Chapter One Introduction
1.1 Research Background
With the persification of consumer demand, the trend of subpision of domesticcosmetics has become more pronounced, and the scale of subpided categories has continued to expand. According to data from the National Bureau of Statistics, thetotal retail sales of the cosmetics industry in 2017 was 251.4 billion yuan, which is up13.5 percent from a year ago. The cosmetics industry has maintained a rapid growthfor three consecutive years since 2015. At the same time, consumption upgrading isthe core driving force driving the growth of the market of fast moving consumergoods according to data provided by Nielsen Co. Shampoos and masks are the twocategories that are experiencing the most remarkable consumer upgrading currently.
In order to comply with market trends, Company A seizes the opportunity of category development. It has created 3 kinds of shampoo brands and 3 kinds of mask brands. Inthe early stage of brand establishment, various brands have developed rapidly with theopportunity of the category development. Without any media publicity, the sales ofShampoo A, one kind of shampoo brand, are among the best in the domestic industryof hair care products. Besides, as the business model continues to be upgraded inrecent years, Shampoo A will also face enormous challenges when it tries to maintainhigh-speed growth in a highly competitive market. In order to maintain the existingleading position of Shampoo A in the domestic industry of hair care products,Company A needs to invest in many aspects such as brand building, channeldevelopment and team building, which will inevitably increase the operating costs ofCompany A. In order not to affect the profitability of the company, the developmentof the other five brands of Company A requires comprehensive planning.
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1.2 Research Purpose and Significance
With the development of information technology, the entire society has embarked ona “quick” lane. The daily chemical industry is closely related to people’s daily lives itis developing quickly. In the daily chemical industry, products that are launched firstin the market will own more market shares. In this case, a large number of Chineselocal daily chemical companies have quickly established brands by the advantage of native business so as to constantly seize market opportunities and own more market shares. However, due to the lack of product innovation and brand building capabilities of domestic daily chemical companies, the survival and development of domesticdaily chemical companies have become more difficult after the pidend period ofmarket demand. Only a few brands can survive in the fierce market competition andoccupy a place. Once the company has such a brand, it will definitely try its best toensure the long-term healthy development of the brand. Company A needs tore-evaluate the development plans of its various brands in order to maximize theprofitability of the company and maximize the brand equity, thereby ensuring thelong-term healthy development of Shampoo A. This study seeks to address thepredicament of the multi-brand package development that Company A is facingcurrently in order to increase the market competitiveness of Company A’s brands andthe company’s profitability. It hopes that this study can provide inspiration andreference for the brand management and the brand strategy of domestic dailychemical industry. In addition, it is also hoped that this thesis could be a supplementto the previous researches of brand strategy.
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Chapter Two Literature Review
2.1 Brand Strategy
2.1.1 Definition
Brand strategy is the company’s business strategy by employing the brand as its core competitiveness to obtain differential profit and value. It is the outcome ofcompetition in the market economy. In recent years, some corporations with advancedconsciousness have utilized the brand strategy to win competitive advantage andgradually keep growing. Brand strategy contains six vital aspects: branding decision,selection of brand model, definition of brand identification, brand extension planning,brand management planning and establishment of brand vision.
In the information boom society, the impression of brand rooted in the recognition of consumers is that, in a sense, the brand represents the image of the company’sproducts, services, and even the entire company. The products and services of thecompany, based on the brand’s personality, value, and image, are to be shaped andpromoted. Especially with the fast-paced modern life and the impetuous psychologyof inpiduals, it is impossible for people to go back to the past, which means that ittakes a lot of time and energy to decide whether the urgently needed consumer goodsare worth buying or mot. However, assuming that a certain company’s brand has longbeen established, and after years of operating in the market has gained awell-deserved reputation, the customers will form the subconscious of the brand’sproducts which are definitely worth owning.
This is a typical manifestation that through branding it can virtually increase the purchase of their products. Hence, we can see that the ultimate determinants of thepurchase behavior of consumers is the brand value or other value which plays adecisive role, and it doesn’t only depend on the value in use of products and services.Therefore, the increasingly urgent task for companies is to establish brands and toincrease the added value of the products.
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2.2 Brand Positioning
2.2.1 Definition
Brand positioning refers to the place that a brand occupies in the mind of the customer and how it is differentiated from products of competitors. When positioning the brand,it is necessary to comprehensively consider the products from the competitors and the goals and life characteristics of the customers. There are two approaches for analyzing the development of brand positioning strategies. The first one emphasizes the brandand its unique features and connects them with the brands or product categories thatpeople are familiar with. Therefore, competitor-oriented positioning approach plays avital role when the company employs the first approach. The second approachemphasizes what kind of benefits will be brought by the particular attributes of thebrand, and makes the benefits closely link with the goals of the consumers.Companies adopt the customer-oriented positioning approach to deepen the brandpositioning by linking the brand to consumers’ lives. These two approaches arecomplementary to each other, not mutually contrary.
No matter which approach employed, the positioning statement should be composedafter completing the analysis so as to clearly define the brand positioning.
Generally, when making the statement of positioning, one is required to ask thefollowing four questions:
A. Who is the target group?
B. Why consumers should take this brand into account? (What kind of brand category it belongs to? What goals can the brand achieves for the target group)
C. Why this brand stands out from a variety of alternative brands?
D. How this brand helps the target people achieve their goals?
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Chapter Three Case Description.......................17
3.1 Profile of Company A.......................... 17
3.2 Current Situation of Brand of Company A.....................18
3.3 Main Problems Company A Facing.................... 20
Chapter Four Case Analysis.........................22
4.1 Analysis of Demand of Company A’ Target Market.............22
4.1.1 Analysis of Demand of FMCG Industry’ Target Market............22
4.1.2 Analysis of Demand of Hair Care Products’ Target Market.......................24
Chapter Five Conclusion and Implications................ 54
5.1 Major Findings............. 54
5.2 Optimization Program in Practical Work.......................54
Chapter Four Case Analysis
4.1 Analysis of Demand of Company A’ Target Market
4.1.1 Analysis of Demand of FMCG Industry’ Target Market
The hair care products and masks of Company A belong to the fast moving consumer goods industry (FMCG). According to the report of the Kantar Worldpanel, theoverall sales of fast moving consumer goods industry in 2017 have increased by ayear-on-year growth of 4.3 percent and the proportion of FMCG in GDP in 2017 is0.7 percentage points higher than that in 2016.
Premiumisation and urbanization and population growth are the driving forces for the overall industry growth. Personal care, as the best performing category in the fast moving consumer goods market in 2017, benefits from the increased consumptionand premiumisation.
Judging from the sales channels of the overall industry, the channel of e-commerce is still rapidly developing. The proportion of sales has increased from 4.4% in 2015 to 8.0% in 2017. The continuous expansion of consumer groups and rapid increase in the frequency of purchases are the main driving forces for the rapid development of the channel of e-commerce. In 2017, 74% of the growth of the sales online came from organic growth instead of the erosion of offline channels’ sales.
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Chapter Five Conclusion and Implications
5.1 Major Findings
reference(omitted)