This made relationship building and mutual
understanding very straightforward.
However, negotiating through the cultural barriers of countries less similar
to your own can be a challenge, said Sarah, so opportunities to talk to
other exporters and share their ideas and experiences are really valuable.
Trilogy also found the wealth of written information available from NZTE
on the topic was helpful in further developing an understanding of this.
Part of Trilogys success in Australia came from thinking of them as a
separate market and using a very specific marketing strategy that worked
for Australians.
Although Trilogy is a strictly natural range the look and feel of the brand
is mainstream. Trilogy market their range to the mainstream consumer
using sophisticated packaging, merchandising material, and marketing
techniques that compete directly with traditional cosmetic house brands.
Trilogy also treats everyone as their customer and this includes suppliers,
retailers, and retail staff, as well as the end customer. Trilogy also invests
in ways of generating word of mouth to promote their products that are
outside mainstream marketing methods.
Business models
Outsourcing
As a company focused on branding, marketing and formulating, Trilogys
business is developed around a model of outsourcing. Therefore,
collaboration with a variety of different businesses is crucial. Maintaining
good relationships with those in the supply chain is essential to sustaining
mutually successful business partnerships.
The supply chain works on a range of different levels and Trilogy has no
doubt that it is absolutely imperative the suppliers are treated with huge
respect.
'You need to enjoy each other and pick partners you like and get on with,'
Sarah says.
She says its more of an intuitive thing. In the early days they made some
mistakes on the distribution side of the business and learnt from that.
Product development
Much of the product development research is carried out internally within
Trilogy; however, aspects of this are also done in collaboration with their
laboratory partners in Auckland. This is where chemists develop the
physical formulation of the products and undertake quality assurance.
Trilogy then works with a design company to develop the look and feel of
the product, and with a packaging company to develop environmentally
friendly ways to package the products in keeping with their brand
philosophy.
Distribution
Warehousing, freight forwarding and distribution are all services
contracted by Trilogy and overseen by supply chain and distribution
managers working in-house. Their roles are to control processes related to
these functions and conduct formal quarterly reviews to ensure quality
control is maintained to the highest possible level.
Internal models
When starting out, Sarah and Catherine had clear areas of responsibility.
Sarah used her business skills to concentrate on developing the business
model and establishing channels to market, while Catherine used her
beauty editor and design experience to drive product development and
branding.
As the company has grown, Sarah and Catherine have established distinct
operational and strategic goals and set up a staffing structure that reflects
this. The operational and strategic decision-making processes at Trilogy
are allocated to different staff; however, operational staff are kept
informed early in the strategic decision-making process to avoid logistical
surprises down the track, which can be time consuming and costly.
While there is a limit to what a small company can do about the big issues
related to worldwide economic factors, Trilogy has ensured they remain
competitive despite the external influences associated with their business.
As part of this process, they have put a high priority on getting advice
around the development of a robust foreign exchange policy to ensure the
company minimizes their exposure to this in the marketplace.
Buying market data is also useful as it gives Trilogy access to finding out
how much product their retail partners are selling. Trilogy then uses this
information to negotiate additional shelf space in store.
While Sarah and Catherine acknowledge that competition in the beauty
business is tough, they know that this is a fact of life for the industry. What
they do is reflect on the kinds of partnerships they currently have and
build on these to ensure they are robust and positive into the future. This
is particularly important at the retail level, where a great deal of emphasis
is placed on training to ensure the Trilogy brand philosophy is cultivated
authentically.
Future focus
Australia is currently Trilogys biggest international market.
However in terms of percentage growth, its Ireland that has really taken
off with around 640 percent growth in 2010. The Irish are big users of
skincare and they like talking about it.
'As a market its so similar to New Zealand. We just get each other,' says
Sarah.
Looking ahead the companys short term plans include further work to
establish their partnerships in the UK and Ireland, where there is a clear
indication that the Trilogy brand is staking a claim to fame. Identifying
potential partnerships and laying the groundwork for expansion are also
currently taking place in Canada.
'Its all about persistence,' says Sarah, 'because while we have fabulous
products and a fabulous brand, so do others. You really have to have
persistence coupled with patience. Just keep going.'
Trilogys medium term plans focus on establishing a branch within Asia. At
this stage it is likely to be in Japan, where several other New Zealand
businesses with a related focus are already successfully established.