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1671 MBC Bldg., Alvarez St., Sta. Cruz, Manila A Strategic Management Paper of Colourette Cosmetics In Partial Fulfillment of the Requirements for the Degree Bachelor of Science in Business Administration Submitted By: Bilan, Sheila Marie Hernado, Lynlen Lustre, Elaine Ortiz, Kristine Submitted to: Doc Eliza Samonte June 25, 2023
Executive Summary Colourette is a Filipino-owned cosmetic company that established this home- grown local makeup brand in October 2015. Colourette is one of the country's finest and most innovative line of makeup products -redefining cosmetics to beautify and empower the modern-day women. The brand is also popular for creating multi-purpose products that can be used for the eyes, lips and cheeks all suited for the Filipino skin. Colourette offers a wide color selection and it's also popular with the younger generation. Nina Ellaine Dizon, founder and CEO of Colourette Cosmetics, the CEO of Colourette Cosmetics has a vision to employ women in the company, which touches the customer’s heart because, in addition to receiving high-quality goods, they are able to support the company's employees, which has helped Colourette Cosmetics increase profit. The brand name “colourette” is a short word that is very appealing to all millennials because of its catchy and trendy pronunciation. The CEO has mentioned before in one of her TikTok videos that the brand name's original pronunciation is “ko-lo- re-te", which means make up. Colourette Cosmetics belongs to the Personal Care Industry. The personal care products industry aims to help people look better and feel better about themselves. Colourette offers classic makeup products such as lipstick, eye shadow palettes, face powder, brow pencils and more. Colourette Cosmetics currently employs 100 employees. Colourette Cosmetics is created by Fairness and Flawless, an online skincare from Angeles, Pampanga. The products are locally made and proudly cruelty-free. The CEO believes that their products and color selection available to market are for everyone regardless of their gender. Colourette's target market is young millennials and Gen Z. To maintain competitiveness, the cosmetics industry like colourette must saturate the market and be part of people. Apart from marketing tactics to empower women, maintain quality products, wide product ranges and product reasonable price, colourette must develop strategies to enter new markets and maintain their loyal base. Big companies from other countries that have already been so long in the Philippine market are also considered to be one of the competitors of Colourette Cosmetics mainly because of the trust that consumers have already put in the brand considering how they have been so long in the industry. The influence of social media also made it possible for small business owners to also reach audiences with the same target market as those big companies. The three main competitors of Colourette Cosmetic , Ellana is one of the top mineral cosmetic brands in the Philippines which already has strong brand recognition in the market. The BLK and Vice cosmetics are owned by famous actresses which already have strong brand recognition in the market. Based on the market performance of Colourette Cosmetics' competitors, it is trailing its top competitors. The
I. Introduction 1.1 Company Profile Nina Ellaine Dizon, founder and CEO of Colourette Cosmetics, established this home-grown local makeup brand in October 2015. Colourette is one of the country's finest and most innovative line of makeup products -redefining cosmetics to beautify and empower the modern-day women. Going beyond aesthetics, Colourette products aim to not only enhance women's beauty naturally but also provide its clients truly happy and healthy skin with its rich formulation of activities and cruelty-free manufacturing. The company continues to successfully maintain its high quality of products with its efficiency-driven approach of developing functional cosmetics with health benefits from all-natural ingredients and plant extracts -ensuring absolute product safety to keep skin beautifully healthy. Colourette Cosmetics specializes in multi- function make up such as eyes, cheeks and lips. They create quality products with affordable prices. Colourettes Cosmetics is a brand that promotes and normalizes differences and to dedicate their brand to many people’s lives. Colourette cosmetics offers products such as lipstick, eyebrows, eye shadow palettes, face powder and more which is ideal for all Filipino skin. The brand name “colourette” is a short word that is very appealing to all millennials because of its catchy and trendy pronunciation. The CEO has mentioned before in one of her TikTok videos that the brand name's original pronunciation is “ko-lo-re-te", which means make up. 1.2 Nature of business/products/services Colourette Cosmetics belongs to the Personal Care Industry. The personal care products industry aims to help people look better and feel better about themselves. Colourette is a Filipino-owned cosmetics company that takes pride in valuing their advocacies of diversity and empowering Filipinos through their products. Colourette offers classic makeup products such as lipstick, eye shadow palettes, face powder, brow pencils and more.
1.3 Organizational Structure The CEO of Colourette Cosmetics has a vision to employ women in the company, which touches the customer’s heart because, in addition to receiving high- quality goods, they are able to support the company's employees, which has helped Colourette Cosmetics increase profit. ● Nina Ellaine Dizon-Cabrera, Founder & CEO ● Colourette Cosmetics currently employs 100 employees. Colourette employs single parent mothers in order to help them to have a stable job to support their family. 1.4 Current revenue size and profit Colourette Cosmetics's revenue is $1 million 1.5 Major Markets Served
● Product Competitors: Different cosmetic brands offer similar benefits to the consumer as the product produced by the company. Before its product is released, there are products that already exist. Like other cosmetics brands, they also have products similar to what Colourette cosmetics have such as tints, balm, contour, palettes, shimmers, blush and more. As listed in published tabloids filtered by showbiz news, BLK Cosmetics,Sunnies Face, Happy Skin and Ever Bilena have almost the same collections. 1.7 Purpose of Strategic Plan The main purpose of the strategic plan of Colourette is: ● To develop a strategy for achieving the company's overall objectives. ● To help the company in formulating ideas on creating makeup products that are safe and will suit even the most sensitive skin type. This is to guarantee that allergies will no longer prevent the customer from purchasing. ● To help the company to face stiff competition from brands such as Maybelline, Everbilena, Careline and to its potential new competitors. ● To help the company’s to create makeup products that offer unique features. ● To be able to deal with the threat of substitution to avoid the risk that the brand faces from replacement by its substitutes. To offer alternatives that are equally as good, that can give customers more options when making a purchase, which will increase utility. It will help to get ahead of the competition and create a one- of-a-kind product before the rivals do. wer II. Company’s Vision and Mission 2.1 Vision Colourette is set out to offer makeup items for the average Filipina: lipsticks, brow products, powders, highlighters, you name it! They wished to reach out to ALL Filipinas and make them feel even more gorgeous in any way possible. Furthermore, they are a company that is active in taking a stand on social problems. They aim to be a progressive brand, and also set aside funds to help causes that we believe in, such as animal rights organizations and LGBTQ+ organizations. 2.2 Mission The absence of Filipina presence in the local beauty business inspired the creation of the brand. Colourette wants to be a business that creates products and
shade ranges exclusively for Filipina skin tones. Colourette is one of the most inventive cosmetics brands in the country, focusing on multi-use products. These items are made to international standards but are priced affordably for the modern Filipina. They seek to redefine beauty and break preconceptions not only through their products, but also through their advocacy for women's empowerment and diversity. Also, they encourage self-acceptance, self-love, and self-empowerment, as well as to have a cosmetic that does not alter natural beauty through the use of their products. Vision and Mission Evaluation Vision Comment The company has a good vision statement. However, it's a very long vision statement and since the vision is the company’s communicating tools, it's possible that the people in the organization can forget or be confused. However, the company’s vision statement is achievable which focuses not only with their brands, but also the wellbeing of their people and supporting organizations to stand with social problems or issues in the community. It’s also stated that their brand name aims to serve makeup that suits Filipina's skin or Morena's. Mission Comment Colourette Cosmetics Mission statement is good but same with their vision. It's too long which is hard to remember and understand, it’s possible that their employees can forget easily. However, the mission statement focuses on customers, their products which are inspired for all Filipina’s with Morena's skin tones. People focus, the CEO wants to support all single mothers to have jobs and their advocacy for women's empowerment. Brand quality and Price that all Filipinas can achieve beauties with quality at a very affordable price. 2.3 Short Term Objectives ● To reach more customer before the end of 2023, by running paid ads to Colourette social media accounts and create relevant content for at least 5 times a month ● To increase monthly sales of 5,000,000 by July ● To maintain competitiveness by inviting or collaborating at least 2 influencers and 15 affiliates per months who will create content about Colourette brands to establish brand awareness 2.4 Long Term Objectives
● Global Influences: There is also a rise in demand for local brand make-up lines, it includes Colourette Cosmetics. Demand for personal care products in the Philippines continues to increase as the young adults focus on maintaining a healthy appearance. ● Price: In the cosmetic industry there are huge players in the market where pricing is a major factor affecting demand. This has a big impact on Colourette Cosmetic which reduces the purchasing power of some consumers. 3.1.3 Socio Cultural ● Consumer purchasing power: The Philippine economy continues to grow and more Filipinos are able to afford luxury cosmetic products. Which has a big effect on Colourette Cosmetic as the company serves local brand products. ● International product trends: Growing interest in Korean and other international beauty products. ● Increase of e-commerce: Easier for consumers to buy cosmetics products online. Which can affect Colourette Cosmetic in maintaining customers due to the wide variety of products available in online shopping platforms. 3.1.4 Technological ● Technological development: Growing demand for cosmetics innovations are slowly creeping out to fill those needs. Most cosmetic companies released new products that they innovated. Some of them bring high-tech beauty treatments that can be used at home and some of their skin care products offer beauty devices that can improve their consumer's efficacy of cosmetic products, with competition. On the flip side though, a global rise in demand for cosmetic products might bring negative outcomes with other brands including increased sales and interest. ● Smart technologies: In the cosmetic field, high technology is elevating the development of skincare products that can go deeper below the skin's surface to give consumers a better result and improve its market. This allows enhanced properties in several areas of interest to the cosmetic products including deeper skin penetration, UV protection, long-lasting
effect, improved hydration, and others. It grants the product consumers to visually try the products or looks of the company or brand. ● E-commerce Platforms: Using the e-commerce platforms like Shopee, Lazada and Tiktok that make their products available nationwide for a broader range of p-profit. 3.1.5 Legal ● Health and Safety: Republic Act No, 3720 an act to ensure the safety and purity of foods, drugs and cosmetics being made available to the public by creating the food and drug administration which shall administer and enforce the laws pertaining thereto. Colourette Cosmetic compliance to health and safety of their consumers are very important, putting safety first is very important to earn customer loyalty over the brand. ● Cosmetic Regulations: Cosmetics products are regulated by government agencies such as Food and Drug Administration (FDA) which Colourette must comply with, in order to protect its consumers and follow standards for the safety and efficacy of their brands and ensure that they are labeled correctly. ● Employment Law: Employment law dictates how companies employees should be treated. However, changes in minimum wages rate per employee can affect business operating expenses which can result in reducing their production workers. The increase of minimum wages can affect small businesses like Colourette which leads to an increase in production cost and may also affect the consumer in the form of adjusting the product price. 3.1.6 Environmental ● Eco-friendly: The beauty industry is focusing more than ever to try and go “green.” Their packaging is becoming increasingly eco-friendly for less stress on the environment. But there’s still a growing issue with heavy plastic usage within the cosmetic and skin care segments. ● Consumer demands: Consumers demand for natural and organic products. The consumers are becoming more conscious of what they purchase effect on the environment. Colourette should also evaluate more
Eco-friendly L^ 12 MONTHS^ U^ >^ RELATIVE IMPORTANT Consumer demands H^ 12 MONTHS^ +^ >^ CRITICAL IMPORTANT Pollution L^ 24 MONTHS^ -^ U^ UNKNOWN Health and Safety H^ 0-6 MONTHS^ +^ >^ CRITICAL IMPORTANT Cosmetic Regulations M^ 12 MONTHS^ -^ >^ RELATIVE IMPORTANT Employment Law M^ 12 MONTHS^ -^ <^ RELATIVE IMPORTANT 3.2 Industry and Competitor Analysis The Philippines is known for Filipinos' love for cosmetics and beauty products mainly because of the influence of Western countries and Asian countries like Korea. Through the help of the internet and social media influencers, more Filipinos are being influenced to try make-up products. Different types of cosmetics products are becoming available in the Philippines. With this trend, cosmetics businesses are being founded in the Philippines. The level of competition for the cosmetics industry in the Philippines is relatively high. The main reason for that is because of the emerging small businesses in the industry. The influence of social media also made it possible for small business owners to also reach audiences with the same target market as those big companies. Big companies from other countries that have already been so long in the Philippine market are also considered to be one of the competitors of Colourette Cosmetics mainly because of the trust that consumers have already put in the brand considering how they have been so long in the industry. Apart from that, the similar pricing strategy that Colourette Cosmetics and other brands share is also the reason for the high competition experienced by the beauty brand. 3.2.1 Competitive Profile Matrix
The three company’s above are the main competitors of Colourette Cosmetics, this brands were introduced and included for the Best Local Cosmetics Brands in the Philippines 2023. This was done with the help of a buying guide, which looked at reviews and ratings from various e-commerce sites like Lazada and Shopee in collaboration with experts to select and rank the product recommendations. Just like Colourette Cosmetics this three local brands are able to produce quality makeup products at a budget-friendly price. Most of them even use natural and locally sourced ingredients. Aside from its ingredients, another thing to look out for is whether the local brand is vegan and cruelty-free, meaning they don’t test on animals. As shown in table above, since the Cosmetic Industry is one of the most competitive industries in the market and many substitute products available from other and Colourette competitors. Ellana is one of the top mineral cosmetic brands in the Philippines which already has strong brand recognition in the market. The BLK and Vice cosmetics are owned by famous actresses which already have strong brand recognition in the market. The Colourette Cosmetic offer an innovative product existing in the market but due to sudden changes in consumer preference over the natural base product it is hard for Colourette to create a new product that is suited for consumers who have sensitive skin. 3.2.2 Market Share Analysis
Colourette Cosmetics maintains its competitiveness in the cosmetics industry which revolves around Asian beauty and to enhance natural features by continuing innovation of products that are safe to use and support Filipinas with “morena” skin tone. Since Colourette Cosmetic always makes sure that customer satisfaction the company places on premium, making customers happy. Aside from valuing the needs of the modern Filipina, Nina’s products are both innovative and empowering. Competitors Rivalry – High ● Competitive Rivalry is quite intense due to numerous players in the market. ● The numbers of competitors in the same industry provide a strong intensity to Colourette Cosmetics. ● Rivals Companies like Vice Cosmetics which currently revenue is 5 million, BLK Cosmetics has current revenue of 5 million and Ellana Mineral Cosmetics which revenue is 14 million that also offer almost similar products that are cruelty-free and affordable. Bargaining Power of Supplier – Low ● Colourette Cosmetics is good at maintaining ties with its suppliers.
● Although there are increases in raw materials that leave the company no choice in increasing some of their products, the company makes sure to serve the market with a quality product. ● The cosmetic industry has a low bargaining power of suppliers due to a higher number of market players and large supply of diverse products to the market. The Bargaining power of customer – High ● Like Filipina’s being the target market of Colourette Cosmetics, offers products to the market which key psychographics are to support local brands and mostly prefer to use a multi-use make-up for a hassle free and ready to go look. ● However, due to availability of the products in the market and high competition in the cosmetic industry. The company may be forced to reduce product prices which can affect the profitability of the company’s long term objectives as buyers can easily switch to other brands. Threats of New Entry– High ● According to Statista, the Philippines is a country with one of the highest numbers of beauty pageants won in history and this is unsurprising that the beauty and cosmetics market continues to flourish in the Philippines. Aside from foreign brands a rise in local beauty brands has been observed in recent years and this includes Colourette Cosmetics which complement the beauty of all Filipina's Morena or tan skinned beauty. ● Due to investment required entering the new market, this industry sets a high barrier from entering the market. ● Possible potential competitors may need a huge amount of money to invest and enter in the cosmetic industry, customer loyalty, brand preferences and quality and affordable products. Threat of Substitute – Low ● In the Cosmetics Industry entering a new market needs large capital requirements and when it comes to adopting new technology in the new product trends introduced in the market. ● Colourette Cosmetics as a local brand in the country caters the growing demand for cosmetics offering higher quality products.
● Wide Selection of product: Colourette prioritizes and supports FIlipina beauty which has morena’s skin. The company offers different shades for all types of skin tone. ● Innovative products: Colourette has multi use products which consumers can buy one product and serves in multiple purposes. ● Product Quality & Affordability: Colourette cosmetic has a high management control in terms of ensuring its product quality. The company makes sure to assess each product before it reaches the end user to check if it is defective to maintain their brand image. Compared to other brands, colourette is a more affordable makeup brand in the market. Considering how products are made in multi-use purpose which really saves the customer money. ● Social Media Presence: The company obtains free product ads and promotion using Tik Tok videos created by the CEO and their consumers. This kind of advertising positively affects the company in a way that make- up products are publicly known and accepted by the market. Weakness ● Harmful Ingredients: It is inevitable to use chemicals that can improve the quality of makeup, this is one of the reasons why there will be accidental overuse of chemicals. ● Allergens: Some products are not suitable for sensitive skin, some consumers want to use colourette brands but they have sensitive skin. This is hard to avoid since products are made for the good of the majority. ● Packaging: Colourette packaging based on their consumer feedback is like a nail polish bottle, which didn’t seal properly and meant it didn’t travel well. Some consumer experience and received product spill on their package. ● Intense Competition: Due to significant strong growth in the cosmetic industry, many players in cosmetic industries are becoming very innovative and creative in providing unique quality products in the market to earn an advantage over the competitors. ● Research & development: As cosmetics are becoming increasingly concerned about their appearance, they are looking for more innovative
and improved products available in the market. Structured and purposeful research and development allow the cosmetics industry to develop new and improved products to cater all the needs of different consumers. Research and development become the weakness of Colourette due its upfront cost. Opportunities ● Consumer Preference: Some consumers prefer locally produced products to help in promoting their regional economy, create and retain valuable employment, support families and strengthen community and culture. ● Health conscious trend: There are consumers who look beyond that brand name and seek out ways to make informed and positive decisions about what they buy and who they buy it from. Colourette Cosmetics can address conscious consumers that want natural products within their healthy beauty standards. ● Global expansion: Cosmetic market gained huge popularity among the young generation particularly to women. The growing popularity of Cosmetic Products drives huge opportunities for Colourette cosmetics. Due to rapidly growing beauty consciousness among people and surge in demand. ● Social Marketing: An opportunity for Colourette to introduce and increase their brand awareness through the followers of those personalities who endorse their products. ● Growing demand: In 2022, worldwide revenue from cosmetics will be 100.50 billion. The market is anticipated to grow at a rate of 6.85% each year through 2022-2026 (CAGR 2022-2026) Threats ● Increase in cost of raw materials: Rising commodity prices had a negative impact on the company’s overall performance due to higher prices of raw materials in production cost. In turn, consumers will feel it if companies pass on the growth of cost.
