market share with both Asia and Europe leading with 33% and 31% of the market, respectively. Considering trends in consumer tastes, the U.S. market share, and industry growth, Angie believes she can enter the cosmetic industry with her lip gloss idea.
Now, she must decide who her target market will be. Upon which female segment should she focus? Census Bureau research reveals that in 2002 teens, tweens, and young adults represented 27% of the U.S. population, or a potential market of 77.8 million (including both males and females). Teen Market Profile 2004 expects the market of 12 to 19 year-olds to reach 33.5 million by 2010. The U.S. Census projects the female teen, tween, and young adult segments aged 8 to 24 will reach over 34 million by 2010, a 0.7% increase since 2006. Angie also discovered that a significant portion of parents’ discretionary income is spent on their children, and is expected to increase to $175.6 billion in 2008.
Since the average teen has a significant influence over household discretionary income and has personal discretionary income, the female teen has become a significant force in the cosmetics industry. Angie set her sights on the female tween, teen, and young adult segments, deciding to soft position YOYO Lip Gloss. She desires to target the teen population directly while also attracting the younger tween segments that tend to purchase products intended for older use and products purchased by their siblings. Later, she reasoned, YOYO Lip Gloss will expand into the young adult market segment using a more sophisticated version of the product – perhaps one featuring a Swarovski Crystaled reel.
MAPPING THE COMPETITIVE LANDSCAPE While there are approximately 115 significant marketers of cosmeceuticals in U.S. mass retail, there are about 500 active marketers in this segment. As a result, the cosmeceuticals industry is highly fragmented. Angie thought to herself, “I see the open door.”
Digging deeper, she found that a few players, including L’Oreal, Revlon, Proctor & Gamble, and Bonnie Bell, dominate the lip make up segment of the industry, controlling over 79% of the U.S. market. Moreover, there are only 19 active marketers that capture a significant amount of retail sales; all other marketers account for only 1.1% of sales within the lip market segment.