I. ACTUAL ACTIVITY MAP
AmorePacific- is the leading Korean cosmetics company, established in 1945. Since that time the company presents its unique value and bring the image of “ASIAN BEATY” to global customers.
The activity plan was prepared based on the four main sustainable competitive advantages over their rivals. * Large and relevant portfolio * Value-adding innovation * Wide-distribution channel * Asian- beauty image
To start the analysis we would like to mention that all these 4 competitive advantages is interrelated among each other. It means that Asian-beauty Image is highly dependent from value-adding innovation that company do in order to sustain and develop that image, the innovation plays a big role in large and relevant portfolio, as due to innovation the researchers established new products and targeted to different kind of customers and their tastes, moreover large, strong and relevant portfolio helps distribution channel to promote and sell the high-quality products.
Asian Beauty Image:
The activities such as High-quality products, Natural and Organic ingredients, Korean footprint and advertisements with famous artists contributed to the competitive advantage of Asian beauty image and are consistent and reinforces each other. Korea is very well known through the whole world due to the natural beauty of people, healthy skin, high-quality products and famous singers and actors. To secure quality and safe natural ingredients, AmorePacific runs a botanical garden and several organic green tea gardens. Green tea is one of the main ingredients for the flagship brand AmorePacific, which again reinforces high-quality products. Famous artists support them by promoting the products through advertisements. All these activities help to build the strong competitive advantage in the way of Asian Beauty Image.
Value-Adding Innovation:
Along with interest in Korean culture, thanks to innovative products, beauty trends, quality and reasonable prices, catching the attention of customers oversees. In order to be in the latest trends and make the products innovative, the company consistently investing huge money in R&D. Product quality has since improved rapidly through technical cooperation with leading companies, dermatologist centers, research laboratories. The stability and effectiveness of cosmetic formula has developed dramatically thanks to high-quality technical researchers. The development of new products was also actively done due to the advancements in sciences such as biotechnology. Functional cosmetics were introduced, such as whitening, anti-aging products; BB creams that draw attention worldwide. In order to grow overseas, the company established research centers in 5 countries, where high-quality technical researchers carries research locally, studying the skin of local customers and establish network and collaborations with dermatology departments and universities.
Large and relevant portfolio:
AMOREPACIFIC achieved high sales growth in major growing markets due to the large and relevant portfolio. With nearly 30 brands in their portfolio, including personal care, skin care and health care brands- the company became very popular with global customers around the world. Due to the fact that high-quality technical researchers established partnership with local dermatology centers, universities, they make regular customer researchers regarding the types of skin of local people, their preferences, tastes, and trends. All these help them to establish segmented brands and prices for variety of target group of people. As we mentioned before, company has 30 brands, which covers different age of people, considering their income and the wide range of needs addressed. All the activities that the group of researches performs help the company to establish good customer relationships, furthermore it strength customer proximity.
Wide- distribution channel
In order to sell the products and be competitive among the rivals it is essential to have a good distribution channel. Actually, to find and buy the products of AMOREPACIFIC is very easy, because their distribution channel covers all areas, starting from offline and online shops. In order to sustain customer proximity, the company placed its stores both in small malls and in the prestige department stores. The door-to-door sales achieved stable growth through innovation in sales approach and systems, despite the sluggish market condition. The company ensured distribution visibility and solidity of inventories in counter customer’s perspective, launched exclusive products for door sales channel to cope with diversified customer’s needs and declining consumptions in the channel, and reinforced product lines in makeup and health functional foods. Duty-free expansion only strengthens the position of the company, which gives the image of presenting in global arena.
II. PROPOSAL FOR A NEW ACTIVITY MAP
Amorepacific have enormous strengths in their Activity map, but we also believe than some of them can play against then when it comes to present their offer abroad Korea, we are talking specifically about two mayor characteristics: Asian Beauty Image and Distribution Channel, About this two points we present as follow a proposal with a modify Activity Map considering changes in their organization when it comes to these two topics:
Beauty Image: as we present in the first part of our report, Amorepacific is very much identify with the “Asian beauty”, young, fresh, beautiful Asian models are the signature image on advertising material, however in multi ethnical countries the Asian look would be only perceive like a fashion trend instead of like a product that consumers would be loyal to. Make up brands like Cover Girl, L’oreal and Maybelline use this element as a very strong resource in order to keep a variety of consumers, this brands advertising material show models from different races and genotypes according to the specific market they target, with this the secure fidelity from customers that feels identify with the brand.
Replicate Lolita Lempika Model: another factor that should be taken on count is the enormous success that merging with local and international figures gives to a foreign brand in order to penetrate a new market niche. Amorepacific use this strategic activity in France when they merge with Lolita Lempika, a very well-known fashion designer, together they launch a line of perfumes and make up using the her image and her name, they still work together and with a long path in their way. This activity hasn’t being replicated again in other countries and we believe this should be considered again not only in Europe but also in countries in South America where team idols have much influence on consumers. Is important to notice that even thought Korean Idols are nowadays more popular around the world, a huge part of the population of the countries targeted by Amorepacific don’t know this figures, so the effect expected is not reflected as they want. For that matter is important to recommend immersion studies to find influential local figures to caught the customers attention.
