Market Penetration Strategy for a European luxury beauty and personal care brand
The US is currently one of the largest markets for beauty and personal care products. In addition, this industry is now growing at a steadier and faster pace in the US when compared to other countries in the world. The lucrative opportunities in the US beauty and personal care sector is prompting several foreign players, especially European companies, to venture into the market. Furthermore, there is an increasing demand for luxury and premium products among American consumers. With ample market opportunities and a robust growth trajectory fueled by the premium segment, the US is now an attractive growth priority for premium beauty brands to expand its global footprint. By leveraging a strong market penetration strategy, businesses can gain a comprehensive understanding of the pros and cons of a new market and become fully equipped to establish their business in a foreign country.
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Business challenge
The client, a European luxury beauty brand retailer, wanted to expand their business into the United States. Although the market for luxury beauty products in the United States looked promising, the client wanted to understand in detail the key challenges and opportunities that the market has to offer before making a move towards market entry.
As the companys core business is into luxury retail, it is a no-brainer that it would be challenging to appeal to all the customer segments equally. So, with Infinitis market penetration strategy, they wanted to understand the demographic conditions in the US and group different customers based on the most profitable segments. Through this, they wanted to gain a better understanding of which customer groups to target for their product marketing strategy and identify the best channels to do so. The European luxury beauty brand retailer also sought to gain an idea of the best distribution models and investment capacity in the US using our market penetration strategy solutions.
An effective market penetration strategy is all you need to win over your target audience. Key challenges in the US luxury beauty market
Highly competitive market – The luxury personal care and beauty market in the US is more consolidated when compared to that of Europe. Unlike the European luxury segment, in the United States, the top 10 companies collectively own a greater share of the premium market segment. This relative consolidation leads to fierce competition and has a major influence over the coveted share of finite shelf space at key retailers. Distribution channel mix – Due to significant competition and product proliferation, distribution channels play a critical role in both the market entry strategy and growth potential of beauty brands entering the US market. The fundamental difference in the distribution channels here is that US markets demand a localized distribution strategy, which is critical for the growth of European brands in the US marketplace. Changing consumer preferences – Consumers increasing preference for plant-based, organic, and natural beauty products have spurred investment and innovation as companies to capture market share in this growing category. Natural products appeal to modern consumers, both from ethical considerations (concern for environment and sustainability) as well as health concerns (fear of harmful ingredients). Solutions offered With over 15 years of experience in serving various industries across the globe, the experts at Infiniti Research helped the client to devise an efficient market penetration strategy to enter the US luxury beauty and personal care market. Results obtained Based on our market penetration strategy and insights, the client gained a detailed understanding of the market demographics and competitive scenario in the US luxury beauty and personal care market. They also developed a detailed understanding of the attractiveness of market opportunities for their product and service offerings. The European luxury beauty and personal care retailer was also able to devise a market penetration plan to establish a foothold in the US. Also, with the help of our market penetration strategy analysis, they were able to better understand the current and future market potential, make effective targeted promotions to attract customers, and thereby successfully plan their market entry into the US. Our strength lies in the unrivaled diversity of our international market research teams, innovative research methodologies, and unique viewpoints that merge seamlessly to offer customized solutions for your every business requirement.
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