Herborist: A Chinese Personal Care Brand Goes Abroad: Ngry Penc S
Herborist: A Chinese Personal Care Brand Goes Abroad: Ngry Penc S
Herborist: A Chinese Personal Care Brand Goes Abroad: Ngry Penc S
Angry Pencils
TEAM
2005 • Entered into a joint venture with french cosmetics chain Sephora
OTHER PROBLEMS
• Conveying the core brand essence
• Expanding the market by prioritizing potential segments
• Acquiring sustainable growth in the new markets
• Fighting with the big players in a saturated market
• Making people aware of the herbal products and its
advantages
FIVE MODES OF ENTRY INTO FOREIGN MARKET
(Future Goal)
Indirect Direct
Exporting Licensing Investment
Direct Joint
Exporting Ventures
(Current Position)
Strengths Opportunities
Weaknesses Threats
North America
Pros Cons
Huge market Decreasing growth rate
South America
Pros Cons
High growth rate Absence of customer base
Europe
Pros Cons
Country Per capita
expenditure
(Personal Care)
France $374.53
THREE
Skin care
specialists/ Doctors INFLUENCING
FACTORS
While buying a herbal product
Reduction of price
(Push strategy) Effects
Profitable relationship with
Sephora
Offering Sephora lower price for its
products Increasing SKU of Herborist
Sephora will have a higher profit margin Promotion of its new products
per product
Brand recognition
Reference power
CONTROLLING THE
INFLUENTIAL
FACTORS
The process continues
Lack of international marketing experience Using familiar symbols (e.g. Yin Yang)
Lack of awareness about the herbal products Coordinating packaging and retail display
PORTER’S FIVE FORCES Threat of
New
Entrants
Current
Suppliers
• France Region: Supplier Competitive Buyer
Power rivalry Power
Sephora
• Hong Kong
Region:
Mannings
Threat of
Substitutes
APPROACHES OF
PRODUCT PROMOTION
Direct marketing
• Cost leadership strategy
SPA model
• Differentiation strategy
DIRECT MARKETING
(COST LEADERSHIP STRATEGY)
Herborist’s point of view
• It has shortest channel length and with high control of power
• It can reduce the cost of channel building and achieve cost leadership
• Direct marketing can integrate regional sales network, such as France as the center of
European sales network
• Direct marketing can increase the contact area between company and consumers
• It can minimize the dependency over the retail chains (e.g. Sephora, Mannings)
• Direct marketing can build the customer relationship & make consumer groups into loyal
customer asset
• Herborist can innovate the product portfolio according to the feedback of the customers
DIRECT MARKETING
(COST LEADERSHIP STRATEGY)
• Customers are aware of the customer service, online promotion activities, products portfolio,
product introduction and membership
Pros Cons
It involves a number of foreign customs
Builds the brand image
and policy issues Alternative Idea
Gives a unique experience to the
Needs a huge amount of fund
customers
Flagship Store
Brings the customers closer to the
Costly promotional tool- lack of budget
cultural heritage of China
• It can initially test foreign consumers’ response for the Chinese type SPA
• Flagship store can be used as a standard store and can be a special franchise model to
expand SPA network
• If SPA model is not feasible in European countries in a short time, then the store can be
combined deeper with direct marketing
DISTRIBUTION CHANNEL
Herborist
International Domestic
Channel Channel