The cosmetic surgery sector is affected by a variety of factors that have an impact on market expansion and company profits. The cosmetic surgery industry has grown significantly and quickly over the generations, emerging as one of the industries with the highest potential for future growth. The characteristics of the market can either raise or decrease the likelihood of achievement for new entrants. Businesses can study the market and assess its investment potential using Porter’s five forces model. This essay aims to assess the market viability of a brand-new cosmetic surgery named Osborne Cosmetic in Miami, Florida, in the United States.
Clinical gene therapy is starting to exist, these have become feasible as a result of improvements in gene transfer technologies and a better knowledge of the biomolecular etiology of some illnesses. Researchers in plastic surgery have welcomed this idea, which has the potential to improve a variety of complex surgical procedures, including skin grafting, muscle, and nerve repair, and the transfer of microvascular tissue, to mention a few. Gene therapy offers by specifically activating the desired genes at specific places, there is the possibility for considerable advancement in the clinical outcome in these areas. Additionally, this strategy may increase the speed and effectiveness of the wound-healing process, which will have a substantial impact on the standard of care provided.
Background
City Profile
The city in focus is Austin, Texas, with a population of over 960,000 people. Texas state was chosen since southern states are among the most popular cosmetic surgery businesses, and, along with California and neighboring states, Texas is one of the leading states (Blau et al., 2020). With a median overall age of 33.7 in 2020, Austin, Texas, had an average family income of $75,000. However, according to the statistics, the median age of residents is slightly rising, growing from 33.0 several years prior and 33.7 in 2020 (U.S. Census, n.d.).
As for the demographic setting, among the most prevalent racial groups are White, accounting for 48.2%, Hispanic, accounting for 21.2%, Asian, with 7.65%, and Black or African American, allotted 7.4% (U.S. Census, n.d.). In this sense, it is noteworthy that research indicates that with age, more people tend to seek cosmetic surgery (Blau et al., 2020). As a result, of Austin’s maturing population and the lucrative location with the most prevalent cosmetic surgery rates, the city is appropriate for the surgery services business.
Service Profile
Cosmetic surgery procedures and other treatments are described as adjustments or changes to the shape, size, texture, color, or location of body traits. The term cosmetic plastic surgery can additionally refer to specialized procedures that prioritize aesthetic improvement (Atiyeh et al., 2020). Its main areas of focus usually include facelifts, ear correction, breast enlargement, facial implants, and fat reductions. In this healthcare field, surgeries are divided into minimally invasive techniques and fully invasive techniques. In 2020, 15,5 million cosmetic surgery operations were carried out by representatives of the American Society of Plastic Surgeons (ASPS), according to the report by Pearlman et al. (2022). This sum included 13,3 million minimally invasive cosmetic surgeries (Pearlman et al., 2022).
These included neuromodulator injections, filler injections, and skin treatments, and roughly 2,3 million cosmetic surgical procedures, such as augmentation mammoplasty, eyelid surgery, rhytidectomy, body contouring, and nose reconstructive surgery (Pearlman et al., 2022). Thus, the cosmetic surgery field within healthcare is becoming more popular and involves different levels of intensity.
What is additionally noteworthy is that with increasing popularity, there is a growth of competition and a necessity to obtain a bigger competitive edge. The industry’s rapid growth restricts the level of competition that is now present. Spending and the need for goods and services have risen steadily in the cosmetics sector (Niamtu, 2018). The creation of new consumer segments has also increased in the sector. For instance, between 1997 and 2015, the need for male cosmetic surgery by 327% due to men’s desire to look young (Valina & Sessa, 2019). Considering media trends, it is anticipated that the usage of cosmetic surgery will rise. The growth of cosmetic surgery tourism is another indicator of the growing demand for cosmetic surgery services (Furnas, 2018). The current market participants are unlikely to use aggressive marketing strategies like price wars because the need for cosmetic surgery is still high.
Competitive Threats
Existing Competitors
Austin is a relatively big city with almost one million residents, and with the growing popularity of cosmetic surgery in the southern states, it has several competitors that permeate the local market. The first existing competitor is the Austin Plastic Surgery Institute, which was founded in 2003 and strives to offer the highest-quality cosmetic surgery services in central Texas (Austin Plastic Surgery Institute, n.d.).
The company comprises a team of doctors, pharmacists, medical assistants, estheticians, and support personnel. The clinic offers a wide variety of services, starting with body, face, and breast surgeries and extending the services to skincare, involving injections, rejuvenation treatments, and women’s health procedures (Austin Plastic Surgery Institute, n.d.). Another local competitor is Westlake Dermatology & Cosmetic Surgery. The company has four subsidiaries around the state and offers dermatology and cosmetic surgery services, such as injections, breast augmentations, laser treatments, and body contouring (Westlake Dermatology & Cosmetic Surgery, n.d.). These are the largest businesses within the area that employ the most qualified doctors with a variety of services.
Potential Entrants
The ease with which suppliers can raise their prices and exert control over the supply chain determines their power level. Among the potential competitors of Osborne Cosmetic Surgery in Austin is Westgate Skin & Cancer. This business is among the most successful practices that offer services ranging from diagnostics to skin treatments and spas (Westgate Skin & Cancer, n.d.). Another potential entrant is Sanova Dermatology, which concentrates on cosmetology services in addition to personal brand cosmetics (Sanova Dermatology, n.d.). The reason behind these businesses permeating the cosmetic surgery industry is because of their expanding models with the growth of interest in surgeries and increase in customer base.
Due to competition, supplier power decreases as the number of providers increases. Unique product suppliers have a lot of clout in the distribution chain since they can utilize monopolies to hurt other companies. In contrast, because consumers have more options, typical product suppliers have little power (Spataro, 2019). The availability and application of items and technologies in the cosmetic procedures market define the influence of suppliers. Since cosmetic procedures clinics are the primary users of these items, vendors’ influence is diminished (Branham, 2019). The businesses in the cosmetics sector are engaged in a fierce battle to sell their goods and brand names.
The ease with which suppliers can raise their prices and exert control over the supply chain determines their power level. Due to competition, supplier power decreases as the number of providers increases (Thiry & Walden, 2019). Unique product suppliers have a lot of clout in the supply chain since they can utilize monopolies to hurt other companies. In contrast, suppliers have less provider power because consumers have more variety when purchasing essential products. The availability and application of items and technologies in the cosmetic procedures market define the influence of suppliers. Since cosmetic surgery facilities are the primary users of these items, vendors’ influence is diminished (Ching & Xu, 2019). The performance of the suppliers’ businesses depends heavily on cosmetics clinics.
Substitutes
Substitutes restrict the market potential of the current products by giving consumers options. When substitute goods or services offer comparable or superior results, such as price and quality, the risk of substitutes is significant. In the cosmetics market, non-surgical techniques compete with surgical operations. Beidas (2018), in their research, emphasized that in 2016, surgical procedures accounted for 56% of all expenditures in the cosmetics sector, while non-surgical procedures accounted for 44% of total expenditures.
Among the substitutes for cosmetic surgery is facial contouring with PDO threads, which do not involve any filler or invasive surgery and might replace cosmetic surgery on the nose, cheekbones, and eyebrow lifts. The utilization of new technology is the main focus of research and development efforts, and non-invasive solutions are becoming increasingly common. The threat of alternatives to cosmetic procedures will grow as suppliers develop new and more powerful treatments.
Conclusion
Porter’s five forces analysis reveals that Osborne Cosmetic Center in Miami has room to grow. The industry’s rapid growth lessens the level of competition for the market’s current participants and opens doors for new entrants. The market’s limited influence on suppliers and consumers lowers corporate uncertainty. The main challenge facing the industry is the creation of substitute products, which might dramatically lower the market share for cosmetic clinics.
The differentiation of their products, lack of experience, and lack of physical presence in well-known locations are likely to challenge Osborne cosmetic clinics must overcome. The rise of non-invasive cosmetic and technological breakthroughs has raised the risk of replacement items. The interaction between cosmetic product makers, the technology used in cosmetic clinics, and the competition limit the influence of suppliers. Osborne Cosmetic Surgery Center will find the market to be lucrative.
References
Austin Plastic Surgery Institute. (n.d.). About. Web.
Atiyeh, B. S., Rubeiz, M. T., & Hayek, S. N. (2020). Aesthetic/cosmetic surgery and ethical challenges. Aesthetic Plastic Surgery, 44(4), 1364-1374. Web.
Over the recent past, consumers of beauty products have evolved to become trendy and dynamic. La Roche-Posay (LRP) is one of the enterprises compelled by the changes in consumer trends to adjust and devise new strategies that can help in market retention and achievement of consumer loyalty. Since the company provides beauty products, which help in skincare and beauty, its focus mainly is on the young individuals in the market of 15 to 25 years. Apparently, these are young individuals characterized by frequent changes in relation to fashion and market demands.
To retain its share of the market and expand its scale of consumers, LRP has to engage in various initiatives. Some of the initiatives include analysis of its market, competition, positioning strategy, consumer demands, and type of innovation to utilize. It is within this context that the essay examines the European market of LRP by analyzing the beauty market, competition, positioning strategy, identifying brand consumers, examining market trends, and the type of innovations evident in the market.
In Europe, competition is cutthroat and every enterprise is working hard to increase its market share. Although LRP is one of the high-end and leading companies that manufacture skin care products, there is a range of companies, which compete and deliver products that can diminish its sales volumes. In the words of Kapferer, Nivea and Eucerin are among the major competitors of LRP (212). These competitors undertake their businesses in Europe, and thus, their competition affects European consumers, who are the main target of LRP. With the increased competition and the behavior of European consumers, quality is the cornerstone of matching consumer demands. Production of high-end skincare products is among the principles that should form the basis of LRP products. The need to focus on quality is because young consumers in Europe are trendy and fashion-oriented.
Fundamentally, companies that emphasize improving the quality of their products receive high volumes of consumers unlike those that do not assess their product quality. As such, LRP should note that its target consumers, who are mostly from 15 to 25 years, are keen on quality and a slight change can affect their behavior towards the product and the company (Kapferer 225). LRP should also understand that several consumers in Europe purchase products basing on the prevailing market trends and love associating with brands that are inclined to quality. The implication of the inclination is the fact that consumers in Europe demand products that are of high quality and budget-friendly. Additionally, these consumers visit companies that supply products, which match their demands. According to Armstrong, Adam, Denize, and Kotler, the ability to match consumer expectations is a factor that companies need to consider when they want to retain their market share (97). Therefore, for LRP to enjoy a good share of the market, it has to focus on quality, consumer demands, and the existing competition in the European skincare and beauty industry.
To develop a good positioning strategy LRP needs to understand the marketing environment. A good understanding of the marketing environment helps the company to align itself in a manner that facilitates easy identification and delivery of products that consumers expect. Smart and well-positioned companies enjoy the loyalty and brand popularity, which is an ingredient that leads to increased market share (Lusch and Vargo 186). The innovations needed by LRP should emphasize areas that are accessible and convenient for target consumers. To increase its spectrum of consumers, the company can introduce a number of services and engage in digital sales.
SWOT Analysis of La Roche-Posay in Europe
Strengths
Opportunities
Threats
Weaknesses
product quality
Increased branding
Competition
Inability to match consumer expectations
Product Brand
Improving product quality
Technological advancements
Availability of substitute products
Use of technology to improve product quality
Introduction of online platforms to communicate to potential consumers
Consumer dynamics
Externalities that affect consumer behavior
Works Cited
Armstrong, Gary, Stewart Adam, Sara Denize, and Philip Kotler. Principles of Debate, and Directions. New York: Routledge, 2014. Print.
Kapferer, Jean-Noël. The New Strategic Brand Management: Advanced Insights and Strategic Thinking. London: Kogan Page, 2012. Print.
Lusch, Robert and Stephen Vargo. The Service-dominant Logic of Marketing: Dialog, Marketing. Sydney: Pearson, 2014. Print.
It has always been assumed that women are the only people who consume cosmetic products. However, from observation and studies that have been conducted in the last few decades, it has been identified that men also use these products. Additionally, the rate at which men consume these products has been increasing at an exponential rate over the last few years.
This increase in consumption rate has created a high demand on male cosmetic products. It is due to these factors that the current study was conducted.
The main aim of this study was to determine the factors that affect the consumption of cosmetic products in the male population. To effectively cover all these areas of study, the objectives of the study were:
To identify how marketing can influence the consumption of men’s cosmetic products.
To identify the difference in the consumption of cosmetic products by men of different levels of incomes.
To determine whether men have a variety of cosmetic products to choose from.
Questionnaires were used to collect data from the target group. The study had a sample size of 110 individuals. Random sampling technique was administered to conduct the interview to eliminate any forms of biasness. The data that was collected was analyzed using SPSS.
Using the software package, Chi-Square tests, t-test and Pearson correlations were used as tools for providing information regarding descriptive statistics. From the results, it was identified that advertisement using celebrities played a significant role in the consumption of male cosmetic products.
It was also identified that men had a wide range of cosmetic products to chose from. Finally, it was identified that the income levels of men did not affect the consumption patterns of cosmetic products. From these results, it was concluded that men, as much as women consume cosmetic products to improve their self-image and boost their confidence.
Introduction
The cosmetic industry has for a long time relied on women as their main target consumers but this is slowly changing. There is an emerging male market for cosmetics and it is growing fast. Cosmetic manufacturers have started acknowledging this fact, and are now trying to find ways of tapping into the male market and exploiting the huge potential there.
Recent studies show that male skin care products already account for more than 30 percent of the market in western countries (Noordhoff, 2004). Similar growth trends are being seen in Asia, especially in those countries that readily embrace western lifestyle ideas like Japan, South Korea and China. Hong Kong has emerged as one of the best markets for doing cosmetics business in this region.
There is zero import duty on cosmetics and toiletries and no registration or labeling requirements. It presents the perfect entry point into China for most of the foreign cosmetic brands. China is now the fastest growing market for cosmetics in the Asia-Pacific region.
In 2007 alone, the total sales for cosmetics and toiletries in this country were valued at $14.3 billion, which represented an increase of 73.3% from 2002 (Murray, 2005). The cosmetic manufacturers are now paying more attention to male consumers to expand their market share in this niche. There is now a variety of male cosmetic products like anti-wrinkle creams, facial creams, hair products and skin care products.
However, the manufacturers are yet to fully understand the attitudes and perceptions of men towards the consumption of cosmetic products. The aim of this paper is to look at how marketing variables can influence the consumption of men’s cosmetic products. The target groups are men in Hong Kong, which is a fast growing market for male cosmetic products.
Study Rationale
The market segment for men’s cosmetic products is growing and manufacturers are trying to find ways of taking full advantage. A study commissioned by L’Oreal, which is one of the largest cosmetic manufacturers in the world, the Chinese market for men’s skin care products rose by 27% in 2009 and 40% in 2010 (Waldmeir, 2010).
This phenomenal growth of the male niche presents a great opportunity for all manufacturers in the cosmetic industry. Several companies are now focusing on male consumers and producing different products targeted specifically at them.
However, there is still little research on the consumer attitudes of men towards cosmetic products. The manufacturers need to know how to market their male cosmetic products better so that they can reach into this market with huge potential. This paper aims to shed some light on how marketing variables influence men’s consumption of cosmetic products.
Objectives
There are three main objectives that this research paper will focus on:
To identify how marketing can influence the consumption of men’s cosmetic products.
To identify the difference in the consumption of cosmetic products by Hong Kong men of different levels of incomes.
To determine whether men have a variety of cosmetic products to choose from.
Literature Review
Several studies have been conducted on the consumption of cosmetic products. These studies have however, concentrated on the consumption patterns of cosmetic products by women. Turner (2008) discovered that contemporary society is attaching a lot of importance to body and physical appearance.
Burton (1995) showed that women put a lot more value on personal beauty and physical attraction as compared to their male counterparts.
Souiden (2009) argued that women are more psychologically committed to consumption of cosmetics than men, and that is why men are less likely to engage in impulse purchases of the same as compared to women. For women, buying cosmetics is like a necessity while men still view it as a luxury (Burns, 1998).
These are just but some of the researches that have been conducted by women. From a social view, the consumption of cosmetics products by men has increased in the past few decades. For instance, the research that was conducted by the French cosmetics giant L’Oreal revealed that Chinese men are increasingly accepting that appearance is vital for professional and social success (Waldmeir, 2010).
For a long time, women are the ones who have held this perception and it played a big part in driving cosmetic sales amongst them. Such attitudes and perceptions are also likely to drive more men into regularly using cosmetics (Dillon, 2003). The fear of losing their attractiveness is one of the motivating factors behind increased male consumption of cosmetic products.
The main reason behind men’s consumption of cosmetic products is to maintain their identity (Featherstone, 1991). A relative proportion of men in the modern world have tried to change their self-image through cosmetic products to try and adapt to the new roles expected of them (Aaker, 1999).
Men also use cosmetic products to identify with symbolic image presented by the products (Grubb, 1987). Sirgy (1982) found out that consumers will go for products that promote positive self-image.
Men are motivated by the images and ideas associated with the cosmetic products (Fiona and Elke, 1998). Kellner (1992) claimed that the different meanings associated with the products are used to boost the fragmented self-image of individuals.
From a personal perspective, men as individuals do not mind aging. However, the process of premature aging associated with lifestyle choices and pollution is a major concern (Temple, 2005). Such concerns drive men to seek cosmetic products that they believe that they slow down the process of aging so that they remain young and attractive for longer.
In a departure from the past when women did the shopping for men when it came to cosmetics, men are increasingly buying their personal care items on their own (Loo-Lee et al., 2005). This is because men have come to appreciate the importance of personal grooming without necessarily being pressured by women (Estelle and Finnegan, 2005).
Men are also more knowledgeable about the various choices available to them (Galloway and Clark, 2003). By shopping on their own, men are able to choose what they feel would best suit them, based on the knowledge they have gathered about the various cosmetic products for men (Clark and Holmes, 2004).
Marketing of cosmetics products has also changed the manner in which men view cosmetic products. This has greatly affected men consumption behavior of cosmetics products. It has been shown that there is a big difference in the manner in which men and women process information related to the consumption of products (Burton, 1995).
It has always been believed that men approach the task of shopping differently from the women (Chiger, 2001). Traditionally, women have been known to be more likely to purchase aesthetic products while the men are more likely to go for functional products (Dittmar et al., 1996).
In analyzing the consumption of cosmetic products, it is clear that it has been traditionally associated with women (Dano et al., 2003). Beauty products are usually considered an important aspect of women’s culture (Coulter et al., 2003). Women readily spent a big part of their income and time on cosmetic products they believe will make them look more attractive.
Men, on the other hand, paid little attention to cosmetics due to past societal attitudes (Inler, 1998).This is the main reason why there are numerous studies on women’s consumption of cosmetic products while the men’s shopping behavior in regards to cosmetics has received little attention (Burton, 1995).
However, there have been a lot of changes in the cosmetic market, and men have become important consumers of cosmetic products as well. Many men are increasingly purchasing different personal care items out of their own volition. Men are becoming more comfortable with doing their own shopping for items like skin care products, toiletries and fragrances (Sturrock and Pioch, 1998).
The men of today have also become part of modern consumerism just like the women (Bocock, 1993). As the men become major players in modern consumerism, they look to create their own identities. They are able to achieve this through dressing style, body image and having the ‘right look’ (Davies and Bell, 1991).
The manufacturers are also sponsoring many studies aimed at learning the consumer behavior of men towards cosmetics (Lambert, 2010). The cosmetic manufacturers have discovered that the male market holds a lot of potential that is largely unexploited.
A lot of resources is now being put into the manufacture and marketing of men’s cosmetic products (Milligan and Neuer, 2009). The major companies now have a whole range of different cosmetic products for men, and they also set aside huge budgets for advertising the same (O’Sullivan and Pearce, 2007).
Social and cultural pressures are some of the main reasons driving this change in the consumer behavior of men. There have been a lot of social and technological changes in the modern and postmodern era, and this is reflected in consumer behavior as well (VanRaaij, 1993).
One of the most outstanding characteristics of the postmodern attitudes towards consumption is that both men and women are involved in equal measure (Sturrock and Pioch, 1998). Social expectation is putting pressure on today’s men to want to look better and remain vibrant (Nickel, 2004). In many societies, it is becoming the norm to be fashionable (McCracken, 2003).
Body image has become very important in today’s society, whose beauty standards have been further reinforced by the mass media (Wolf, 2002). The need to conform to prescribed societal norms concerning attractiveness is as important to men as it is to women since it is seen as a prerequisite for success (Patzer, 2006). The idea of being an attractive individual is seen as the key to success (Peiss, 1998).
The change in culture, beliefs, and norms within the society has also affected the manner in which men perceive cosmetic products. Changing attitudes in social circles are also contributing to men’s consumption of cosmetic products (Cardona, 2000). Caroline (2005) found out that men consume cosmetic products to fit in with their social friends. They do not want to be seen as backward.
The increasing number of women in the workplace is also putting men under pressure to groom themselves (Milligan, 2011). Men feel the need to look good at the workplace. The workplace is one of the areas where men feel intense pressure to take personal grooming seriously. The idea of using cosmetics is also readily acceptable in the office environment than outside (Lou et al., 1998).
Men who are conscious about their image are likely to be perceived as serious businessmen (Caroline, 2005). Men have come to believe that a good image can play a big role in bringing success at the workplace. Men who are serious about their personal grooming are likely to enjoy more success in the business environment (De-Loris, 2001).
The cosmetic industry has moved to capitalize on this change in men’s consumer behavior by undertaking different studies aimed at developing appropriate strategies for meeting the needs of men (Weber, 2002). Recent studies show that younger men (18-34 yrs) do much more shopping in the retail stores than their older counterparts.
The men in the younger age group (16-24 yrs) are now shopping openly for health and beauty products than was the case in the past (Coley and Burgess, 2003). This open embrace of cosmetic products by men is seen by some researchers as evidence of gender-blurring (Kacen, 2000). Young people are usually more open to change and trying new things (Ronald, 2003).
Tremendous changes in the society have led to the emergence of young men who put a lot of value on aesthetics just like women. This phenomena has been referred to as feminization of masculinity (Iida, 2004) and the metro sexual generation (Clarkson, 2005). These metro sexual men are usually found living in big cities, and they place a lot of value on aesthetic appearance.
They are thus willing to put in a lot of efforts and spend a lot of money to boost their self-image and live a certain lifestyle. They have gone past the conventional masculine values and embraced a new, trendy lifestyle that values looks and physical appearance.
They are willing to spend money on fashion, healthy foods, fitness clubs and cosmetic products. Living in the big cities is seen as progressiveness, and everyone there wants to belong and conform (Phelan, Robertson and Sanders, 1997). The big city environment is more open to the idea of cosmetics consumption by men so the men there feel more comfortable buying and using these products (Thomson and Valdermont, 2000).
The various aspects of city life put a lot of emphasis on personal grooming so the men have to ensure that they conform. Celebrities are used to endorse the cosmetic products to offset the negative perceptions towards metro sexual men (Nizar and Miriam, 2009). Celebrities are used to make men feel more comfortable with the idea of using beauty products.
They have helped in changing men’s attitude towards the idea of consuming cosmetic products (Cole, 2008). The celebrities who endorse cosmetic products have good looks and style that are highly regarded by heterosexuals (McCracken, 2003). Most of the celebrities used, like sportsmen and movie stars have masculine roles, and this helps offset the attitudes that cosmetics consumption is a feminine thing.
This presents a potentially huge market for cosmetic manufacturers but there have been relatively few male-specific strategies in the cosmetic industry. The few recognizable strategies, like the media campaigns that target men directly, have played a significant role in increasing men’s consumption of cosmetic products.
Having reviewed a few of the studies done on men’s attitudes and behaviors when it comes to the consumption of cosmetic products, it emerged that there are certain variables that play an important role in all these. These variables can be grouped into three general categories.
The category of personal variables refers to physical appearance, aging concerns, health and fitness and self-image. The sociocultural variables touch on societal perceptions and the new consumer lifestyles.
The third category is for the marketing variables, and the main factors here are advertising and purchase situation. This paper will focus on the marketing variables and how they influence the consumption of men’s cosmetic products.
When compared to the female target market, men’s cosmetic advertising still has a long way to go. Of course there has been significant progress, and there has been an increasing number of media campaigns aimed at men. Media ads related to men’s cosmetic products and images of physically attractive men are now found all over (Iida, 2004).
There has been an increase in the sales of media, like magazines that target men specifically, and they are being used for these advertisement campaigns. The increase in advertisement campaigns for male cosmetic products has made more men comfortable with the idea of using beauty products.
It has also been noted that majority of these ads do not dwell on the traditional aspects of male masculinity (Mort, 1988). They try to project a modern image of men where grooming is the norm. The use of popular male icons like celebrities is bringing a lot of success in changing men’s attitudes towards consumption of cosmetics.
The main is to change people’s perception of cosmetics as a women’s thing, but instead as a useful product that even macho men can benefit from. Many companies have run successful ad campaigns using movie stars and sportsmen for positive imagery.
These are cultural icons with a great following in the society, and they can be used to promote and reinforce positive attitudes towards male consumption of cosmetic products.
There are also some situational factors that come into play before a man decides to purchase any cosmetic products. These include the channel of product distribution, the store location and environment, and the availability of knowledgeable attendants (Weber, 2002). The distribution channels used for men’s cosmetics include pharmacies and spas.
For these places, the cosmetic company is trying to avoid the feminine association with the products, and instead presents them as medical care products. Men’s cosmetics can also be sold in mega stores or through the internet so that men can enjoy discretion and fair prices when making purchases.
Stores or counters dedicated exclusively to men’s cosmetic products are also used, and this is seen mainly with the brands that try to project an image of top quality and luxury. The store environment also plays a significant role in influencing purchases of cosmetics by men (Chao and Schor, 1998).
There are studies that have looked at how consumer perceptions are shaped by elements like colors, music and brightness (Loo-Lee et al., 2005). The visual aspects like signs, layout and architecture of the retail stores have a major effect on attracting and retaining customers, and giving the impression of quality service (Baker et al., 1992).
This is why some cosmetic companies and retailers have put up dedicated corners specifically for men’s cosmetics. There are also places where there are exclusive shops for men’s cosmetics. The main reason behind all these strategies is to make men feel comfortable about purchasing cosmetics.
Research Methodology
In this study, secondary data was attained by reviewing works which have been done in the field of marketing especially in the case of consumer response of men and women on cosmetic products. This included the works on buyer behaviour and marketing strategies that have been done in the field of cosmetic products.
This data was obtained from books, magazines, peer reviewed journals, online articles and other relevant sources. Through literature review, the methods that had been used in the previous studies were also be borrowed and applied in the current study.
Also the recommendations of the previous studies were considered in the current work. Information from literature review was therefore used as a guiding tool in conducting the present study.
However, to complement on the secondary data available in the study, it was essential to conduct a primary study. This was a quantitative research conducted in the form of a survey. The study used structured questionnaires to collect data from men at shopping malls in Hong Kong.
The men were all above 18 years of age. The use of shopping malls was strategic for the study since there was a higher chance of finding men who are more open to the idea of using cosmetics. People who are out shopping are also likely to be relaxed, and they would be more willing to take time and participate in such a study.
A shopping mall also presents a variety of shops so there is likelihood of finding men shopping for different products from different shops. The survey method was chosen since it is fast, economical and convenient. The method is fast since the questionnaires can be handed over to many men at the same time. Each person only needs about 10 minutes or less to complete a questionnaire and be on their way.
The use of questionnaires is economical since there are no elaborate instruments, tools or equipment needed for collecting the data. Collecting data using questionnaires is also very convenient since all the researchers have to do is to introduce themselves and request participants to spare a few minutes.
They will then give a brief explanation of what the survey is about and what the participant is required to do. The use of questionnaires also allows for instant response and quality control (Groves et al., 2004). The study used a sample size of 110 to ensure that a broad set of data was obtained. To help realize the objectives of the research, the researchers conducted non-probability sampling.
This was because the research needed respondents with specific characteristics (Lau and Lee, 1999). The questionnaires used had questions in four general categories. The questions in the first part dealt mainly with societal perceptions towards men’s consumption of cosmetics and how it affected men’s use of the same.
The second part dwelt on the men’s perceptions, especially trying to find out the benefits men expect to get from using cosmetics. The third part explores how available cosmetics are to men, in terms of costs. The aim was to find out if cost was a major barrier to men using cosmetic products.
The questions in the last section dwelt specifically with the role of marketing in driving men’s consumption of cosmetic products. Before conducting the actual research, the questionnaires were pre-tested using 10 respondents to see how relevant the analysis was. The pre-test led to the modification of the questions to fit better with the objectives of the study.
Raw data from the field is of no use since it does not make sense. It is mainly composed of numbers and codes which need to be analyzed to make sense. In this study, the analysis of data involved three major steps:
Data preparation – This involved the organization of the data which has been collected for easy analysis.
Descriptive statistics – This step entailed the description and interpretation of the data which has been collected.
Inferential statistics – This was done to test whether the data which has been collected is consistent with the hypothesis of the study. This is where either the null hypothesis or alternative hypothesis is proved to be true.
For accurate analysis of the statistical data, a computer program called SPSS 16.0 was used for descriptive data analysis. The data were explored using descriptive statistics and histogram plots will be used to determine the shape of the distribution for each sample variable.
Data analysis was carried out using parametric tests where the data will follow a normal distribution and where the sample number will equal to or greater statistical power. Where the data failed to follow a normal distribution or where the data was split into groups of less than the sample size (n), non-parametric test was be used.
For example a several Chi-Square, t-tests and correlations were carried out on the data to explore any linear relationships between the variables. These tests were essential as they gave information with regards to the relationship that was presented between the variables hence supporting or rejecting the hypothesis of the study and the research questions. Therefore, from these analyses, a concrete conclusion for the study was arrived.
Results
From the analysis that was conducted in the study, the following results were arrived at. The information included in this section of the study was gathered from the 110 surveys that were conducted. Chi-Square analysis, t-test, and Pearson correlations were used as a tool of in depth analysis in the study.
The survey that was conducted only focused on male respondents. This was due to the fact that the study aimed identifying the attitudes and perceptions of males towards cosmetics products. Most of the respondents who were interviewed in the study were married.
This group accounted for 49.46% of the entire sample size. Single men were second comprising of 23.66% of the sample size. The reminder of the population was made up of widowed, divorced and other. Additionally, an equal number of respondents between the ages of 18-30 years and 31-43 years were interviewed.
Each one of these age groups comprised of 46.88% of the sample size. Individuals between the ages of 44-56 comprised of 6.25%. Finally, majority of the respondents (43.01%) had attained college level education while 30.1% had attained high school education.
Concurrently, majority of the sample size were part time individuals (32.26%) while 28% were employees at a professional. From these results, it is evident that most men who are highly educated and hold desirable position in the respective field of employment are conscious about their self-image hence the high reliance and awareness about cosmetics products.
To fully understand this trend, a chi-square test was conducted to determine the impacts that advertisements of male cosmetic products had on the target market. From the respondents who were interviewed, the following results were arrived at.
The frequency count of advertising in playing a significant role in making men use cosmetic products has the majority saying they agree with a percentage frequency of 50%.
The effect of use of male celebrities to create a positive effect on male cosmetics:
Chi-Square Tests
Value
df
Asymp. Sig. (2-sided)
Pearson Chi-Square
9.917a
9
.357
Likelihood Ratio
10.549
9
.308
Linear-by-Linear Association
.744
1
.389
N of Valid Cases
10
a. 16 cells (100.0%) have expected count less than 5. The minimum expected count is 10.
The Pearson Chi-Square asymptotic two sided significance assessing whether use of male celebrities in advertising has a positive effect on male cosmetics was insignificant since 0.357<0.05 p-value. There is a strong association between the effect on male cosmetics and use of male celebrities with a two-sided insignificance of 0.389<0.05 p-value depicting a positive influence on targeted advertisements
To determine whether purchase trends and marketing strategies have influence on the manner in which men consume cosmetic products, a t-test was conducted to compare the purchase trends of individuals with high income and low incomes.
From this test, it was determined that despite the fact that men cosmetic products were expensive, the purchase trends did not vary among individuals of different income levels. The test is summarized in the table below.
From the above results, the value of men who consume cosmetic products is more than 0.05. It is thus insignificant to state that the consumption of this product is mainly by individuals of high income levels due to their high market prices.
Finally, it was identified that men had a wide array of cosmetic products to choose from. This was determine after conducting a Pearson correlation test. The table below can be used to summarize the results:
The correlation results shown above are significant at the level of 0.01 (2-tailed).
Discussion
Cosmetic products have for a long time been associated with women. Women have for a long time used these products to enhance their appearance and improve their confidence (Brune, 2004). However, with time, a new trend has been slowly creeping up into the market.
It has been identified that men also have started to venture into consuming cosmetic products (Temple, 2005). Over the years, several studies have been conducted to determine the trends that are related with the consumption of male cosmetic products.
The results that were arrived at from other studies indicated that there is a proportion of a male population who utilize cosmetic products to boost their appearance and to increase their confidence (Brune, 2004). However, unlike women, these individuals use cosmetic products that boost their masculinity (Miller and Roo, 2004).
However, these products do not come cheap. Male cosmetic products have been associated with high prices (Ronald, 2003). Despite of this, the findings of this study revealed that the consumption of these products did not necessarily rely on the income levels of individuals.
Thus, it can be concluded that males mainly consume cosmetic products to enhance their looks in a bid to improve their representation within the society. However, from a closer look of the results, it is evident that individuals who earn some income are the highest consumers of cosmetic products.
This is reasonable as the people who make up this group usually interact with respectable people. Thus, it is essential for them to maintain a desirable profile as their image and appearance matter a lot in their line of work (Nixon, 1992; Michelle, 2008).
Several factors affect the manner in which men consume cosmetic products. This study managed to identify several factors that influence the consumption of these products. Disposable income is the first factor that played a critical role in the consumption of this product.
From the study, it was identified that it is the males who hold key positions within the employment sector have the capability of purchasing and consuming cosmetic products. This is because these products are essential both in their work as professional and as a means of satisfying their own personal needs (Halliwell, 2002).
Age was also another factor that played a significant role in determining the purchase and utilization of cosmetic products (Lambert, 2010). It was identified that male cosmetic products were mainly consumed by individuals between the ages of 18 and 43 years.
The group comprises of the most active segment of the population. Many males in this category either are students or employed. According to Murray (2005), such individuals possess higher level of self-image and awareness than any other group within the male population.
To improve on their self-image, utilization of cosmetic products has been one of the main options that these men utilize (Halliwell, 2002). This has in turn increased the consumption of cosmetic product as the size of this group has been increasing over time together with their need for cosmetic products.
To create awareness about male cosmetic products to their target market many companies have used several marketing strategies to market these products. Advertisement with the use of celebrities has been one of the main avenues in which companies have used to reach to their target audience (Lau and Lee, 1999).
In this study, it was identified that there was a direct relationship with the use of celebrities in male cosmetic adverts and the consumption of the product. This is due to the fact that many individuals view celebrities as their mentors and role models on different grounds including fashion and grooming (Halliwell, 2002).
As such, to keep up with current trends and to ensure that they look good, men have not hesitated to use the cosmetic products which many celebrities in the world use. Thus, adverts with celebrities on have played a significant role in boosting the sales of cosmetic products all around the world (Lau and Lee, 1999).
Conclusion
A tremendous revolution is being experienced in the cosmetic industry. This is an industry that was mainly dominated by female consumers. However, within the last few decades, the number of male consumers has increased. This has come about as a result of the realization that just like their female counterparts, men also need to look great and improve their personal appearance which in turn boosts their self esteem.
In addition to this, there are also other factors such as educational background, age, occupation and marital status that affect the consumption of the product within the male target market.
This study identified that the product was mainly consumed by individuals with a relatively high income who are between the ages of 18 and 43. However, to ensure that detailed information is arrived at with regards to this topic of study, the same study should be repeated over time and in different locations to determine the trends over time.
Recommendations
This study has shined a new light into the field of cosmetics with regards to the consumption of the product by men. However, to enhance on this field of study several considerations need to be put into account.
First, further study needs to be conducted on the impacts of income and the consumption of male cosmetic products. In this study, it was revealed that income did not play a significant role in determining the consumption of male cosmetic products.
This will give a clear understanding of the economic, social and cultural variables that affect the consumption of male cosmetic products. Finally, a similar study should be conducted in different times of the year. This will create an avenue of having a clear understanding of the trends that affect the consumption of the product.
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This analysis of cosmetics industry will look into threat of substitutes, economies of scale, and other aspects influencing the marketing of beauty products. It will also study competitive rivalry in cosmetic industry, barriers to entry, and bargaining power of consumers.
Cosmetic Industry Five Forces Analysis: Introduction
Cosmetic retail is quite developed industry. However, every industry has its peculiarities, which are sometimes hard to understand. Thus, in order to better understand the context in which this or that the company operates, it is crucial to use Michael Porter’s Five-Forces Model.
As stated by Berger, this framework “considers the five competitive forces that influence a business success or failure” (10). Each of the forces has variables. Five variables have been chosen for each force and rated on a scale of 1 to 5 according to their importance for the cosmetic industry.
Competitive rivalry in cosmetic industry
Barriers to entry (cosmetic industry)
Economies of scale
Capital requirements
Brand equity
Switching costs
If there are no considerable barriers to enter, cosmetic industry may have many new entrants (Berger, 11). For this industry, the most important barriers are the exclusive rights and economies of scale. However, this industry has large capital requirements since the differentiation of products that are sold in it. Moreover, cosmetic retail is more widespread as chain stores or exclusive brand retailers, which also make up chains.
Potential Entry of New Competitors
Barriers to entry (rights)
Economies of scale
Capital requirements
Brand equity
Switching costs
If there are no considerable barriers to enter, there may be many new entrants (Berger, 11). For the cosmetic industry, the most important barriers are the exclusive rights and economies of scale. However, this industry has large capital requirements since the differentiation of products that are sold in it. Moreover, cosmetic retail is more widespread as chain stores or exclusive brand retailers, which also make up chains.
Potential Development of Substitute Products
Ease of substitution
Buyer inclination to substitute
Buyer switching costs
Relative price performance of substitute
Quality depreciation
For the cosmetic industry the crucial issue is the way for buyers to substitute and their willing to do this. For the retailers it is better to sell unique products, for example to sell one cosmetic brand. The less valuable is the change of quality, due to the fact that retailer cannot influence the quality of products they sell.
Bargaining Power of Suppliers
Supplier concentration to firm concentration ratio
Strength of distribution channel
Impact of inputs on cost or differentiation
Switching costs of firms in the industry
Differentiation of inputs
Suppliers tend to have very little power in the retail industry. However, for the cosmetics the exclusive suppliers matter a lot and influence the market. They can make retailers have large inputs on the scale of orders. If the supplier is exclusive, the switching costs are very high. As for the cosmetic retail – the inputs are slightly differentiated, so this variable is less crucial.
Bargaining Power of Consumers
Buyer information
Substitutes available
Brand identity
Buyer volume
Price sensitivity
As for cosmetics retail, “buyers are fragmented – no buyer has any particular influence on the product or price” (Porter’s Five Forces:A Model For Industry Analysis, para. 18). Still, buyer has to be provided with the information and has a choice of substitutes. Some buyers tend to choose only one brand. Buyer volume and price sensitivity are less important because cosmetic is what people tend to buy all the time, and prices do not react on the slightest changes.
Works Cited
Berger, Alexander. Contemporary Development in Business and Management: Beiersdorf. Pakistan: GRIN Verlag, 2011.
David, Fred R. Strategic management: concepts and cases. 13th ed. New Jersey: Prentice Hall, 2011.
In most industries, business organizations continually face potential threats and risks that might severely obstruct the primary functions and the overall process of the companies. To minimize the chances and consequences of disruptions, it is essential to develop a comprehensive contingency plan that would account for various types of threats. Depending on the industry, the potential emergencies might include disasters, economic fluctuations, social and political trends, and other key risks. The contemporary business situation is further complicated by the pandemic restrictions in a large number of countries that might also pose a threat to the financial well-being of organizations. The current paper attempts to critically analyze the cosmetics industry and propose a detailed contingency plan for BRIGHT, an e-commerce organization specializing in personal care.
Overview of the Organization
The chosen organization is BRIGHT, a client-centered cosmetic brand based in Seoul, South Korea. The primary product line of the organization is skincare and personal care commodities. BRIGHT is an e-commerce company operating primarily in South and Southeast Asia, with most customers ordering from India, South Korea, Thailand, and Indonesia. To meet the customers’ needs, the website is localized in five languages, including English, Hindi, Korean, Thai, and Indonesian, respectively. Currently, the company’s primary business application is B2C e-commerce (business-to-customer); therefore, BRIGHT emphasizes customer service and acquisition as its primary mission and puts considerable effort into the marketing of the product. The team consists of eleven consistent members with occasional contractors, including package and logistics services. The full-time employees are accountable primarily for merchandising, content, marketing, and front-end/back-end development. The current dimensions and strategies of the company do not require additional labor power.
Industry
The cosmetic business is a rapidly developing industry of health and beauty products offering a wide range of commodities from shampoos to skincare. The industry’s growth rate is estimated at 6.4% per year (Halla et al., 2018). Nevertheless, cosmetics are also associated with a wide range of risks, including biological and chemical contamination due to violation of safety standards (Halla et al., 2018). The regulations in the industry are provided by various official organizations depending on the country; for instance, Food and Drug Administration (FDA) governs the safety of the cosmetic business in America (Halla et al., 2018). Nevertheless, the majority of cosmetic goods are chemical compounds produced from synthetic sources and might harm customers if not appropriately managed. Therefore, BRIGHT ensures the safety of its products by contacting the verified suppliers and avoiding inorganic sources.
Product Line
BRIGHT focuses on skincare and beauty products promoting organic products and sustainable development. One particular type of cosmetic goods that BRIGHT is known for is the innovative version of skin-lightening products. In general, skin-lightening or skin-whitening cosmetics are highly prominent among males and females in South Asia; nevertheless, they have been recently criticized for promoting colorism (Adbi et al., 2021). Furthermore, the recent trends in the industry support social and environmental sustainability and have led to a number of companies rebranding and shifting away from skin-lightening products (Adbi et al., 2021). BRIGHT agrees with these policies and promotes cosmetics with lightening effects that do not change the color but only level the hues and pigmentation spots of the skin. Accompanied by the sustainable marketing strategies, BRIGHT plans to make a change concerning the skin-lightening products.
Location
As mentioned briefly before, the organization is positioned in Seoul. The company is located in South Korea due to the increased prevalence of the cosmetic industry in South Asia, with a revenue of approximately 50% of the global market (Roberts, 2021). The value of the beauty and personal markets is predicted to reach $784.6 billion by 2025, implying the rapid growth of the industry and making cosmetics a highly nourishing area for business (Roberts, 2021). Furthermore, South Korea provides excellent opportunities to online businesses and is widely known for its cosmetic brands. Moreover, South Korea is located in relative proximity to the other extensive cosmetic markets, namely, Indian and Thai.
Strategies
BRIGHT is an e-commerce organization that sells cosmetics only in online form. There are no retail shops or separate departments of BRIGHT’s products in supermarkets, drugstores, beauty salons, or other cosmetics distributors. Ultimately, BRIGHT focuses solely on e-commerce since the potential growth in this area highly exceeds the traditional methods. The research demonstrates that online sales increase by approximately 4-6% per year, while offline sales decline by about 1% each year (Roberts, 2021). Furthermore, the value of independent e-commerce cosmetic brands increases by approximately 16-20% per year (Roberts, 2021). Lastly, traditional retail is widely populated by top manufacturers, such as L’Oreal and Dove, making it almost impossible for new companies to get into the market. Despite the high levels of competition, independent brands can strive in online retail due to the exclusivity of the content and intelligent marketing (Roberts, 2021). Sustainable strategies, e-commerce, and the denial of traditional skin-lightening products are among the primary reasons for the company’s success.
Threats
Due to the rapid growth of the industry and intelligent marketing, BRIGHT has established a stable position in the market with the continual growth of revenue. Nevertheless, the beauty industry is associated with a large number of risks and threats that might potentially disrupt the development of the companies. The inclusive contingencies of the sector include political, legal, social, technological, and environmental factors. Furthermore, supply chain disruptions may occur due to a number of external factors, such as natural disasters and cyber-attacks. The chart below demonstrates the primary threats of the business in the cosmetic industry:
Figure 1. Industry-specific and External Threats to Business
Demand for Contingency Planning Efforts
At the present time, BRIGHT is lacking contingency planning efforts and requires additional assistance in this area. Having acknowledged the primary strengths, weaknesses, strategies, and potential threats, it is possible to develop a comprehensive contingency plan. The critical risks for the organization are the disruption of the global and local supply chains, economic fluctuations, social trends for a particular line of products, potential chemical risks of the commodities, and natural disasters. Before establishing a contingency plan, it is essential to evaluate the risk management plan and assess the potential impact of the threats. The chart below demonstrates the probability and impact of the aforementioned risks.
Figure 2. Probability and Impact of the Potential Threats
Risk Assessment
The most impactful threat to the success of the business is the risk of global pandemics that might severely disrupt the global supply chains. Due to the increasing globalization and digitalization of all industries, supply chains are highly vulnerable to external factors that affect the global networks of suppliers (Hobbs, 2020). For instance, approximately 75% of businesses in America have suffered from supply chain disruptions due to the COVID-19 restrictions (Hobbs, 2020). Since a large number of companies operate internationally, the pandemic has had a vast impact on businesses in all parts of the world. Thus, while global pandemics do not occur frequently, they are the most impactful threats to businesses in contemporary realities.
The other two highly prominent factors that might stagnate the growth of the company are social trends and predicaments with manufacturers and suppliers. As mentioned in the ‘Product Line’ section, BRIGHT has substituted the traditional skin-lightening products with more sustainable commodities that do not promote colorism and racial stereotypes. The primary reason for the approach is the ongoing trend toward sustainability and organic products that support social equality. Furthermore, skin-lightening products may cause severe health complications if the regulations are not followed (Michalek et al., 2019). As a result, BRIGHT has established a loyal customer base (primarily in India and South Korea) that considers the quality of the products. Nevertheless, if the social trend shifts back to skin-lightening cosmetics, BRIGHT might lose the majority of its clients. At the same time, this transformation is unlikely to happen since sustainable development is an ongoing global trend that is predicted to only strengthen in the future. Eco-friendliness is among the most significant factors in the choice of cosmetics for young people (Roberts, 2021). Therefore, social trends are unlikely to change in the near future.
Miscommunication and other predicaments with manufacturers might also severely delay the services of the company. It is vital to propose a backup plan for every step of the primary processes, such as manufacturing, logistics, and delivery. At the same time, it is essential to develop diverse responses for various types of supply chain disruptions. It is also advisable to establish different levels of contingency depending on the severity of the emergency. Ultimately, the comprehensive contingency plan should take all the potential risks and threats into account and propose diverse responses for them.
Subtypes of Contingency Planning
Frequently, business organizations need to account for additional subordinate functions in their contingency plans, including business impact analysis (BIA), business continuity planning (BCP), Business Continuity Planning (DRP&BCP), and incident response plan (ICP). Each of the categories includes necessary components and guidelines for the contingency plan to be effective. Therefore, it is essential to specifically discuss the subordinate functions before proposing the contingency planning policies and procedures.
Business Impact Analysis
Business impact analysis is a proactive methodology that allows predicting the disruptions of supply chains and business operations. Furthermore, BIA identifies the potential impact of the threats and enables the company to minimize the financial damage (Hyun, 2020). A comprehensive BIA also indicates the prioritized operations and areas for recovery, such as communication with customers or necessary repairs (Hyun, 2020). While BIA is a part of contingency planning, its primary purpose is to assess the critical processes of the company and propose a response plan (Hyun, 2020). Therefore, BIA does not develop coherent strategies for each potential threat specifically but addresses the consequences of the risks (Hyun, 2020). For instance, if BRIGHT is to suffer from supply chain disruption, BIA ensures that resource requirements are met and prioritizes certain processes while not proposing specific solutions to specific problems.
Business Continuity Planning
Business continuity planning is another subcategory of a contingency plan that covers the wide array of issues in the emergency response. Its primary purpose is to propose a set of actions during and after the emergency (IBM Services, 2020). It is a broad category that covers the primary stages of the contingency plan and a disaster recovery plan (IBM Services, 2020). BCP generally proposes strategies to handle emergencies and analyzes the preventive measures. A comprehensive BCP allows minimizing the damage from the disruption and continuing the business operations as fast as possible.
Incident Response Plan
IRP generally concerns the response to cyber threats, such as data breaches, malware, DDoS attacks, and other digital risks. IRPs are beneficial for e-commerce organizations since most of their processes are highly vulnerable to online threats. A comprehensive IRP improves data protection, enhances the reputation of the company, and reduces the costs due to the potential losses from breaches (Casetto, 2018). Exabeam proposes the following chart of primary components of IRP:
Figure 3. The primary components of IRP
Some of the mentioned regulations apply to all types and subcategories of contingency plans, while some are specific to digital threats.
Contingency Plan
Having established the primary components of comprehensive emergency response, it is possible to formally structure and highlight the primary stages of the contingency plan.
Figure 4. Contingency Planning Steps
Table 1. The contingency planning steps within BRIGHT
Contingency Planning policies
Business Impact Analysis
Preventive Controls
Contingency Strategies
Documentation
Simulation
Maintenance
National safety policies
Logistics: Downtime up to 3 days
Custom logistics availability
Data backup
Documented policies
Implementation of simulation models
Maintenance of data security
Legal, political, and social requirements
Supplier unavailability: Downtime up to 7 days
Custom supplier availability
Continuous and transparent communication with customers
Documented BIA
Personnel training, including:
Documented organizational changes
Data backup policies
Website malfunction: Downtime should not exceed 1 day
Regular updates by the IT team
Efficient interaction between the team members
Documented schedule
Tabletop exercises
Regular updates of contingency planning concerning:
Security policies and protocols
Warehousing issues: Downtime up to 3 days
Additional places for storing
Alternate sites availability
Documented recovery procedures
Functional exercises
Operational requirements; technical processes; business functions;
Designation of the CP leader and communication department
Shipping: Downtime up to 7 days
Additional transportation companies
Equipment replacement
Documented sequence of recovery efforts
Full-scale functional exercises and simulation
Hardware and software; security requirements; contact information
The Incident Scenario
To further evaluate the quality of the existing contingency plan, it is necessary to simulate the incident scenario. The hypothetical emergency is another global pandemic that has disrupted the major supply chains in South Asia. Having learned numerous lessons from the COVID-19, SARS, H1N1, and Ebola pandemics, it is essential to integrate innovative technologies and techniques into the current contingency plan. Unlike most economic shocks extended for a long period of time, pandemics are commonly associated with safety risks and potential health complications of the staff (Black & Glaser-Segura, 2020). Furthermore, the experts have found that legal, political, social, and economic trends might significantly increase the chance of supply chain disruption (Black & Glaser-Segura, 2020). However, the current contingency plan is developed according to the risk assessment of both industry-specific and external threats (figure. 1). Therefore, the plan is sufficiently equipped to handle any type of potential emergency. The timeline below demonstrates the consequent steps of contingency planning during the pandemic outbreak.
Timeline of the Contingency Plan
Figure 5. Timeline of the emergency response
Ethical Concerns
Emergencies and pandemics, in particular, are highly stressful environments and might cause significant damage to the mental health of the employees. Furthermore, the consequent recovery efforts are frequently accompanied by overtime hours and additional physical strain. While it is essential to restore the operating system as fast as possible, a comprehensive contingency plan must take ethical concerns into account to maintain the health of the employees. Therefore, a thorough schedule of recovery efforts is necessary to minimize the overtime hours of the workers and ensure their safety.
Furthermore, there are company-specific ethical concerns that need to be addressed. Since BRIGHT is a customer-oriented cosmetic brand, it is vital to minimize the downtime of the supply chain and restore the shipping process as fast as possible. Extra waiting time for customers goes against the ethical policies of the company; therefore, the CP leader and communication department are exposed to additional pressure during supply chain disruption. Ultimately, cosmetic e-commerce is a highly competitive environment, and unsatisfied customers might severely damage the business.
Conclusion
The current paper has thoroughly described the organizational structure and business methodology of BRIGHT, a cosmetic company located in Seoul, South Korea. Furthermore, the work has examined the potential risks and threats that are prevalent in the industry as a whole and contingencies that are specific to BRIGHT. Based on these data, a contingency plan is proposed with a thorough classification of the subcategories, such as BIA, BCP, and IRP. Consequently, seven stages of contingency planning are identified and thoroughly examined. Lastly, the paper illustrates the effectiveness of the contingency plan on the example of a hypothetical global pandemic.
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