SymphonyIRI report analyzes unique pricing dynamics of four beauty, personal care categories
CHICAGO — SymphonyIRI has unveiled a new report that takes an up-close look at beauty pricing dynamics and how savvy marketers can take advantage of an opportunity to provide consumers with meaningful mid-tier product options.
SymphonyIRI said its analysis, "In the eye of the beholder: High-low pricing strategies are not always suitable for beauty," found that while high-low portfolio pricing strategy works in the consumer packaged goods market, it is not an optimal strategy in the beauty and personal care industry, which is known for being innovative and destination-driven. Because of this, SymphonyIRI outlined what factors that manufacturers and retailers should consider when looking to tap into the underserved mid-tier beauty market. These include:
Pricing: Price is not the primary driver in most beauty segments and thus brand trumps price on most occasions, creating a unique opportunity for beauty manufacturers to better weather the storm caused by economic flux. Something as simple as smaller unit sizes, thus slightly lower prices, speaks to value- and brand-driven consumers, giving them the opportunity to stick with their brand, but buy smaller units or channel surf for the best deal;
Brand loyalty: Consumers have shown a commitment to finding — and spending on — the right brand, the right product and the best performance for their needs, and wear their strong brand loyalty as a badge of honor. These highly personal consumables demand more thoughtful choices for consumers, who expect these products to contribute to their physical appearance and provide usage experiences that contribute to their emotional well-being. Further, consumers often feel their brands of choice represent them and their own philosophies, making these personal product brands a part of their identity;
New product development and innovation: Consumers have shown time and time again that they will pay for high-performance products. By fostering innovation within brand portfolios, manufacturers can avoid price wars. Since brand trumps price in beauty, money spent on building brands and loyalty as defense against competitive brands and private label will be well-spent; and
Retail experience: The experience at retail also builds dimension to the entire beauty shopping experience, setting it apart from other less essential, less personal categories where consumers don’t have an emotional connection. Not only do beauty products create destination shopping, but an up-to-date, modern retail environment delivers a pleasant experience that will build loyalty and incremental sales. [Manufacturers and retailers should] consider reconfiguring stores to make the experience less typical, more boutique-like and more contemporary.
"Even though the middle class has lost 7% of its buying power in the past 25 years, they still represent a substantial part of the population that wants to purchase mid-tier products," said Victoria Gustafson, author of the "Point of View" and principal and team lead of strategic insights at SymphonyIRI. "Companies that disregard this still large and powerful section of the market, especially in beauty, are poised to miss a great portion of sales and broad opportunity today and into the future. This analysis points to certain beauty markets where high-low portfolio pricing strategy holds, but also highlights segments that are neglecting the middle market, which means losing overall."
To download the full report, click here.
APhA names president-elect
WASHINGTON — The American Pharmacists Association has a new president-elect, the group said Thursday.
The APhA announced the election of Matthew Osterhaus, who will succeed Steven Simenson at the conclusion of the 2014 APhA Annual Meeting and Exposition in Orlando, Fla., on March 31, 2014. Osterhaus is the co-owner of Osterhaus Pharmacy in Maquoketa, Iowa, and an APhA trustee.
The group also elected to three-year terms on the APhA board of trustees Nancy Alvarez, of Oxford, Pa., the director of medical information at Endo Pharmaceuticals; and Ronald Small of Advance, N.C., a medication management consultant at Joint Commission Resources. Alvarez and Small will begin their terms in March 2013. The group also elected as its honorary president Norman Campbell, a professor of pharmacy administration at the University of Rhode Island College of Pharmacy. All will be installed at the APhA’s 160th annual meeting in Los Angeles next March.
Bipartisan bill will give DEA broader powers to stop steroids sold as supplements
WASHINGTON — Sens. Orrin Hatch, R-Utah, and Sheldon Whitehouse, D-R.I., on Wednesday introduced the Designer Anabolic Steroid Control Act, a bill that will protect consumers by providing the Drug Enforcement Administration with new enforcement tools to identify and quickly respond when new designer anabolic steroids are created and marketed as dietary supplements.
"This legislation will allow the DEA to target substances whose chemical structures mimic other anabolic steroids and whose manufacturers and marketers promote their anabolic or muscle-building effects and give the DEA new authority to remove them from the market as controlled substances," stated Steve Mister, president and CEO for the Council for Responsible Nutrition. CRN on Wednesday issued its support of the legislation.
In December 2010, CRN, along with four additional dietary supplement trade associations, joined forces with the Food and Drug Administration to raise awareness about the public health problems posed by adulterated products illegally marketed as dietary supplements and heighten enforcement efforts targeting those illegal products. Bodybuilding products unlawfully containing anabolic steroids are one of the categories receiving heightened review by the FDA, Mister noted.
"Misbranded products that contain designer anabolic steroids present serious health risks to consumers, particularly young men who may be unaware of the dangers of anabolic steroid use," Mister said. "When marketers sell new unapproved steroids under the guise of supplements, it is not only dangerous for consumers, but [also] disparages responsible dietary supplement companies producing and selling legitimate, high-quality and beneficial supplements for sports nutrition and performance. We pledge to do what we can to help pass this important legislation.”