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Table of Contents

Business Plan: To introduce cosmetic products for men in Saudi Arabia - Part 2



Crystal care limited will offer wide range of customer care products specifically designed for oily skin treatment. The product discussed in this report will be based on male grooming products, specifically skincare products for men. The market analysis is done on the basis to explore the potential of growth in the industry.

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These days’ men have become conscious about their appearance. This has increased the demand for skin care products for male segment of the population. The gender biasness towards only women using skincare products is blurring away as more and more men have started to show concerns regarding their beauty. Large numbers of personal care products brand have emerged in the industry along with several Niche brands.

Saudi Arabia has witnessed significant changes in the sector of cosmetic industry. Sector is though dominated by women that according to the research spend SAR 14000 per year on cosmetics[1]. The market size of skin care products in Saudi Arabia was estimated USD 397.2 in 2010 while the estimations for the year 2015 have shown rise to nearly USD 502.9; accounting nearly increase of 26 percent within just five years. This dramatic increase in the size of the market is centrally dominated by women where extensive use of make-up and skin care products is seen as a sign of status than aim to attract opposite sex[2]. . .However, though the market is dominated by women; there has been a rise in the demand for cosmetics products by men as well [3] .

The trend in KSA has changed over a period of time. Contrasting to the earlier market behavior any product aimed at highlighting male vanity was disregarded and gained frowning responses. However, with increased awareness from media and internet men in KSA have developed more attention towards well-grooming and appearance factor. This awareness is complimented with career orientation, affluence and pride. In the absence of the grooming orientation in men, the market was dominated by the Gillette with provision of men grooming product such as razor, shaving sets and other closely related and associated products. Gillette dominated SA market with nearly 34% market share. With the change in trend and increase in the demand for skin and hair care product, the new main stream market has emerged with growth rate of 18 percent and 20 percent respectively [4]

4.1. Target Market And Customer Base

The skin care products industry, specifically the products targeting male grooming are gaining popularity with the passage of time. Market in KSA has entered in new era where skin care products sectors being dominated by women has started to view growing share from the men as well. New and innovative products were introduced to realize the fact that the industry has significant growth potential and men in SA are demanding products specifically designed to deal with skin care issue of men. As predicted by analysts, the industry has potential of drastic growth [5].

Crystal Care Limited will aim at targeting the following segment of the industry. The product at its initial phase will aim to specifically catering the target markets by providing a skincare product for men with oily and sensitive skin.

The segmentation of the target market will be as follows:

Population: High Income urban population of KSA will be the primary target because they are growing concern about their beauty and are aware of the importance of personal grooming.

Age: The age of the target customers would be between 15-54 years.

Gender: This product is specifically for the skincare of men who have oily and sensitive skin.

Income: The per capita income in SA has been recently increased from USD$21,600 (81,200) Saudi riyals)) to $USD 23000 (87,277 Saudi riyals) in 2012 [6]. This refers that there has been over improvement in the standards of living in the country. The target market for the products of Crystal Care constitutes the income class with SAR 95,000 and above.

The target customers will be those men who are concerned for their appearance and care for their personal grooming. The men with oily skin will be the primary target of this product. Working class male professionals which include mainly office employees, TV stars and movie actors etc. will be the particular target market. Students in the age bracket of target market are attracted through distributors who will make the product available for local area markets and several male salons will be the target.

Nearly, 30.3% of the total population falls in category of the age bracket defined s the target customer of this product. The size of this population is 371 million [7]. Since niche market constitutes small chunk of the entire market; therefore, only limited number of sales for units is predicted. The market is growing and the industry expects the market to grow by 18 percent [8]. This is primarily because the male population of the world in general and SA in specific are becoming more and more concerned about their presentation. The products which are being introduced are very innovative and appealing. The higher income middle class population considers skin care as an important issue and due to increasing connectivity has increased awareness for grooming excessively. The universality of prestige has increased across the world. The overall percentage of growth is expected to grow as the economy will recover from recession and company aims to attract two percent market in the initial phase. This is also small chunk as target market is niche and is attracting high income men with oily and sensitive skin.

4.2. Market Size and potential

The overall skin care cosmetics section of industry targeting men depicts growth of 18% [9]. Due to the economic recession the industry growth had been stagnant across the world but KSA restrained the impact of recession. This already had significant positive impact on the markets of all industry. Cosmetic industry in KSA has also contributed to economic growth and high prospect growth of the market is considered to further continue with positive addition as economy across the world manages to revive. The size of the market is small chunk of the entire 30% of the total percentage of the population in the defined bracket [10]. The market has a lot of potential and through extensive research the companies can succeed in attracting significant market share. The rise in demand for organic, Halal and natural products has also increased the market share. The male segment of the society is also becoming centered towards skincare and enhancing their beauty. This change in trend is taken as market opportunity by Crystal Care Limited.

The overall cosmetic industry is intended to grow by 24% internationally [11]. The market trends have evolved and more youth oriented segment of the society is being attracted towards skin care as compared to old customers. This change in the market trends has encouraged new brands to enter the market. New business opportunity has also benefited the users are they have got a much wider range of products available in the market.

The economic recession has slowed down the market growth. It has been observed and predicted by market analysts that the trend of the customers will change as the recession ends. The market has reasonable growth and potential to attract new customers. Men residing in this society have increasingly accepted the importance of skincare. For this purpose, they have indulged in using treatment products which can enhance their appearance. This changing trend will prove to be beneficial for both new and existing brands. This has also provided increased opportunity for the brands to enhance their performance along with the changing trends of the industry.

4.3. Expected sales and Market share

The company intends to avail the opportunity by launching a product which has a lot of potential of growth in the industry, due to changing trends. The market share which Crystal Care Limited intends to realize can be estimated by its sales.

The estimation of sales for the first five years are shown below

Years Estimated Sales
1 SAR 283,010
2  SAR 652,854.80
3 SAR 854,310.42
4 SAR 11,297,776.6
5  SAR 1,732,798.51

The estimated industry growth and the company growth have also been shown below. This is showing the estimation of profitability which can be expected by the firms over the years.

The growth of industry and company are applicable on the sales estimates for year one:

Years Industry Growth Company Growth
2 18% 30%
3 20% 30%
4 25% 35%
5 20% 15%

The growth of industry is applied with higher percentage in year three in expectation to rise in trend for using the skin care products as economies worldwide revives and moves towards growth. In the following years after year three, the growth of industry is taken as five percent considering sustained growth.

Similarly, company growth is applied with 30 percent in the initial year as the company will be sole provider of the product specifically designed for the targeted segment. This will increase at the sales of the company in multiples of industry growth. High percentage of growth is applied as the growth in industry is also in double digits.

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