Red Earth
... fee) charges RMB 11,000 of Qantas, but only RMB 6,315 of Japan Airlines. Red Earth could try some other airlines, which offers international air services as well just to reduce its cost so that to be more competitive and bring its customers more benefits. Distributing Products Directly: another good idea of reducing cost for Red Earth is to distribute its products to other countries directly. That saves time, money, energy sources, labors and reduce risk and ullages. Threats: Substitute Products: at that time, the market existed the Body Shop6, Bodyline7, Jurlique8 and some other competitors such as Neutrogena9, they were alike Red Earth, also nature made cosmetics. Customers could choose any of them, not just Red Earth. Vigorous Competitors: among all the competitors the Body Shop had the biggest market share 60-65%, Bodyline had 15%, Jurlique had 5%, what Red Earth had was10-14%. And the others had the rest 5-8%. Red Earth had threats of losing its current market and even been annexed by other competitors ♦ The Retail Marketing Mix Facing its Internationalisation program, Red Earth’ policy of Price: was to remain competitive and offer high quality products at an affordable price. Aimed for providing every day use products instead of luxury goods. Place (distribution): due 1994, Red Earth had 56 stores and 23 concept shops situated throughout Australia. Red Earth also had substantial operation overseas, and had approximately 70 outlets around the world, including Japan, Hong Kong, Malaysia, Singapore, Thailand, Indonesia, Philippines, California (USA) and Canada. Promotion: Red Earth utilized many forms of advertising media to promote its products. Red Earth had also advertised its products in some world-influential magazines such as “Girlfriend” and “Dolly”. Red Earth had promoted its pure & natural image through the development of the “Earth Club”. This program used a customer-joining fee of $ 10.00 for lifetime membership to fund charity groups working in environmental and social sphere of world importance. Also, implemented recycling incentives, encouraging its customers to return empty Red Earth containers to receive free products or discounts. Meanwhile, Red Earth controlled over the use of advertising material to avoid distorting the image of the brand. People: the Red Earth company provided ongoing training & support, and the franchisee and concept shop staff nurture the heart and soul of the business. Red Earth’s management regularly traveled Australia and Hong Kong and company circulars enable Red Earth to keep up-to-date with what happening in all of its outlets. Telecommunications equipment, such as telephones, faxes and computers. This provided Red Earth with important feedback and vital communication link between Red Earth Australia developed and distributed a training video to its international office in Hong Kong. The companies personnel in Hong Kong dubbed the video into the appropriate languages and adapted the training techniques to the requirements of different cultures. Products: Red Earth product rang was made up of over 400 different products and was divided into different product categories: Earth Colour cosmetics, body care, bath & shower, skin care, fragrances, aromatherapy products, hair care and sundry products. More than 80 percent of all the products were made from ingredients grown & cultivated in Australia. On the other hand, the Red Earth brand and logo had been successfully transferred across international boundaries as well. ♦ Red Earth’s Market Segments According 1994, approximately 78 percent of all Red Earth’s products were targeted towards women, who are between 20-27 years old, environmentally aware but typically not greenies. Round about 15-20 percent of Red Earth’s business were targeted teenagers between 12-20 years old. At that time, 8 percent of Red earth’s business was targeted towards men. It’s clear to see that Red Earth mainly targeted its customers who were between 20-27 years old. These people were on their ways to have a growing in all aspects of their lives. Economically, they were getting richer and therefore they would have more purchase abilities. On their jobs, they were taking more taking more and more important and advanced positions. Personally, they were on the age of getting married, have their own family. As for positioning its company strategic, Red Earth would hold this group of people tightly, consolidate its existed market and ulteriorly populist its products through these customers. Women between 20-27, probably have brothers and sisters, a lot of friends and are making more friends, classmates and colleagues, when get married they would have husbands and kids. All these relationship of the women between 20-27 are Red Earth’s potential customers. Women between 20-27 are on a very promising age, and these promising people are surly enable Red Earth a promising prospect. Teenagers between 12-20, they are on the ago which full of imagination. They also start to be aware of their appearances. They are young, energetic and have financial support from their parents. They are credulous, easily to be attracted, their philosophies are budding. For a business, the ideal strategy is to have long-term turn, the long the better. Young people are promising, having the potential to be Red Earth’s lifetime customers and also require low cost of introducing fees compare the mature or even the senior people. They are very willing to teste the new things but they are not sophisticated yet, that enables Red Earth to get these customers relatively breezily. Gentlemen are not so sensitive as ladies when talking about cosmetics, so sometimes they need a push by their family or their friends. Thus, before men cosmetics being a fashion, Red Earth emphasize on its female members to introduce its products to their male family members and friends. From 3 percent in 1992 to 8 percent in 1994, we can see the tendency of substantial increasing of Red Earth men cosmetics. That gives us a suggest that men are getting aware of their needs towards cosmetics and they are get used to using cosmetics every day. Males are very wistful customers for Red Earth, it’s not only because the competition for male market for cosmetics is not so strong as women’s, but also males are tend to be more loyal customers according to purchasing brands, a very good example: Cigarette. In 1994, Red Earth took a steady going strategy to position its target market, and it mainly targeted women between 20-27 years old. Ten years later-2004, based on its 10-year development, Red Earth still targeted women. But with its more internationalised, its targeted customer is expended, from 18-3510 years old. Its early young customers got more mature, wise and independent, have their own life style and appreciations towards fashion and vogue. Most of them are well educated, but still environmentally aware. ♦ Culture Issues for International marketers and the technological, legal/political, economical, and social environments In the middle-east countries like Dubai, females are not allowed be touched by males, except their fathers, brothers and husbands. In the most countries, it is okay if the shop assistant is a male and the customer is a female. But in middle-east countries, Red Earth has to set up different shops for female only and male only, and sales its female products and male products separately, heirs female shop assistants for female customers males for males, just to keep opposite sex apart and put the same sex together. The Mohammedan’s woman is not allowed to take her veiling off and show her face to non-family members, so when Red Earth intends to do some visual advertisements, it has to use the non-Islam model, especially women. ♦ Competitive Analysis 1. Currently in Shanghai, Red Earth’s sole competitor is Neutrogena, its other competitors haven’t entered into Shanghai yet. 2. Compare with Red Earth, Neutrogena is little bit similar with Red Earth. They are both nature-made products, both engaging in cosmetic research and development. Furthermore, they are both owned by their bigger companies. Red Earth is owned by Esprit, Neutrogena is owned by Johnson & Johnson (J&J)11. But they still have big differences: Broke in time: 18th June, 199812 Red Earth set up its first concept shop in Shanghai, the shop is located in HuaiHai Road, which is a street sales the most fashion goods in Shanghai. Neutrogena just entered Shanghai market in the beginning of 2004. Products: With Red Earth’s coming, it also brought a wide range of products. At the beginning of its entrance, it mainly brought its Earth Colour cosmetics for these products were not able to be produced in Australia, and that reduced its cost. But after 7 years’ hard working, now Red Earth offers a wide range of products they are still mainly the cosmetics, but also have skin care13. For the coming AutumnWinter 2004, Red Earth presented its new series cosmetic “Metro Glamour”, its slogan is “My City, My Rules”. It including: Magic Lip tint, UV Protection Lip Tint, Smoky eyes Palette, 3 in 1 Eye Pen. If we say that Red Earth, based on 7 years’ China market experience and hard working, it already developed and occupied certain amount of its own market, made Red Earth’s products a part of Chinese women’s life. Neutrogena, just tentatively and scrupulously try to bring its bring its most basic skincare products into China Mainland market. In Shanghai, we cannot find the whole range products of Neutrogena, what we are able to find is just the following 8 ones: Fine Fairness Mask, Deep Clean Foaming Cleanser, Alcohol-free Toner, Deep Clean Facial Cleaner, Extra Gentle Cleanser, Moisture Defense Lotion (SPF 15), Moisture Defense Cream (SPF 15), Formula Hand Cream. Price: for its wide range of products, the prices for Red Earth’s products are from RMB195 – RMB15, for Neutrogena all the products are below RMB 65, the most expensive one is just RMB64 and the cheapest one just RMB 15. Promotion: speaking of the way of promotion, Red Earth and Neutrogena are total different. Red Earth uses magazines such as ELLE, Cosmopolitan, Vogue, Marie Claire and some local influential magazines like City Beauty. Red Earth also enjoys using big billboard in walls of big department stores and shopping centers. Since Red Earth started its business in Mainland China, it kept on using the Chinese background models as its prolocutor, from Shu Qi the famous Hong Kong movie star in the early time to Zhao Wei, Guo jing jing the widely known charming mainland film stars currently, Red Earth does very well on its localization construction. Inside the department stores and the shopping centers, if you can see Esprit, then you can surly see Red Earth. Esprit used to take foreign models to help express its products spirit. If we say, Esprit is liberty and enthusiastic, then Red Earth is oriental and lingering-charming. The distinct contrast makes the both brands deeper impressed. Opposite to Red Earth, Neutrogena takes use of the TV advertisement, playing it in the hot time but not very frequently. The model it uses is just young Chinese girl, nobody knows her name, just looks cute and pure. Besides TV ads, no any other promotion at the moment. Places (distribution): we can see Red Earth’s shops concept shops and just sale counters all around in most department stores and shopping centers. When Esprit starts a new shop, there must has one Red Earth along with it, yes where Esprit goes, where Red Earth follows. But sometime, Red Earth also has its dependence it set up its own shops or sale counters without Esprit. Neutrogena just started its business in mainland China, so it is not doing that big at the moment. Neutrogena chooses to start its business in Watsons, the Hong Kong based personal products chain store. At present, Shanghai has 20 Watsons totally they distributing in different areas of Shanghai. Neutrogena has put all its 8 products at the moment on the most staring shelves of Watsons’ to catch the customers’ eyes. Cooperator Culture: Red Earth gives its staff various training courses, publicizes it business spirit, encourages its staff working hard and challenge themselves, makes its love the job they do and be passionable to it. The philosophy of Red Earth is “Premium beauty made easy”and it also holds its four-culture value: 1. Passion for everything we do 2. Belief that there is beauty in all things 3. Challenge the status quo 4. Be bold and take risks Marketing Target: Red Earth seems knows what’s it going to do at the beginning of entering the China market, it ballyhoos its products, set up billboards, uses the most famous also the most expensive stars to be its model. It aims for the well-educated, relatively high-income, environmentally friendly modern women. It makes great efforts to penalize its products with its target customers. Red Earth is working targeting definitely, step steadily on i...