Posted at 01.02.2019
In order to analyze the success of a Natura makeup, there a wide range of factors to be mentioned. For me, two main reasons that ought to be listed will be the effectiveness of romantic relationship between Natura and organizations associated with its operation and its own learning, development activities.
Firstly, it isn't difficult to realize that Natura's relationship strategy works very effectively. Based on the case study, this company's main procedures including development, logistics and research and development are located in Sao Paulo. When there is a new order, the stock status will be inspected immediately by the stock management system. In no more than 1 day from the purchase order, the done products are delivered to the sales representative's home. With 26 delivery associates as well as postal service, Natural's products will be transported to its representatives no longer than six days regardless of far vacation spots (Natura case study). Clearly, in order to guarantee the quality of the merchandise and good services for the customers, the bond between individual parts in a complete group must be strong. It requires all body to have to cooperate and contribute to the potency of the common tasks. One focus of Natura's romantic relationship strategy is on sales staff. They have emerged as the company's consultants who are well-trained, autonomous woman salespersons and generally are housewives having good relationship with potential prospects such as friends, office personnel, independent professionals One special thing here is that Natura doesn't have to pay immediate employment costs for this force. This method will help the company save a large sum of money to invest in other activities. And yes it will encourage Natura to grow its market without having to be worried about minimizing profit margins. Using this way, the advantages will belong to not only Natura but also sales force. They don't receive a direct salary amount however the commission rate for sold products is the best on the market, which including 30% margin of end consumer prices and superior prices (Natura research study). Definitely, this way is dependant on the capability to sell products of every sales representative and it generates motivation to allow them to try more because of themselves as well as the company. Another durability of its management is organizational ethnic. Openness, transparency and respects for its stakeholders ( Natura case study) are the words to spell it out this operating environment. They will be ready to give task to middle management who are thought to be ambitious and highly trained. This force is able to take great and out of thoughts success for the company. Additionally, the plan for new skills is positive. Natura would like to fulfill both from outside and inside sources. They does take time to build up potential abilities and headhunt as well. As a result, the manager push will be varied. With customers, Natura has a such different procedure. A customer going to Natura means that she actually is buying belief. The business does not discuss market needs but catches their emotions, feelings. By this way, whenever a customer sees an ad of Natura, she'll think that the product is born for her, and Natura helps her have a much better life through retailing it. It really is impossible to deny the potency of this marketing school of thought. About the quality of products, Natura persuades customers by using natural and lasting ingredients. For example, Ekos product line comprises of Brazilian berries and crops, such as guarana, brazil nuts, mate verde and cocoa( Natura research study). Lately, cosmetics consumers largely believe that products extracted from the nature will have good results on the skin no side-effect. With information about materials from reserves in the rainforests and savannahs, clearly Ekos is much easier to be treasured from the general public. One important thing of Natura's romantic relationship strategy is to take part in environmental issues. This action demonstrates that Natura not only runs to make profits but plays a part in the development of world as well. Normally, it will bring positive image in public for the company and create its good reference to the customers, government. Such activities, such as Rainforest Education and Recovery Job, Rio de Janeiro Botanical Gardens are specific types of maintaining garden and regenerating ruined forest ecosystems (Natura case study).
Secondly, Natura's functional pathway is the process of learning and creativity. Staring from a little laboratory and cosmetics store, the company made a bid step in the marketplace by studying the knowledge of Avon-
the then leader on earth. In 1974, Natura decided to operate following direct sales model. The consequence of this plan was the expansion at low to modest cost. With a fresh company, learning from successful and well-known brand is very important and this offers useful lessons for Natura in those days. Besides, the success of Natura also comes from its technology and product development. Every year, the company put in about 2. 9% total annual net earnings in research and development (R&D) to start and improve approximately 153 products (Natura case study). Natura also purchases patents, technology from research centers in Brazil and outside the house. Their focus is put on skincare and environment-friendly products.
In bottom line, effective marriage strategy as well as learning and invention activities are two main factors of the success of Natura internationally.
In the period 1982 - 2005, it has seen the introduction of Natura in makeup products international market. Along with the growth into different areas from the near to the far, this company changed the operational strategies slowly but surely and better. It demonstrates that the business's market determination as well as internationalization level has increased together in this era. Because of this, in order to evaluate Natura's internationalization strategy from 1982 to 2005, I decide to choose the Uppsala model which emphasizes increasing commitment towards abroad market when the firm's experience goes up (Svend Hollensen, 2007).
In the calendar year1982, it saw the first endeavor of Natura to deliver its products to foreign customers. The company used an unbiased distributor in Chile. However, the effect because of this action was horrible. The operation was ceased after it managed in a short term. The reason behind this failure is the fact Natura did not have careful prep. Clearly heading international can be an important issue for any companies which want to develop. One of the most essential conditions for success is the fact the company needs to have a proper plan and it must result from its genuine demand. At this time, Natura's expansion overseas was influenced by impulse. (Natura's research study). Maybe it might not create enough drive for working attitude and successful ambition. The second cause is that the company experienced no enough information about the marketplace (Natura's research study). Knowledge such as politics, culture, distance dissimilarities between markets always should be obtained by the businesses in the case they really need to succeed. Additionally, staff and financial problems happened when the business went to Portugal and Florida. And lessons due to insufficient experience was given to Natura. Accordingly, market commitment or internationalization level in this example is quite low.
Until the 1990s, Natura's action of going abroad occurred again. Distinction with the last time, the business planned carefully. And this time, a great advantage of the Government plan favored to development way of Natura. Brazil and other South and Central American nations took advantageous change in politics and macroeconomics. With potential marketplaces of Natura such as, Mexico, Argentina were attempting to cooperate commercially with Brazil and their overall economy were growing positively. Besides that, the frame of mind of high gratitude of beauty and better knowledge of cosmetic makeup products has made an increase in demand for cosmetics. It could not be denied that many favorable conditions have come to Natura (Natura research study). From this time, the success of the company in various marketplaces has truly gone. Three specific illustrations for effective internationalization strategy are Argentina, French and Mexico. Argentina and Brazil are two nations in the same Latin America area. The geographic distance between them is not so significantly. And Natura took the first step to this market in 1994 but until 2001 the large mark happened. In December 2001, this market was thrown into crisis because of currency devaluation of about 40%. While its competitors tried to move up prices, Natura held it stable. The company has just increased it only when local salary evolved in the better way (Natura research study) which information was announced publicly to the customers. By reducing cost and remaining price, the company acquired good impression on Argentinean market and help the process of creating the brand here. The strategy helped bring the "win situation" for Natura. In 3 years later, there is a growth of six- factor revenue which is a wonderful number. The primary method that the company put on sell products in Argentina in this era is direct advertising through sales consultants power. The amount of consultants proceeded to go up nearly three times from 7000 in 2002 to 20000 in 2005. Clearly, Natura has got good result with contribution strategy into Argentinean market. The next you need to be described in internationalization strategy of Natura is France. It can be said that from Argentina to France there is a development of both geographic diversification, internationalization and market determination. The distance from France to Brazil is much larger than that of the remainder. Actually, situated in two different continents, there is not same characteristics in the beauty product custom. Hence, Seabra said that "France has historically been a way to obtain knowledge and uncooked material for our products as well as a source of inspiration". About just how of sales, Natura discontinued using traditional model which is direct sales and improved to retail store. It is an increase in size of investment in marketing and organization. In stead of a point of sales, in 2005 the company designed a two - storey flagship store where are used for sampling products, advertising events and sometimes appears as displacement place of Natura's notion and eyesight (Natura case study). That is an evidence showing the business's market determination is on upwards. Another point is the change in Natura's product packaging and size. Making its products well suited for the sponsor market's demand shows effort to take up the market talk about and internationalize.
Moving to Mexican market, it offers seen a more progressive part of the strategy of Natura. And it seems to acquire leapfrog level here. In the year 2003 which is prior of 2 yrs compared to the time of entrant in France, Natura came backs to the nearer market numerous similar characteristics of economy, demographics and enthusiasm for beauty products (Natura research study). In Mexico, the business developed the experience in France to a new model - "hybrid model". Building Natura's House, it can combine the advantages of both direct sales model and store chain. Here sales staff can interchange experience, learn professional skills, talk to brand and even receive test. Also in this country, the company takes an effort in new marketing tools. A good example of this is "magalogue". This mixture between publication and catalogue is put on give Natura's products and special offerings, articles about health insurance and beauty problem. So, in comparison with French market, Natura's investment in Mexico can take more attempt. Differ from a store string to Natura's House is an example. It needs both market-specific knowledge and basic knowledge. And resources should be employed more efficiently, especially human source of information. Each one of these elements explain that there surely is an upward tendency of market commitment, internationalization when Natura gets into Mexican market.
Generally, Natura's internationalization strategy was successful in the period 1990s to 2005, but ineffective in the entire year 1980s.
Coming back again to international makeup products market because the calendar year 1990s, Natura has little by little succeeded with several adjustment of market entry insurance policies. Two specific evidences are "Maison Natura" in France and "Casa Natura" in Mexico. These models show that the amount of geographic diversification, market determination and internationalization (The Uppsala internationalization model) of Natura has increased as well as their international market accessibility method has improved in comparison with direct sales model ever before -used. Moreover, to be able going international more drastically, Natura should make use of an appropriate market entry strategy. In my opinion, it can be "Hierarchical model" with resident sales reps in foreign marketplace.
Firstly, it ought to be mentioned the direct sales model that Natura used to hire to provide products to its customers. The existing demand for the business's cosmetics are achieved through the force of 483000 active sales reps in Brazil and 36000 brokers overseas, who are well-trained and versatile consultants. And mostly requests from customers are located via Web and telephones.
However, with French market of which Paris has been known as a holy city of fashion and cosmetics, to get much attention from the public, Natura innovated its traditional way. The business decided to start a two-storey flagship store that was called as "Maison Natura" in 2005. This store takes the duty of more than a point of sales, where is seen to show Natura's perception and vision. Also here examples are given to customers or advertising events happen (Natura case study). There is an improvement in the way Natura enters to the market and persuades audience. With this retail store, Natura has to spend more investment than its immediate distribution. It really is for the organization, marketing and even workersFor example, the company had to create a store and make it become a place served for most purposes. It really is so not the same as a call centre which can only just receive purchase requests. Besides that, to adjust to this competitive environment, Natura changed its products' presentation and size. It can not be denied these activities could actually help Natura get a foothold in France. And the reasons were that the business ready carefully market specific knowledge and made market determination. From that, Natura seems to be more suited to an international market entry model which requires more responsibility and competence.
And about Mexican market, it continues to be another upsurge in market determination as well as internationalization. However, there is leapfrog stage herein. The distance from Mexico to Brazil is smaller than that of France and enough time of joining Mexican market is sooner 2 yrs (2003) but internationalization process goes up. Having some advantages of similar characteristics of economy, demographics, love for makeup, Natural also faced the issue lately participation (Natura case study). Hence, to be able to get success, it seemed to request the company to adjust a new strategy. The perfect solution is given was that Natura House which has talents of both clean direct sales model and retail store. There sales consultants can help each other with experience and it could be place for exhibitions, training speeches or product evaluation, offerings. Clearly, benefit of direct sales model which is the strong romance between person and sales consultant, and those of retail chain which can be close romance among sales consultants and multi-purpose place are merged. Not only the corporation invested in finance to establish this "hybrid model" most importantly cities and areas with many complexes, but also at Natura House, new marketing tools were applied at the first time to remind the general public about the business's brand (Natura research study). For example, the company tried issuing "magalogue". By this way, Natura could supply both its product, special offerings and health, makeup products articles as well. It could be considered that Natura's attempts of organizational and marketing change shows their ambition to get a step into Mexican cosmetics market and take up a certain market share. Also the way was done professionally detail by detail. Importantly, it did differ from direct sales model Natura used to use.
Far from these two markets, in the next years, the business wants to attack new potential large ones, such as the UK, the united states, Russia and so on. Only in the United States, in 2004, the value of sales of cosmetic makeup products and toiletries in 2004 was 45. 6 billions US$, made 19. 7% of total market show. Or In United Kingdom and Russia, the statistics were 11. 6 billions US$ (5%) and 6. 4 billions US$ (2. 8%) respectively (stand 1 of Natura case study). However, with these countries, the key retail route methods won't be the same with Brazil. While in Brazil, sales through direct selling gained the impressive proportion of 27. 4% in 2004, in European Europe, that percentage was only 4. 7%. In these parts, the most common methods are different each others. ( Desk 2 of Natura case study).
From the factors that have already mentioned, in my view Natura should move to apply a fresh international market access - Hierarchical mode. With current conditions, it can open up resident sales reps in the sponsor country. Rather just like models used in France and Mexico, the company can create a place of many functions dished up for sales and marketing activities. These can be considered a showroom, an information centre for customers, after-sales service centre, an exercise centre for sales consultants, a place for test receiving Sales and service division should be situated in the web host countries because it will be better to know carefully about local enthusiasm and demand in comparison to doing from distance. When being familiar with local market, Natura can open up sales subsidiaries. At this business office method, the business can be take duty gain but it must take more responsibilities and autonomy. Besides, research and development, production, marketing departments remain located in Brazil. It seems to be face a big amount of issues to change overseas assumed that other conditions do not change.
Since the establishment in 1969, Natura has experienced different expansion cycles. First period from 1969 to1981, the company tried out to build the brand and take growth in local market. In 1982, Natura authorized a deal with an unbiased distributor in Chile in order to expand in another country. However, this plan failed financially. Before 1990s, once again Natura travelled internationally in line with the open insurance plan of the government and has got success detail by detail. Although Natura has transformed their activities drastically compared to the foundation time, production facilities has still situated in Brazil. One concern is given is that decision is suited to the introduction of Natura in pursuing years?
Firstly, with current situation, in my view positioning all creation facilities in Brazil is an acceptable decision. Brazil is the place where Natura was born. Because of this, the company's products are produced will often have characteristics suited to Brazilian demand. So combined with the development of this brand, a well balanced market share in Brazil has been occupied. For just about any companies, they will penetrate into overseas markets once increasing or becoming acquainted with its home market. This will be a strong basis for the company to strike another. About Natura, its Brazilian market share in 2003 was 11. 3%, positioned the next leading makeup and toiletries company in Brazil (Table 3 of Natura research study). Additionally, this country has a big advantage of material sources of production for the company. In recent years, Natura has focused their procedure on the merchandise using sustainable materials. And Brazil's diversity is a profuse supply source. Fulfilling these natural materials for the development in the house country, clearly the business has bigger advantages over its opponents. They can save cost of transportation, import duty and preferential policies for local companies to utilize inside materials. On top of that, the traditional marketplaces of the company are Argentina, Mexico, and so on. These countries are not far from Brazil and most of them are in the same area with many similar characteristics. So creation facilities in Brazil and using energetic sales representatives induce to distribute the merchandise to the customers in these countries may well not create serious problems of transportation cost. Another reason to support for creation facilities in Brazil is the potency of the current businesses. Whenever a customer place an order, in 24 next hours finished product is made to be carried to the sales representative's home. It is because of the close co-operation among different division and automated system. Soon after having a fresh order, the stock status is inspected by the stock management system, and materials are accumulated to development facilities. Final steps are packaging and labeling. Total time for the whole process is only one day. After that, with 26 delivery partner, products are sent to its representative within 2 days in Sao Paulo or no more than 6 days and nights for far vacation spots (Natura research study). It could be said that the functional process works actually effectively to ensure delivery plan. This punctuality has backed placing development facilities in the foundation country of products.
From these tips, that Natura's cosmetics are made in Brazil is appropriate. However, this decision will continue to be agreed in the foreseeable future when plan of earning Natura brand become commonplace with global audience? First problem can occur when moving development abroad is the price. Compared to most of other countries in the same South North american area and Europe, labor cost here is much cheaper. One of the reasons is that their population is the fifth leading in the world and still young or in labor ages (Wikipedia information). If Natura choose a country which labor price is high, finished product's price increase drastically and the competitiveness will lower. In addition, start operating at a new location, there are two ways for materials issue. The first solution is to get the new source. However, it isn't simple to carry out because main materials for the company's makeup are from the type, especially from Brazil's biodiversity. The second one is to move materials from Brazil to the production place. Maybe it is an impractical solution scheduled to a huge amount of cons. It could be denied that vehicles as well as import tax will make it go up. In addition, it can result from import insurance plan which procedures or rules in the number country do not encourage to import such materials. Also Natura should take into account the origin country of products. It is not true that customers evaluate similarly with the same brand but different creation places It really is considered frequently that the customer have choice for the merchandise from well-known countries for high technology and long-term tradition of this kind of goods. Because of this, when deciding to choose a new production location, the professionals need to investigate the customer's desire. About distribution network, presently Natura still uses direct selling model through dynamic sales representative power. They have emerged as Natura's expert who are mainly well trained housewives and receive orders via Web and calls (Natura research study). So the company does not have to pay immediate job cost but high payment for each and every product sold. With current conditions this retail channel still works effectively. But when there is an alteration in development facilities, it is still good? Finally, logistics issue can meet hurdles in the case of moving production location in another country if that insurance policy there is still close. It could come from various legislation about import - export documents or the quality of transport system is modern enough to aid Natura'a activities or inventory, storage area problems, packaging and so on. Nowadays to get high profits, generally multinational companies invest in developing country, however they have to accept certain dangers related to low quality of logistics. Hence, Natura ought to consider the power of goods to move between nations.
In conclusion, with current affecting factors, Natura seems to keep production facility situate in Brazil. Inside the far future, along with long term strategy and improvement exterior, an alteration maybe reasonable if they're supportive.