SERVICE OUTPUT DEMAND ANALYSIS ON ELLANA COSMETICS

In Partial Fulfillment of the requirements for the course

Distribution Management

Bautista, Angelika Joy

Danao, Christelle Ecila Faith
Mabini, Hanna
Sebastian, Bianca
Zamora, Samantha Nicole

Ma’am Rhodora L.Rosales

Distribution Management Professor

TABLE OF CONTENTS
 I. Name of the Company Understudy ………………………………………. 2

II. Analysis of the Industry where the Company belongs ………………. 3

III. Identify how the end-users buy ………………………………………. 5

IV. Identify what the end-users buy ……………………………………..... 8

V. Identify the Service Output given by the company in all, or any, or ………. 11

a combination

VI. Service Demand Output Differences by Customer Segment ………………. 15

VII. Analyze the Gap between the service provided to and receive by ………. 16

End-User

VIII. How do you close the Gap ……………………………………………… 18

1
 I. Name of the Company Understudy

“The Search for Poreless Perfection Ends With Ellana Minerals”

Ellana Minerals was established in 2008 by Theresa Carbonel and Coney Avellana. Ellana

Minerals started due to Avellana’s sensitive skin and ridiculously priced imported mineral makeup,

Avellana pitched her plan to Carbonel, a cosmetic entrepreneur and a Research and Development

Manager in Vivanti Executive Advantage Inc., whom liked the idea and gave the business a shot.

The name Ellana is a greek word that translates to “light” or “bright” in English, meaning that

Ellana Cosmetic products are preferred for on-the-go users – light and easy on the skin yet give

users its sheer and natural glow. With the help of their family and tons of sacrifices from both

founders, Ellana Cosmetics launched their first store in Quezon City and is now the number one

(1) Mineral Cosmetic brand in the Philippines.

Ellana Cosmetics is an intellectual property of Vivanti Executive Advantage Inc, under the

mother company Elevese Buenven Holdings Corp, which also has stakes in Pharmaceutical

Distribution and Executive Search Services. Vivanti formulates and distributes high-quality color

cosmetics that are made from quality European and Japanese sourced natural ingredients.

Brief description of the Business

Ellana Cosmetics is a Philippine-based company that celebrates affordable mineral makeup

for Southeast Asian skin or the so called “Morena”, bringing each customer variety of shades to

choose from depending on their skin color. Ellana Cosmetics is talc-free, fragrance-free, cruelty-

free, and has 100% vegan ingredients, concluding that Ellana Cosmetics is safe to use in the long

run and is a great substitute for people who have sensitive skin. According to Ellana Cosmetics’

2
website, their products contain mica, phosphates, magnesium, dioxides, and Vitamins C, E &

Allantoin.

The company now owns 38 branches nationwide and delivers its products internationally

with the help of their own online store and other e-commerce websites such as BeautyMNL.

Vision

“A world where the pursuit of beauty goes hand in hand with healthy skin.”

Mission

“To be recognized as a high-quality natural makeup brand, which is the preferred daily use makeup

by young, career-oriented South East Asian women.”

II. Analysis of the Industry where the Company Belongs

The Cosmetics and Toiletries are products such as perfumes, cosmetics, deodorants,

creams, lotions, which are used for improving the appearance of the body and taking care of it.

The industry of cosmetics and toiletries have a significant growth in terms of sales and

technological advancement because of the customer awareness towards personal hygiene and

health.

The Cosmetics and Personal Care market in the Philippines is defined here as consumer

goods for beauty and body care. Revenue in the Cosmetics & Personal Care market amounts to

US$3,393m in 2019. The market is expected to grow annually by 2.1% (CAGR 2019-2023).

The demand for organic and non-harmful formulas is creating more opportunities in the

market emerging for new market players to enter.

3
 One major factor for the growth of the market is the shifting of production units to cost-

effective economies like China. Cosmetic brands are usually available only on up-scale

departmental stores; entrance of new distribution channels like online marketing, infomercial, and

tele home shopping, were made available.

Consumption of cosmetics and toiletries are not limited to female population alone. Men

grooming products are emerging as an important segment of the market. The cosmetics industry

is characterised by a handful of global players with internationally recognized brands of which the

most important are L'Oréal, Unilever, Procter & Gamble, Estee Lauder, Shiseido and Beiersdorf.

Competitors of Ellana Cosmetics

Happy Skin

First launched last October 18, 2013. The First makeup line that offers an entire range of

skin-caring makeup. Created for women who want to look naturally beautiful, but want to make

sure that their skin is also cared for. The brand started with merely five counters. In less than a

month after its launch, local luxury department store Rustan’s and leading cosmetics hub Beauty

Bar asked to carry Happy Skin in their stores. Two years after their launch Happy Skin opened

their first boutique in Glorietta. Today Happy Skin has 14 stores and 80 beauty counters across the

Philippines.

Detail Make Over

Recognizes itself by being both high-quality and cruelty-free while maintaining prices the

local consumer can afford. Perceive themselves as a makeup company for everyone. A cutting-

edge brand that transcends identity and gender. Detail Make Over‘s products offers different

categories. The items they have available on the site include Mineral Pressed Powder, Baked

4
Highlighter, MakeBrow Eyebrow Palette, Matte In Detail Liquid Lipstick, Duo Eyebrow Brush,

Bloom Matte Blush, and many more. Give your features a little something extra.

III. Identify how the end-users buy

The respondents of the survey consisted of fifty-two (52) women who are aware and are

users of Ellana Cosmetics. The respondents consisted of women from ages 18 years old to 24 years

old and above. The survey was all answered by the age ranges and the highest of respondents were

aged 19, aged 22, and aged 20 respectively. The survey consists of multiple-choice questionnaire

to gather specific answers regarding the preferences of the respondents when they shop and what

they are looking for in particular when it comes to cosmetics. The content of the survey was mostly

revolving around Ellana Cosmetics’ service output demand and the features of benefits of their

products.

Ellana being available both in their physical and online stores, 24 students and 15 working

adults, a total of 75% of the responses, prefer that the products of their choice have stocks all the

time. While 14 or only 26.9% of the responses prefer having the products available on physical

stores of Ellana to be able to test it before buying.

Figure 1. Availability of Products in Online and Physical Stores

5
 The result reveals that both of the segmented respondents (students and working adults)

prefer that products are accessible in every retail store in the Philippines with 18 students and 16

working adults choosing this option resulting to 63.5% of the responses. 12 respondents from the

working segment prefer of having an available store in a nearby mall and not need to go to farther

place to purchase a desired product.

Figure 2. Accessibility of Products in Retail Stores

According to the charts below 51.9% of the respondents answered that they prefer

purchasing cosmetic products in one brand and the remaining 48.1 % of the respondents answered

the opposite.

The students and the working women share the same preferences when it comes to

purchasing makeup and tools. 20 respondents, composed of 13 students and 7 working women,

said that they like purchasing cosmetic products in one store. This option got the highest rank from

both segments. The respondents also added that even though they enjoy shopping products from

one store, they still want some variation in their makeup tools. 19 of the respondents picked this

6
option, 13 of them were students. In totality, both segments prefer purchasing makeup and tools

in one brand but still want one that can offer product variety especially on the part of the students.

Figure 3. Purchasing make up products and tools in one brand

Figure 4 illustrated that 86.5 % of the segmented respondents purchase on a brand that has

a considerable return and policies when the item is faulty, while the remaining 13.5% prefer the

opposite.

This data shows that both of the students and working adults consider a guarantee for

convenient return and policies since 30 respondents opted for it where the majority where students.

12 working women chose the same option which means that they consider the return policies as

highly significant. 13 students also believed that it is also important to consider brands who value

satisfaction of customers. This reveals the value the customers holds when it comes to service.

Only 4 working women answered this option regarding satisfaction. Respondents from both

segments value the guarantee that brands give them in case they want to return some products.

7
Students are more likely to engage in a purchase in brands who are after customer satisfaction

compared to working women.

Figure 4. Policy preferences of consumers

IV. Identify what the end-users want to buy

From the total of 52 respondents from the ages 18 years old to 24 years old and above,

most of the respondents were keen on having cruelty-free products instead of those products that

harm animals. With over 92.3% percent or 48 respondents said yes as they care for the animals not

getting harmed and to ensure their safety. However, 34 respondents still want sure quality products

so the consumers do not get harmed or receive allergies despite animal cruelty-free testings.

Both the students and working women strives for the assurance that the products they

purchase will not harm their face, this ensures that consumers’ safety is important. The majority

of the respondents who prioritizes their safety are the students. 13 out of 34 came from the working

women. The respondents also prioritize the safety of the animals, the respondents do not like it

when animals are harmed especially to the students. 21 out of 28 of the respondents majority were

8
students. Only 7 working women answered that they also prioritize the safety of the animals. With

that said, students care for the environment more than working women.

Figure 5. Preference of Consumers in Animal Testing

The end-users of Ellana Cosmetics considers the factor of using vegan, organic ingredients

on their skin than the chemicals usually used in makeup like competitors such as Maybelline,

Revlon, and L’Oreal with 82.7 percent gravitating to vegan and organic ingredients for makeup.

More students, 15 of the 52 respondents had sensitive skin meanwhile 12 working women

has the same skin type, leaning towards a great make up alternative, which is Ellana Cosmetics.

Ellana’s promise is to dedicate themselves into curating products that are vegan, cruelty-free, and

are for sensitive skin. The 2nd option that most respondents lean towards is the assurance that the

products they put on their face is pure, good make up, meaning there will be no other chemical or

harmful acids in their products. Respondents wants make up that functions both as skincare and

make up.

9
 Figure 6. Preference of consumers on Vegan, Organic Ingredients in Makeup

Refillable pigments and powders were also supported by majority of the end-users of

Ellana Cosmetics with 73.1 percent preferring purchasing refills than the whole compact again

itself. 32 respondents preferred refraining from creating or producing more plastic products and

wanted to make a little bit of change in the environment. As they say, corporations use the most

plastic and waste the most plastic. 1 respondent said that the cost will be cheaper having another

compact made of plastic.

As becoming environment-friendly begins to be in-demand, more companies are starting

to be conscious and take part on the movement. In that case, the demand of zero-waste or less

waste products have started. Taking care of the world and refraining from plastic is something that

most consumers love to take part on. 32 respondents out of 52 said that they want to refrain from

plastic packaging as much as they can. 11 of which are from the working segment and 21 of which

are from the student segment. The drive that most people, especially students, wants to reduce

10
waste is because of the destruction caused by major corporations and Ellana Cosmetics taking part

of the movement is a huge step for consumers who are environmentally conscious. Caring for the

environment starts small and taking part of helping the environment even a little is a start, 12

students wanted to start becoming environmentally conscious even if it is small and 8 working

women wanted to do the same.

Figure 7. Preference of Consumers in Refillables

V. Identify the Service Output given by the company in all, or any, or a combination

Bulk Breaking

Ellana Cosmetics’ is the first make up brand in the Philippines that created refills for their

pressed pigments and loose pigments such as foundation and eyeshadow. Ellana has created this

in the hopes of becoming environmentally conscious and lessen plastic waste. The jar is made up

of plastic that can withstand different mishaps and the magnetic palette is made up of paper that

11
can be recycled. All Ellana products are travel friendly due to its slim packaging and some products

are contained in sachet-like packaging that does not take up much space in a woman’s purse.

Product Variety

Ellana Cosmetics’ offers variation of products to make up for the face, eyes, lips, and

cheeks and accessories such as setting spray, pouches for their makeup, brushes, brush cleaner,

make up remover, and jars/palettes for their loose and pressed pigments.

Ellana Cosmetics also offers different shades for people’s undertones (olive, cool, warm)

as well as skin tones (Mestiza, Chinita, Morena) for their loose and pressed foundation. As well as

a variety of shades in their cheek and lip sets that suit most Filipinas.

Spatial Convenience

Ellana Cosmetics provides customers with accessible beauty counters and grab and go

corners in different locations making their customers feel the presence of their brand. They have

stores in the following places: Metro Manila, Rizal, Laguna, Pampanga and Cebu. In addition to

those places, they are about to open new stores in Batangas and in Baguio.

The kiosks of Ellana Cosmetics are placed in prominent areas where the customers can

easily notice and identify their products. In this way, customers are able to save time and effort in

searching for the cosmetics that they plan to purchase.

Ellana Cosmetics also established an online store for the convenience of the consumers

who doesn't have the time to go to places. Consumers can purchase the Ellana products from the

official site of the latter. Also, they can purchase it from health and beauty e-commerce, beautymnl.

Although, stocks in www.beautymnl.com falter more because of its efficiency in delivering goods

12
with beautymnl’s 1 day delivery than in Ellana Cosmetics’ own site,

https://www.ellanacosmetics.com.

Lot Size

Ellana Cosmetics also offers discount codes for the customers. It follows a 1:1 ratio per

customer and applies only to regular priced items. Also, the discounts may require a minimum

purchase amount so usually it would help if customers would order quantities of product to reach

the target amount and get big benefits in terms of discount.

Service Backup

The Ellana Beauty Counters offer all products plus services like facial massage using their

primer, highlighting touch ups, full face makeup, color customization, etc. It is like a one-stop

shop where the customers can purchase the product and maximize the experience through the

services offered. Meanwhile, the Grab and Go Corners only offer a selected number of products.

Ellana Cosmetics was able to make good use of their spaces in various retail stores through the

availability of their offerings per counters which customers usually look for.

As seen in Ellana Cosmetics’ website, the brand has different modes to contact them. These

modes are Facebook, Viber, and through Text Messaging. The brand can also be contacted through

email for inquiries.

Online Orders can made through Ellana Cosmetics’ website can be tracked through

different delivery service, depending on the consumers’ preference. As shown in their website,

Ellana has created a separate space for order tracking.

13
 Image 1. Online Order Tracking

Reverse Logistics

Ellana has considerable policies when it comes to change of orders, return, refund and

replacement. For the change of order, it is only allowed after an hour of the placement of the order.

Buyers are allowed to change the product and/or the mode of payment given that it is done within

the allowed period of time.

For the replacement of the product, Ellana has this one-time replacement program where

the buyers should give information such as their order number, proof of purchase, and can also be

an image of the product to grant the replacement. They will only accept those products that are

defective, damaged and a mismatch to the buyer's skin color. The replacement of the product may

take 2-7 working days.

14
 For the refund, buyers are asked to provide for their bank account details and the need for

refund will be processed after 15 days upon the receipt of the returned item.

VI. Service Demand Output Differences by Customer Segment

With the consumer profile gathered from the survey conducted, it shows that Ellana

Cosmetics have two main customer segment – the students, and the working females. While both

segments are similar in terms of buying behavior, there is still a significant difference that can be

noticed.

Bulk Breaking

In the Bulk Breaking service output of Ellana, customers can have a refill of their selected

product in any branches of Ellana. This is important as refills are priced lower than the regular

products, which customers in tight budgets, particularly the students, can afford. While working

customers of Ellana also prefers these refillable products, they are still purchasing the same

products, especially when they forgot to bring their used products.

Product Variety

Ellana have wide variation of products – from primers, foundation, concealers, eye

products, lip products and skin care products. With the claim of Ellana to be a Filipina Skin Type

fitted product, each variety of products have several shades from a whiter shade to darker shades

that covers the different skin tone of Filipinas for the foundations and concealers. The eye products

of Ellana are also in different styles fitted to different type of occasions. The lipsticks have also a

15
variety of shades. Students prefer toned down shades like nudes, pinks, and oranges or peachy.

While working customer of Ellana prefer bolder shades such as reds, browns.

Spatial Convenience

Ellana strategically located their kiosks in places where it can be easily seen by people.

With several stores cluttered in Metro Manila and other nearby places outside the metro, it is

important that the availability of a physical store for customers (students) to be able to try the

products first before purchase. While physical stores may have limited numbers of products, Ellana

also have their own online store where the products are made available. Customers who does not

have enough time to go to malls to buy a single product only, it is a convenient way to just check

out the available products online and order.

VII. Analyze the Gap between the service provided to and receive by End-User

Stock Problems

Ellana has low stocks in their accessories such as refillable jars and magnetic palette which

can be a hassle to both new consumers and those who has broken down their old palettes.

According to the beauty assistant in Ellana Cosmetics’ Festival Mall kiosk is that they have been

requesting for stocks of the magnetic palette and jar for months but have not yet received any

update from the manufacturer. Ellana is only a medium enterprise but has problems with its stock

already, Ellana heavily promotes their products in social media and have gained a following

already. Once more people are aware of the brand, more and more people would want to hop on

the train especially for environmentally conscious consumers.

As ethical and environmentally conscious living is gaining more acknowledgement than

ever, Ellana Cosmetics must be prepared in fulfilling the satisfaction of the consumers and if one

16
of the foundation of Ellana Cosmetics, the refillable jar and palettes, are not available for new

consumers, it can decrease new consumers wanting to try out the brand.

Service Problems

According to some users of the brand, Ellana Cosmetics has very poor customer service.

They were not able to answer to inquiries as soon as possible, customers of the brand would

message to follow up however, the brand is not responsive at all. Some customers wait till a month

for the brand’s reply. As shown in the picture below, customers of Ellana Cosmetics are not happy

with the customer service. In one comment, she said that Ellana has high quality products but it

cannot garner the loyalty of potential consumers if the service is poor. According to one customer,

her package ordered a month ago, cannot be tracked and has not yet arrived.

Image 2. Customer Service reviews of Ellana Cosmetics customers

17
 Ellana Cosmetics’ target market are young adult women and adult women, it promises fuss-

free, good looking makeup that does not hinder their day-to-day hustles. The brand must be

consistent in providing the best for their target market.

VIII. How to close the Gap

The several problems encountered by Ellana play a huge role in the decision of the potential

buyers whether to make a purchase or not. Since the connection, between the service and

consumers, has been identified, it would be easy to come up with solutions to close the gap in

accordance to the preferences of the end-users.

Stock Problems

The end-users value the importance of stocks and the availability of the products they

frequently use. However, the several complaints as mentioned in Part VII, regarding the

insufficient stock can be a disadvantage to the enterprise. To close the gap, they should create an

estimation of the demand based on the sales of those products like those palettes and refillable jars

that they heavily advertise and are also considered as their unique offering to the market. They

should also continue to supervise the flow of the items to maintain enough levels of the products

especially at times when there is a high public demand. Moreover, it is suggested that they should

keep an open communication with the manufacturer to avoid this problem and the potential loss

that comes with it.

18
Customer Service

The people who are in charge of rendering customer service should be knowledgeable

about the brand and all the details that are highly significant to the customers. They should be able

to answer the inquiries promptly. It is also important to state the reason and provide explanation

especially when there is a delay since it is the right of the customer. The customers should not be

deprived of the information that they need. In addition, Ellana should be able to provide assistance

at all times that will make the customers, both from physical and online stores, comfortable and at

ease.

The good way to close the gap is to be the brand that is able to suffice what the customer

demands. It is normal to have these kinds of problems but being able to bridge the gap between

the service and the end-users can be an essential key for the betterment of the services that Ellana

can offer to their consumers.

19
 Appendices

SURVEY DEMAND OUTPUT FOR ELLANA COSMETICS

Good day! We are students from De La Salle University-Dasmariñas and we are

conducting a survey in fulfillment of the requirements in Distribution Management. Please do
answer honestly as we desire to know your feedback with Ellana Cosmetics as a consumer of the
brand.The survey consists of 10 questions and will only take 5 minutes of your time.
Thank you!

1. Do you prefer cosmetics that do not harm animals while testing the products? Why?
O Yes
O No
Because:
() I like it when I’m sure the products will not harm my face to ensure my safety
() I don’t really mind that animals are harmed in the process
() I like it when the products do not hurt animals to ensure their safety
() I care for the animals and their wellbeing
Others:__________

2. Do you prefer vegan, organic ingredients on your face rather than the chemicals usually used
for makeup? Why?
O Yes
O No
Because:
() I have sensitive skin
() I like the feeling of being ensured products that the products I put on my face is pure
() I like putting chemicals such as acids on my face
() I don’t have sensitive skin so I don’t mind whatever I put on my face
Others:___________

3. Do you prefer products that are always available online and in retail stores? Why?
O Yes
O No
Because:
() I like it when the products I like are always in stock
() I like to test the product first before buying
() I prefer Ellana not sacrificing the quality of their products for more quantity

20
() I prefer Ellana provide as much as many information about the product online
Others:__________

4. Do you prefer products that are accessible in every retail store in the Philippines? Why?
O Yes
O No
Because:
() I like going to any mall in the Philippines and see my favorite brand
() I like not having to go to a place far from me just to buy makeup
() I prefer when products are exclusive to me
() I avoid accessibility everywhere for low or less markup in price
Others:_________

5. Do you prefer purchasing refillable pigments and powders? Why?

O Yes
O No
Because:
() It allows me to refrain from more plastic-waste
() I like it when I can save the environment even a little bit
() I don’t like when there’s a possibility of contamination
() I’d rather consume more plastic for safety and sanitation
Others:__________

6. Do you prefer purchasing all my cosmetic products such as makeup and tools in one brand?
Why?
O Yes
O No
Because:
() I like purchasing everything in one go in one store
() I prefer not taking too much time looking for tools
() I want to have variety in my make up tools and make up
() I like taking my time and investing in quality products
Others:__________

7. Do you consider purchasing in brands that has a considerable returns & policies when the item
is faulty? Why?
O Yes
O No
Because:

21
() I want brands that give me guarantee that I can conveniently return/ get a refund when I am
unhappy about the product
() I prefer to purchase from brands that prioritize the satisfaction of customers
() I do not mind about the brand’s return policies as long as they have the product/s that I want
() I’d rather focus on buying from brands known for quality products even if they do not offer
considerable returns
Others:________

1. How was your experience purchasing products by Ellana Cosmetics? Kindly indicate the
whether good or bad experience.
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________

2. Do you think Ellana Cosmetics need improvement in their products? Why?

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________

3. Do you think Ellana Cosmetics need improvement in service and expansion of location? Why?
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________

22