Research On Product Differentiation Strategy Of China's Cosmetics Enterprises

In recent years, China's cosmetics market has always been to maintain sustained, rapid growth. China has become the world's third largest cosmetics consumer market, only behind to Japan and the United States. Regrettably, foreign brands are occupying the leading position of Chinese cosmetics market, and holding a large section of market share, while native cosmetics enterprises with limited profits can only wander up and down on the relatively low end market of china. Compared with the multi-national corporations, local cosmetics companies are in an inferior position either from the capital strength to product portfolio, or from product R&D to brand impact. Homogeneous products combination, duplicate market positioning and lacking of brand building are main factors restricting the development of local cosmetics corporations.Product differentiation plays a very important role in cosmetics industry. Due to diversified and guidable consumer demands, continuous growing market scale, fast product updates and inevitable trend of market segmentation, product differentiation is one of available strategy to provide consumers with more superior effectiveness and to upgrade competitiveness of Chinese cosmetics enterprises.Observing the domestic cosmetics market, one of the common characteristics of well-know local brands is making good use of product differentiation strategy, segmenting market, creating market and publicizing the brands. Based on a review of some typical case, this paper analyses the application of product differentiation strategy in home cosmetic market and then providing some recommendation on positioning, R&D and marketing. It is of great practical significance.As to the structure of this thesis, it is separated into five parts. The first part is the introduction, giving some background information related to research, methodology and its contribution. The second part is a review on the development of product differentiation, the research of product differentiation under the framework of industrial organization and management strategy theories. The third part analyses the problems of China's cosmetics companies and the motivation of its product differentiation, which are based on the discussion in its current situation and trends. The fourth part is analysis of general ideas and suggestions on how to take advantage of product differentiation strategy to enhance the competition power of national cosmetics brands. The fifth part gives conclusions and some suggestions for further research.