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External analysis Economic Rand has beens trengthning against dollar – cheaper to buy US products owever, despite such adverse conditions, beauty and personal care increased in current value by 10% in 2012, one percentage point slower than the growth recorded in 2011. This was mainly due to aggressive competition and heavy price promotion across various categories. - euromonitor Africa’s consumer-facing industries are expected to grow by more than US$400 billion by 2020, according to a recent McKinsey report. Economies of scale; demand driven by preferences and population growth The explosive growth in sales of professional nail care products outshined resilient but modest growth rates in other cosmetics categories, posting over 25% increase globally in 2012, according to Kline’s exclusive Professional Nail Care: Global Market Brief. AFFORDABLE LUXURY USA average income for nail technician $420.98 Per Week The nail industry has had “price stagnation” in various service areas for decades. The price of a full set of acrylics – little adjustment for inflation has barely changed in 20 years. The Nail Polish Index: Economy watchers used to say that when times got tough, women would buy a lipstick, because it was an affordable pick-me-up. Now the economic barometer is measured by nail polish. When times are tough, women buy a bottle of nail polish. And when times are good, they buy lots of polish and go to the salon. The nail care category and its growth could be on the verge of a tipping point, particularly given the probability of long-term economic sluggishness in developed markets and the untapped opportunities presented by emerging markets. Latin America and emerging Asia continued to prop up the global beauty industry in 2011, driving collectively more than 60% of worldwide incremental retail revenue, according to data from Euromonitor International. However, developed markets also played their part, notably the U.S., which posted its best beauty performance in more than five years on the back of strong sales of premium brands. Nail polish seems to have replaced lipstick as a more accurate barometer of austere times. In 2011, nail polish recorded global retail growth of 11%, double the growth rate of lipstick, according to Euromonitor International. And between 2008 and 2011—a period characterized by the global financial meltdown—sales increased by 43% (based on current U.S. dollar prices at fixed 2011 exchange rates), compared with 7% for lip products, 11% for facial makeup and 17% for eye makeup. Nail polish has become the fastest-growing category in the global beauty market for three consecutive years. What is most striking—and the reason why nail polish, rather than lipstick, is a window into the health of the macro economy—is that its heaviest demand over the past year has come from the U.S. and Western Europe, not from the BRICs. The U.S. even dethroned Brazil last year to become the largest nail polish market in the world, with retail value sales climbing by 31% to reach $778 million. At the core of this bullishness was the growing perception of nail polish as an affordable fashion accessory and a quick-fix morale booster for these tougher economic times. The study’s findings reveal that the professional nail care market will continue to grow, although at the slower pace. Having the right manicure and color has now become the norm, as opposed to a luxury, driving the market to prosper. Technological Acrylic most often eliminated Traditional gel nails 2nd most (Biosculpture) – what if trend continues? Obsolete and new nail technology Gel-polish is no trend; it’s now an industry standard. The products continue to be refined, the removal methods faster and safer, and the colors infinite. There are now 46 brands of gel-polish. You can find lights that are UV, LED, combo UV/LED, 1-finger, 2-hand — you name it. However, in some countries such as Brazil, nail gels are not as popular as nail polishes, which are more affordable. Gel products continue to grow at a stellar rate, posting nearly 30% growth in 2012 Environmental Hard to make green products – so much paperwork (pdf) “not possible to develop functional laquers without solvents” Legal/Ethical/Political Cosmetics in nail industry don’t require pre-market testing – be careful ? Focus more on proper training than the fromulas – but this is not happening – pg 22 Cosmetics industry generally unregulated – economy, large company power Natural/organic – not so much? – “green washing” Social Preferences – more gels released – competition Nailsmag - Nail technicians are predominantly female, early middle-aged, have finished some college, and have not been doing nails most of their professional lives. The “average nail tech” is married with kids and she works part-time. Celebrities help put nail trends on the spotlight No celebrity this year had more effect on nails than Michelle Obama, who wowed an international audience at the Democratic National Convention with her lavender-hued nails. Artistic Nail Design, which made the color she was wearing, said FLOTUS sent 42,352 new visitors to the company’s website. Movie tie-ins DIY has become increasingly popular Drugstore sales of polish and nail products have soared: polish sales are up 59%, 36% increase in natural nail products, and a 100% increase of top and base coats. The “mass market” nail care category was augmented by innovations in application techniques, which could be seen in products such as Sally Hansen Salon Effects and Nails Inc.’s Magnetic Polish. In August, the popular but ordinarily snarky blog Jezebel weighs in: “Nail art … might be the only form of primping and grooming that isn’t rooted in making oneself more appealing to men or exploiting women’s insecurities. It transcends skin color and hair texture and face symmetry and body type.” Instagram very popular with sharing nailcare trents Demographics – on the nail magazine thing In the United States and more frequently in Australia, salons are offering young girls and teens “nail parties” as a novel and successful take on birthday parties. Leading professional brands vary by region, with the smaller local brands often leading within some regional markets. OPI holds a commanding lead on the overall professional nail care market with near 20% of total market share, followed at a distance by CND. Currently, recent product innovations allow nail artists to harness cutting edge technology, thereby decreasing service times to be cost-competitive. With this in mind, marketers focus on covering extensive product portfolios so salons do not have to take on additional brands. Generation x are entering peak spending years Ordering nail supplies on the web Iin US – may spread Salongeek.com – compare tips and stories Marketing plan HYPERLOCAL TARGETING specific to stellenbosch Influencers? Smaller business can afford to be more edgy and less CSI oriented More than ever before, the expectation among youth is that brands will respond to their queries, complaints and interest within minutes. Waiting 24 hours for a brand to revert with feedback is slacking in the eyes of these millennials. If a brand insists on leveraging social media networks, they had better be able to back it up. Dress code – black with red/turquoise accents Tone down some swearing Mobile element on commission Extend to tanning, dermal, permanent makeup, lashes Social media overhaul, especially w.r.t getting Instagram Use “crowd-sourcing” to harness new ideas On 29 August 2013, Facebook introduced new competition rules which allow you to run a competition on your page WITHOUT the use of a third party application! There will always be tomorrow's hotter, sexier platform, with more special effects and better make-up. Choose specific platforms that make the most sense for the brand and their audiences. By doing so, you'll see greater returns and less wasted effort. SIMPLICITY against brand overload For internal: Nail technicians are concerned about their health, but they haven’t taken all the precautions they can to protect themselves from work-related injuries like carpal tunnel or allergic reactions. Only 21% wear gloves most of the time. THREAT: SORBET ATTACH COMPETITOR ANALYSIS AS APPENDIX Research section: As I mentioned last year, online surveys are set to supplant other survey modes. The growth in smartphones and increasing undersea-cable capacity have caused us to jump to an entirely different diffusion curve. According to Gartner, smartphones will reach 80% penetration by 2014, a game-changing statistic.1 By then, I would expect online surveys to have become the datacollection mainstay.