We have written before, in Skin Care Forum, about the evident dominance of the Big 5 international manufacturers when it comes to mass market skincare. The plain fact is that globally, Beiersdorf, L'Oreal, P&G and Unilever between them hold over 40% of the category worldwide. When it comes to Europe, where one has to add in Henkel, then the number increases to 65%.

Marketing executives unfamiliar with Cosmetics & Toiletries could be forgiven for concluding that local brands are unlikely to get much of a look in. For the most part, of course, they would be right - it is a tough world out there! But in a number of cases, in individual countries, there are some notable exceptions where local players are not only holding their own but winning, too.

It will be our intention in this edition of Skin Care Forum to examine some of these local situations in Europe, and see whether there are any common threads running through their individual case histories.

Rules of the game

Deep Pockets!

Technical Excellence

Branding Skills Second To None

Sales Muscle

....or does it?

For despite these supposed rules-of-the-game, it is interesting to note some fascinating examples across Europe where local players have held their own without necessarily playing by all of the 'rules'.

Clinians

This excellent brand currently has around 4% of the national market in Italy for mass facial skincare, holding its own against L'Oreal's Plenitude and even daring to take a small price premium as well.

Clinians was developed just a few years ago by Turin based Medestea, a relatively small, pharmaceutical skincare company, as their first entry into the mass market in Italy. The product itself was contract manufactured, and whilst the company handled Key Account head office selling themselves, independent sales agents were used.

The secret undoubtedly lay in the branding skills within the company, coupled with a really close understanding of the Italian retail scene - all of which paid off, for in January 2001, the brand was sold to Mirato SpA, for an alleged $24m (not bad for sales of around $8m). Mirato, which went public on the Milan stock exchange in 1999, already had a relatively strong position in the mass channel and was clearly in a position to exploit Clinian's undoubted potential.

Family controlled Puig SA, from Barcelona, is more famous for its internationally successful Paco Rabbanne and Carolina Herrera prestige fragrances, than for its local mass market lines. Nevertheless, in its domestic market of Spain, Puig has a powerful sales force covering the mass channel; the company also has an enviable creative reputation, born of its experience in the international fragrance arena.

These two attributes have helped build Puig's Vitesse brand of facial skincare, to a 9% national share, against Beiersdorf's Nivea Visage, L'Oreal's Plenitude & Henkel's Diadermine.

Simple

Some things in marketing are not as simple as they look. And Accantia's Simple skincare range in UK is one of them! This quietly elegant brand contains no fragrance and no artificial colouring, as the packs say "Not perfumed, not coloured, just nice!"

Owned by Accantia Health & Beauty Ltd - itself the result of a management buy-out of Smith & Nephew's UK toiletry business - the Simple brand is the result of some very carefully listening. Listening by its marketing management to what different segments of consumers were saying about what they wanted from their skincare, what they liked and what they did not.

The result has been a mainstream brand holding 7% of the entire UK facial skincare category - and still fragrance-free. It takes very careful listening to make such a platform mainstream, not niche, yet Accantia's marketing team have achieved it by skilful use of market research.


France

Some brands' fortunes ebb and flow, none more so than the Barbara Gould skincare range in France.

Although the origins of the brand were undoubtedly American, Barbara Gould long since ceased to be sold in the US. For many years it belonged to Reckitt & Colman's French subsidiary. The latter has always had a very strong reputation for its mass channel sales force, and coupled with some clever use of specialist formulators, Barbara Gould got to No.4 brand in the mass market in France, with a 7% share.

But life changes, and the brand was sold to Carter-Wallace, whose stewardship turned out to be not so successful.

Anyway, by the time Carter-Wallace came to be swallowed up by fellow American company, Church & Dwight, in May 2001, the brand had more than halved in share from its Reckitt's heyday and currently looks to be in need of some TLC (Tender Loving Care!).

Lumene


Most people in the Cosmetics & Toiletries industry who operate at international level could be forgiven for paying only passing attention to the Nordic region within Europe. After all, with a population of just under 24 million, it only accounts for 6% of Western Europe. And anyway, is it not already sown up by the international majors, like the rest of Europe? Well, not entirely...

The international players do not have it all their own way in the Nordic region. Take skincare, for example. One local manufacturer in Finland, Noiro, dominates their local market with a very powerful brand, Lumene, holding category leadership for the last 5 years, with a 27% share, ahead of all the major international brands.

	Skincare'shares in Finland (%) (basis market value)
Year	1995	1996	1997	1998	1999
Facial'skincare	20.3	21.4	21.8	24.6	27.2
Source: Finnish Cosmetic, Toiletry & Detergent Association

Remarkable results for a local player, certainly, but Lumene's manufacturer, Noiro, with sales of $120m, is in turn a wholly owned subsidiary of Finland's largest pharmaceutical company, The Orion Group, with sales approaching $1bn.

The secret of Lumene's powerful franchise seemingly lies somewhere in the depths of Lake Lummenne in Northern Finland, where it is said that the water is so pure that sometimes you can see nearly 30 metres down, when the Northern Lights radiate through the deep waters of the lake.

Whatever the origins of Lumene, the brand's appeal, based on natural radiance, purity and caring for Nordic complexions in the harshest of winters, has a wide-spread following. For example, Swedish department chain, Ahlens give Lumene special pride of place in their stores because of the strength of its appeal.

It seems consumers want the natural, radiant look which is Lumene's trademark up in the Nordics. This is epitomised by the company's choice of 'face' for Lumene, well known Finnish model & actress, Niina Kurkinen, famous for her blond Nordic appeal. Maybe the Finns know a thing or two about marketing, up there in the land of the midnight sun.

Key Learning

So are there any common threads which run through these mini case histories we have examined? Is there any Key Learning we can cite?

We suspect that it is simply this: most of the normal rules of the game apply, namely

• Technical Excellence - certainly
• Branding Skills - a pre-requisite
• Sales Skills - not always Sales Muscle (though muscle helps!)
  

But

Deep Pockets - not necessarily. Sometimes the skills of a professional poker player seem to be able to win through, initially at least. Does this suggest a build-to-sell strategy for local players? Well, that ce rtainly would require poker playing skills - because you can only sell success.


Author

Colin Hession is Managing Director of Colin Hession Consulting, a'specialist consultancy which focuses exclusively on the Cosmetics & Toiletry industry from the marketing & commercial point of view.

tel: +44-1625-522241
fax: +44-1625-527284
e-mail: ch@hessioncosmetics.com
web'site: www.hessioncosmetics.com