Cosmetics Firm

C: I would firstly like to know how much loss in share the client has seen. Do we know about that?

I: Yes, I would like to give you some information.

Consider - 5 years ago, the market was INR 100, and we were INR 50 of that.

Today, the market is at INR 200, the client is at INR 80.

In the next 5 years, the market will be INR 500 and we want to figure out our problem now which will decide whether we see a further dip, stay stagnant or manage to regain our old share.

C: Thank you for the inputs, so we presently have a market share of 40%, down from an earlier 50% and must diagnose why to be able to accurately understand our position in the future.

I: That’s right.

C: Breaking down Revenue into # of units x Price/unit, I want to know if there have been any changes or decrease in the same?

I: There have been no changes in the prices and overall sales have remained same.

C: Since the demand for the products and in general the size of market has increased, is it safe to assume that the demand for our products has also not seen a decline?

I: Yes, that is right.

C: I am going to further divide the # of units to understand where the problem may lie. Considering the Production Capacity – (Procurement of Raw Materials, Processing & Manufacturing) and Distribution. Could you shed some light on any major overhauls made in these and our distribution channels?

I: No major changes in the first one. We primarily retail our items in offline stores.

C: Alright. Since our major sales are from retailing, I want to know if our accessibility in the stores and shelf space remained the same?

I: Yes. It has remained the same.

C: What about online channels? Do we have a significant presence there?

I: No, we don’t. One of the reasons why we have been facing a decline in market share is that we have not got a good stronghold in the online presence. Our competitors have moved to these digital channels where a lot of cosmetic, skin and beauty related items are sold. Could you explore more reasons?

C: Sure. I would now like to move on to customer perception. Is our brand image and likeability affected by some external/internal factors?

I: Yes, good. Recently, we faced a lot of backlash for our skin brightening creams and faced a disconnect with our consumers. Our brand image has also taken a hit because of some unflattering PR.

C: Do we know how much this product contributed to our revenue stream?

I: Before the fiasco happened, it contributed 80% to the revenue streams which has now fallen to 60%.

C: This seems like a significant reason for the drop in market share. Should I explore any other reasons for the same?

I: Yes, you can dive in a little further.

C: I would like to look at the product differentiation and perception of skincare products in general. Is this a good line of approach?

I: Alright, you can proceed.

C: Considering the major consumer shift in the perception of beauty, there has been an increased focus on healthy skin being an internal determinant of beauty more than a superficial one. Skincare is also exploding with a growing trend shift and new players entering the segment with more natural and herbal products which are not harmful.

I: Can you be more specific about these products?

C: There have been new products for skincare like serums, sheet masks, peeling solutions etc. There are some companies which are moving in the dermatological product segment as per concern at affordable prices compared to skin clinics as well.

I: Very good. This was the third reason for the decline in our market share, the inability to cope with trends and launch new products. We can close, thank you.