Beauty and personal care in mass market: A strategic analysis of perfumery and cosmetics at Sonae MC

Directed internship

Purpose - The present study aims to understand the reality of the beauty sector in Portugal with the purpose of developing strategies that create value to the Perfumery and Cosmetics category in Continente® hypermarkets. To support the proposed strategies a study with Continente® and Well’s® clients is developed with the intention of segmenting each subcategory of articles (Body Care, Hand and Foot Care, Face Care, Makeup, Fragrances and Sun Care) by the point of sale (Coiffeur, Catalog, Pharmacies, Parapharmacies, Perfumeries and Super and Hipermarkets), understanding the source of business of each subcategory and also the factors that customers value the most. Methodology – To understand the beauty market as a whole, the role of Continente® hypermarket in the sector and the new trends, Sonae®’s internal data was used, along with research developed by suppliers as well as national and international data published in specialized magazines and websites. To support this study, academic publications regarding market segmentation and brand loyalty were used. The conclusions achieved are based on the answers of 290 customers. Findings – We concluded that customers identify Convenience and Promotional activities as the most relevant factors when purchasing at Continente®, that Fragrances and Makeup are the subcategory that customers less acquire. Customers identify pharmacies and super and hypermarkets as the place where they most acquire Body Care, Hand and Foot Care, Face Care and Sun Care products, and perfumeries as the place where they most acquire Makeup and Fragrances. Practical Implications – As beauty and personal care is one of the most sacrificed sectors by the economical crisis it is crucial to understand the market trends and develop rational actions that allow companies to keep a strong position in the market. This study aims to explore the consumer behavior in this sector and the strategies that Continente® could follow to keep its interesting position in the market.