Executive Summary

Now Malaysia BaoLiLai Company is in the process of

diversifying. As the business development manager, I have done
much marketing research for several months, I suggest our
company will be engage in skin care industry, we will research
and manufacture two kind of moisture creams to target high end
and low end market. Why choice these? What positions our
products should occupy? I can analyze from these aspects.
In recent years, skin care industry develops stability; sales of
skin care products are expected to be stable over the next few
years. There are many manufacturers in skin care industry. Most
of them are international company, including Estee Lauder,
Christan Dior, L'Oreal etc; they occupy 90 percent of market
share. Follow Me and Ginvera are belong to local company.
Skin care products are available at different kind of stores. In
skin care industry, competition is fierce, and each of competitors
adopts different strategy to earn more profit in market. From
marketing investigation, I find moisture cream is in great
demand for consumers, so our company can produce moisture
cream to target consumer market.
There are many brands of moisture cream in consumer market.
Most of consumers evaluate moisture cream from two criteria:
the degree of protecting moisturizing and nourishing. In existing
products, Christan Dior moisture cream is high nourishing and
high moisturizing. It is positioned on best quality and high price.
POND'S is low nourishing and high moisturizing; it is
positioned on middle quality and middle price. L'Oreal is high
nourishing and low moisturizing; it is positioned on the best
value for money. Follow Me moisturizing cream is relative low
nourishing and low moisturizing, it is positioned on low price
and low class.
Gender and income segmentation has long been applied in skin
care industry. From consumer income level, the total market can
be divided into high-end market, middle-end market and low-
end market.

I suggest our company will research and manufacture 'Ister'

moisture cream to target high-end market. Because nowadays
more and more women become high-income class, they spend a
lot of money on taking good care of their skin care. They always
stay at air-conditioned room, premium moisture cream has a
great demand. From market investigation, Estee Lauder
moisture cream occupied the largest market share in high-end
market, although its quality is not the best one. Estee Lauder is
positioned on superior quality and high price. I suggest 'Ister'
moisture cream can be positioned on higher quality and lower
price than Estee Lauder.
We can create Ister moisture cream image from produce itself.
We use an exclusive ingredient that can highly protect
moisturizing and nourish in Ister moisture cream. We can design
a unique and elegant packaging for it. Meanwhile, our company
performs relative low price. We try to convince consumers that
Ister moisture cream is a good enough product at an acceptable
price. Our company is a local company, we can use heavy
advertisement to persuade high-income consumers that Ister is
specially designed for them.
Our company can use marketing strategy to achieve Ister
position. In product aspect, Ister moisture cream contains special
ingredient to keep moisturizing and nourishing for long time, its
packaging is unique and elegant. We can set 'Ister' moisture
cream price according product costs and competitors price, we
fix Ister moisture cream price lower than Estee Lauder does.
Ister moisture cream can be distributed in large-scale shopping
center. We will use heavy advertisement in TV, newspaper and
high quality magazine to boost Ister moisture cream. We can
present free sample as gift to attract consumer attention.

In low-end market, women increase the demand of low price

moisture cream, so our company can produce 'Cherro' moisture
cream to target low-end market. From market research, Follow
Me moisturizing cream occupies the largest market share in low-
end market, it is the leading product in it. I suggest 'Cherro'
moisture cream will compete with Follow Me in low-end
market. Cherro moisture cream can be positioned on low price.
We also create Cherro image from product itself, we design
beautiful packaging for Cherro moisture cream, we try to
convince consumer Cherro moisture cream is a good enough
product. We emphasize Cherro moisture cream is lower price
than other competitors.
We can perform market strategy to achieve 'Cherro' position. In
product aspect, we design a good packaging. We set Cherro
moisture cream price according product costs, we use low price
strategy to attract more consumers. We can distribute Cherro
moisture cream anywhere which consumer can buy
conveniently. Our company can use heavy advertisement in
newspaper and popular magazine to build and support Cherro
brand. In the beginning of selling, we can offer 20% more
moisture cream for the same price to attract more consumers.

Part I Purpose of the Report

Malaysian BaoLiLai Company produces many chemical
appliances, including shampoo, soap and body shower foam.
Now the company is in the process of diversifying. As the
business development manager, I have done much marketing
research for several months. I am to advise the managing
director that our company will be engage in moisturizing crème
market in skin care industry, because today more and more
people pay more attention to health and beauty. Moreover, skin
care industry has a big potential profit. I suggest that our
company will research and manufacture two brand moisturizing
crème products to target high end and low-end market. Facing
fierce competitors in skin care industry and many externals
various factors in marketing; we must analyze different external
and internal factors and know how to be firmly positioned in
market, so I write this report.

Part II Current Situation Analysis

2.1 An overview of skin cares industry in Malaysia
In recent years, due to economy recession in Malaysia, skin care
products price has declined almost 10 percent, but the marketing
demand is still increasing. Totally skin care industry develops
stability, so sales of skin care products are expected to be stable
over the next few years. Skin care industry can be divided into
many categories, including cleansers, masks, lotions, essences,
moisturizers, eye care and body care, etc. There are many
manufacturers in skin care industry. Most of them are
international companies, including Estee Lauder (Appendix 1),
Clinique, Christan Dior, POND'S, L'Oreal, Hazeline etc; they
occupy 90 percent of market share in skin care industry. The
local companies include Follow Me (Appendix 2), Biodermie
and Ginvera, they just occupy a small proportion of market
share. In market, some brands products have built good
reputation and earn large profit. For example, Estee Lauder, it
has won a reputation for innovation, research and quality
(Appendix 3). Skin care products can be sold through large-scale
shopping center, supermarket and retailers. Some of famous
brand skin care products like Christan Dior, Clinique, Estee
Lauder etc; they are distributed in the large-scale shopping
center (Jusco, British India, Sogo, Isetan, KLCC etc). Other
brands including L'Oreal, POND'S, Follow me, Ginvera,
customers can buy them from large-scale supermarket
(Carrefour, Jusco), middle-scale store (Guardian, Apex, and
Kiosk) and many other retail shops.

2.2 Competitors Analysis

Competition is fierce in skin care industry; each of the
manufacturers adopts different strategy to earn more profit in
market. Christan Dior, Estee Lauder, Clinique, Kose and Macys
are main manufacturers, which produce high quality and high
price products with excellent design and very high service to
customers. They have strong financial resources and use new
technologies to innovate products. They spend a large amount of
money in advertising and promotion in boosting its products and
earning brand loyalty. L'Oreal, Johnson & Johnson, POND'S
offer medium quality products at medium prices and medium
services. Follow Me, Ginvera, Biodermie and Hazeline offer
products with low price and low service. They adopt cost
leadership strategy to earn more profit.

2.3Product Description
From marketing investigation, I find moisturizing crème is in
great demand for consumer, so our company intends to produce
moisturizing crème to target consumer market.

Part III The Positions Occupied by Leading Existing Products

3.1 Perceptual map - moisturizing crème brands
There are many different brands moisturizing crème (Appendix
4,5) in consumer market. From marketing research, I find the
main criteria for consumer to evaluate moisturizing crème are
the degree of protecting moisturizing and nourishing. From
these, consumers judge the similarity of alternative brand, then I
can draw perceptual map from these two criteria.
Figure 1 Perceptual map of perception of moisturizing crème
brands
High moisturizing
· · Christan Dior
POND'S * Ister
· Estee Lauder
· · Clinique
Oil and Olay ·Shiesido

· Elizabeth Arden

· Kose
·Clarins
Low * Cherro
· L'Oreal High
Nourishing · Follow me
· Nourishing
Johnson & Johnson
· Biodermie

· Hazeline
· Ginvera

Low moisturizing

3.2 The position occupied by leading existing products

From perceptual map, different brands of moisturizing crème in
first quadrant are relative high nourishing and high moisturizing,
Christan Dior (Appendix 6) is the leading product in it. Christan
Dior has been positioned on best quality, high price and best
brand in skin care industry. It offers very high service to
customers, and customers always associate it with good social
image. In second quadrant, moisturizing creams are relative low
nourishing and high moisturizing, POND'S is the leading
product in it. POND'S emphasizes its high moisturizing, it is
positioned on middle quality and medium price.
In third quadrant, moisturizing creams are relative low
nourishing and low moisturizing, Follow Me (Appendix 7) is
the leading product in it. Follow me is positioned on low price
and low class, it emphasizes that it is a homemade brand in skin
care industry. Its quality is relative high compared with other
brand products in third quadrant. Moisturizing creams in fourth
quadrant are relative high nourishing and low moisturizing;
L'Oreal is the leading product in it. L'Oreal is positioned on the
best value for the money; it's advertising emphasizes, "Because
I'm worth it". The price list of all brand products in perceptual
map can be referred in Appendix 8.

Part IV Evaluate the Situation -- Suggest 2 Positions to Target

Our company wants to produce two kinds of moisture creams to
target some segments of consumer market, so we must segment
consumer market, evaluate situation and select segments to
target. We also need evaluate the existing products positioning,
and then we can select which positions our products will
occupy.
4.1 Market Segmentation
Gender and income segmentation has long been applied in skin
care industry. According consumer income level, consumer
market can be divided into high-end market (consumer income
is above RM 3,000 per month), middle-end market (consumer
income is between RM 1,200 and RM 3,000 per month) and
low-end market (consumer income is below RM1, 200 per
month).
4.2 Evaluating situation and selecting the market segments
In recent years, more and more women take part in jobs, they
play an important role in working, and their income has
increased rapidly. A large proportion of them become high-
income class, they have much disposable income. Moreover
they pay more attention to health and beauty; they spend a lot of
money on taking good care of their skin care. They can select
high quality, high price and famous brand of skin care product.
Premium moisture cream has a great demand, because they stay
in air-conditioned room, moisturizing and nourishing have
become very important. Facing these, our company can produce
'Ister' moisture cream to target high-end market.
In low-end market, women increase the demand of low price
moisture cream. Most of them live in small town and village,
Price is an important factor for them to select moisture cream.
Facing these, our company can produce 'Cherro' moisture cream
to target low-end market.
4.3 Evaluating existing products positions and selecting 2
positions to target
There are many competitors in high end and low-end market.
Our company is a newcomer in skin care industry, so we must
analyze competitor positions in high end and low-end market,
we will select 2 positions to target at.
Estee Lauder moisture cream is positioned on superior quality
and high price. It has an excellent brand image, consumer
always associate it with good social image, so it targets at high-
end market. Estee Lauder performs 4 Ps to achieve its position.
In product itself, the ingredient contains exclusive BioMineral
water with over 70 fossilized plant mineral (Appendix 9). Its
design and packaging are excellent. Estee Lauder is distributed
in large-scale shopping center (Jusco, KLCC etc). Estee Lauder
uses heavy advertisement in TV and magazine (Appendix 10) to
attract consumer attention, it is often exhibited in large shopping
center. Its price is high, but it always associates with high
quality and good brand image.
Our company wants to produce "Ister" moisture crème to
compete with Estee Lauder in high-end market. Although Estee
Lauder moisture crème is not the best products in high-end
market (from perceptual map), it occupies the largest market
share in high-end market (Appendix 11). Moreover, Estee
Lauder has won good reputation for innovation and quality. We
can position 'Ister' moisture cream that quality is higher than
Estee Lauder is and price is lower than it is.
Follow me moisturizing cream is positioned on its low price and
low class. It is a local brand in Malaysia. It targets at low-end
consumer market. Different marketing strategies have been
used to achieve its position. Follow Me moisturizing cream is
formulated with an advanced formula containing AHA, its
design and package are good. Follow me is distributed in
supermarket, minimarket and sundries shops. It uses heavy
advertisement in magazine (Appendix 12), newspaper and
billboard to boost its sales. Its price is keeping lower than other
competitors.
We can produce 'Cherro' moisture cream to compete with
Follow Me in low-end market. Because Follow Me is the
leading product in low-end market (Appendix 11). Cherro
moisture cream can be positioned on low price in low-end
market.
Part V Marketing Strategy - High End Market
5.1 Marketing positioning -- Suggest the image 'Ister' should
have to be firmly positioned
Our company wants to position 'Ister' moisture crème on higher
quality and relative lower price than Estee Lauder does in high-
end market. What image 'Ister' should have to be firmly
positioned? We can create Ister image for product itself, our
company uses new technology and new method to make a high
quality product. Ister moisture cream contains an exclusive
ingredient that can highly protect moisturizing and nourishing.
In packaging, Ister moisture cream uses a unique and elegant
style and packaging. Meanwhile, our company performs relative
low price. We try to convince consumer that Ister moisture
cream is a good enough product at an acceptable price. Before
Ister moisture cream is put into market, we use heavy
advertisement to build and strength Ister brand. Our company is
a local company in Malaysia, we can emphasize that Ister know
more about consumer than other international brand of products,
we try to convince high-end consumer that Ister is specially
designed for them.

5.2 Outline marketing strategy to achieve 'Ister' position in high-

end market
Product 'Ister' moisture crème contains special ingredient to
keep moisturizing and nourishing for long time. Its' quality is
superior. 'Ister' moisture cream uses a unique and elegant
packaging, it adopts fruit flavor. Our company offers very high
sales service and performs returning policy (if customer does not
satisfy with product, they can return in one month).
Price We can set 'Ister' moisture cream price according product
costs and competitors price. Because Ister moisture cream is a
new product in market, it wants to earn more competitive
advantage than Estee Lauder does in market. Our company must
think about Estee Lauder retailing price, then we can fix Ister
moisture cream price lower than Estee Lauder.
Place We can select "manufacturer wholesaler retailer
customer" channel to distribute 'Ister' moisture cream in market.
We can distribute Ister moisture cream in large-scale shopping
center to attract more consumers.
Promotion Our company can use heavy advertisement in TV,
newspaper and high quality magazine to boost Ister moisture
cream and create excellent brand image in consumer mind. In
the beginning of sale, we can exhibit ' Ister' moisture cream in
large shopping center and present free sample as gift to earn
more customers.
Part VI Marketing Strategy - Low End Market
6.1 Marketing positioning - suggest the image 'Cherro' should
have to be firmly positioned
Our company wants to position 'Cherro' moisture cream on low
price in low-end market. What image 'Cherro' should have to be
firmly position in market? We can build its image from product
aspect, we can use new technology and methods to improve
product quality and reduce cost. We design beauty packaging for
'Cherro' moisture cream in order to let consumer like it. We will
use heavy advertising in newspaper and radio to boost 'Cherro'
moisture cream, we emphasize Cherro is lower price than other
competitors.

6.2 Outline marketing strategy to achieve 'Cherro' position in

low-end market
Product Our company use new technology and new method to
produce a relative high quality product. We can design a very
good packaging for Cherro moisture cream.
Price we can set 'Cherro' moisture cream price according
product costs. As price is an important factor for low-income
consumer to choose moisture cream, we can use low price
strategy to attract more consumers.
Place We can select "manufacturer wholesaler jobber
retailer consumer"
channel to distribute 'Cherro' moisture cream in market. Because
Cherro targets at low-income consumer, we can distribute it in
supermarket, minimarket and other sundry shops.
Promotion We can use advertisement in newspaper, radio and
popular magazine to build and support 'Cherro' brand. In the
beginning of selling, we can offer 20% more moisture cream for
the same price to promote 'Cherro' moisture cream sales.

Appendix 8

Brand NameChristan
DiorEsteeLauderCliniqueElizabethArdenShiseidoKoseClarinsPo
nd's
Vol. orWeight 50g 1.70z 30g 2.50z 50g 40g 1.0z 118g
Price(RM) 168 171 114 178 140 124 89 25.80

Brand NameFollowmeBiodermieHazelineGinveraJohnson
&JohnsonL'OrealOil of Olay
Vol. orWeight 14ml 12ml 100g 12ml 75ml 50ml 50g
Price(RM) 9.8 8.6 11.25 6.9 21.3 23.8 15.25

Appendix 11
Recently I did some investigation about moisturizing crème. I
visited 300 women in KL, among them 100 women are belong
to high-end stratum, their incomes are above RM3, 000 per
month; the other 100 women are belong to middle-end class,
their incomes are between RM 1, 200 and RM 3, 000 per month;
another 100 women are belong to low- end class, their incomes
are below RM1, 200 Per month. I asked some question about
these aspects: which brand they like to use, how much they buy,
what criteria they use for buying product: quality, brand
awareness, and price etc, what fragrance they like.
In high-end stratum, among 100 women, 95 percent of them can
select famous brand products, like Christan Dior, Estee Lauder;
they pay attention to high quality, high price and good fragrance
products. 32 percent of them buy Estee Lauder, 18 percent of
them buy Christan Dior, 15 percent of them buy Clinique, 13
percent of them buy Shiseido, 10 percent of them buy Kose, 3
percent of them buy Elizabeth Arden, another 11 percent of
them buy another brand. Most of them are brand loyalty.
In middle end class, among 100 women, 90 percent of them can
select medium quality and middle price moisturizing crème, 10
percent of them can select high quality, high price brand
products. Among 90 percent of them, 29 percent of them select
L'Oreal, 26 percent of them select Pond's, 18 percent of them
select Oil and Olay, 15 percent of them can buy Johnson &
Johnsom, 12 percent of them can select other brands.
In low-end stratum, Among 100 women 98 percent of them can
select low price and middle quality moisturizing crème. Among
them, 40 percent of them buy follow me, 20 percent of them buy
Haziline, 18 percent of them select Ginvera and 10 percent of
them buy Biodermie. 12 percent of them can buy other brands.
They all think fragrance is an important factor for them to
choose moisturizing crème, 42 percent of them like fruit flavor,
25 percent of them like original odor, 23 percent of them like
delicate fragrance, 10 percent of them like strong fragrance.