Splash Corporation

The Philippines Market • Per capita GDP US $ 5100, 2005 (130th globally) • 40% Pilipino live BPL (US $ 1 /day) • Rising oil prices- inflation 1

Cosmetic and Toiletry Industry • • • •

Total sales= P83 bn, 2004 Projected to grow @5%/year Will reach P107 bn by 2009 According to Vanity index Philippines is 5th globally and first regionally • The industry is marked by the frequent redesigning, repackaging and relaunching of existing products 2

Splash in Cosmetic and Toiletry Industry • Only domestic company in top 10 • Company name closely associated for offering high value for money • It deals in two categories:-1. Skin Care - 2. Hair Care • Skin Care: Important Category contributing about >P17 bn • Projected growth rate 9%/yr

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Market Share of The two Skin care products

40%

60%

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Top 5 skin care companies by market share, 2003

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Branding, Marketing and distribution of Splash • Market research: Consumer safaris - potential gold mine. • General branding: Multi-brand strategy-lead brand. • Advertisement: Rational perspective --------Emotional perspective As against only emotional advertisements by MNC’s because they have brands which have reached mature stage in life cycle. Brand name speaks product action and 6 potency.

Pricing and distribution • No low prices • Distribution of products # General trade accounts: 78% of total revenue #Modern trade accounts • Used network of 24 distribution companies. #17.5% discount from list price to distributors #Margin to retailers by 10%

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Splash in Cosmetic and Toiletry Industry contd. • Hair

Care:

Largest

Category

(contributing P19 bn, 2004) • Slow

growth

rate

(projected

@

4%/year to reach P24 bn by 2009)

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Filipino Consumer • 6 Socio Economic group A and B

Upper class (5-10%)prefer

premium brands

C1 and C2

Middle class

D

Lower class

E

Splash’s Target MarketMasses/ Masa!

Extremely Low class 9

Filipino Consumer contd. • Consumer loyalty- “Hiyang” • Changing Consumer Preferences:Earlier men use to purchase hair gels only but metrosexual trend is coming in and hair colours and skin care products gaining share • Consumers heavily influenced by national celebrities 10

Splash Establishment and Evolution

Year 1985 1986

Event

RBH cosmetics- Acetone Cuticle Remover Renamed Company as Hortaleza

Cosmetics 1987 Renamed Company as Splash Cosmetics Hair Sprayer* 1989  Extract facial Cleanser Cucumber (oily Avocado(dry skin) skin) 1997 Splash holding Inc. (Umbrella for several products) 1990- Developed and Launched string of 2000 new skin and hair care products 11

Brand Portfolio • Facial Care and Exfoliants – Extraderm • Exfoliant category • Annual sales grew by 211% in 1997! • Imitation by domestic company (at 20% less price)

– Maxipeel • More potent • Acquired 65% share of exfoliant category, 2005 • Priced roughly 10% more than competing brands 12 • Now a lead brand

Brand Portfolio contd. • Whitening Lotion – Unintended whitening effects in exfoliant products – This property used to launch product under extraderm brand – Block and White, the competitor! – Skin White, new brand in whitening lotion – Many local competitors – Sara Lee purchased Block and White – Under arm whitening cream – Splash gained market share of 29% in 2005 13

Brand Portfolio contd. • Natural Soaps – Natural ingredients preferred over chemicals – Ripe orange colour papaya fruit enzyme used as natural whitening agent (Safe guard papaya and Hiyas as leading brand) Hiyasefficient (Ripe – Green unripe papaya more (SRI papaya) scientist) BioLink (Unripe papaya) Competitive threat by local companies with green papaya products DC MNC Splash

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Brand Portfolio contd. • Hair care – 10% revenue in 2004 – Styling gel- 1. Control (20% lower priced than Dep) 2. Tricks – Kolours brand- Hair colouring agent – Gels for teenagers with low disposable income and dyes for adult women with more money – Main rival in hair colouring category15

Emerging Competitive Forces • Low Cost products from China and Taiwan Low prices Lagging economy • Private labeled skin care products #Watsons personal care stores-77 # Could nt lead the market with their own products

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Strategies S Produc Constraint .No t 1. MaxiPee Alternative . l Product, Toner launched advertising that exfoliant cause long term skin damage. 2. Biolink Domestic Companies Selling their own green papaya products at lower prices.

Strategies Advertisements by experts and dermatologists standing in favour of MaxiPeel with concrete justifications. Low Price SKUs

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Strategies contd. S Product Constraint .No. 3. Hair Competitio care n with Products dominant hair care companies.

4.

In Focus Brands

-

Strategies Foray in R&D of Shampoos and Conditioners with capital harvested from Cash cow products of hair care category and come up with innovative 1. BIOLINK-products. Patent green papaya agent 2. MAXIPEEL 18