CeraVe’s International Marketing Plan

Global Marketing 9:30am

December 11, 2020

Team 9C

Emma Carr 111734429 carreh@dukes.jmu.edu

Holly Parsons 110412511 parsonhs@dukes.jmu.edu
Maria Echavarria 111844018 echavamf@dukes.jmu.edu
Sara Mundell 112374686 mundelsa@dukes.jmu.edu
Sarah Gotthold 110030830 gotthose@dukes.jmu.edu

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 Executive Summary

CeraVe is a skincare brand developed with dermatologists aimed to bring affordable

skincare backed by science to the average consumer. CeraVe was purchased by L’Oréal in 2017

and is part of their Active Cosmetics Division which focuses on adding health to beauty

(L’Oréal). This marketing plan proposes CeraVe enter the South African market with their

bestselling Moisturizing Cream. The South African skincare market is one of the largest in sub-

Saharan Africa with price sensitive consumers who are looking for convenience and products

that promote a healthy lifestyle. The ideal target market for CeraVe’s expansion are women aged

25 and older. CeraVe distinguishes itself from competitors with Multivesicular Emulsion

technology. The purpose of the marketing plan is to increase sales and profit while developing

brand awareness and customer retention. Specific goals include an increase in market share by

1% through sales by the end of year 2, increase brand awareness by 25% and have a customer

retention rate of 10% in four years.

We utilize a STP approach in order to reach our objectives and support a successful

expansion into a new market. The Moisturizing Cream will be distributed through online

retailers, supermarkets, and specialist retailers. Our expected marketing costs are around R38

million. The marketing costs include promotion techniques used to reach the target market such

as advertising, publicity and internet marketing, and direct marketing. We will apply controls to

measure the marketing plan’s performance to ensure consistency with our standards and

objectives. The expansion into the South African market offers the opportunity for CeraVe to

continue their commitment to providing affordable skincare and becoming a globally renowned

skincare brand.

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 Table of Contents

Title Page………………………………………………………………………………………….1

Executive Summary……………………………………………………………………………….2

Current Marketing Situation………………………………………………………………………4

A. Current Product/Services Situation…………………………………………………….4

B. Company Situation……………………………………...……………………………...4

C. Current Marketing Situation……………………………………………………………5

D. Consumer Situation…………………………………………………………………….6

E. Macro-environment Situation…………………………………………………………..8

SWOT Analysis…………………………………………………………………………………...9

Objectives………………………………………………………………………………………..11

Marketing Strategy…………………..…………………………………………………………...12

Action Programs……………………………………………………….……………………...…14

Projected Profit and Loss Statement……………………………………………………………..17

Controls…………………………………………………………………………………………..18

Conclusion……………………………………………………………………………………….19

Appendix…………………………………………………………………………………………20

Bibliography……………………………………………………………………………………..34

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 Current Marketing Situation

A. Current Product Situation

CeraVe’s Moisturizing Cream is a dual-purpose product that helps to hydrate and restore

the skin’s protective barrier. CeraVe utilizes gender neutral and clinical looking packaging and

offers their Moisturizing Cream in four different sizes from 1.89 fl oz. up to 19 fl oz. At an

affordable price point, CeraVe offers a hypoallergenic, fragrance and oil free cream that is

effective in hydrating and replenishing consumers' skin.

B. Company Situation

CeraVe launched in 2006 with three different products: a moisturizing cream, a

moisturizing lotion, and a hydrating cleanser (CeraVe). In 2017, CeraVe and two other

companies were bought by L'Oréal for $1.3 billion dollars (Mackenzie, 2017). In 2019, L'Oréal l

reported sales of 29.87 billion euros, making it the world’s largest cosmetic company (L'Oréal l

Finance). Now, according to CeraVe’s website, the company has expanded to over 70 different

skincare products such as sunscreen and body wash. In 2019, the sales of CeraVe products

spiked due to dermatologist recommendations according to a CNN article. CeraVe has

established their global presence by expanding their products in over 35 countries from selling

both online and in local retail stores (CeraVe). As of 2019, CeraVe has acquired nearly a 5%

market share of the U.S. body lotion industry and made $107.7 million in U.S. sales from June

2018-19 (Shahbandeh, 2020). L’Oréal Active Cosmetics division, which CeraVe is a part of,

reported a 17.1% growth rate and sales of €2.6 billion in 2019. Additionally, L'Oréal saw €688.7

million in sales in the Africa/Middle East region for 2019 (L'Oréal Finance, 2020).

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C. Current Market Situation

As a result of little disposable income, South Africans have an innate price sensitivity,

especially in the personal and beauty care sector (Jones, 2019, p. 6). There is very notable

income inequality in South Africa. From the Republic of South Africa’s Statistics Department,

“females with no education earned 54.4% of the income earned by their male counterparts, while

females with high school or tertiary educations earned 68.2% and 63.1%, respectively, of their

male counterparts’ average income” (Statistics South Africa, 2019). Households in South Africa

spend approximately 29% on non-essentials, while females have less disposable income to spend

on non-essential items due to the income equality (Jones, 2019, p. 3). The most popular South

African beauty market segments include oral and dental care, personal hygiene products, and

skin care. Additional segments can be found in Appendix A. The data shows oral and dental care

are most popular and are used regularly by 91% of South Africans, while personal hygiene

products are used regularly by 88% of South Africans and skin care is used regularly by 75% of

South Africans (Statista Research Department, 2020).

Products in the skin care industry in South Africa are distributed through supermarkets,

convenience stores, and online retail stores (“South Africa skincare market: growth: trends:

forecast”). There are multiple different mediums used in South Africa to interact with possible

consumers, with the most prevalent mediums being TV and Movie, Internet, and Radio

(Guttman, 2019). A barrier to entering the South African Market is the lack of involvement in

current trade agreements. For example, the agreement between the South African Development

Community and the European Union gives European products an advantage to enter South

Africa cheaper than U.S. products. Another barrier is corruption in the South African

government. Due to the constant changes in regulations and requirements, there is a high risk

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while conducting business (International Trade Administration, 2020). Earlier this year, the

skincare industry saw a 1.6% increase in their products due to the current global pandemic which

has pushed consumers to focus more on their health and wellbeing, skincare included (Kavilanz,

2020).

D. Consumer Situation

The average South African buyer can be described as cautious and brand loyal.

Consumers want products that combine convenience and natural ingredients while promoting a

healthy lifestyle. In the next ten years, the South African consumer landscape will experience a

large market growth within Generation X (35-49 year old). “Although [Generation] Y will still

be marginally bigger in size than X, older generations will grow faster than younger generations

resulting in different product and service needs and a keen focus on health and wellness amongst

others” (Janardhanan 2018). Even though the typical consumer is cautious, 38% actively look for

something new and enjoy trying new things (“The double-edged demand of the South African

consumer,” 2019).

South Africa is one of the largest skin care markets in Sub-Saharan Africa, expecting to

reach over $839 million in market value by 2023 (Oriaikhi-Sao, 2020). Due to increasing

awareness about skincare and the increasing desire to have a beautiful or younger appearance,

the skincare market in South Africa is expected to grow at a CAGR of 7.4% (“South Africa

skincare market - growth, trends and forecasts (2019 - 2024),” 2019). South Africans prefer

products with natural and organic ingredients. Due to the diverse skin types in South Africa, each

type has different needs, but some of the most common skin care concerns are dry skin, signs of

aging, sun damage, sensitive skin, loss of firmness, etc. (Oriaikhi-Sao, 2020).

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 Our primary target market in South Africa consists of women over the age of 25. We aim

to support women who strive to maintain and protect the health of their skin. As women get

older, they tend to care more about their image and desire a certain appearance. In 2020, 49.3%

of personal care users were between 25-35 years old and 63.8% were female (“Personal care -

South Africa: Statista market forecast”). Over 60% of female consumers in South Africa are the

primary purchaser in their households. The stages of a woman’s life significantly alter shopping

behavior, especially for those who have children. Research has found that women who do not

have kids tend to prioritize personal desires while first time moms tend to prioritize family needs

(“Women Wield The Bulk Of South African Spending Power,” 2019). Our aim is to satisfy the

growing desire of women in this region who are beginning to seek out skincare products and

develop a greater understanding of their skin (Oriaikhi-Sao). Like the majority of women, those

in South Africa are facing society’s demand to attain certain standards of beauty including the

desire for “perfect skin.”

Women between the ages of 25 to 34 accounted for the highest number of social media

users in South Africa at over 17% (South Africa: Social media user age & gender distribution

2020, 2020). Women between the ages of 25 and 34 make up 16.8% of Facebook users and

18.4% of Instagram users in South Africa (“Facebook users in South Africa - March 2019,”

2019; “Instagram users in South Africa - October 2020,” 2020). While we hope to capture those

women who interact on social media whose browsing often leads to content interaction and a

direct link to a potential purchase, we will focus on taking advantage of the popularity of

traditional shoppers that remains dominant in South Africa today (Female Consumers in Sub-

Saharan Africa: Buying Habits, Lifestyle Trends, 2018; “Why online shopping is popular with

SA women,” 2019).

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 According to Nielsen data, 80% of women purchase from supermarkets, shop in stores at

least once a week, and bulk shop once a month. The data also reported 61% of women who bulk

shop include skincare such as body lotion, moisturizers, and body wash in their monthly

purchase (“Women Wield The Bulk Of South African Spending Power,” 2019). While online

shopping has significantly increased in South Africa, traditional shopping habits still dominate

(“Why online shopping is popular with SA women,” 2019).

E. Macro-environment Situation

Sociological: Hofstede Insights reported that the white population in South Africa

exhibits a culture of indulgence. An indulgent culture places a higher level of importance on

leisure and spending money as they desire. According to a Passport survey, shown in Appendix

B, asking South African consumers their values on finances and shopping, 73% of the

respondents like to try new products and services. This is a promising percentage for CeraVe and

its launch into the South African skincare market.

Technical: In 2012, the South African Government implemented a National Infrastructure

Plan which was aimed towards developing their “economic landscape” and creating jobs

(Government of South Africa). The government will invest in improving the construction of

ports, roads and railway systems all of which will be beneficial for importing CeraVe products

into the South African market.

Economic: As a result of COVID-19, South Africa’s economy is experiencing a sharp

recession. In 2020 real GDP is expected to decline by 7.5%. In 2019 the unemployment rate was

28.7% but will rise to 31.2% in 2020. Additionally, consumer spending is expected to fall 7.5%

in 2020, having a large impact on discretionary items (Eghbal, 2020).

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 Political: South Africa became a democratic state in 1994 but has been slow in

progressing towards an equal society. The disparity of wealth in South Africa is a major

problem. According to the World Bank, 71% of the wealth in the country is held by the top 10%

while 60% of the population only accounts for 7% of net wealth (“South Africa Overview”,

2018). The current president, Cyril Ramaphosa, inherited a split party, struggling economy, and a

country rooted with corruption from former president Jacob Zuma who resigned due to

corruption charges in 2018 (“South Africa Country Profile”, 2019).

SWOT Analysis

CeraVe Moisturizing Cream:

Opportunity/Threats Analysis

CeraVe has the advantage of being under the parent company L'Oréal, which is a

multinational corporation that owns over 30 different brands (L'Oréal). South Africa has a

population of about 59.5 million people, which allows for many potential consumers (“South

Africa Population”). The main threat we face in South Africa is that approximately 49.5% of

adults live below the upper poverty line (“Five facts about poverty in South Africa”).

Strengths/Weaknesses Analysis

Due to being oil and fragrance free, the CeraVe Moisturizing Cream, is suitable for those

with sensitive or dry skin. While the product is good for sensitive skin, it also lists many artificial

ingredients that could turn customers away from the product (CeraVe).

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Identification of Distinctive Competency

The main distinction of CeraVe is that they utilize Multivesicular Emulsion technology,

which slowly releases moisturizers and therapeutic skin products over a 24-hour period

(L'Oréal).

Key Issues Regarding Comparison of External Factors to Internal Factors.

CeraVe, under L’Oréal, has access to a lot of money for advertising and research.

Although they have the ability to market throughout the country, nearly half of the population is

in poverty thus they may not consider the product.

Unilever:

Opportunity/Threats Analysis

Consumers are looking for more environmentally friendly products, Unilever has the

ability to find and sell products that fulfill that need. A threat to Unilever is huge competitors like

Johnson & Johnson and Procter & Gamble (David, 2020).

Strengths/Weaknesses Analysis

Unilever has a factory in South Africa which means they are familiar with the

governmental restrictions (“Our History”). One article states that “Unilever’s turnover in 2019

was €52 billion. Out of it, €21.9 billion was generated by beauty and personal care products.”

Although it is one of the oldest multinational companies, a weakness of Unilever is their

products can be easily replaced by substitutes and they rely on retailers to sell their products

(David, 2020).

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Identification of Distinctive Competency

Unilever has the distinctive competency of having a diverse range of brands that target

various price points (Kissinger, 2017).

Key Issues Regarding Comparison of External Factors to Internal Factors.

As one of the oldest multinational companies, Unilever is well-established within South

Africa, giving them prior knowledge on the culture. However, there are many competitors that

make similar products as Unilever.

Additional competitive analysis can be found in Appendix C.

Objectives

The broad goal of CeraVe is to make profit in South Africa by meeting and hopefully

surpassing the objectives created. An optimistic sales projection for the 2021 year is

approximately R113,15 million, which would achieve a 1% market share. More realistically,

sales projections for the next year would be R56,57 million or 0.5% of market share. These sales

projections were found by multiplying the R11.314,59 million in professional skin care sales in

South Africa in 2021 by the percentage of market share we plan to attain (Appendix D).

Financial Objectives

● Increase market share by 1% through sales by the end of year 2 (“How to calculate

market share”).

● Have a $10 million increase in profit by year 5.

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Marketing Objectives

● Increase brand awareness by 25% through social media and website impressions in the

next 3 years.

● Have a customer retention rate of 10% in 4 years.

● Have at least 2 CeraVe representatives in the L’Oréal South Africa office by the end of

2021.

Marketing Strategy

Segmenting, Targeting, and Positioning Strategy (STP Approach)

We will utilize a STP approach: segmenting, targeting, and positioning strategies applied

together in order to reach the target audience. By using all these strategies together, we plan to

find the right target audience for CeraVe’s Moisturizing Cream.

Segmenting: The segmentation strategy will help to identify South African consumers

likes/dislikes, personality, values, and needs. There are four subsets: demographic,

psychographic, behavior, and geographic. Parts of the demographics are age, gender, income,

social status, and family size. Psychographic includes lifestyle, concerns, personality, and values.

The subsets of segmenting through behavior are benefits sought, purchase, usage, intent, buyer

stage, and life cycle stage. The city, country, language, area, and population are part of the

demographic subset. An example buyer persona is in Appendix E.

Targeting: Through evaluating size, accessibility and buyer potential we can determine

the attractiveness of each segment. The target market for CeraVe is women over the age of 25.

The campaign will target females who want healthy looking skin at a low cost.

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 Positioning: The South African beauty market offers a wide range of cosmetics. In order

to differentiate CeraVe from competitors, a positioning strategy allows for the company to

generate a specific image in the consumer's mind. The positioning strategy includes product,

place, promotion, and price. Using all these approaches together will help increase brand loyalty,

reach our target market, and increase our presence in South Africa.

Distribution Strategy

An indirect distribution strategy will be used to make the product available for South

African customers. The product will be distributed through supermarkets, specialist retail stores,

and highly used online retail stores like Rabaki (“South Africa skincare market: growth: trends:

forecast”). By distributing the product through several channels, the company will increase

market share and meet sales objectives.

Promotion Strategies

Advertising Strategy: An advertising strategy will help persuade the target audience to

buy the product. This requires having outside the box ideas for advertising (Schildge, 2018). The

advertising strategy will help reach the desired audience and increase brand awareness.

Publicity and Internet Marketing Strategy: Publicity is a free way to increase brand

awareness. As of 2020, 56.3% of South Africans are internet users with a projection of 62.3% in

2025 (“Internet user penetration in South Africa from 2015 to 2025”, 2020). People aged 25-34

are the majority of users on social media sites, with English being used by over 90% of users.

Currently, the most used applications include WhatsApp, YouTube and Facebook. Facebook is

an ideal way to reach the female market as they represent 51.3% of the advertisement audience.

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Women are also the majority on Instagram and Twitter (Lama, 2020). By targeting social media

users, we can increase sales, market share and brand awareness of our company.

Direct Marketing Strategy: According to The Balance Small Business article “a key

factor in the success of any direct marketing campaign is what industry experts refer to as a ‘call

to action.’ A successful direct marketing campaign usually offers consumers a benefit” (Wolfe,

2019). Mediums to directly get in touch with consumers and generate a call to action are direct

mail and coupon ads. These direct marketing strategies will aid in increasing brand awareness.

Service/Customer Service, Price Strategies, Product Strategies and Action Plans

These strategies are in Appendix F. We have chosen to apply the same strategies CeraVe

are currently using in order to reduce costs.

Action Programs

Segmenting, Targeting, and Positioning Strategy (STP Approach)

The CeraVe marketing team will conduct research on the various market segments and

then decide the target market. As we introduce CeraVe into the South African market, our target

audience is women over the age of 25. Through segmentation, we can determine what women

over the age of 25 value, how they live, how they think, etc. The marketing team will also be

responsible for creating a positioning strategy to reach our target market.

The first step of the positioning strategy is to find a location for CeraVe to expand their

business in, which in this case is South Africa. Once the marketing department has determined a

place, research will be conducted to conclude the best CeraVe product to introduce the company

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in the new location. After analyzing the introduction of CeraVe Moisturizing Cream into various

international markets, we expect that this product will succeed in the South African Market.

Next, a pricing strategy will be implemented that reflects the quality of the product, what our

target market can afford, and the costs of making the product. Lastly, promotion strategies that

are appropriately directed towards the target market will be investigated. Some strategies

include, advertisements in the form of commercials and billboards, directing marketing and

publicity, and internet marketing via social media.

CeraVe’s marketing department will be responsible for managing the STP approach. The

cost of this strategy is normal employee compensations and the time to conduct the research. The

department will begin the STP research twelve months before entering the market, with daily

analysis of purchasing patterns and sales. Using segmentation, targeting, and positioning

strategies simultaneously will help to provide a unified idea of how to market CeraVe’s

Moisturizing Cream.

Distribution Strategy

We will be distributing CeraVe’s Moisturizing Cream through multiple retail stores,

pharmacies, supermarkets, and online stores. The retailer we will be using to sell CeraVe in

South Africa is Metro Cosmetic, a location specialized in skincare (Maleé, 2020). This retail

store sells local and international skincare products, targeting “beauty enthusiasts,” making it an

adequate place to distribute CeraVe. We will also be distributing CeraVe’s product through

Massmart, a large retailer in South Africa that was bought by Walmart in 2013. We will also

distribute through Pick n Pay (Farfan, 2019). Additionally, the Moisturizing Cream will be

distributed through Rabaki, which is an online store similar to Amazon. The usage of online

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stores in South Africa has continuously grown, predicted to reach an 8.2% growth by 2024

(“South Africa skincare market: growth: trends: forecast”). The company can build an online

presence for the skincare market through Rabaki, the main online store in South Africa. A

logistics team will oversee getting the product to South African retailers. We will allot R305.000

for distribution costs.

Promotion Strategies

Advertising Strategy: There are many different ways to advertise in South Africa. The

advertisements that will be used are billboards, street poles, and bus shelters. Billboards have the

option to rotate in order to reach a larger audience. Another benefit of billboards is that they

cannot be turned off (Outdoor Advertising in South Africa). Once the advertisement location is

decided, the marketing department will create the advertisements. The ads will be displayed prior

to the launch of CeraVe in order to generate interest and buzz. The cost to this will be R20.000 to

R70.000 monthly for billboards with a reproduction one-time cost of R15.000. Street pole

posters will cost R15.000-R20.000 while bus shelters will cost R2.289,48-R45.789,56 (Admin,

2014; Cost of Transit Advertising). The advertisements will be posted all over South Africa to

reach our target market. Today television is the largest advertising medium in South Africa, in

which around 14.4 million households own a television (Nevill, 2020). Television

advertisements are most affordable to run January to April, which would be ideal for CeraVe to

begin getting their name out in the country (Fourie, 2019). The costliest television

advertisements range from R95.000 to R230.000, although they are expensive they generate

awareness (Marklives, 2014). The daily task of the marketing department is to continue to create

advertisements that capture the attention of our target market. Examples of the advertisements

are in Appendix G.

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 Publicity and Internet Marketing Strategy: After entering the South African market

CeraVe can create geographically targeted advertisements that promote nearby stores who sell

our product. Although CeraVe cannot control publicity, we can share positive testimonies on our

social media sites for relatively no price. In a few short years internet advertising will become

the most popular medium in South Africa (Nevill, 2020). Facebook advertisements can be

utilized very simply and for a low price of R50 for around 1,000 impressions (Dezign - It, 2020).

Instagram is owned by Facebook, making the advertising process similar. Generally, the prices

for Instagram advertisements are more but in return they have higher engagement. By using a

click per mile, the cost is averaged as $5 or around R77 for 1,000 impressions (“How much does

it cost to advertise on Instagram?”). Throughout the first year of advertising on Facebook and

Instagram, we plan on running 10,000 ads on each platform, allowing for approximately 20

million impressions. Example Instagram advertisements can be seen in Appendix H.

Direct Marketing Strategy: We will utilize coupon ads to encourage sampling, as 35% of

those who receive a sample tend to purchase the product (Eventeem, 2017). The South African

Postal Service offers businesses the opportunity to send out mail in mass, although there is

approval from the Regional Sales Office, each piece could be sent for as little as R4,15 (Post

Office South Africa, 2020, p.14). The postcard sent to our target market can be seen in Appendix

I, including a coupon to encourage a trial of our product.

Projected Profit and Loss Statement

By assuming that CeraVe will gain 0.5% market share the first year we were able to

project sales for 2021 as R56.572.950. The marketing budget allocates costs for advertisements

the first year, marketing employees’ salaries, and partnering with retailers in South Africa. The

17
budget allots R32.500 to one off costs and R40.541.848 to other expenses. It is projected that

there will be a profit of R158.176 the first year after the 28% tax that corporations pay in South

Africa (Corporate tax in South Africa). The detailed statement is in Appendix J. If CeraVe enters

South Africa they will be able to use their connection with their parent company to benefit them

due to L'Oréal already selling in this region. L'Oréal has made approximately R12.429,88 million

in the South Africa and Middle East market in 2020. The addition of CeraVe’s sales in South

Africa will only boost L'Oréal’s sales by .001%, however over time the South African market

should achieve greater profitability.

Controls

In order to monitor a successful introduction of CeraVe’s Moisturizing Cream into the

South African Market, we will have a goal to obtain an average customer review of four out of

five stars. By utilizing surveys on receipts and email confirmations, customer reviews can be

measured. We will incentivize consumers to give reviews by offering them a discount on their

next purchase. The customer service department will be responsible for monitoring the surveys

each month to analyze the average rating. They will also be responsible for actively responding

to low ratings as a way of addressing customer issues. Additionally, we will strive to increase

product sales by two percent each quarter by evaluating the quarterly sales report. If we do not

meet this standard, we will inspect the data to find which distribution channel is not reaching

performance goals and reassess promotional techniques to apply corrective action. Lastly, we

hope to increase content interaction, the number of total followers and accounts reached by 0.5%

every week by monitoring our social media account platforms/analytics weekly. If necessary, we

will increase the number of both paid and unpaid posts along with interactive content in hopes to

reach this standard.

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 Conclusion

Through analyzing the current market situation, advertising techniques and the profit/loss

statement, we recommend CeraVe enter the South African market. When entering this market,

we advise CeraVe to keep in mind the wealth and racial disparities throughout the country.

Marketing and price strategies must reflect the current situation in order to effectively reach the

objectives created. By providing a variety of sizes, CeraVe can combat the skewed income

distribution and allow South African consumers to afford and benefit from our product.

CeraVe has great potential to succeed in the South African market. It is important to note

that introducing one product produces minimal profit, however, if they were to introduce a

product line, they could experience larger profits. Along with diversifying our target markets and

increasing our market share by offering a range of products, we could focus on capturing those

overlooked in the skincare industry. For example, male consumers show a high potential as

men’s grooming is one of the fastest growing sectors in the beauty and personal care industry

(Abdoolla, 2019).

Through the creation of this marketing plan, we faced some difficulty in finding

important information and statistics about CeraVe. In the future we would stray away from

choosing a company that is owned by a parent company, as individual financial reports are not

accessible. By applying our knowledge from class, we feel the creation of this successful

international marketing plan broadened our awareness of the vast amounts of diverse markets.

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 Appendix

Appendix A

Statista, 2020

Appendix B

Passport, 2019

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Appendix C

Procter & Gamble:

Opportunity/Threats Analysis

The leading opportunity for Procter & Gamble is product innovation, which helps to
differentiate their products from competitors. Additional opportunities are rural and emerging
economies, both offering substantial growth for sales. The threat of competitors leads to higher
R&D costs, along with higher prices in raw materials and labor costs (Pratap, 2019).

Strengths/Weaknesses Analysis

Procter & Gamble has been selling in the “Hair Care, Skin & Personal Care, and Oral
Care” markets for over 180 years (“P&G History”). They maintain accessibility by having their
products available through “...mass merchandisers, e-commerce, grocery stores, membership
club stores, drug stores, department stores, distributors, wholesalers, baby stores, specialty
beauty stores, high-frequency stores and pharmacies” (Pratap, 2019). A weakness is they are
dependent on Walmart to distribute their products, this channel contributed to 15% of total sales
in 2018 (Pratap, 2019).

Identification of Distinctive Competency

Procter & Gamble has the distinctive competency of focusing on consumer needs more
than many other companies in the industry. They spend, at minimum, $400 million a year in
customer research to innovate their products (Brown, 2017).

Key Issues Regarding Comparison of External Factors to Internal Factors.

Procter & Gamble sells a variation of products to over 180 countries, enabling them to
increase innovation to differentiate their products from competitors due to the high number of
substitutes. They are able to grow into different countries’ markets but face the threat of higher
costs and pressure.

Johnson & Johnson:

Opportunity/Threats Analysis

Johnson & Johnson has the opportunity to focus on targeting more towards the lower
class, achieving this would improve revenue and sales. A threat is their poor health record, which
could have a substantial impact on global sales. Additionally, Johnson & Johnson face stiff
competition within the industry (Johnson & Johnson).

Strengths/Weaknesses Analysis

Johnson & Johnson operates 265 companies in more than 60 countries, establishing them
as the world's largest healthcare company. They have “a strong community engagement” and are
known to be highly experienced and influential across the world (“Johnson & Johnson SWOT

21
Analysis”, 2020). A weakness is they have around $15 billion in lawsuits which hurts their
reputation and trust (Johnson & Johnson). Due to many generic products being available,
Johnson & Johnson’s sales may suffer.

Identification of Distinctive Competency

Johnson & Johnson spends over $2 billion a year on advertising, resulting in a strong
brand recognition which allows them to foster relationships with consumers (Williams, 2015).

Key Issues Regarding Comparison of External Factors to Internal Factors.

Even though Johnson & Johnson is a well-established company, their reputation needs
improvement. Their products are replaceable because more reputable companies in their industry
have similar products for a better price.

Avon:

Opportunity/Threats Analysis

An opportunity for Avon is the use of online portals to expand their reach to potential
customers in a cost-effective manner (Bhasin, 2019). However, Avon has strong competition in
the same industry which is a big threat (Team, 2020). The customs and laws in a growing
economy could be another threat because if they do not know what the customs are, they may
offend people in that area (Desai, 2017).

Strengths/Weaknesses Analysis

The main strength for Avon is personal selling, allowing them to make their products
appealing to different cultures and people. “Avon is one of the leading global beauty
compan[ies] which helps in attracting new customers” (Desai, 2017). Another strength is their
revenue keeps continuing to grow (Team, 2020). A weakness is their low market share in
comparison to their competitors and weak advertising skills with limited distribution channels
(Desai, 2017; Team, 2020)

Identification of Distinctive Competency

Avon’s distinctive competency is their business model. Not only do they have a fully
functional website to order from, but they also have representatives that go out and directly sell
products (“Why Sell Avon”).

Key Issues Regarding Comparison of External Factors to Internal Factors.

Due to having a low market share and weak marketing skills, Avon may have trouble
differentiating their product for various markets. In addition, since the beauty care market is
composed of many well-established companies, Avon may struggle to gain a larger market share.

22
Appendix D

Ridder, 2020a

Ridder, 2020b

23
Appendix E

Appendix F

Service/Customer Service Strategy

We will provide employees with excellent product knowledge to ensure that customers
will be told correct information. Through the established Customer Care Center as well as the
Knowledgeable Physicians Contact information found on the CeraVe website, customers will be
able to have their questions answered with confidence. The hours of the Customer Care Center
will remain from 9:00AM - 5:00PM EST Monday through Friday and the Physicians line will be
available from 8:00AM - 5:00PM EST. While we are aware that the time zone is different,
CeraVe offers hotlines in surrounding countries such as Morocco, that we will advise our
customers to utilize to have their questions answered efficiently. In addition, customers can have
their questions answered through the ‘Contact Us' section of the website or visit the FAQ page
for answers to frequently asked questions. By committing to provide excellent customer service
we hope to reach a customer retention rate of 10% in 4 years.

24
Price Strategy

When entering the South African market, CeraVe will utilize penetration pricing. This
will allow us to capture market share quickly. Since South Africa has a large wealth disparity,
most consumers are price sensitive. We want to ensure CeraVe is an attainable brand for the
average consumer to purchase. Through implementing a penetration pricing strategy and offering
a variety of sizes for the Moisturizing Cream, we are able to reach diverse levels of income
within our target market. The smallest size offered is 1.89 fl oz which will cost our South
African consumer approximately R77,57 while the 19 fl oz cream can be purchased for roughly
R295,19. The average consumer in our target market makes R138.168 yearly (Living Conditions
of Households in South Africa, 2014, p.13). The 1.89 fl oz Moisturizing Cream accounts for
nearly 0.005% of their yearly income and the bulk size (19 fl oz) is approximately 0.02% of their
annual salary. According to a survey, “out of the thousands of women who took part in the
survey, 47% said they dock up between R100-R500 a month on products” (“How much do you
spend on beauty?”, 2013). This is a promising statistic as it means CeraVe is well within the
price range of our target market. The marketing and operations team will be responsible for
keeping the price of CeraVe products competitive and in line with a penetration pricing strategy.

Product Strategy

In five years, CeraVe will be among the top-selling moisturizers in South Africa,
providing an affordable way to experience healthy skin. In order to reach our vision, we need to
gain at least 1% of the market share by the end of 2022. In order to reach our goal, initially we
need to increase brand awareness and loyalty by 25% in the next 3 years. After observing the
integration of L'Oréal products in different international markets, we predict to reach a desirable
amount of sales, as we have seen the African and Middle Eastern markets reaching over $12
billion in sales in 2020 (“L'Oréal: News release: ‘First Quarter 2020 Sales’”, 2020). We will
introduce the CeraVe Moisturizing Cream in a variety of sizes to reach the different
demographics. The sizes available include 1.89 fl oz, 12 fl oz, 16 fl oz, 19 fl oz. This product is
specifically targeted to women over the age of 25 who are seeking beautiful, younger looking,
and healthier skin. If the introduction of the Moisturizing Cream is successful, we hope to offer
more CeraVe products in the future to attain a larger profit. This gentle on the skin moisturizing
cream is designed for all day hydration utilizing hydraulic acid. The packing will remain
unchanged with instructions written in English. The marketing department and research and
development team will be responsible for implementing the product strategy at no additional cost
due to the fact we are not changing the physical product.

Appendix G

25
26
27
28
Appendix H

29
30
31
Appendix I

32
Appendix J

33
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