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Unceasing warfare in cosmetics market

Burhanuddin Abe Contributor Jakarta

It is not only Coca-Cola and Pepsi Cola that are at war: The marketing battlefield is full of brands that are battling each other, and it is the same situation for personal care and beauty aid products.

With the availability of a huge market covering consumers of both sexes and all ages, marketing warfare has been going on for decades, and the end is nowhere in sight.

The local market for personal care and beauty aids consists of not only international brands but also domestic and extremely traditional products.

In spite of the fierce fighting among famous and lesser-known brands, marketing keeps expanding due to population growth and the concern for better personal care. Ongoing surveys are conducted by the most established companies, however, it is only possible to estimate roughly the exact size of the market and the immense range of products that continue to inundate it.

With the marketing of shampoo that also contains conditioner, the battles waged by both PT Unilever Indonesia and PT Procter & Gamble (P&G) Indonesia are interesting examples. Although P&G was the first to launch this type of a product in several Asian countries with its brand, Rejoice 2in1 (two-in-one), for the Indonesian market, Unilever was quicker and preempted the first move. Weeks before Rejoice 2in1 reached the local supermarket shelves, Unilever's brand -- Dimension 2in1 -- was already dominating the market. This brand, which resembled Rejoice 2in1 in almost every way, including its logo and advertising campaign, was a real winner for Unilever in the shampoo-cum-conditioner field.

Similarly, fierce competition also abounds in the detergent segment. Another Unilever brand, Rinso, which has been dominating Indonesia's market for years, has been frequently attacked by a number of international as well as domestic brands, such as So Klin and Attack, which belong to various price brackets. The marketing war is wide-ranging as it also affects the minds of consumers in the form of clever advertising campaigns launched by all related companies.

Although it is still a leader in the personal care and beauty aids segment, Unilever -- or any other giant corporation -- can never totally occupy the entire domestic territory due to the hugeness of this particular market segment. Fortunately, its immense size allows new players to try their luck and some, for example, like the Wings Group, a major domestic company, has been successful amid the ongoing fierce battles among giant multinationals.

Two other thriving domestic companies are Mustika Ratu and Sariayu, who have both been tremendously successful with product items that remain untouched by multinational corporations -- products associated with Indonesia's traditional heritage, such as mangir, an old Javanese secret for lightening the skin, and cosmetics that are derived from ancient formulas.

Innovative products are also successful in this market. Sariayu, for example, was applauded for its well-received launch of two-toned double color lipstick, which was also awarded the National Product of 1998. During the country's economic crisis that same year imported products became expensive due to the weak rupiah, but Sariayu, with its affordable prices, was indeed the smart choice at the time. With its deep understanding of local consumers' spending capacity and sensitivity to price increases, Sariayu was able to maintain their loyalty.

In the multinational area, Unilever, a Dutch-based corporation, has been a market leader in Indonesia with some of its brands for quite some time. This is attributable to the company's deft moves, innovativeness and a solid marketing and distribution network. On the other hand, P&G, another U.S.-based giant corporation with an international reputation, did not do so well during its early years in Indonesia. This was probably due to P&G's relatively slower market penetration, although the company is otherwise renowned for its brand management and full range of personal care and beauty aid products.

P&G's entry into the Indonesian market in 1975 was during an economically conducive situation. Meanwhile, Unilever has been in Indonesia since the 1930s. "So, one can easily imagine how expansive and more solid Unilever's network is due to all those years of intensive work," wrote one of Indonesia's marketing gurus, Hermawan Kartajaya, in his book Hermawan Kartajaya on Marketing, 2002.

This also means that although P&G's products are equal or even superior quality-wise, it has not been easy for the company to compete with the established multinationals and aggressive domestic companies in this highly competitive market segment. Even Unilever often faces fierce competition from all corners, especially in the detergent and shampoo area. The same goes for Kao and Tancho, two other major brands in toiletries and personal care products.

Another of Unilever's successful entries into the health and beauty aid battlefield was Close-Up toothpaste, a product that blends modernity as well as current local demands.

With heavy advertising that relies strongly on youth-related themes, such as love at first sight and so forth, the brand was an instant success. Not many competitors have dared challenge the giant, except for the Wings group. It bravely launched Smile Up, which was regarded to be a notch trendier than its competition and it immediately stole the hearts of Indonesian youth.

Its millennium image was also right on target. Not too long afterwards, the advertising campaign of Close Up was suspended. It may sound unbelievable that a company with a stature or reputation as solid as Unilever's had to back away from a market segment that it had helped build and nurture.

What can one learn from this example? Well, at least it shows that innovative products can still make it in this highly competitive market, which is largely dominated by major players like Unilever. There are a few things, though, that new players going up against long-established companies with a solid brand equity need to keep in mind as they try penetrating the local market.

Hermawan Kartajaya explained that although it was important that newcomer companies have to provide better products, it was necessary for them to be brands that consumers can easily relate to and hence get attached to. Brands have to be also well-managed as well as have intensive research and development activities, huge funds for advertising and promotion, an expansive network plus a deep understanding of the local market, including its specific culture.

So, for companies dealing in personal care and beauty aids in Indonesia, do not be disheartened, the market is vast and it is increasing by the day. The most important thing is to keep creating brands that can instantly capture the minds and hearts of the targeted market.