кейси для індивідуальної роботи 2014 н.р. / REVLON INC IN BEAUTY AND PERSONAL CARE

Colourants is expected to be the most dynamic category in absolute growth terms in hair care, with value advancing US$2.3 billion over 20112016. Revlon’s focus on colourants provides the company a good platform to develop its future growth.

However, the company’s bias towards North America is a major weakness for Revlon, as value growth of colourants will be largely driven by rising demand from emerging markets as consumers become more selfconscious about appearance on the back of rising disposable incomes and are more willing to try out hair colouring to boost self-confidence.

International expansion in emerging markets is key for Revlon to develop

Top Absolute Value

Growth Countries in Hair

Care (Colourants vs

Others) 2011/2016

Brazil

India

China

its future business, but given the company’s weak financial situation, instead of being lost in the fierce competition in the first-tier emerging markets of China and Brazil, targeting development in the second-tier emerging markets of India and Russia may be better suited to Revlon’s future development.

 Hair care in India is expected to post a dynamic 10% CAGR over 20112016, potentially generating US$1.2 billion in absolute terms. Increasing sophistication is set to be the main driver, as at one level shampoos and conditioners become more mainstream and at another as styling agents and colourants grow in popularity.

US

Iran

Mexico

Pakistan

Indonesia

Saudi Arabia

 Revlon has the equity and portfolio to exploit this potential, but strong product innovation is very much needed to add dynamism to its portfolio and stand out against the competition.

0 1,000 2,000 3,000 4,000 Absolute Value Growth (US$ million)

Colourants Others

Revlon also markets deodorants primarily in the US with some small presence in Australasia, Latin America, Middle East and Africa, as well as Western Europe. Sales in North America accounted for 49% of the company’s total category sales in 2011.

Value sales declined in 2011 as Revlon lost some significant sales in its second largest value market, South Africa, which was not able to be offset by growth in other emerging markets. While Revlon sustained its second leading position with popular brands Fire & Ice, Mitchum and Charlie, the company faced increased competition from both leading multinationals and smaller domestic players offering more affordable brands.

The lack of product innovation, combined with limited marketing and advertising support, contributed to

Revlon’s loss of share by over one percentage point in

2011.

As growth potential is limited in its core US market, where deodorants’ commodity status is driving intense competition, Revlon’s growth potential is bleak without notable innovation and international expansion.

Revlon Inc: Deodorants Presence by Region 2011

 To achieve the goal of growing sales in skin care, Revlon will be under great pressure to devote more effort in product innovation, and most importantly marketing and advertising to support its brand building. Given the company’s restricted financial resources and its focus on colour cosmetics, it is unlikely that Revlon’s skin care products will achieve great sales momentum in the short to medium term.

Revlon Inc: Global Share and Ranking in Skin Care by Category 2011

BRAND STRATEGY

Almay disappoints due to lack of scale

Almay is Revlon’s secondary brand in beauty and personal care, specifically colour cosmetics. Sales of Almay grew moderately by 3% in 2011 after two years of decline. Almay is primarily marketed in North America, the US in particular, with sales in the latter accounting for 83% of total global brand value in 2011. Almay’s presence in international markets is very limited.

Promoted as hypoallergenic, dermatologist-tested and fragrance free, Almay is positioned as a niche brand targeting consumers looking for skin-friendly cosmetics products. Subsequently Almay receives limited marketing and advertising resources in the highly competitive US market, where brands are generally investing heavily to remind and entice consumers especially during a period of economic uncertainty.

While consumers demand less chemical and more natural beauty products, Revlon has introduced new products to refresh consumer interest. In 2011, Revlon introduced Almay Wake-Up Hydrating MakeUp, which is a loose powder containing encapsulated water beads which break on contact. Both favourable market trends and prompt new product introduction helped drive up Almay’s value sales in 2011 for the first time since the outbreak of the financial crisis in 2008.

That said, with the comparatively limited budget available for Almay’s product development and support and overseas expansion, it is difficult to be optimistic about the brand’s future growth.

US$ million

Almay: Brand Presence in Colour Cosmetics by Region 2006/2011

275

250

225

200

175

150

125

100

75

50

25

0

Middle East and Africa

Latin America

Australasia

Revlon operates a cosmetics research and development facility in Edison, New Jersey. Staff at the Edison facility perform extensive safety and quality testing on Revlon’s products, including toxicology, microbiology, efficacy and package testing.

In 2011, Revlon employed approximately 140 people in research and development, and spent US$24 million on research and development.

In terms of product distribution, Revlon sells its products through a range of distribution channels, including parapharmacies/drugstores, chemists/pharmacies, hypermarkets, mass volume retailers, general merchandise stores, department stores and speciality stores, such as perfumeries.

Revlon’s largest customer is Wal-Mart and its affiliates worldwide, which accounted for approximately 22% of the company’s 2011 consolidated net sales. Other major domestic retailers include Walgreens, CVS and Target, reflecting is mass-market focus.

In 2011, Revlon’s beauty and personal care products were produced at the company’s facilities in the US

(North Carolina), Venezuela, France and South Africa and at third party facilities around the world.

The North Carolina facility is responsible for a substantial portion of its products. The facility managed to export products to Venezuela where

Revlon’s production plant was destroyed by fire on 5

June 2011. Exported products helped to resume market sales after Revlon products were not available for some time after the fire.

Revlon’s third party activity includes the licensed manufacture of beauty-related products and accessories.

As part of the company’s rationalisation programme, aimed at reducing its debt burden, it has overhauled its manufacturing infrastructure.

In recent years, production for the European market has been moved primarily to North Carolina, following divestment of its facility in Mexico City, Mexico.