Unit 3: Developing the Outline

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Tutorial Activity 3.1: Findings Special Niche for Small Competitors in the Cosmetic Business

Your boss, Len Chow (vice president of corporate planning), has asked you to research opportunities in the cosmetics industry in Hong Kong 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 preliminary notecards:

Sub: Demand ref: 1.1
Industry grew through 1970s, 1980s, and early 1990s fueled by 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
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 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 consistent while promotion budgets are increasing
Sub: Niches ref: 1.9
Men: 50% 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
Some firms specialize in products for Asian women; few firms oriented toward imported products from US, Japan, and France.
Sub: Demand ref: 1.12
Average annual expenditure per person for cosmetics is $450
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 review; trend expected to continue well into next year
Sub: Niches ref: 1.15
Senior citizens: large growing segment of population; account for 6% of cosmetics 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 especially immigrants from China

Tutorial Activity 3.1: Findings Special Niche for Small Competitors in the Cosmetic Business (page 2)

Using the following “Organizational Chart for Organizing a Message” as a model, reorganize your notes: Determine the main idea (your recommendation), 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 memo report to Chow.

“Organizational Chart” for Organizing a Message

Source: Bovée, C., & Thill, J. (2000). Business communication today (6th ed.). Upper Saddle River, NJ: Prentice Hall International, p. 133.

EN3165/ Essential English Communication Skills for Business