The perfumery and cosmetic market in Russia is one of the most developing in the world. Its growth rates are on average 10-15%. It is one of the largest consumer markets in Europe.

The Russian perfumery and cosmetics market is one of the largest consumer markets in Europe and continues to develop dynamically. It occupies 8% of the European market and is in sixth place in terms of sales of perfumery and cosmetic products after countries such as France, Germany, Great Britain, Spain and Italy. In the past few years, the volumes of the Russian market have reached figures comparable to those of European countries.

The development of the market for perfumery and cosmetic products is facilitated by the growth of the population's ability to pay and the development of infrastructure. In addition, Russians are the most active in comparison with Western consumers of perfumery and cosmetic products, they are ready to spend a large share of their income on these products.

Fig. 1.1 Dynamics of retail sales of cosmetic products in 2005-2010, million rubles (Source: http://adindex.ru/publication/analitics/conjuncture/2011/12/26/84288.phtml)

Every year the market for cosmetic products is improving, creating new products. Consequently, consumption is increasing. The market is aimed at women, and women always want to stay beautiful and young. They are ready to buy everything, and not in one tool.

Now the share of Russian manufacturers accounts for about 47% of the market. The share of Russian companies in commodity terms, as a rule, exceeds the market share in value terms.

According to ACVI, the volume of retail sales of cosmetic products in 2010 amounted to about 234 billion rubles. and, in comparison with 2009, increased by 5%. A relatively small increase is due to the high base of 2009, as well as the growth of the market due to an increase in physical indicators only, while the cost indicators remained approximately at the level of 2009.

Products: face care, body care, perfumery, decorative cosmetics, skin care for men, hair care.

According to the division adopted at the international level, the perfumery and cosmetic market is divided into three parts: personal care products, perfumery and cosmetics proper.

Personal care products include bath and shower products, deodorants, hair care products, and oral care products.

Perfumery is perfume, eau de parfum and eau de toilette. Cosmetics are divided into decorative products (from lipstick to nail polish) and skin and body care products.

In turn, facial skin care products include moisturizers, nourishing, cleansers and anti-aging products.

Body care products include, in addition to traditional creams and lotions, depilatories, scrubs, shaving products, sunscreens and anti-cellulite products, bust products, and baby skin care products.

Fig. 1.2

Services: assistance of a consultant in choosing products, the opportunity to try before you buy, delivery to a place convenient for the client and at a convenient time, festive packaging of products for free.

conducting master classes

training clients on the correct use of cosmetics and perfumes ("beauty schools")

individual work with customers

attention to product consumers

notifications about loyalty programs at points of sale

The cosmetic market is a competitive market, that is, a market with a large number of companies, each with a small market share and poorly differentiated products.

The Russian cosmetics market is considered one of the most dynamically growing and attractive ones. Over the years, we have been observing positive dynamics, even despite the economic problems in the country. This phenomenon is explained by a number of factors:

Firstly, the main target audience of cosmetic products are women who are the last to save on their beauty. For them, buying cosmetics and perfumes is a kind of "antidepressant", especially in difficult times.

Second, many manufacturers and distributors are quickly adjusting to new economic realities. During the economic downturn, they actively apply anti-crisis measures: revising advertising budgets, reducing inventories, optimizing production costs, adjusting the assortment.

Thirdly, manufacturers adapt at lightning speed to changes in consumer sentiment. Thus, due to the reduction in the income of the population, for the majority of companies in the cosmetic market, active entry into the economy segment turned out to be one of the most popular ways to increase sales.

Fourthly, the main market players are constantly mastering new technologies in production and bringing a huge number of new products to the market.

Direct selling services are widespread in Russian society

Two-thirds of Russians have experience in purchasing products from distributors of companies (63%) (Figure 1.3)

• 22% of Russians regularly purchase products from distributors (Fig. 1.3)
• 78% of Russian residents contacted distributors (Fig. 1.3)

The overwhelming majority of Russians, according to a personal survey, are aware of the method of direct sales (89%), while more than half of the residents of the Russian Federation have detailed information about this method of selling goods (59%).

Almost every resident of Russia knows at least one company that sells its products using the direct sales method (96%).

Information is quickly perceived as tables and graphs are simple and straightforward. Aggregated data on market participants are summarized in ratings of participants, market shares are calculated. As a result, the time for studying information is reduced and there is an opportunity to immediately proceed to making decisions that are “on the surface”;

The customer has the opportunity to receive part of the data free of charge in the form of a preliminary express assessment of the market niche. It helps to orientate in the situation and decide whether to study deeper;

We not only talk about the customer's market niche, but also suggest which niches are related. We give you the opportunity to find a solution in time - not to be limited to your product, but to find profitable new niches;

Professional consultation with our industry managers at all stages of the transaction.

Let's analyze it in detail.

The company should calculate the potential market size based on the following assumptions (below are the assumptions from the manufacturer that will form the basis for calculating the potential market size; you can build your own assumptions in the calculation that reflect your current valuation objectives):

• All potential toothbrush consumers use "electric toothbrushes" as opposed to conventional manual brushes.
• All consumers buy brushes in accordance with the manufacturer's recommended frequency: that is, they change them regularly, after 1 month of use.
• The average price of a brush corresponds to the current average price of the manufacturer.

To estimate the actual market share, the company must take into account the prevailing culture of consumption of the product (electric toothbrushes) in the target market.

Estimated total market capacity in which the company operates

How market capacity and market share are calculated

Market share Is one of the most popular tracked criteria, KPIs. It is an objective indicator of the progress of a business project and control of the dynamics of demand for your product or services provided.

The development of your business can be ideal: profit increases, income increases. But in some situations, promotion can only be associated with an increase in the sales market itself.

Such calculations are also needed for researching competition: identifying the position of your company and analyzing the position of your opponents.

• how many potential consumers of your product are in your area;
• your potential competitors;
• the solvency of your customers;
• how mastered this segment is in your region;
• how you can attract unreached customers.

Attention

In addition, nuances such as seasonality will be very important factors in promoting your products. It's no secret that the peak of sales of garden products falls on the spring and early summer.

As you can see, there are a great many nuances that should be taken into account, and most of them are based on assumptions.

Stage 7. Calculation of the available market capacity.

Here we need data on the sales volume of each competitor.

In a real forecast of the available market share, it is logical to assume that its further division will be carried out in approximately the same way as it happened with the already sold product, that is, the percentage ratio in the distribution of market capacity will remain approximately the same, which means that cable TV providers can hope for such proportions:

Your company - 8319 users (47% of the total);

Competitor N - 4749 users (27% of the total volume);

Competitor C - 4071 users (23% of the total);

Small networks - 531 users (3% of the total).

8319 × 180 rubles / month = 1 497 420 rubles / month

Market size (market size) - the size of the market for a particular product or service, expressed in the total volume of sales of the product for the billing period; or the total demand for a category of goods, expressed in the purchasing power of the population. Often in marketing, instead of the concept of "market capacity", its synonyms are used: market size and volume.

In this article we will tell you everything about the concept of "target market capacity": consider the terms "potential, actual and available market capacity"; Let's talk about the main indicators that are used to determine the size of the market; we describe the factors affecting the capacity of the sales market; and also describe the existing methods of calculating, assessing and forecasting market capacity.

Secondary sources of information.

This method allows you to study the entire range of goods, guarantees the amount of information received and provides an opportunity to find out the socio-demographic and psychographic characteristics of buyers, the nature of their behavior.

The disadvantages of this method are:

Difficulty finding reliable information;

Long time periods of research;

Difficulty verifying the accuracy of the data;

Quite a lot of financial expenses.

2. Calculation of market capacity based on the norms (standards) of consumption of certain goods.

The statistical basis for the calculations is the annual indicators of product consumption per person and the total population.

It is used for the favorable distribution of a specific product across territorial markets according to the level of consumer demand.

At one time, for each separate territorial market, if necessary, this method appears in various forms of calculation:

• summation of markets, when the total volume of potential sales is determined;
• calculation of purchasing power indices, which also determines the potential sales volume under the influence of several significant factors;

In the second method of assessment, each quantitative factor is assigned a coefficient that directly depends on the importance of its influence.

However, it often happens that the calculated and real indicators of market capacity differ.

Mathematically, market capacity can be expressed as follows:

E = M x C; Where:

Е - market capacity in physical or monetary terms (units / year, rubles / year);

M is the amount of goods sold per year (units);

С - the cost of the goods (rub.)

There are various approaches and methods for calculating market capacity:

1. An expert approach to determining the size of the market;

2.
Economic and mathematical modeling of the market capacity;

The simplest method for assessing market capacity with an economic and mathematical approach is the formation of trend models, which are based on the mathematical alignment of the dynamic series of actual values ​​of the total consumption of a particular group of goods or services.

3. Forecasting method

Important

In order to assess the size of the market capacity in sufficiently large territories, such as a country or a republic, one should use the information of state statistics. If we talk about small areas, then in such a situation one can limit ourselves to field research, since in such cases the statistics are not visible.

Prices.

Time... The most popular time period that is used when calculating market size is one year. This is justified by the opportunity to investigate various seasonal demand fluctuations and their impact on sales.

TV. We have a potential capacity, we calculated it by multiplying all households in the provider's coverage area by the average cost of a package, and we got 57,240,000 rubles or 106,000 subscribers.

Let us recall that this is the absolute maximum of the market, beyond which it will not be able to develop under current conditions. Now we calculate the actual capacity:

(own sales volume + shares of all competitors).

For example:

• the cable TV provider has 14,000 subscribers (47% of the total),
• competitor A - 8,000 subscribers (27%),
• competitor B - 7,000 subscribers (23%),
• small networks - 1,000 subscribers (3%).

Total 30,000 subscribers * average price RUB 180 = RUB 5,400,000 - monthly covered market capacity.

Now consider the survey data, according to which 47,700 households seek or use cable TV services.

For this analysis, you should refer to statistics, marketing research of your organization, information from open sources, reporting, as well as inside information when analyzing competitors. The probable market capacity is a predictive category, the value of which is determined by the methods of extrapolation and expert assessment.

The value of the possible sales volume has a huge weight in the process of making a managerial decision about the penetration of an organization into a certain niche of economic relations.

As a rule, when calculating the probable market capacity, the indicators of its existing size and the potential of the firm in its segment are summed up.

A large difference between possible and actual data speaks of the potential profitability of working in a particular niche. On the contrary, if during the calculation it was found that this discrepancy is small, then the market is in a state of stagnation.

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Today our guest is a seminar participant
"Store Management: Factors of Retail Performance"
Kukushkin Vladimir (chain of stores "House + Garden", Moscow).

- Hello, Vladimir. Please tell us about the company you represent.

Our company is engaged in retail sale of household goods.

- How long has your company been on the market? How did it develop? Where did you start, where did you come to?

We started working in November 2003, more precisely, since November 24, 2003, when the first store was opened. After that, we opened one store at a time, about once every 2 months, some closed. At this stage, we have 11 operating stores, and in 2005 we plan to open 18 more.

- What market does your company operate in?

So far, our network operates only on the Moscow market. This is done artificially, since we are now looking for that format, that business model that will allow us to develop further, and not only in the Moscow market.

- Tell us about the most significant achievements of the company.

One of the company's achievements, probably, can be attributed to the fact that, opening literally from scratch without any business technologies, after 1.5 years we nevertheless found a model that is profitable in these competitive conditions and which can be successfully scaled up in the future.

- How long have you been with this company? How did you start your work in it?

I have been working for a long time. I joined the company as the seventeenth person, now we have 210 people. Then we didn't have a single store, we didn't even have a chief accountant. And I came there as a store director. Now I am the director of the sales department.

- What did you do before joining this company?

Before joining the company, I was also a store director. Only the assortment was completely different and the principles of work were also different, but the position was nominally called the director of the store.

- What, in your opinion, are your most significant achievements?

I have been working in my current position for only a month. Before joining this position, I opened 3 stores in our company, at the same time headed 2 stores, worked out all the new technologies that we are now starting to actively use.

- What are your professional plans for the near future?
- The main task now is to implement the company's plans to open new stores this year.

- What is the purpose of attending the seminar?

An attempt to find new methods, approaches and apply them in their direct work.

- What is your impression of the last seminar?

Since we ourselves have developed certain schemes of business processes, when I came to the seminar and heard them from the lips of competent authors, I understand that we are on the right path.

- Your wishes, suggestions of our company.

To bring to the audience as many practical methods of influencing certain indicators as possible and present it in a visual form, for example, in spreadsheets, graphs.
In general, everything is great. I liked it all very much. Thank you!

- Thank you for your time.