Market fragmentation.

The picture is taken from here.

Both Dove and Axe brands are personal care brands. In its turn, personal care market includes in itself skin care, hair care, male care segments together with fragrances segment and some others. It is quite intuitive to assume that personal care market is somewhat fragmented. Indeed, there are top fifty firms (among overall number of eight hundred firms) that hold an overall personal care market share of 85% according to Hoovers, a business research company. Moreover, the key players on the personal care market are USA, UK, EU, Brazil and Russia. The market is expected to grow even further. According to MarketLine, “The global bath and shower product market is expected to exceed $12.85 billion in 2015, representing a near 19% increase in five years. The EU holds a 54% share in the global market, and Unilever is the leading company with more than 17% of overall market value.”, and to TechNavio, “The world skincare market to exceed $90 billion by 2014, fuelled by consumer affluence and demand for organic and natural products.”.

One should not be an expert to name some big global companies that manufacture personal care products. For example, Henkel, Johnson&Johnson, L’Oreal, Procter&Gamble and, of course, Unilever. All these firms have their own brand portfolio, that includes a number of brands, both from personal care market and probably some others (like home care and food&beverages). Let’s consider an example of Unilever more deeply, since it’s a parent company of our brands in consideration. Apart from Dove and Axe, one can find in Unilever’s portfolio the following personal care brands: Lux, Vaseline, Lifebuoy, Rexona, Pond’s, Simple, Signal, Closeup, Sunsilk, Clear, Brylcream, Radox, Timotei, St Ives, Tony&Guy, Tresemmé, Vos and Fissan. Quite a big diversity of brands already, and it is only in Unilever. Other companies, both big global and small local ones have another sound number of overall brands too.

Reading Annual Report and Accounts 2012 by Unilever, on page 37 one can read the following “Unilever operates globally in competitive markets, where other local, regional and global companies are targeting the same consumer base. Our retail consumers frequently compete with us through private label offerings.”, and on page 28 it is written that “Amongst our categories, Home Care and Personal Care grew ahead of the markets, up to 10,3% and 10,10% respectively; resulting in solid market share gains. … In Personal Care, our hair care business garnered market shares around the world, and skin care as well as deodorants reflected the success of innovations”. From these statements one can conclude, that on a big market of personal care brands firms fight for their consumers, in another words, companies “share the pie”, and Unilever does it better, since it has acquired some additional market share in 2012, but not “make the pie bigger”, where “pie” is consumers. So, according to the data that the market of personal care will expand, one can conclude, that all firms should win.

All in all, one can say, and it is supported by companies’ reports, that a personal care market is very big nowadays, yet expanding. It is also very fragmented too, giving a wide choice of differentiated products to satisfy each and every consumer’s needs.

Picture Sources:
http://vegansofig.tumblr.com/post/23219728752/animal-testing-is-still-very-common-its

Text Sources:
http://www.reportlinker.com/ci02134/Personal-Care.html
http://www.unilever.com/brands-in-action/view-brands.aspx
http://www.unilever.com/images/ir_Unilever_AR12_tcm13-348376.pdf

AG