NATURA&CO

The international cosmetics company Natura&Co was founded in 1969 by

Luiz Seabra as a small perfumery shop in Sao Paulo, the idea was to incorporate
Brazil’s natural products with principles of therapeutic treatments in the production of
cosmetics. The group currently includes The Body Shop, Aesop, Natura Cosmetics
and Avon. In 1974, the business adopted a direct sales model, where a direct seller
makes money buy reselling company’s products directly to customers. Nowadays
the largest Brazilian cosmetics company now has operations worldwide with more
than 3,200 stores across 73 countries and more than 1.7 million consultants, tough
focusing most operations on Latin America, France, and the United States. In 2004
the “family” business became a limited public company entering the Sao Paulo Stock
Exchange.

The company corporate mission commits to a sustainability model, working

with local communities in the Amazon Region since 1999 encouraging the
development of products that benefits the forest and its habitants, seeking to position
itself as an eco-friendly, sustainable company. The CEO Roberto Lima mentioned in
a press release “More than contributing to society by adopting sustainable practices,
we want to promote a growing movement to raise awareness and find solutions for a
more balanced and fairer future from the economic, social and environmental
standpoints". The company also uses ordinary women instead of supermodels in
their advertises. The statement “well-being well” is an example of the company’s
philosophy, products that enhance each one’s natural beauty and well-being. “By
being well in ourselves, we can feel well with the world, the environment, other
people and society’’ (Natura’s website).

By having a big variety in the group brands, the company appeals to a large
target market. Typically, most their products are targeted at low- and middle-income
consumers, with a few exceptions. For example, Avon prospective consumers are
Latin women between 35 to 45 years old with higher education, while Natura’s relies
on millennials which are usually more interested in the sustainable aspects of the
company. A large fraction of Natura’s profit comes from their sales representatives,
their main distribution channel performing one-to-one sales individually door-to-door,
for motivating this team the company approaches with a pyramid and a reward
scheme. The sale’s organisation is divided in three levels: sales representative,
sales promoter, and sales manager. Each sales manager is responsible for a group
of promoters that cover and specific area. Promoters are expected to train and
supervise their team of sales representatives as well as finding new representatives,
as the largest chunk of their salary is based on retention of representatives rather
than selling. The groups organize the so called “Natura Meetings” every 21 days,
where new products are presented, along with instructions and the target costumer.
Usually taking place at the promoters home, creating an intimate atmosphere, the
meetings have a family feeling that unifies the team, with cheers and applauses for
celebration as a quarter of the sales representatives get to receive a gift, as a reward
for high performance on sales or for bringing new prospects.

Natura’s top competitors include brands such as Lush, Total Beauty Work and
Freeman Beauty. Natura’s major competitive advantage is their innovation process,
coming along with products made from Brazilian resources, while the competitors
rely on keeping the prices low for the masses. It’s suppliers tough are mostly local
communities in the Amazon, this way the company doesn’t depend solely on one
supplier and has a good relationship with them, by improving the place they live and
even creating schools and organizations that protect the rainforest.

Analysing the macroenvironment of Natura’s it is impossible to ignore the

geographical fact that most products are based on Brazilian biodiversity,
complicating the transportation of raw materials, and setting factories in Europe and
the United States for example. Even though, the company can differentiate even in
highly competitive markets such as France, most European customers buy from
well-known brands from Unilever or L’Oréal, but Natura has innovative products lines
nature-based that offer an appeal for its distinction. The company’s strategy in Latin
America can’t rely on the cultural-empowerment aspect only as there are other
brands with similar ideas, all products are targeted for medium and low-income
consumers as this is the reality of most Latin countries. As for political forces, the
company gets a series of benefits such as reduced taxes for being environment
friendly and acting sustainably, which increases its profits.

For its investments reaching $1.5bn in Amazon’s business, the company is

seen as a “friendly face of capitalism”, reinvesting its profits into their producers
motivating them to preserve the natural environment, balancing profitability, and
sustainability. Tough the company does not have only one source of finance
anymore, Long-term sale of shares turned out to be a major source of income for the
company as in 2004 it became a public limited company entering the Brazilian stock
market , and in 2020 in the United States stock market, selling their shares to
shareholders
In January 2020, the company acquired Avon Products Inc., and announced
its sustainability plans. The announcement came in the same time as the Brazilian
president Jair Bolsonaro cut environmental regulations and started funding legal
deforestation. The company pretends achieving greenhouse emissions of net zero
by 2030, almost double its preservation sites in the Amazon from 4.4 million acres to
7.4 million and become fully recyclable using plastic. The efforts will impact more
than 24,000 people across 40 communities. The company will probably increase it’s
profits by billions by that, saving money not only by recycling it’s plastic but also with
the huge marketing campaign that comes with it, millennials usually tend to prefer
companies that are eco-friendly and will buy more products from the group. By
increasing its preservation sites, Natura also increases its number of producers as
the products needed don’t require deforestation, for example, a native used to get
paid $7 for cutting a tree of ucuuba, now Natura pays him $36 to keep the tree
preserved and collect its seeds that the company will be using for soaps and
moisturisers. The company CEO Robert Marques states “Our motivation is not to be
better than others or to have all the answers, but instead, to engage with a broad
range of stakeholders and, together, find solutions that allow faster and wider
positive impact for all”.
The company depends on various activities for the product to reach the hands
of the customer, using network analysis, it becomes easier to identify the critical
paths, where managers spend most of their time concentrating their efforts. The
company critical path starts in the rainforest communities harvesting resources, to
sending those to fabrics which can be located across the world, varying type and
strategy of transportation as natural products are easier to get damaged, and training
their direct-sales staff for the best experience with the customer as this will be the
image they have from the company.
The global cosmetics, fragrance and toiletries (CFT) industry is very
interesting, it is expected to garner around $489.8 billion by 2022, the Brazilian
market represents more than half of the Latin America CFT market and the world
third largest CFT market, only after the USA and Japan. Natura is the market leader
in Brazil, with a market share over 31% and Avon follows with 16%. The company’s
biggest market segment is in Latin America, where it has various customers as low-
income and middle class, the big masses which usually buy their products from
retailers or direct salesman. On the other side, literally, across Europe and the
United States, the company’s costumers are mostly upper-middle class, which
mostly rely on products from Avon.
Natura was way ahead of the game since the beginning, by 2024, the natural
and organic beauty market is expected to reach $22 billion in sales. Consumers are
not just looking for products that label “natural”, but are actually free of chemicals
that might be harmful, considering that, Natura is much ahead of the curve,
advertising itself as eco-friendly, sustainable business and even received a B Corp
Certification in 2014, meaning that the company meets standards of transparency,
performance and accountability. This not only proves that the company actually
generates positive impact but is a huge marketing appeal, consumers can choose
between shelves which products will provoke harm for them and even which brands
are actually making the world a better place. The direct sales method of the
company also is an interesting marketing strategy as it is based solely on one-to-one
relationships with the customer, and more important, it provides first-hand input for
their product development, with a large channel of direct feedback, ideas and
observations.
Using an innovative electronic biding system for finding new prospects for the
team, mostly for the direct-sales teams. To participate, volunteers are screened and
evaluated particularly on technical capacity and past performance, another way of
entering the direct-sales team is knowing someone from the “inside” and getting a
recommendation. Most candidates for this position are low-income or middle-income
people, the company tends to evaluate them based on charisma and possible
network, as the salesman needs to be as captivating as possible, in a position where
talking and convincing are the skills more practiced, knowing a lot of people might be
an advantage when trying to find new clients or even new prospects for the sales
team as its members get bonuses for bringing new prospects. For training them,
firstly the company teaches about every product and the target market they should
be aiming at, language that shall be using when addressing clients and solving
particular situations. Secondly, the sales-representatives teams have a strong
connection with each other, having recurrent meetings for discussing achievements
and next goals. And finally, the company organizes meetings every year for
discussing its new products and re-training the team with experts based on the new
tendencies.

Caio Santos Nogueira

BIBLIOGRAPHY

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