Tag: best market entry strategy

Market penetration strategy

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.

You are just one step away from successfully establishing your business in a new market. Request a free proposal to know how our market penetration strategy for business can help you achieve this.

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 company’s 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 Infiniti’s 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. Get in touch with us our experts to know how we can help you formulate an ideal market penetration strategy for your business.

Key challenges in the US luxury beauty market 

market penetration strategy

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.

  • A thorough market entry research was undertaken to help the client understand the demographic segmentation and demand patterns in the market and plan their market penetration strategy accordingly.
  • As a part of the market penetration study, Infiniti helped the client formulate a comparative market analysis was provided to the client to help them understand the strategies of their key competitors in the US. They were also able to gain insights on the core difference between consumer groups and demand patterns in the European and US markets. This helped them identify the best promotional activities that are more likely to work with their target audience in the US.
  • During the course of the market penetration strategy study offered to the client, we identified the different modes of distribution that can be chosen by the client to quickly leverage local resources, networks, and market knowledge with minimal investment.

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.

Learn more about the importance of a market penetration strategy for your business

route to market

Essentials for a Successful Route to Market Strategy

What is a route to market strategy?

A route to market strategy, also known as a sales execution strategy provides a roadmap for companies to get their products from the factory or warehouse to the end-users, customers, or distributors. The primary objective of a route to market strategy is to ensure that the products reach the clients/customers in an efficient and effective manner, thereby ensuring satisfied customers and increased sales growth.

Developing a high performing route to market strategy involves focusing on the right markets, with alignment to the behaviors and needs of the customers in those markets. Furthermore, it is vital to choose the right sales channels, products, and value propositions, which would consequently result in a company that delivers high revenues, profitability, and customer loyalty. Experts at Infiniti Research have provided some general guidelines for achieving a successful route to market strategy:

Are you leveraging the right and most profitable route to market strategy to reach your end users? If you are not sure, request a free proposal to know how our route to market intelligence can help.

route to marketStart with the customers

Route to market intelligence involves identifying the depth of understanding that a company has to its customers, their expectations, behaviors, and needs. All route to market decisions largely depends on this kind of detailed information. Businesses must only sell products that customers need and are willing to buy. To gain a better idea, they must interact directly with the customers through focused interviews, customer surveys, or prototype testing. Then, understand what makes the company’s products or services add value to the customers. It is also critical to evaluate the best channels to reach out to the target customers.

Low-cost channels for improved profitability

Sales is an area of business that can have the greatest impact on profitability, especially if it includes selling some of the products through lower-cost channels. The challenge here is to understand which channels can be used for which customer. While some products and sales transactions require more complex and expensive channels, others can be maintained by lower cost channels such as telesales.  Therefore, utilizing the correct channels can significantly affect profitability.

Identify gaps in your business process and formulate the best strategies to win in the market. Request a free brochure to learn how our solutions can help you achieve this.

Balance between market penetration and control

Using a global market coverage route to market strategy with a mix of channels can result in channel conflict, margin erosion, and even dissatisfied customers. This is especially true when channels are not closely controlled. To stay in control, it is important to identify these potential risks. For instance, several luxury brands maintain quality, stability, exclusiveness and, ultimately, high margins on a defined segment of the population. At the same time, they forgo the fact that they could probably sell ten times as many products as they manufacture, but at a cost to brand image and market position.

Products sold and channel should match

Businesses must ensure that the products that they sell and the channels that they choose are suited to each other. They must try to sell products through the channels that customers use to buy the product that is being sold. It is also necessary to resort to channels that give economic sense to the point of sale. Which means, avoid using expensive channels to sell cost-based products which are not unique from others in the market. An effective route to market strategy is to use low-cost channels for such products.

Ready to explore the best route to market strategies for your business? Get in touch with us to learn more.

IR23

Beating the Odds in Market Entry with Competent Market Entry Strategies

New and emerging markets open up numerous opportunities and have limitless potential for growth. However, when to take a closer look at the annals of business history, it shows that for every successful market entry, about four fail. Interestingly, it is not just inexperienced startups that face the heat from new markets while implementing their market entry strategies, several sophisticated corporations also face the same fate. Industrial strategists at Infiniti Research agree that successful market entry strategies depend largely on factors including timing, scale relative to the competition, and the ability to leverage complementary assets. Moreover, it is vital to undertake detailed analysis and market research before entering into a foreign market.

(more…)