The Centurions
Lege Artis Marketing Report
Marketing 1102, Set D
Andrea Boyer, Erika Schiller, Marko Babic, Michelle Miller,
Samuel Ueland and Selena Yip
Table of Contents
Introduction .............................................................................................................................................. - 1 Problem Statement ................................................................................................................................... - 1 Key Findings Facts and Assumptions ........................................................................................................ - 1 Target Market ........................................................................................................................................... - 1 Positioning ................................................................................................................................................ - 3 SWOT ........................................................................................................................................................ - 3 Strengths ............................................................................................................................................... - 3 Weaknesses .......................................................................................................................................... - 4 Opportunities ........................................................................................................................................ - 4 Threats .................................................................................................................................................. - 5 Competitive Analysis ................................................................................................................................. - 5 Vivier Pharma Inc. ................................................................................................................................. - 5 GM Collins ............................................................................................................................................. - 6 Alternatives ............................................................................................................................................... - 6 Alternative 1 (Full Service Wholesaler) ................................................................................................. - 6 Alternative 2 (Direct Service Selling)..................................................................................................... - 7 Alternative 3 (E-commerce) .................................................................................................................. - 7 Solution ..................................................................................................................................................... - 8 Place ...................................................................................................................................................... - 8 Promotion ............................................................................................................................................. - 8 Product .................................................................................................................................................. - 9 Price ...................................................................................................................................................... - 9 Implementation ........................................................................................................................................ - 9 Contingency ........................................................................................................................................ - 10 Conclusion ........................................................................................................................................... - 10 Course Concepts ..................................................................................................................................... - 10 Bibliography ................................................................................................................................................ 12
End Notes ................................................................................................................................................ 13
Introduction
Lege Artist is looking to expand its business in the Canadian market. Currently the
owner, Irina is looking for help in revising the current marketing strategy to be able to
establish long-term clientele. The most important task is to develop a plan that gains
prospective investors that will help fund the business plans. To gain the support of our
potential investors, we will introduce a distribution plan to increase our sales and expand
our target market.
Problem Statement
How can Lege Artis grow the market share for their skin care products by choosing a
distribution channel that will increase their net sales by 30% within 1 year?
Key Findings Facts and Assumptions
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Lege Artis is a relatively new company established in 1996
Unique skin care products and methods has been developed based on the extensive
medical knowledge of the owner
Products line offers creams and gels that are non-irritating, and have proven results
Products are registered under Health Canada as “non-medical cosmetic class”
Already invested in one of the fastest growing segments of the personal care
industry
Variety of products has already been developed
A clinical skin care product line for men is in development
Has single retail location with 9 employees and prices range from $50 and $110 a
product
Has already been market tested with clientele in Toronto’s clinic
Product line generated $1.6 million in sales annually
The Canadian market which includes anti-aging products, creams, gels, toners, and
face masks, generated $821.7 million in revenue in 2010
Target Market
We believe that the ideal market for Lege Artis Skin Care will be women between the
ages of 35 and 50 years old. As of 2006, there are approximately 3,780,170 women
between those ages which make up approximately 23% of the Canadian population1. This
market will allow the company to grow and achieve higher sales in the future. Furthermore,
as Lege Artist is developing a men’s line we also believe we should target males between
the ages of 30 and 40 as a secondary target market. As we wish to increase our sales
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within one year, this is the ideal market segment to focus on as they account for a large
amount of the skin care market’s yearly sales.
Demographics
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Geographic’s
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Psychographics
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Behavioral
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Women between the ages of 35 to 50
Men between the ages of 30 to 40
There are approximately 1,083,495 women between the
ages of 35 to 39, 1,285,535 between the ages of 40 to 44 and
1,290,130 between the ages of 45 to 49
Marital status of this group includes married, never married,
separated, divorced
Their birth era is between the baby boomers (1962) and
generation X (1965 to 1976)
Average after tax income for women in Canada is
$29,214. However, the dominant income range for women is
over $50,000 as of 2006
There are 2,071,440 men between the ages of 30 and 40
The average income for men in Canada is 43,684 and the
dominant income range is over 60,000
Most of the women in the target market will most likely be
found in metropolitan cities.
Montreal has 437,315 women between the ages of 35 and
49. Vancouver has 347,400 women in this age range and
Toronto has 655,110 women in this age range. Together this
represents a large segment of women in these metropolitan
areas.
The density of this population is primarily Metropolitan with
nearly half of the population of this group residing in major
cities.
Suburban Elite: According to Environics, there are 2,976,063
people in this category.
Urban elite is further broken down into three categories:
Suburban Gentry (580,890), Nouveaux Riches (288,584) and
11 Pets and PCs (2,106,589). The later refers mainly to
middle class individuals and families.
Want knowledgeable and effective customer service.
This age range typically has medium to a heavy user of these
products.
In 2006 there was $8,795,408,761 spent on personal care,
supplies and equipment plus a further to their quality products
once they $2,277,443,274 spent on Makeup, skin care and
manicure products in Canada.
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They generally have a strong loyalty have found a product
they like.
Men that take care of themselves and are up to date on
fashion, exercise frequently and consider their appearance as
a priority2
Positioning
Based on our target market we intend to position our products in the mind of our
consumers as a state of the art anti-aging cream and that will maintain youthful beauty.
Our positioning statement is as follows:
“For elegant sophisticated females who desire to maintain or achieve beautiful,
youthful skin, Lege Artis is a state of the art, non-irritating, premium skin care product that
focuses on beauty and health.”
SWOT
Strengths
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Lege Artis provides many skin services for clients (Laser therapy, photo-rejuvenation, LED light
therapy and microdermabrasion)
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Offers 5 handmade skin care line products and being successful, soon to develop a men’s skin
care line.
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Has great loyal clientele buyers in Toronto that keeps the business going strong
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Offer’s Free Consultations which attract new clients for spa/health services
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Lege Artis delivers beauty with medical benefits. They portrays themselves as a clinic and a
necessity rather than a spa filled with indulgence.
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With today’s constantly changing economy, Lege Artis’ business is not affected
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Lege Artis is a proud donor to Support Sick Kids Hospital and SOS Children’s Villages charities.
They’ve donated products and gift certificates to the Fitness in Fashion Charitable event
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Use best technology to perform the most effective services for clients. ( Lightsheer
ZLaser,Candela Vbeam™ laser , LHE™ IPL,Omnilux™ Light Therapy )3
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Weaknesses
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Due to the lack of medical qualifications Irina has in Canada, she has to follow some
restrictions. (Can’t administer Botox, prescribe Acutance or perform dermatological procedures
in treating aging or lance)
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Lege Artis is in a highly competitive skin care industry.
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Skin Care market is dominated by popular brands such as Dove, Vaseline and Ponds (takes
up 35.8% of the market)
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Lege Artis has Facebook, Twitter, Youtube and Google Plus which can constantly attract and
introduce services to new clients. However their social media websites aren’t recently updated
and are very basic. ( 0 followers on Youtube , 19 likes on Facebook)4
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Legis Artis skin products are currently only targeted towards women. Not having products sold
and made for men can make a huge difference in their sales revenue.
Opportunities
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Launching a new product line for men will influence and attract more consumers to buy Lege Artis.
This new product line will attract a new target market for Lege Artis which would increase sales
dramatically and will give us an advantage over our competitors who don’t sell men’s products.
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Since they only have the one store, opening stores outside of Toronto will increase market share,
brand loyalty and companywide revenues.
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With plastic surgery prices being so high, Lege Artis can market their products as an effective,
affordable alternative.
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Lege Artis Inc. could take advantage of the green movement and start producing environmentally
friendly and organic products. By doing so, that will give Lege Artis Inc a new target market to
exploit.
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Threats
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Established companies in the market that have a strong reputation and provide a similar line of
products are a threat because they are able to offer their products at a lower price and have brand
loyalty.
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Since the popularity of face lifts had grown to 19% in 2005, it is easy to say that the need and want
for an anti-ageing skin care product can drop, having the business to lose its customers and sales 5.
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Only having one location of Lege Artis Inc. in Toronto, is a threat because they are less able to
expand their product line to potential customers.
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With the advertising regulations for Anti-Aging/Anti-Wrinkle in Canada’s Guidelines for Cosmetic
Advertising and Labelling Claims, it limits Lege Artis’ advertising capabilities 6.
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With the increasing prices of products to produce Lege Artis’ lotions and creams, it would be harder
to come out of a financial crisis being such a small company.
Competitive Analysis
Based upon our target market and SWOT analysis we have selected two companies
that we will directly compete with. The first is Vivier Pharma Inc. and the second is GM
Collins Inc. They both have a strong history in Canada and already sell in the areas in
which we wish to expand. We will have to overcome these companies’ advantages to meet
our goal of increased sales.
Vivier Pharma Inc.
Vivier Pharma launch in 2000 and was founded by Jess Vivier CEO who has 30
years of experience in this field. Their philosophy is “At Vivier Pharma we bring a
pharmaceutical approach to skin care products. Our experience demonstrates that
achieving healthy skin begins with using the highest quality skin care products. We deliver
our promise by manufacturing and testing at pharmaceutical standards. Allow our passion
for skin care to make a positive impact on your skin today.”7 Vivier Pharam would be one of
our main competitors because they are a well know Canadian company that has a loyal
customer base and are known for having a higher quality product that would appeal to our
target market.
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They carry three skin care lines: Vivier Skin, Vivier Skin Plantine and Skin TX.
Vivier has offices in Montreal, Canada and Chaplain, New York. Location sales
volume for Vaudreuil-Dorion in Montreal, Québec are $10,997,000, there are about
5-9 employees at this location8.
Vivier Skin Care Products are widely distributed to over 20 countries Canada, USA,
Mexico, South America, Middle East and Asia.
Product prices range from $40.00 to $150.009
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Vivier has been featured in magazines such as Zoomer, Flare and Elevate and has
472 likes on Facebook10
GM Collins
GM Collin was founded in 1957 in France but since 1991, has started to produce
their products in the Dermo-Cosmetik Laboratories in Montreal, Canada. GM Collin
produces the highest of quality skin care products focusing on anti-aging, sun care and
organic line products. Their mission is to “Recapture your true natural radiance with the help
of nature and modern technology. Beauty reborn.”11 Gm Collin will be one of our main
competitors as they sell in the locations where we wish to expand into and have a
comparable line of products which are sold to a similar target market.
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GM Collin’s Organic Line is made from 99% organic products with completely
organic and biodegradable packaging12
Proudly not tested on animals
Exclusively sold at clinics, spas and doctors’ offices
Has a successful men’s skin care line
Conducts over 100 product education seminars yearly all over North America
Location Sales Volume (Saint-Laurent, Montreal, Canada) $4,721,00013
Facebook has 4.3k “likes” and Twitter has 260 followers
Prices: GM Collin Bio Organique Treating Serum: Serum Traitant (30ml) $59.00
GM Collin Bio Organique Nourishing Cream: Crème Nourissante (50ml) $57.0014
Alternatives
Alternative 1 (Full Service Wholesaler)
As our 1st alternative we suggest that Irina uses an indirect channel for distribution
with selective distribution focusing on specific retailers which will be higher end Spas.
Indirect channel for distribution:
Producer
Wholesaler (Full
Service Wholesaler,
Specilaty
Wholesaler)
Retailer (Spas)
Consumer
We suggest using a Full Service Wholesaler, Specialty Wholesaler and a pull strategy
where promotional efforts are aimed at the consumer who will demand product from retailer.
When using a specialty wholesaler they will carry our stock, maintain a sales force, offer
credit, make the deliveries and provide management assistance. According to Pasquale
Martiono summarized, most Spas purchase their products directly from the wholesaler and
resell the products themselves15. As such there will be no shelving fee. As our target
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market is an age range of those who focus on quality skin care and have the funds to go to
spas, we feel this would be a beneficial and rewarding distribution channel for Lege Artis 16.
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Pros
With Selective distribution there is
market coverage to the Spas we
have chosen.
Allows us to focus on getting our
product into Spas, where staff will be
knowledgeable on the product
Our target market spends time and
money in spas; they will also be able
to sample the product through their
selected appointments.
Reputation from selective distribution
may provide value perception with
consumers
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Cons
The cost of wholesalers
Irina will have to relinquish a certain
amount of control over to the
wholesalers
Product may seem less desirable
because it is more readily available
through a wholesaler
Alternative 2 (Direct Service Selling)
For this alternative we have chosen non-store retailing. This deals with Direct Selling
sometimes called door-to-door selling which is appealing to consumers because it involves
direct sales of goods and services through personal interactions and demonstrations in their
home or offices. The individual seller is responsible for placing orders, and has a limited
supply of products on hand just used for showcasing to customers. The benefit for the
consumer is that having the goods and services offered to you at their convenience is the
ideal result for establishing long-term clientele and would be selective distribution. It
provides the customers with personalized service and convenience and is a great way to
assist lack of consumer knowledge about products17.
Pros
Cons
 Employees work on a commission
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 High employ turnover
 Someone needs to be responsible for
base, less expenses for the business
Representatives of the company can
be located internationally
Customers receive a personalized
service in their homes or offices
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training the employees
The seller is responsible for the cost of
brochures, business cards and product
Alternative 3 (E-commerce)
Finally, we would suggest that Irina should become involved in the e-commerce
business to distribute her products. This would be a direct distribution method going straight to
the customer’s door with intensive distribution intensity. She would be able to ship directly from
her store in Toronto and could reach her target market across Canada. We would have to
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charge for shipping and with Purolator the typical shipping fee would be $9.95 although it would
be delivered within 2 days18. As more individuals with our target market age range begin
shopping online for their needs this would be a great opportunity to move into that market early.
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Pros
Gives worldwide/national presence
Chance to buy and sell online and can
interact directly with customers which
helps to increase the market
It is cost effective to promote and
market your service
You can offer other online services to
increase customer service such as
online chat
Customers can easily locate the
products they want and allows them to
compare the products available
Once customers have made a
purchase it is easy to track if you are
reaching your target market
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Cons
There is a high cost to optimize the
online store and to make it visible
through online search engines
It only provides limited business as
some customers would not be able to
use the service do to delivery
restrictions and they require access to
the internet
If there are dissatisfied customers they
tend to be quite vocal in their
displeasure as they are usually internet
savvy. This would lead to negative
exposure through online review sites19
Solution
We believe that the best solution for Lege Artist to grow and increase their sales within 1
year would be to follow our first alternative. As Lege Artist would continue to sell their product
through their store this would be a multichannel approach. We would also need to retain a full
service wholesaler to get the products to all of our business partners.
Place
Lege Artist skin care line will be introduced to the Canadian Market through our wholesaler
Frananda’s Beauty and Spa Supplier. Frananda’s is a wholesale supplier for Spas and Salons
in Canada and North America with 20 years’ experience; they are located in Mississauga,
Ontario.
Promotion
We will want to promote our products at the Esthetique Spa International convention in
Vancouver. This will allow us to introduce our products to spa owners, new wholesaler and
dermatologist in a new region of the country. The event occurs on February 17th and 18th of
2013 and is the perfect introduction to the western part of Canada 20.
Furthermore, having ongoing promotions for customers can attract customers to buy our
products. We have three options to help promote our products
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Discounting: Discounting the products for a certain time in the market can attract
customers to come and purchase our products for a lower price. This will attract
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customers that haven’t had enough money to purchase our product. Now they can
have look into our product and see what we offer for our price.
Bundling: Having our skin care products in a bundle with lotions and creams can
get consumers to buy our products rather than buying one item at a time. This gives
them a wider range of products to try out and to see if it suits their specific needs.
Seasonal pricing: Special promotions for seasonal holidays can get customers the
seasonal holiday joy for purchasing our products at reduced prices and in bundle
packages. This will get people to buy in bigger quantities for themselves or as gifts
for loved ones21.
Product
We will not be changing our product with our implementation plan. Irina has made a great line of
products that are non-irritating and give youthful and beautiful results!
The 5 products hand made products developed by Irina are:
Soja - a soothing and moisturizing cream
Baobib C10 - a high potency anti-oxidant
Natural Actives - a tinted moisturizing cream
Serum-CE - a high potency antioxidant serum
The prices of these products range from $50 to $110 each. We believe that being in such a
competitive market, this prestige price will attract our target market by giving them the
satisfaction of high quality and price.
Price
As most wholesalers expect to markup their prices by %50 we will sell our products to
for a minimal markup22. This will allow us to maintain our prices at a range of $50 to $110
depending on the particular product.
Implementation
Aquire a beauty
wholesaler (1-3
months)
Promote the
product with
specialty discounts
and at the trade
show (3 to 9)
Months
Locate Retailers
to sell the
product
(ongoing)
Engage in further
product
development
Our implementation plan will have four phases. The first will be to locate a full service
wholesaler to get our products into Spa’s and then to our final customer. The second part will
be to insure that our products or in the store that will give them the proper attention and offer the
correct customer experience. Thirdly, we will want to attend the Esthetique Spa International
convention in Vancouver to promote our products and reveal our men’s line. Finally, due to the
ever changing industry we believe we should engage in further product development such as
the upcoming men’s line.
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Contingency
If it occurs that our first suggestion will not work we recommend implementing our
second alternative to reach our goals. To do this we will need to hire new employees for
regional sales and the Employees will work on a commission bases limiting our costs to the
business. This implementation plan can be very successful because representatives for the
company can be located nationally.
To make this word we will need to find offices for our training managers to train and hire
new staff although our staff will not be limited to where they can meet customers. We will also
need our new to be responsible for advertising the job opportunities, the product and our
company. We will also have to provide our local sales agents with samples of the products to
show customers, brochures for the customers to keep with details on the products and contact
information to place their orders. In conclusion we believe that if selling our products through a
wholesaler will not work our personal selling method will.
Conclusion
In conclusion we believe that following our strategy of using a full service wholesaler we
believe that we can increase sales by 30% within 1 year by spreading the range of Lege Artist
across Canada. This would also allow us to reach our target market of women and men as we
would retain the selective positioning that the suburban elite look for. Even though this is
somewhat costly, we believe that this will achieve the best results while maintaining Lege
Artists’ control over the product quality.
Course Concepts
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Electronic marketing Channels: As one of our alternatives, we displayed how Irina can
use the internet to make her products available for consumers worldwide (Page 375)23.
Customer service- As shown in the Strengths, Lege Artis has loyal customer service as
her clientele in Toronto is increasing growing (P. 390)24.
Retailing – In our first alternative, we suggest Irina to retail her products to the ultimate
consumer (P.402)25.
Indirect channel - In the first alternative, we illustrated an option for Irina to use an
indirect channel for distribution that would focus on distributing her products to higher
end spas (P.373)26.
Total logistics cost - We displayed the expenses that are associated with delivering Lege
Artis products. We suggested her to ship with Purolator with a fee of $9.95 (P.389)27.
Specialty Good – In key findings; we listed her products as exclusive to buyers with a
cost price of 50-110 dollars. Being exclusive, customers would need to search for her
product (P.256)28.
Competition - Demonstrated how Vivier Pharma and GM Collin as top competitors with
Lege Artis (P.89)29.
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Marketing channel – In this case study, we proved how Lege Artis is in the process of
making her products available for consumption by consumers (P.374)30.
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Bibliography
esthetique-spa-internationa. (2012, 11 22). Retrieved from www.biztradeshows.com:
http://www.biztradeshows.com/esthetique-spa-international/
Canada, S. (2006, November 12). 2006 Census of Population. Retrieved from Statistics Canada:
http://www12.statcan.ca/census-recensement/2006/rt-td/index-eng.cfm
City News Toronto. (2006, 3 17). City News Toronto. Retrieved from Popularity Of Non Surgical Cosmetic
Procedures Rising: Study: http://www.citytv.com/toronto/citynews/life/health/article/20438
Crane, F. G. (2011). Marketing Eight Canadian Edition. United States of America: McGraw-Hill Ryerson.
eskincarestore. (2012, 11). Eskincarestore Beauty Starts Here. Retrieved from www.eskincarestore.com:
http://www.eskincarestore.com/productcart/pc/viewCategories.asp?idCategory=32
Facebook. (201, 11). Vivier Pharma. Retrieved from www.facebook.com:
https://www.facebook.com/#!/pages/Vivier-Pharma/112226955462015?fref=ts
Gm Collins. (2012, 11). Gm Collins. Retrieved from www.gmcollins.com:
http://www.gmcollin.com/en/index.php
Health Canada. (2006, 2). Guidelines for Cosmetic Advertising and Labelling Claims. Retrieved from
http://www.hc-sc.gc.ca: http://www.hc-sc.gc.ca/cps-spc/pubs/indust/cosmet/index-eng.php
How to start a business. (2012, 11). Pros and cons of an E-Business. Retrieved from How to start a
business: http://www.howtostartabusiness.ws/business-guide/pros-cons-ebusiness.php
Khurana, A. (2012, 11). About.com Ecommerce. Retrieved from http://ecommerce.about.com:
http://ecommerce.about.com/b/2011/12/29/a-giant-list-of-36-pros-and-cons-ofecommerce.htm
Lege Artis. (2012, 11). http://www.lege-artis.ca/. Retrieved from Lege Artis Laser & Skin Care Center:
http://www.lege-artis.ca/
Martino, P. (2012, 11 22). (E. Schiller, Interviewer)
Monosoff, T. (2006, 11 27). Demystifying Profit Margins and Markups. Retrieved from
www.entrepreneur.com: http://www.entrepreneur.com/article/170964
Purolator. (2012, 11). Purolator Customer Support Center. Retrieved from http://www.purolator.com:
http://www.purolator.com/en/resources-and-support/help/faq/shipping-my-package.page?
Reference USA. (2012, 11 19). www.referenceusa.com. Retrieved from Reference USA: (http://0www.referenceusa.com.innopac.lib.bcit.ca/CaBusiness/Detail/Tagged/ef6069b7f98840cb84bfd
8689f0e4849?recordId=034689646
12
Spa Boutique. (2012, 11). Spa Boutique. Retrieved from http://www.spaboutique.ca:
http://www.spaboutique.ca/siteSearch.asp?cur=CAD&search=vivierskin&rewrite=false&scriptN
ame=siteSearch
Spa Marketing. (2012, 11). Spa Marketing. Retrieved from www.spamarketing.net:
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Vivier Pharma Inc. (2012, 1). ABOUT VIVIER PHARMA. Retrieved from Vivier Pharma:
https://www.vivierpharma.com/about_vivier_pharma.php
End Notes
1
All statistical information for the target market comes from the 2006 Canadian Census (Canada, 2006)
(Canada, 2006)
3
(Lege Artis, 2012)
4
(Lege Artis, 2012)
5
(City News Toronto, 2006)
6
(Health Canada, 2006)
7
(Vivier Pharma Inc., 2012)
8
(Reference USA, 2012)
9
(Spa Boutique, 2012)
10
(Facebook, 201)
11
(Gm Collins, 2012)
12
(Gm Collins, 2012)
13
(Reference USA, 2012)
14
(Spa Boutique, 2012)
15
(Martino, 2012)
16
(Crane, 2011)
17
(Crane, 2011)
18
(Purolator, 2012)
19
(How to start a business, 2012) All information from this table came from the “How to start and business”
Website
20
(esthetique-spa-internationa, 2012)
21
(Spa Marketing, 2012) All three promotional ideas originate from this site
22
(Monosoff, 2006)
23
(Crane, 2011)
24
(Crane, 2011)
25
(Crane, 2011)
26
(Crane, 2011)
27
(Crane, 2011)
28
(Crane, 2011)
29
(Crane, 2011)
30
(Crane, 2011)
2
13