Huda Beauty Analysis Assignment Sample

• Subject Name : marketing management business economics organisation behaviour

Marketing Management

Executive Summary of Huda Beauty

A marketing strategy is a comprehensive plan designed especially to realise the marketing objectives of the organization. It helps organizations to allocate their scarce resources on the best opportunities to deliver value to the target customer base. This paper analysed the marketing strategy of Huda Beauty and in order to do so, the paper includes current situational analysis of the brand, and its current marketing strategies, along with its future missions. The paper concluded with a set of recommendations for the brand based on the marketing strategy analysis.

Huda Beauty is one of the best makeup brands in the UAE and is owned by a Dubai based makeup artist, Huda Kattan. The brand mainly deals in beauty products and has over 140 products in-store or online. The product portfolio includes a wide range of beauty products such as face palettes, lipstick collections, and highlighters. In terms of market analysis, the current political environment is favourable for Huda beauty with its liberal western ideals and progressive eastern influences.

Moreover, the population of rich and beauty conscious people is also increasing which is further supported by technological developments. Huda Beauty's marketing strategy mainly revolves around digital mediums and the company's pricing strategy is based on premium pricing, geography served, product demand, and competition. Moreover, the key competitors of Huda Beauty include Hammamii, Reine Michi Beauty, Herbal Essentials, and The Camel Soap Factory. These competitors also offer similar products in the UAE market; however, Huda Beauty differentiates its products by providing superior quality. The intended target audience for Huda Beauty's cosmetic line is primarily females between 25 and 35 years of age. Such females have high household income and are willing to pay a premium for better quality products. In addition to this, the market segment also cares about the ingredients of the beauty products and tends to prefer natural products over chemical ones.

Contents

Executive summary.

Introduction.

Current Situation Analysis.

PESTLE Analysis.

Political factors.

Economic factors.

Social factors.

Technological factors.

Legal factors.

Environmental factors.

Competitor Analysis.

Hammamii

Reine Michi Beauty.

Herbal Essentials.

The Camel Soap Factory.

SWOT Analysis.

Market Research.

Current Marketing Strategies.

Marketing Mix.

Price.

Product

Promotion.

Place.

Customer Demographic/Target Segments.

Differentiation Strategies/USP.

Future Plans.

Conclusion.

Recommendations.

References.

Introduction to Huda Beauty

For all businesses, whether a multinational giant or a modest start-up, an effective marketing strategy can act as the vital road map for the entire business. By formulating and establishing a well-considered and coherent marketing strategy, businesses can court the right type of clients, ensure the effective allocation of resources, and promote themselves (Chaffey, 2019). Simply put, a marketing strategy is a comprehensive plan designed especially to realise the marketing objectives of the organization. It helps organizations to allocate their scarce resources on the best opportunities to deliver value to the target customer base (Ismail,2018). This paper analyzes the marketing strategy of Huda Beauty and in order to do so, the paper includes current situational analysis of the brand, and its current marketing strategies, along with its future missions. The paper concludes with a set of recommendations for the brand based on the marketing strategy analysis.

Huda Beauty is one of the best makeup brands in the UAE and is owned by a Dubai based makeup artist, Huda Kattan. The brand launched in 2013 after its founder became a successful beauty influencer on various social media platforms like YouTube and Instagram. The brand mainly deals in beauty products and has over 140 products in-store or online (Phung & Qin, 2018). The product portfolio of the brand incorporates a wide range of beauty products such as face palettes, lipstick collections, and highlighters. Considering that the global cosmetics market is expected to reach $700B by 2020, it is not surprising that the industry is becoming more and more competitive (Leung, Wu, Ip & Ho, 2019). Therefore, it is becoming more and more important for brands like Huda Beauty to implement a strong marketing strategy in order to deliver value and capture market share.

Current Situation Analysis

This section describes the internal and external environment of Huda Beauty in order to identify the customers, business environment, potential customers, capabilities, and the competitive environment of the industry. This helps to assess the current business environment which is crucial for a successful future strategy (Bolat & Gilani, 2018).

PESTLE Analysis

PESTLE analysis is used to analyse the external business environment of an organization, which mainly includes political, economic, social, technological, legal, and environmental factors.

Political factors

The political environment of the UAE is quite stable; however, the country is still at the centre of a diplomatic row between Qatar and the Arab States. It is also a major political force in the Middle East and has sound diplomatic and trading relations with Saudi Arabia, China, the United States, and India. In accordance with its growth strategy, the county provides free trade zones with zero taxes and 100% foreign ownership (TechSci Research, 2020). Furthermore, the introduction of liberal western ideals and progressive eastern influences has resulted in the political environment which is leaned towards modernisation (Euromonitor, 2019).

Economic factors

UAE's ambitious growth strategy can be perceived in the diversity of GDP structure, yet its financial relationship with Iran is forcing it to make difficult financial decisions. Despite the instability in the Middle East, UAE is relatively stable and is considered as a safe haven for foreign investment (Sadaqat, 2018). UAE is also a member of numerous economic forums such as the Arab League, World Bank, OPEC, and GNC which further improves its economic position. With a GDP of $414.18billion, it is one of the richest countries in respect of per capita income. In addition to this, companies in the UAE do not usually pay any taxes on wealth and income (Euromonitor, 2019)

Social factors

In terms of social factors, the beauty industry is witnessing a premiumisation trend, as consumers are increasingly looking for products with clearly defined benefits and products which tackle specific problems. Moreover, brand loyalty is becoming one of the major social factors for the beauty industry which, although present threat for market acquisition and expansion, provides a stable consumer base. UAE's population is estimated to be 8.3 million which largely has a good education and sound income. Around 34% of the total population is between 25 and35 and is reported to be using social media for four or more hours every day (TechSci Research, 2020). However, this is the problem of the wealth gap in the UAE, along with other social challenges like drug abuse and obesity.

Technological factors

UAE is very keen on using social media and approximately 82% of its population has Facebook accounts, while YouTube penetration is also around 80%. Moreover, in respect of the beauty industry, personalisation and AI, along with virtual 'try on' apps are becoming a fad in UAE (Sadaqat, 2018). The dependence on digital devices for online interaction with customers is also becoming popular among brands to deliver better value and customer experience. Such technological developments are opening up new areas of opportunities for closeness between beauty consumers and brads (TechSci Research, 2020).

Legal factors

The Emirates Standardisation and Meteorological Authority (ESMA) is the authority established in UAE to supervise and regulate the personal care industry. In order to distribute personal care products, brands have to ensure that products shall be free from prohibited substances which also includes substances prohibited by Islam such as pork (Nolasia, 2019). In addition to this, personal care brands need to comply with the UAE regulation for the control of cosmetics and personal care products, and the UAE regulation for the supervision of fragrances (Nolasia, 2019). Moreover, product containers should not have sharp edges and should comply with Standard UAE S. GSO ISO 22175 related to packaging. UAE also has labelling requirements stipulated by Emirati Standard No. UAE.S GSO 1943 (TechSci Research, 2020). Registered products are also subjected to market surveillance and periodic review by ESMA.

Environmental factors

Environmental issues are becoming quite significant in the personal care industry mainly because of its dependence on chemicals and plastic. In addition to this, the carbon emission associated with manufacturing and shipment of beauty products, along with the degradation of natural habitats is resulting in a public outcry against personal care industry (Sadaqat, 2018). Cosmetics also contain a wide range of chemicals that are damaging to human health and the environment which is driving the trend towards natural products in personal care (TechSci Research, 2020).

Competitor Analysis

Competitor analysis is used for the identification of key competitors and their products. This helps to improve the marketing strategies of business competitors in order to gain a competitive advantage.

The key competitors of Huda Beauty include the following:

Hammamii

Hammamii is UAE based personal care brand that mainly provides beauty products made from natural ingredients. The company aims to create hammam (Turkish bath) inspired skincare treatments and products by using ingredients that are sourced locally from the Emirates. Hammamii uses a digital marketing strategy that heavily relies on social media tools like Instagram for promotion (Hammamii, 2020). Therefore, the brand has an active social media presence with 1354 followers on Instagram.

Reine Michi Beauty

This is a youth beauty brand that advocates for simplicity in skincare. The brand targets the UAE population and differentiates itself in the market through simplicity. Its bestselling product is the moisturising sugar scrub which only contains 3 ingredients. The brand also attracts its target customer base by delivering vegan, handmade, and natural products that are specifically tailored to the needs of the local population (D-Journaldubai, 2019). It also uses social media to promote its products and has 368 followers on Instagram, the social media channel it primarily uses for promotion (Instagram, 2020).

Herbal Essentials

Herbal essentials is an established brand in the UAE beauty industry and are currently one of the leading brands in UAE. Since its launch, the brand has won numerous beauty awards and has created strong community ties. The brand differentiates itself by promoting its philosophy of clean formulations which strictly forbids the usage of chemicals in its products. The brand also uses recyclable packaging for environmental conservation (Menafn, 2019).

The Camel Soap Factory

This company primarily offers soaps made from local ingredients and is the only industrial factory in UAE which offers handcrafted soaps made from camel milk. The company has grown to become the biggest manufacturers of handcrafted soaps, and its success has largely been due to the fact that the company offers locally manufactured products (The camel shop factory, 2020). Like other competitors in the beauty industry, the camel soap factory also depends on social media marketing for promotion and uses its Facebook and Instagram accounts to do so.

SWOT Analysis

Figure 4: SWOT Analysis of Market Competitors

Market Research

Huda Beauty primarily targets middle or upper-middle-class females, but the company is expanding to the male segment as well. Even though the company operates in the UAE, its products are also available in other countries. The target audience mainly ranges from 22 to 45 years olds and can be divided into four categories:

Traditional customers: This category includes individuals who are influenced by media but do not invest in pursuit of the latest trends (Nolasia, 2019). Such individuals do not tend to behave recklessly and consider their financial availability before making a purchase.

New entrant: This includes consumers who are just beginning to put on makeup and showing increasing curiosity towards makeup products. The new entrants are more influenced by communication efforts but do not have a strong passion for the industry (Bolat & Gilani, 2018).

Beauty addicted: These customers spend most of their time on tutorials and blogs related to beauty and have a tendency to buy the latest beauty products irrespective of their actual needs (Rodgers, 2020). Such customers can be considered as the lead user in respect of understanding the positioning, appeal, and use of the new product.

Beauty expert: This category involves professional makeup artists. They are not influenced by opinions and have a variety of sources for new information. Moreover, their customers are also more likely to be loyal to a specific brand to access a degree of consistency and reliability in their work (Talavera & Sasse, 2019).

Current Marketing Strategies

This section examines the current marketing strategies being used by Huda Beauty.

Marketing Mix

It refers to the set of tactics and actions used by a company to promote its product or its brand in the marketplace. The 4Ps, namely, price, product, promotion, and place, are included in a typical marketing mix (Chaffey, 2019).

Marketing mix of Huda Beauty is as follows:

Price

Huda Beauty is one of the leading cosmetic brands in the UAE and distributes its products in retail chains to make them available for the mass market. In addition to this, the company also delivers through eCommerce. As a result, the company earns huge profits from such division. Moreover, its products are also available for professionals so when customers visit such salons they pay for these products as they are not highly-priced. Huda Beauty products are available at cosmetics shops, own-brand outlets, supermarkets, and even online. Yet, the offered products have high-end prices and customers are ready to pay a premium for reliability and quality of the products as compared to its competitors. Huda Beauty uses different price levels to facilitate market penetration and brings innovation across various product divisions (Ismail, 2018). Therefore, the pricing strategy of Huda Beauty is based on premium pricing, geography served, product demand, and competition.

Product

This category includes the items that are being sold in the marketplace by the brand under consideration and examines what customer want to form the product and what need does the product exactly satisfies. Huda Beauty offers all kinds of beauty products ranging from eye shadow palettes and lip liners to acrylics. This means that the brand has a wide product portfolio, and under its product divisions Huda Beauty have products like lipstick, lip gloss, foundation, blush for face, hair care, conditioners, serum, nail polish remover, eye shadow, eyeliner, mascara, lip liner, cleanser, concealer, hair colour, shampoos and hair spray. The products are innovated and produced according to customer needs and preferences. Moreover, the company does not test its products on animals (Huda Beauty, 2020).

Promotion

Promotion refers to the business approach towards delivering the marketing message across the target market and the way it reaches to the desired market segment. The company mainly uses online advertising and promotional strategy which includes posts on social media channels. The founder of the company, Huda Kattan, has her own social media accounts and she also uses them to promote the brand (Octoly, 2018). In addition to this, the company has a dedicated website and an online blog to deliver the marketing message. The huge following of the company on social media channels has significantly contributed to its success and still helps to promote new products. The company also employs online influencers in this marketing channel for product promotion.

Place

The products are available to customers worldwide and Huda Beauty makes sure that it has vast distribution channels to facilitate a strong market presence. Its products are available at retail outlets, department stores, salons, own-brand boutiques, cosmetics stores, and e-commerce websites. The company also has a tie-up with Sephora, a French multinational chain of beauty and personal care stores, which helps to makes the products accessible in the market (Ismail, 2018).

Customer Demographic/Target Segments

The intended target audience for Huda Beauty’s cosmetic line is primarily females between 25 and 35 years of age. Such females have high household income and are willing to pay a premium for better quality products (Launchmetrics, 2019). In addition to this, the market segment also cares about the ingredients of the beauty products and tends to prefer natural products over chemical ones. Furthermore, since the cultures are being redefined, the company has also expanded its offerings to the male segment as well. The target audience includes both married and single individuals and is highly educated. (Euromonitor, 2019)

Differentiation Strategies/USP

In terms of differentiation strategy, Huda beauty uses is superior quality to make its products stand out in the market (Huda Beauty, 2020). Huda Beauty's founder has openly talked about her own skin issues and has sought out experts in South Korea to develop high-quality products that feature fruit extracts and hydroxy acids. In addition to this, while most of its competitors simply try to provide beauty solutions, Huda Beauty, on the other hand, prioritizes natural look over heavier makeup and embraces growing appeal and health awareness of natural products (TechSci Research, 2020).

Future Plans of Huda Beauty

As a brand, Huda Beauty aims to give people the power to express who they want to be no matter where they come from and who they are. For the company, beauty is not about how much one spends, it is about how confident one feels and it is the ultimate goal of the company to make individuals feel confident (Huda Beauty, 2020).

The company has a clear mission, which is to change the world of beauty. As its founder puts it, ‘When we pass, when we're gone, the world of beauty can never be the same and it has to be because of Huda Beauty” (Business Insider, 2019).

Moreover, in the future, the company aims to deliver customizable beauty products that can be used to create multiple styles according to the wants and desires of the customers. The company strives to deliver what its consumer base demands.

Conclusion on Marketing Management

In conclusion, it can be said that formulating and implementing an effective marketing plan is crucial for the long term viability of a business. Huda Beauty’s marketing strategy mainly revolves around digital mediums and the company's pricing strategy is based on premium pricing, geography served, product demand, and competition. Moreover, the key competitors of Huda Beauty include Hammamii, Reine Michi Beauty, Herbal Essentials, and The Camel Soap Factory. These competitors also offer similar products in the UAE market; however, Huda Beauty differentiates its products by providing superior quality. The intended target audience for Huda Beauty’s cosmetic line is primarily females between 25 and 35 years of age. Such females have high household income and are willing to pay a premium for better quality products. In addition to this, the market segment also cares about the ingredients of the beauty products and tends to prefer natural products over chemical ones.

Recommendations on Marketing Management

On the basis of the aforementioned market analysis, it is recommended that Huda Beauty should also opt for Omni channel-based marketing strategy in order to deliver better value to customers and to improve its market competitiveness.

References for Marketing Management

Bolat, E., & Gilani, P. (2018). Instagram influencers: when a special relationship with fans turns dark.

Business Insider. (2019). What’s next for Huda Kattan. Retrieved from https://www.businessinsider.com/how-build-billion-dollar-company-5-years-with-huda-kattan-2019-10

Chaffey, D. (2019). Digital marketing. Pearson UK.

D-journaldubai. (2019). Homegrown vegan skincare brand. Retrieved from https://www.d-journaldubai.com/homegrown-vegan-skincare-brand-reine-michi-launches-uae/

Euromonitor. (2019). Beauty and personal care in the United Arab Emirates. Retrieved from https://www.euromonitor.com/beauty-and-personal-care-in-the-united-arab-emirates/report

Hammamii. (2020). About us. Retrieved from http://hammamii.com/about/

Huda Beauty. (2020). Home. Retrieved from https://hudabeauty.com/us/en_US/home

Instagram. (2020). Reine Michi Beauty. Retrieved from https://www.instagram.com/reinemichibeauty/?hl=en

Ismail, A. (2018). International Marketing Strategies in the Celebrity Cosmetics Industry: A Dual Case Study: Huda Beauty and Fenty Beauty.

Launchmetrics. (2019). Huda Beauty and the digital strategy. Retrieved from https://www.launchmetrics.com/resources/blog/huda-beauty-digital-strategy

Leung, P. P. L., Wu, C. H., Ip, W. H., & Ho, G. T. (2019). Enhancing online-to-offline specific customer loyalty in the beauty industry. Enterprise Information Systems, 13(3), 352-375.

Menafn. (2019). UAE-Herbal essentials. Retrieved from https://menafn.com/1098469861/UAE-Herbal-Essentials-Natural-Beauty-Inspired-by-and-Infused-With-Himalayan-Essentials

Nolasia. (2019). Dubai: The next beauty capital of the world. Retrieved from https://nolasia.net/dubai-the-next-beauty-capital-of-the-world/

Octoly. (2018). Brand Insight. Retrieved from https://insights.octoly.com/a-brand-insight-on-huda-beauty-9cda36a1c3cc

Phung, L., & Qin, L. (2018). Perception of social media influencers: A study on evaluation of Social Media Influencer types for different beauty categories.

Rodgers, J. (2020). Integrated Marketing Campaign Case Study: Dove Real Beauty.

Sadaqat, R. (2018). UAE consumers among top spenders in cosmetic and personal care globally. Retrieved from https://www.khaleejtimes.com/business/retail/uae-consumers-among-top-spenders-in-cosmetics-personal-care-globally

Talavera, M., & Sasse, A. M. (2019). Gathering consumer terminology using focus groups—An example with beauty care. Journal of Sensory Studies, 34(6), e12533.

TechSci Research. (2020). UAE cosmetics market. Retrieved from https://www.techsciresearch.com/report/uae-cosmetics-market/1406.html

The camel shop factory. (2020). About. Retrieved from https://thecamelsoapfactory.com/about-the-camel-soap-factory/

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