Your boss, Len Chow (vice president of corporate planning), has asked you to research opportunities in the cosmetics industry and to prepare a report that presents your findings and your recommendation for where you think the company should focus its marketing efforts. Here's a copy of your note cards (data were created for this exercise):
Sub: Demand ........................................................................... ref: 1.1
Industrywide sales have grown consistently for several decades, Fueled by both a growing population and increased per capita consumption
Sub: Competition ............................................................ .......... ref: 1.2
700 companies currently in cosmetics industry
Sub: Niches .............................................................................. ref: 1.3
Focusing on special niches avoids head-on competition with industry leaders Sub: Competition ...................................................................... ref: 1.4
Industry dominated by market leaders: Revlon. Procter 8 Gamble. Avon. Gillette
Sub: Demand ........................................................................... ref: 1.5
Industry no longer recession-proof: Past year, sales sluggish; Consumer spending is down: most affected were mid- to high-Priced brands; consumers traded down to less expensive lines
Sub: Competition ...................................................................... ref: 1.6
Smaller companies (Neutregena, Mary Kay, Softsoap, and Noxell) survive by: specializing in niches, differentiating product line, focusing on market segment.
Sub: Demand ........................................................................... ref: 1.7
Consumption of cosmetics relatively flat for past five years
Sub: Competition ....................................................................... ref: 1.8
Prices are constant while promotion budgets are increasing
Sub: Niches .............................................................................. ref 1.9
Men: 50 percent of adult population; account for one-fifth of cosmetic sales; market leaders have attempted this market but failed
Sub: Demand ............................................................................ ref: 1.10
Cosmetic industry is near maturity, but some segments may vary. Total market currently produces annual retail sales of $14.5 billion: Cosmetics/lotions/fragrances-$5.635 billion; Personal hygiene products-$4.375 billion; Hair care products-$3.435 billion; Shaving products-$1.055 billion
Sub: Niches ............................................................................ ref: 1.11
Ethnic groups; Some firms specialize in products for African Americans; few firms oriented toward Hispanic, Asian, or Native Americans, which tend to be concentrated geographically
Sub: Demand .......................................................................... ref: 1.12
Average annual expenditure per person for cosmetics is $58
Sub: Competition ..................................................................... ref: 1.13
Competition is intensifying and dominant companies are putting pressure on smaller ones
Sub: Demand .......................................................................... ref: 1.14
First quarter of current year, demand is beginning to revive; trend expected to continue well into next year
Sub: Niches ........................................................................... ref: 1.15
Senior citizens: large growing segment of population; account for 6$ of cosmetic sales; specialized needs for hair and skin not being met; interested in appearance
Sub: Demand ........................................................................ ref: 1.16
Demographic trends: (1) Gradual maturing of baby-boomer generation will fuel growth by consuming greater quantities of shaving cream, hair-coloring agents, and skin creams; (2) population is increasing in the South and Southwest, where some brands have strong distribution
List the main idea of your message (your recommendation), the major points (your conclusions), and supporting evidence. Then construct a final report outline with first-and second-level informative headings focusing on your conclusions. Because Chow requested this report, you can feel free to use the direct approach. Finish by writing a draft of your memo report to Chow.