The fierce race for profit
The fierce competition within the personal care market is apparent in short product lifecycles and price wars. Since consumers prefer drugstores and supermarkets to buy basic skincare and daily necessities, the industry is highly reliant on third-party retailers in distribution. As such, manufacturers are faced with the challenge of responding to the pricing strategies of rival brands and contracted retailers while balancing profit expectations to remain competitive.Frequent mergers and acquisitions of emerging brands and the downsizing of broad portfolios to core products form the backbone of brand strategies. To explore new niche segments and supplement the core business with new brands, manufacturers in the cosmetics and toiletries industry are highly active in research and development, with spending exceeding on average a three percent ratio to sales. Unprofitable lineups are quickly discontinued to make way for new, potentially more profitable brands, resulting in rapidly changing product lines.
