Target Market Attractiveness Assessment Tool Project
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Target Market Attractiveness Assessment Tool Project
THOMPSON RIVERS UNIVERSITY
BEAUTITOWN
ASSIGNMENT 2B
(FEASIBILITY ANALYSIS)
SUBMITTED TO: SUBMITTED BY:
VAN DYK SHEENA KARAMPREET KAUR
KEERTIMAN SHARMA
ASHNEET KAUR
SAM CHIRINDA
Beautitown
Feasibility Analysis
Introduction
A: Name of the proposed business: Beautitown
B: Name of the founders: Karampreet Kaur, Ashneet Kaur, Keertiman Sharma, Sam Chirinda
C: Summary of the business:
Beautitown is an app committed to help customers to identify the potential risks associated with the personal care products they use every day. The app will use the product ingredient information such as chemical regulations to rate products so that consumers can have instant access to credible product information. The app will show the picture of the ingredients and see what’s inside the ingredients and how the ingredients rate.
Nowadays People are facing a lot of skin related problems because of the changing environment, food habits, hormones changes etc. As a result, people got acne problem, skin allergies, skin cancer etc. These problems can be overcome by using a right product on your skin and the app will help to provide the knowledge of different products by utilizing a 10- point scale. Products are scored from a low of 0 to a high of 10. The higher the rating, the better the product from health perspective. The rating is based on the database of thousands of products and its information is gathered from the retailers and manufacturers.
The app also gives the information about animal testing. There are many big companies which are still using animals for testing as well as in production of the products. Beautitown will clearly shows categorized the products which are cruelty free and which are not.
App will encourage the customers to participate in recycling programs. As there are many brands in cosmetic industry who are launching many programs for preventing the usage of plastics and launching the recycling program. But there are many customers who are unaware of theses programs and the benefits given by the brands. Beautitown will give the information about all the different programs to their users.
Beautitown app will also provide benefits to people by showing the opportunities in the cosmetic industries such as job offers, events and campaigns held by various brands and suggestions to customers for making a purchase decision on natural products depending upon customer preferences and needs to deliver the values.
The app will act as a guide to customers in the existing tough competition of cosmetic brands. The app is easy, free to use and also informative one.
Part 2: Industry/ Market Feasibilty
Assessment Tools
- Industry Attractiveness
- NAICS code is the classification of trade foundations by the type of activities taking place in economies. The industry code is one of the important things in today’s growing business world. There is no specific code which is given to the cosmetic app. As The research identified NAICS code 446120-Cosmetics, beauty supplies and perfume stores. This industry deals with the perfume stores, cosmetic etc. which are engaged in retailing cosmetics, perfumes, toiletries and personal grooming products.
- Classification based on category
Industry Attractiveness Assessment Tool
Low Potential Moderate Potential High Potential 1. Number of competitors Many Few None 2. Age of industry Old Middle aged Young 3. Growth rate of industry Little or no growth Moderate growth Strong growth 4. Average net income for firms in the industry Low Medium High 5. Degree of industry concentration Concentrated Neither concentrated nor fragmented Fragmented 6. Stage of industry life cycle Maturity phase or decline phase Growth phase Emergence phase 7. Importance of industry’s products and/or services to customers “Ambivalent” “Would like to have” “Must have” 8. Extent to which business and environmental trends are moving in favor of the industry Low Medium High 9. Number of exciting new product and services emerging from the industry Low Medium High 10. Long-term prospects Weak Neutral Strong
- Target Market Attractiveness
- The portion or specific market
- Genders do affect the choice of skin care products. There were the days when skin care products are known or famous for girls and women but now the time has changed, nowadays men are also becoming more conscious about their skin care. So, we are targeting both men and women of age group 16-65.
- Beautitown app will also focusing on the geographic segments such as: – Canada, U.S.A, Europe and the rest pf the world.
Target Market Attractiveness Assessment Tool
Low Potential Moderate Potential High Potential 1. Number of competitors in target market Many Few None 2. Growth rate of firms in the target market Little to no growth Slow growth Rapid growth 3. Average net income for firms in the target market Low Medium High 4. Methods for generating revenue in the industry Unclear Somewhat clear Clear 5. Ability to create “barriers to entry” for potential competitors Unable to create May or may not be able to create Can create 6. Degree to which customers feel satisfied by the current offerings in the target market Satisfied Neither satisfied or dissatisfied Unsatisfied 7. Potential to employ low cost guerrilla and/or buzz marketing techniques to promote the firm’s product or services Low Moderate High 8. Excitement surrounding new product/service offerings in the target market Low Medium High
- Market Timeliness
- Determine the timeliness of entering a specific target market based on other criteria.
- One of the most important factors that can determine timeliness of the cosmetic market is culture. Every country possesses different culture as well as different lifestyle due to this their preferences for cosmetics is not same. The other factors are political stability, promotional methods, population growth.
- Moreover, the developing countries market provide a great opportunity for international brands than the developed countries.
- Determine the extent to which the “window opportunity” for the proposed business is open or closed on the following criteria.
Market Timeliness Assessment Tool
Low Potential Moderate Potential High Potential 1. Buying mood of customers Customers are not in a buying mood Customers are in a moderate buying mood Customers are in an aggressive buying mood 2. Momentum of the market Stable to losing momentum Slowly gaining momentum Rapidly gaining momentum 3. Need for a new firm in the market with your offerings or geographic location Low Moderate High 4. Extent to which business and environmental trends are moving in favor of the target market Low Medium High 5. Recent or planned entrance of large firms into the market Large firms entering the market Rumors that large firms may be entering the market No larger firms entered the market or are rumored to be entering the market Conclusion
- Industry Attractiveness
Beautitown app is especially for cosmetic industry. The cosmetic industry is growing at an increasing scale as the people are becoming more conscious about the skin care as well as skin problems are also increasing. The young, strong- growing industry has many competitors in the existing in the market, which makes medium average income. The cosmetic industry is concentrated due to the use of online services or social media. The number of exciting new products and services emerging from the industry is high, giving the industry prospects strong.
- Target Market attractiveness
There are many numbers of competitors in the target market as the growth rate of the firms in the target market is rapidly high. The reason behind is the both the male and female buy the product which gives high results that means high qualified product. The methods of generating revenue in the industry is somewhat clear because as the competition is hard in the cosmetic industry, the companies are adopting the transparent methods so that customers can get more information which will help then in their buying decision. Beautitown is having a high chance of success because main focus of the app is sustainability and also coming up with more advanced features such as QR bar code, skin testing. There is high potential of enjoying the promotional firms’ services or products. The excitement for the new product or new service is always high in the surrounding environment.
- Market timeliness
The culture is one of the main factors which contribute the high sales of cosmetic industries. It is the culture which contributes the change in lifestyle of the individual. The other factors such as the promotional methods which increase the usage of the app. The countries whose population is growing at increasing rate, is beneficial for the cosmetic industry as well as for the service. The other factor is the stability of the government, the countries mainly the developing whose government is not stable then the policies for business or industries are not stable or may be not favoring but the developing countries after globalization opens up many opportunities for the international brands.
- Industry/market feasibility (circle the correct response)
Not Feasible Unsure Feasible
- Suggestions for improving industry/market feasibility
As the Beautitown app is free so the main challenge for the industry is the revenue. So, the app can generate the revenue by adopting new methods like by contacting many organizations, brands etc. Moreover, increase the customer awareness on organic products. As the app is coming with some new features like QR bar code scanner and skin testing which is the unique feature of the beautitown. In the future beautitown will add more languages to attract more target users. Moreover, Beautitown will update products to cover all the categories of cosmetics and skin care to be an android application which most beneficial and useful.
Justification of assessment:
The Beautitown app main focus is on cosmetic industry which is the ever-growing industry. While there are many competitors or app existing in the market but there is no one who is providing a transparent information to their customers as the customers lifestyle has been changed. Nowadays majority of the customers want the quality rather than the quantity. As the skin problems are increasing and the customers does not have so much knowledge about the ingredients of the product and the app will help in skin testing. The app will clearly give them the information of the ingredients which are suitable them for their skins. Moreover the app will give information about the recycling programs of the brands .As the app is free, easy to access and easy to use. There are large number of brands in the cosmetic industry and the customer get confused between the brands and their specifications and to solve this problem Beautitown is coming in the market.
Total Startup Cash Needed (to Make First Sale)
Capital Investments Amount Property 750 Furniture and fixtures 500 Computer equipment 2,000 Other equipment 50 Vehicles 450 Operating Expenses Amount Legal, accounting, and professional services 250 Advertising and promotions 700 Deposits for utilities 300 Licenses and permits 500 Prepaid insurance 300 Lease payments 0 Salary and wages 1,500 Payroll taxes 150 Travel 500 Signs 400 Tools and supplies 600 Starting inventory 2,000 Cash (working capital) 200 Other expense 1 500 Other expense 2 300 Total Startup Cash Needed = $ 11,950 Comparison of the Financial Performance of Proposed Venture to Similar Firms
Most businesses in this market are performing on average than Beautitown because of the high-income returns. However, the organization is expected to make great developments in profitability because of the beneficial nature of the business. However, there are other organizations that are performing poor because of lack of proper marketing techniques and they target the wrong market.
Comparison of the Financial Performance of Proposed Venture to Similar Firms Assessment Tool
Annual Sales
Estimate of Proposed Venture’s Annual Sales—Year 1
Explanation of How the Estimate Was Computed
Estimate of Year 1 Sales __________ Summary: How proposed annual sales, on average, compares to similar firms (circle one)
Below Average Average Above Average
Estimate of Year 2 Sales __________ Summary: How proposed annual sales, on average, compares to similar firms (circle one)
Below Average Average Above Average
Net Income
Estimate of Proposed Venture’s Net Income—Year 1
Explanation of How the Estimate was Computed
Estimate of Year 1 Net Income __________ Summary: How proposed net income, on average, compares to similar firms (circle one)
Below Average Average Above Average
The value was calculated by estimating the sales and expenses of the first year. Consequently, they were subtracted to provide an accurate net income for the year 2020. Estimate of Year 2 Net Income __________ Summary: How proposed net income, on average, compares to similar firms (circle one)
Below Average Average Above Average
The income was calculated based on the estimated percentage rise in the initial cost. As such, it was believed that the company`s profitability would improve by 300%, which led to the estimation of the net profit. Overall Financial Attractiveness of the Proposed Venture
- The following factors are important in regard to the overall financial attractiveness of the proposed business.
- Assess the strength of each factor in the following table.
- Overall Financial Attractiveness of Proposed Venture Assessment Tool
Low Potential Moderate Potential High Potential 1. Steady and rapid growth in sales during the first one to three years in a clearly defined target market Unlikely Moderately likely Highly likely 2. High percentage of recurring income—meaning that once you win a client, the client will provide recurring sources of revenue Low Moderate Strong 3. Ability to forecast income and expenses with a reasonable degree of certainty Weak Moderate Strong 4. Likelihood that internally generated funds will be available within two years to finance growth Unlikely Moderately likely Highly likely 5. Availability of exit opportunity for investor if applicable Unlikely to be unavailable May be available Likely to be available Conclusion:
- Total startup cash needed
The estimated total startup cost for the business is $11,950. The cost is based on the existing basic assets and expense requirements. This cost was estimated closely depending on the entire project and business venture.
- Financial performance of similar businesses
The company`s performance with regard to similar businesses in the industry is moderate. This is because its revenue is high but not equal to giant businesses in the industry. However, it still beats some of the less advertised businesses.
C. Financial feasibility (circle the correct response) Not Feasible Unsure Feasible
D. Suggestions for improving financial feasibility Overall Feasibility: Summary and Conclusion
Overall Feasibility of the Business Idea Based on Each Part Suggestions for Improving the Feasibility Product/Market Feasibility
Not feasible Unsure Feasible Industry/Market Feasibility
Not feasible Unsure Feasible Organizational Feasibility
Not feasible Unsure Feasible Financial Feasibility
Not feasible Unsure Feasible Overall Assessment
Not feasible Unsure Feasible Justification of assessment:
The cosmetics app industry is one of the most growing businesses in the world. The secret to its success is good marketing and adverting strategies. Social media had a great impact on marketing and adverting if they are used well and target the right audience, this will result in an increase sale of the app and products. For this reason, although Beautitown, has a low capital investment, it is estimated to spike a huge profit within the first year, which can double by the second year based on the app-knowledge and marketing strategies.
Abbreviated Marketing Plan. Situational Analysis and Target Market.
Product description:
Beautitown is the app created for users to differentiate between various brands and to make best decision for their purchase. With the increased use of cosmetics people are becoming more conscious towards it. This app will help consumers to know about what actually they are using, is good for their skin or not. Are there any toxic ingredients? This will also help them to know which companies are contributing to save the environment. Like which companies do animal testing or not? It our initiative to provide truthful information to the customers about brands and make our contribution to the environmental sustainability by reducing the usage of products that harm the environment.
Implementation of idea:
The Beantown app is actualized and created by utilizing Android studio, which is a stage for creating Android application utilizing the Java Programming language. The execution
Additionally incorporates the primary library that is utilized for standardized identification and QR code examining called the Zing library. In expansion, Beautitown stores and recovers items, fixings, and client data by utilizing a Firebase Database AS an ongoing database.
Situational Analysis:
Industry trend and environmental scan:
Cosmetic industry covers a huge market area. The target market is wide as it includes people of all ages. Cosmetic industry comes up with new and innovative products every year to meet customer need and want. Over last 20 years cosmetic industry has by 4.5% per year with annual growth rates range from 3% to 5.5% globally.
The concern of people towards beauty products has given chance to people earn billions of dollars. There are several apps in the market which provides information about the products. People pay billions of dollars consulting doctors and beauticians for the recommendations of the products for their skin type. But, still nothing works for them even after. Also, none of them provides the information about the environment friendly products and can reduce environment pollution which is the most important thing nowadays.
Competitive Analysis:
Below table shows the comparison between the beautitown and other apps:
Applications Platforms Barcode Scanner Qr Code Scanner Cosmetics news/events Ingredient rating Blogger reviews Search product by product name Skin tips Primary skin testing About the Competitors:
Think Dirty – This is the US application which supports around 500,000 products of many famous brands. One of its functions is showing the measurement of carcinogenicity, toxicity, and allergy level to inform users which ingredients may be harmful.
EWG’s Healthy Living – This is the US application under the control of the Environmental Working Group (EWG). The application allows users to scan a barcode of products not only cosmetic and skin care products but also food and personal care products
Code check – This is an application for checking and scanning a barcode on cosmetic products. It offers users the information about ingredients, the level of harmfulness, and a rating of each product. Its database consists of more than 150,000 products
Cosmetics – This application allows users to scan a barcode on cosmetic products. It also enables users to set the personalized allergy alert function, which provides a notification alert when users scan a product that contains hazardous ingredients
Ingredient – This application lets users take pictures of ingredients on product labels and then provides information, such as the name, Chemical Abstracts Service (CAS) number, description, rating, hazardous descriptions, and suggestions. So, users can gain knowledge about ingredients in skin care products.
How we are different?
Skin testing: – To make it more simple and easy we have decided to use the questionnaire technique in the skin testing part. Users will understand it easily and the skin analysis result will come out instantly.
Cosmetic ingredient information: – Our application utilizes a fixings rating, favorable circumstances, and drawbacks dependent on the data from Paula’s Choice’s site, which is a skincare brand built up by globally perceived master in the skincare business, Paula Begoun.
Qr bar code: – GS1128 is a standard barcode based on the Code 128 barcode specification. It was discovered by LG Electronics from Seoul, Republic of Korea. The purpose of the system is to generate the expired date of each cosmetic products to users by scanning EAN-13, which is one type of barcode on products. As the system provides the expired date after scanning the barcode, it helps users easily manage their cosmetic usage.
All the cosmetic applications have barcode scanner as the main function to gather and personalize product information to users .These apps command a small market because of low marketing strategies and are offering similar functions to customers.
We are offering primary skin test function, QR scanner and blogger review functions which makes this app more advanced in comparison with competitors which will be beneficial and useful to users in checking and selecting the best appropriate product for consumption.
Why consumers will use Beautitown?
-Naturals are on the rise
– Consumers are better informed –
– Technology becomes increasingly commonplace –
– Focus on local pride
Segmentation and target Market Analysis:
Our App will be available on google play store and app store. We are mainly targeting the people age form 16-65. People with different age group have their own opinions and motives to use our app. People 16-25 are highly concerned for their skin health and avoid using toxic products. Skin testing and blogger is the factor that would influence them to use our app. whereas, people of 26-40 are concerned about the products that use animal testing or harm the planet. People of above 40 face some issues while using the app. They are not able to get proper information because of the complicated structure of the app such as pop ups. Our app is made user friendly that anybody could use it without any trouble. This app is built for wide age group of people to solve their different issues.
References:-
Retrieved from:
https://www.cosmethics.com/aboutus/
Retrieved from:
http://www.ingred.io/how-it-works/
Retrieved from:
https://www.thinkdirtyapp.com/
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https://www.mdpi.com/2079-9276/8/3/137/pdf
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