PESTEL-analysis
To assess an external market environment we also have conducted a PESTEL-analysis.
Political and legal factors |
|
Economic factors |
· A slowdown in consumer spending and curbed expenditure on personal care product is going to cause a long-term decline in the UK which is not expected to pick up until 2012 (Euromonitor, 2009). · A strong currency may make exporting more difficult because it may raise the price in terms of foreign currency. · As consumers increasingly look for better value, acceleration in beauty will continue · Higher national income growth may boost demand for a firm’s products. |
Social factors |
· Growing demand for natural organic cosmetics in UK. · Health consciousness in the country · Carrier attitude in the UK influences the trend of looking good as a business woman. More sophisticated demand for natural cosmetic. · Green trends make consumers think more about the percentage of artificial ingredients in cosmetics. · Sales of skin care product for men are predicted to grow by 18% globally and by 12% in UK (Euromonitor, 2009). |
Technological factors |
· The trend towards high-tech, eco-friendly formulations will continue to spiral. · The cosmetics market will still be important, with anti-ageing being the most demanding factor, increasing the R&D role in this sector. · Internet with its forums and blogs has a great influence on consumer attitude towards new product in this industry. |
Environmental factors |
· Growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer, both creating new markets and diminishing or destroying existing ones. · Due to specified ingredients and way of transferring, the shelf life of product can be short. · Ecological trend has a great impact on consumer positive attitude towards organic and natural products. |
Table 1. PESTEL-analysis
GRID-analysis
Basing on PESTEL-analysis we also have conducted a GRID-analysis, which showed the following strong influences between the PESTEL dimensions and 4Ps:
PESTEL dimension |
4Ps |
Political and legal dimension |
Product: increase in demand for premium products due to the customer income growth. Price: changes in price due to the import taxes and other governmental regulations. |
Economic dimension |
Product: production in accordance to legal requirements. Price: changes in price due to the customer expenditure fluctuations. Promotion: an emphasis on the price-for-value in order to boost sales. |
Social dimension |
Product: launch of the men’s product line. Promotion: an emphasis on 100% naturalness in the product positioning due to the ‘green’ trend and health concerns. Place: distribution through the pharmacies due to customer health concerns. |
Technological dimension |
Product: improvement of production technologies. Promotion: through the Internet and social media. Place: distribution via e-stores. |
Environmental dimension |
Product: continuous improvements in production and packaging technologies in order to prolong product shelf life and reduce waste of materials. Promotion: an emphasis on eco-image of products in order to improve customer loyalty. |
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