Market analysis of the UK cosmetic industry – Marketing assignment


For centuries mankind has been trying to find the secret to eternal youth, the elixir of life. The key to turning off the aging process. Con-merchants have sold all manner of potions claiming to do just this and in the seventeenth century arsenic was used as make-up, and led was dropped into the eyes to make them appear brighter! You are the marketing team for a cosmetics company which, while working on a new face cream formula in 2000 made a very fortunate mistake and achieved what con-men and scientists have been dreaming of: they accidentally developed a substance which will actually stop the aging process in its tracks.

This breakthrough has been kept quiet for the last eighteen years while the Chief Geneticist used herself as a guinea pig. She has bathed twice daily in a bath into which the substance is added, much as you would with bubble bath. Not only does she not look a day older, but at a genetic level she is exactly the same age now as she was eighteen years earlier. Other than this, the cream has had no ill effects. The Board is ready to go public with the product in the UK market only, subject only to achieving clearance from various health and safety agencies, which they are certain will happen.


  1. Where do you see your key markets and who would be your main customers?

  2. What pricing strategy should be adopted?

  3. What promotional techniques would you recommend?

  4. Who are your competitors, and which ones will be the most important?

  5. How will the various elements of the marketing environment impact on your plans?


In all cases you must explain why you are making your recommendations and justify them fully by using quality academic referencing.


Where do you see your key markets and who would be your main customers?

The cosmetics industry in the United Kingdom will generate up to a 17 billion euros by the year 2020. This is according to Statista, an online portal that focuses on data analysis (Statista, 2019).  They analyzed the market value of the beauty and personal care products sold throughout the United Kingdom from 2015 to 2020.

The industry has seen a steady growth from around 14 billion euros in 2015 to 16 billion euros in 2019. Lucy Whitehouse of Cosmetic Design-Europe, writes in her report that the United Kingdom is the sixth largest market for cosmetic products while an average spender in the country spends 155 pounds on cosmetics which is the fifth highest in the world (Lucy Whitehouse 2018). There is no doubt that the United Kingdom offers great opportunity for launching our face cream.

According to the CTPA’s report ‘Cosmetic Industry in Figures’, the beauty market is divided into five key areas; toiletries which accounts to 24% of the market, haircare products accounting for 17.5%% market, skin-care (23.6%), color cosmetics (16.4%) and fragrances at 18.5% market share (CTPA, 2018).  The total market value of the beauty market stood at 9.7 billion pounds in 2017.

The two dominant markets were the skin care market and toiletries which stood at 2.3 billion pounds each (CTPA, 2018). Airports are an excellent location for retail. According to the survey done by CEW and research firm Mintel, 24% of airport passengers spent an estimated 650 million pounds in 2017 (Lucy Whitehouse 2018).

The effects of Brexit have not been felt so far but the researchers believe that the United Kingdom’s exit will not hamper sales. To the contrary they cite the ‘The Lipstick Effect’ where consumers turn to beauty products during periods of economic hardship to make themselves good (Lucy Whitehouse 2018). To be able to maximize sales of our new face cream, it will be imperative to diversify our product portfolio by incorporating fragrances and hair products.

What pricing strategy should be adopted?

One of the most important considerations in marketing is price. We have to find the right balance between what that the consumers are willing to pay and the company makes a profit to stay afloat. Pricing affects product positioning and ultimately influences the target demographics. Pricing also affects the extent of product features, sales and marketing channels and the whole production process. If the prices are too high, then the target market is the high end and if the prices are too low then the company will not make a profit. The best pricing strategy is penetration.

In this strategy, the product pricing starts at an affordable price to stimulate sales. The new face cream is a novel product and most consumers are not aware of it. It will be catastrophic to price it a higher cost before we learn how the market works. We will have to understand the effects of the face cream on different age-sets, sexes, races or skin genetics. Once the evaluation process is complete and an active customer base established, then incremental price increases will be done annually till we reach an optimum price (Corporate Finance Institute 2019).

The main reasons for choosing the penetration strategy include our face cream is mass market and utilizing economies of scale especially in the production and marketing processes will help drive down production costs. There second reason is that the cosmetic market is inundated with many products and product differentiation is very narrow. Consumers have a wide variety of choice and price is one of the major considerations before purchase. Penetration will ensure that we capture a share of the market from our competitors whilst also enhancing our brand presence (Corporate Finance Institute 2019).

  1. What promotional techniques would you recommend?

It is no secret that marketing campaign generally influence our beauty purchases. Marketing campaigns in the digital age have to be innovative, sophisticated and very informative. The marketing campaign has to explain to the potential customers the science behind the breakthrough, the potential effects of its application and its overall health benefits.

The best promotional techniques for beauty products are television advertisements, posters, magazines, newspapers and social media sites. According Ivan Rahal, marketing manager at In-cosmetics Asia, effective advertisements have to adopt the “AIDA” approach; Attention, Interest, Desire, Action (Rahal 2012).

The marketing campaign must be able to capture the potential customer’s attention through the use of bright colors and layouts. Customers are constantly bombarded with marketing advertisements. A potential customer has less than 60 seconds to make a conscious decision to ignore the advertisement. Colors and well-designed product labels and advertisements should be incorporated in product design and marketing campaigns.

After getting a customer’s attention then the campaign has to be able demonstrate the potential benefits (of the face cream to the customer to create desire. Desire is enhanced through endorsements by celebrities, social media influencers and public figures. The last part is action; get the customer to purchase the product.

  1. Who are your competitors, and which ones will be the most important?

There are over 1000 companies that are currently operating in the beauty and personal care products market in the United Kingdom producing at least 40,000 exclusive products under 1800 diverse brands (Lucy Whitehouse, 2018). The United Kingdom has also seen a rise in home based beauty treatments and an increase in number of people employed in the beauty and spa sectors.

It is estimated the United Kingdom has over 50,000 premises that are offering beauty treatments; over 35,000 hair salons, 1512 nail bars, 2967 barber shops, 13,107 beauty salons (Lucy Whitehouse, 2018). The biggest threat to the face cream sales in the home based beauty treatments, it will be proper to incorporate these small businesses into the overall marketing strategy.

  1. How will the various elements of the marketing environment impact on your plans?

This is a highly saturated market with no product differentiation. It is a very tough market to crack unless the product outperforms all the other competing products. Currently there are lots of products that boast off their anti-ageing effects but none of them has been able to live up to the hype. For the face cream to create a foothold in the market the product has to do well across ages, races and gender. The potential health benefits have to outweigh the negative side effects.



  1. Corporate Finance Institute. (2019). Penetration Pricing – Definition, Example, Advantages and Disadvantages. Available from: [March 07, 2019].
  2. CTPA. (2019). GB Market Statistics Overview. Retrieved 10, 26, 2018, from
  3. Ivan Rahal. (2019). 10 Marketing Tips to promote Your Cosmetic Brand Effectively. Retrieved March 07, 2019, from
  4. Lucy Whitehouse. (2018). What is the current state of the UK beauty market? Key findings. Retrieved 10, 26, 2018, from
  5. Statista. (2019). Beauty and personal care: market value in the UK 2015-2020 | Statistic. Retrieved March 07, 2019, from

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