You will need to conduct additional secondary research to support your answers adequately and you must acknowledge and reference all sources used or it will be considered as plagiarism. Proper referencing using the APA format or the Harvard referencing format is required.
Is organic the best?
Walk into any beauty department or personal-care store and chances are you will find an everwidening array of cosmetic products that claim to be “organic” or “natural”. But can you always trust labels that claim to be both? According to Mr Amarjit Sahota, managing director of Organic Monitor, a London-based specialist research and consulting company which focuses on global sustainable product industries, Asian consumers are not aware of what organic means. Basically, it is a sustainable form of farming.
There is no single official definition of what makes a product organic, but generally, organic cosmetic ingredients are those that come from organic plants, while natural cosmetic ingredients are those obtained only from plants, animals and substances of microbiological or mineral origin. Mr Sahota adds that in Asia, the absence of mainstream retailers of such products and a lack of large natural food shop chains lead to “a disorganised sector where there is strong competition for shelf space with pseudo-natural brands”.
Small speciality retailers which carry a relatively wide range of reputable organic and natural beauty products in Singapore include SuperNature, Bud Cosmetics and Pure Tincture.
Mislabelling is one of the biggest problems. Mr Sahota estimates the global natural and organic cosmetics market to be worth US$11.7 billion (S$16.6 billion), with the United States and Germany being the largest markets. There are no official figures on the market for such organic beauty products in Singapore. But there are now more skincare labels – claiming to be natural or organic-based – on the shelves. About five new brands have been launched every quarter in the last two years. Some of the latest ones include Botaneco Garden, Stenders and Bottega Verde.
The businesses of local organic and natural cosmetic speciality retailers are growing. Mr Eric Chew opened his first Bud Cosmetics store, at Novena Square 2 in 2008 with just three labels – British brand The Organic Pharmacy, Logona from Germany and American label 100 Per Cent Pure. Today, he has two more stores – one at Mandarin Gallery and another at Paya Lebar Square. Bud Cosmetics now carries 16 brands, including South Korean label Isoi and Mukti Organics from Australia. It also offers organic and natural facial and body treatments at the Mandarin Gallery outlet.
In October 2015, Pure Tincture launched its second store and beauty studio in Tras Street. It also operates a store at The Adelphi. Pure Tincture started in 2005 with three organic brands (Sukipure and Osea from the United States and Santaverde Natural Cosmetics from Germany). It now stocks 11 labels, including London- based Pai and Martina Gebhardt from Germany, and offers 25 kinds of facials.
Even organic food grocer SuperNature at Forum The Shopping Mall, which opened in 2001, has an entire section devoted to personal care products. It sells at least 12 organic and natural labels, such as American brands Rahua, Simply Organic Beauty, Nature’s Gate and Coslys from France.
Mr Chew of Bud Cosmetics and Ms Helen Lien, founder of Pure Tincture, say Singaporeans make up more than 70 per cent of their customers. Their regular customers are in their mid-20s onwards and are usually savvy about organic products. They add that organic and natural beauty products these days are more competitively priced and have improved formulas.
Mr Chew points out that many organic concoctions are no longer rudimentary as customers have become more discerning and expect the organic products to perform as well as nonorganic products from big beauty brands. “In the past, an organic product was made of raw ingredients. One just has to whip it up and if it smells nice, it can be sold. Now, organic products are infused with botanical cosmeceuticals.”
Today, the prices of organic and natural cosmetics are now comparable to those made mainly with synthetic ingredients. Mr Chew attributes this to economies of scale and the fact that premium skincare products are usually priced higher, regardless of whether they are natural or organic or neither.
Traditionally, life-changing events – such as pregnancy or serious illness – also lead consumers to switch to organic and natural cosmetic products because the products are believed to be better for one’s well-being, notes Mr Chew. When Ms Brenda Lim, who is in her early 40s, was diagnosed with breast cancer three years ago, she started on an organic beauty regime to complement her strict organic vegan diet. Three years on and fully recovered, she still continues to use only organic skincare products from brands such as John Masters Organics and The Organic Pharmacy. She says: “The products make me feels healthy inside out and also give me a radiant glow.” Many consumers also turn to organic and natural cosmetics to deal with their sensitive skin. Ms Lien says: “Most of my customers have rosacea, eczema, thin skin, adult acne or contact dermatitis and they don’t respond well to over-the-counter products and those from pharmacies.”
(Adapted for academic purposes.Source: Is organic the best? By Gladys Chung, The Straits Times, Page D4, D5, 12 November 2015)
(a) Based on the case and your research, describe the product life cycle stage of the organic cosmetic industry in Singapore. Give four (4) reasons for your answer. (13 marks)
(b) From the case, select an organic cosmetic brand of your choice. Apply appropriate pricing (at least two (2) product mix pricing and/or price adaptation strategies) and distribution (types and number of intermediaries) strategies that the brand should adopt in Singapore in order to build sales. (24 marks)