In addition, the recession is leading to greater levels of discounting and special pricing, which hurts gross margins. According to Kline, companies heavily focused on luxury products, such as Estée Lauder, will feel the sting of the recession more than those whose products are lower in price, such as Avon, Johnson & Johnson and Procter & Gamble. Overall, the recession will affect the ability of personal care marketers to increase retail prices, unless they highlight their product or brand’s unique benefits.
“Companies that continue to employ effective marketing, efficient operations, sustained R&D expenditures, and steady innovation are the ones that will remain profitable and hold market leadership positions in uncertain times,” noted Laura Mahecha, industry manager for Kline’s market research division.
Kline’s Personal Care: U.S. Competitor Cost Structures 2008 study presents information on the financial performance of 10 leading suppliers of cosmetics and toiletries in the U.S. Cost breakdowns are provided for each company’s overall personal care business as well as its leading product classes, including fragrances, hair care, makeup, oral care, skin care and other toiletries.
More info: www.KlineGroup.com