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E-Business Case; Maryam Keyarsalan. PREFACE COSMETIC INDUSTRY OVERVIEW Online Consumer Trends Competition PROCTER & GAMBLE Project Mirror.

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Presentation on theme: "E-Business Case; Maryam Keyarsalan. PREFACE COSMETIC INDUSTRY OVERVIEW Online Consumer Trends Competition PROCTER & GAMBLE Project Mirror."— Presentation transcript:

1 E-Business Case; Maryam Keyarsalan


3 an e-commerce site that allows women to customized beauty products. needed a capital infusion from its original investors, which included the consumer packaged goods leader Procter & Gamble. The funds were needed to redesign the website and improve the consumer purchase process. PREFACE Ginger Kent,CEO of reflect. COM Your state-of-the-art skin care, hair care and cosmetic products don't exist until you create them. Simply create your beauty profile and our scientific process then blends your requests with the best technology to custom make your products. Delivered free. Unconditionally guaranteed. !!!

4 The total cosmetics market (app.$10 billion in sales) comprised two segments: –The mass market: Mass products were sold through drug stores, grocery stores, health and beauty stores, and mass merchandisers. –The prestige market: Prestige products were sold through department stores and upscale retailers. Market sales were $6.5 bill. COSMETIC INDUSTRY OVERVIEW $24 billion market the fastest growing and most profitable sectors in the U.S. online beauty sales : $360 million by 2003. Online Consumer Trends – half of Internet users in 1999. (27 million women online in the U.S.) –Approximately 58 percent of new Internet users were women –The most popular purchases were in the bath and body category, least-purchased category was color cosmetics. –Buyers were not very experimental, 6% of buyers bought things they had never tried before.

5 COSMETIC INDUSTRY OVERVIEW Competition: Chaos in Online Cosmetics - shakeout Traditional manufacturer competitors: - Procter & Gamble - LOreal - Estee Lauder Online competitors : – – – – – –

6 PROCTER & GAMBLE started in 1837 as a soap manufacturer in Cincinnati offered over 300 brands of consumer packaged goods in nearly 140 countries is a global leader in the industry with sales topping $38 billion annually 's beauty care segment included three cosmetic labels; # Cover Girl(1960), # Max Factor(2002),# Oil of Olay The Beauty category included noncosmetic brands, such as hair care, including VS Vidal Sassoon, Pantene, and Physique Project Mirror A corporate known for innovation and brand marketing prosess, leader in new product development. Changes product development process as; new collaborative technologies to promote sharing ideas and info. (video conference) "collaboration [chat] rooms. Global e-mail systems (93,000 users). (creating virtual libraries) Developing an internal innovation fund. 10 brand managers came up with a plan, developed tech. to customize products, and created a prototype website. The idea of Project Mirror was born, by P&G's Interactive Marketting Team

7 REFLECT.COM Project Mirror was born: a mass customization website that would allow women to make their own formulations of : - make up - shampoo - fragrance was financed with $35 million from P&G and $15 million from Institutional Venture Partners (IVP) Independence Day, Burn the ships –On October 1, 1999, to make the Web venture more authentic, P&G forced employees to resign from the consumer goods giant, a team of 15 people left P&G to join –Denis Beausejour has presented each team member's spouse with one share of stock. –They don't have a lifeline back to P&G, have only stock and their teammates. (P&G's worldwide VP of marketing for beauty care)

8 REFLECT.COM The Site The launched in December 1999 as a personalized line of beauty products and services, using a patent-pending system for a mass customization model, Capability to create more than 300,000 different products and packages, By asking the consumer a series of questions and letting her control the experience, Company was able to produce product in very small lots, and reduced changeovers to 5 to 7 min. The industry average was 90 min. also enjoyed the benefits of lower inventories and reduced cost of sales, Customer's order was shipped, first time buyers received a live orchid as a thank you, Browsers who registered on the site and created a product but did not buy it received a surprise "delight sample" with their name on the bottle, If a customer was not satisfied with the product, would customize it until she was. However, did not accept returns.

9 SUMMARY PROFIT SITE: B2C, on-line retailer SCOPE: The firm targets all people, who needs beauty product, have different type skin, hair, expectations. CUSTOMER VALUE: By Differentiation: Product Features; allows user to create their own formulates Product Mix: It presents all kind of beauty product. Brand Name Reputation: The firm sells the P&Gs products. BUSINESS MODEL

10 SUMMARY CUSTOMER VALUE: Low cost; Prices are not expensive than its competitors. PRICE: Menu Pricing; Prices changes according to your choice. Ever you can buy or leave your product. Affiliative Program; over certain purchasing in a month, you will not pay for posting. REVENUE RESOURCE: Directly from the product that firm sold. SUSTAINABILITY: By Customer feedback, innovation, promotions. BUSINESS MODEL

11 COMPETITIVE ADVANTAGES P&G had long been a leader in product development (innovation & brand making skill) Project Mirror; a mass customization website that would allow women to make their own formulations. (Women want and deserve individualized attention), Affilliate Program; It's easy, generate revenue, free to join. Structure of site; easy access, navigation bar, P&G was more interested in information, than sale. (Customer feedback) Use an interactive question-and-answer. Promotions; buyers received a live orchid as a thank you.

12 Thank you

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