sarbec cosmetics france india marketing strategy

Team 2B:

Sukran KasnakLaura KnaubBhuvan MathurMélanie MonacoSarah MussolYating Wang

AgendaGeneral recommendationsWhy selecting India?The market entry modeThe product rangeThe strategyFuture road mapSummary

EDHEC BUSINESS SCHOOL_TEAM 2B_01.12.2009 2

General RecommendationsDevelop Sarbec own brandsStandard productsStandard brand nameLocal priceLocal promotionA glocal strategyA contract negotiated in euros


The Opportunities and Threats of India


Opportunities Threats

Good business relationships between France and India

Tariff and non tariff barriers

economic growth of 7,48% in 2008 according to the India Central Statistical OrganizationInvestment grade BB+

High competition with many foreign companies willing to enter the market and strong position of the multinational groups

7% growth rate in the cosmetic market between 2009 and 2012 (RNOS)

Low average purchasing power

Increasing of the income level which leads to higher purchasing power

Poor development of the retailing system

Fast development of the middle class Price sensitive market

Increasing share of women working High brand loyalty

Cultural differences between India and France

A direct export entry mode Firm size (-) Complexity of the product (--) International experience (+) Product Differentiation

Advantages (-+) Risk averse (-) Control (-) Flexibility (--) Tacit nature of know-how (+) Socio-cultural distance (--) Country risk/Demand

Uncertainty (+)

Intensity of competition (--) Market size and growth (++) Direct- Indirect trade

barriers(++) Small number of relevant

export intermediaries available (--)


A direct export entry modeHierarchical entry mode definitely not suitableExport entry mode to gain better market knowledge with

the lowest commitment and riskConsideration of an intermediary entry mode in the future

for more controlA direct export entry mode for control and commitment


The Hair care products

• A fast growing market• Acceptable competition• Opportunity to sell specialized products on a niche market• The “natural” advantage


The Perfumes• The French perfumes reputation• Increasing demand• Reduction of tariffs on imported perfumes


The Wipes• A new promising market• The support of the government• Success of convenient disposable products


General strategyhigh-margin rather than high-volumeStrong position on niche marketsThe main target

Young urban people Middle to high income from 18 000 to 98000

Euros per year-> around 3500 millions of household

Focus on big cities ( Mumbai, New Delhi)Standardized packaging in French and English


General strategyA differentiated strategy according to the

product:Wipes to make profits on volumeShampoo and Perfumes to make higher

margins


The pricing

Margin

Duties

Transportation costs

Manufacturing costs

Between 40% and 60 % of the selling price

• Manufacturing costs unknown• Price based on competition prices, mainly of foreign companies exporting their products to India


The hair care products: Institut PhytoTarget: urban active people from 25 to 50 years old high disposable income Product:Institut phyto shampoo and conditioners Place:spas, hairdressers, drugstores, specialized stores Promotion:samples and leaflets offered in spas and at hairdressers


Selling Price for the consumer: Rs 175

MS expectation:

Sales expectations:

The hair care products: Institut Phyto

Year 2010

2011 2012

Market share

2% 2% 3%

2010 2011 2012Expected Total Sales in the Market in value (Rs Million)

66 884.4 72 347.2 78 105

Expected SARBEC Sales in value (Rs Million) 2397.5 2555 2712.5

Expected SARBEC Sales in volume (Million units)

13.7 14.6 15.5


The Perfumes: C. de FarmeTarget:both male and femalefrom 18 to 35 years old middle class+ Perfumes as a giftProduct:C. de Farme perfumesPlace:A n exclusive distribution in the 3 big department storesPromotion:Samples will be given away in front of the major department stores


The PerfumesThe perfumes launched:

Women

Eau de toilette CAMELIA

Eau de toilette TERNATA

Eau de toilette SAMOA

Men

Eau de toilette EROS COOLEau de toilette EROS FEVERLongboard


The Perfumes: C. De FarmeSelling price to the consumer: Rs 1000 MS expectation:

Sales expectations:

Year 2010

2011 2012

Market share

1% 1-2% 3%

2010 2011 2012

Expected Total Sales in the Market in value(M€)

123.73 148.48 185.6

Expected SARBEC Sales in value(M€)

1.23 3.0 5.56

Expected SARBEC Sales in value(M Rs) (1€=69,942 Rs)

86.03 209.86 388.88


The Wipes: Corine de FarmeTarget: urban active people from 25 to 50 years old high disposable income Busy life Research of convenient and serviceable productsProduct: Baby wipesFacial cleansing wipesFamily packages and on-the-go packagesPlace:supermarkets , department stores Promotion:Samples in schools, maternity, supermarketsLeaflets to educate customers


The Wipes: Corine de FarmeSelling price to the consumer: Rs 3,50 per wipe MS expectation:

Sales expectations:

Year 2010 2011 2012

Market share 7% 8% 10%

2010 2011 2012

Expected total sales in the market in value Rs million

85.3 91.3 97

Sarbec expected sales in volume millions of units of package of 20 wipes

93.297 114.125 151.563

Sarbec Expected sales in value in Rs million

6.531 7.989 10.609


Expected results of Sarbec in IndiaGlobal sales expectations in value

2010 2011 2012

Expected total sales of Sarbec in India in value Rs million

2490.06 2772.85 3111.99

Expected total sales of Sarbec in India in value € million (1 Rs = 0,0143)

35.608 39.652 44.501


Future Road Map


SummaryIndia, a thriving marketOpportunities on the cosmetics marketSelected products to be launched: hair care,

wipes and perfumesA complementary strategy by productA first step in India through export towards

more commitment


Thank you!


Questions and Answers


sarbec cosmetics france india marketing strategy

Documents

euros edhec business

english edhec business

market entry mode

niche market

market size

market share

cosmetic market

intermediary entry mode