The Philippines Market

• Per capita GDP US $ 5100, 2005

(130th globally)

• 40% Pilipino live BPL (US $ 1 /day)

• Rising oil prices- inflation

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 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
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 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 3
Market Share of The two
Skin care products

40%

60%

4
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
potency. 6
 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% 7
 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
Splash’s
C1 and C2 Middle class Target
Market-
Masses/
D Lower class Masa!
E Extremely Low class

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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

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 Splash Establishment and
Evolution
Year Event
1985 RBH cosmetics- Acetone Cuticle
1986 Remover
Renamed Company as Hortaleza
Cosmetics
1987 Renamed Company as Splash
Cosmetics
1989  Hair Sprayer*
Extract facial Cleanser
Avocado(dry skin) Cucumber (oily
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
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 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
– Green unripe papaya more (Ripe (SRI
papaya)
scientist) BioLink (Unripe
papaya)
Competitive threat by local companies with green papaya
products
DC MNC Splash 14
 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 category-
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 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 16
 Strategies
S Produc Constraint Strategies
.No t
1.
. MaxiPee Alternative Advertisements
l Product, Toner by experts and
launched dermatologists
advertising that standing in
exfoliant cause favour of
long term skin MaxiPeel with
damage. concrete
2. Biolink Domestic justifications.
Low Price SKUs
Companies Selling
their own green
papaya products at
lower prices.

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 Strategies contd.
S Product Constraint Strategies
.No.
3. Hair Competitio Foray in R&D of
care n with Shampoos and
Products dominant Conditioners with
hair care capital harvested from
companies. Cash cow products of
hair care category and
come up with
4. In Focus - innovative
1. BIOLINK-products.
Patent
Brands green papaya agent
2. MAXIPEEL

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