Balea | Bài tiểu luận kết thúc học phần Brand Management | Trường Đại học Quốc tế, Đại học Quốc gia Thành phố Hồ Chí Minh

INTERNATIONAL UNIVERSITY – VIETNAM NATIONAL UNIVERSITY
School of Business Administration --- BRAND MANAGEMENT
Lecturer: Nguyen The Man Group 6: 1. Võ Thị Ái My- BABAIU20455 2. Lê Huy Hiếu - BABAIU21018 3.
Phạm Gia Hạnh Linh - BABAIU21232 4.
Nguyễn Bá Hoàng - BABAIU21115 5.
Nguyễn Thị Hằng Nga - BABAIU21243 Ho Chi Minh City, Vietnam April 10, 2024 P a g e | 2 Table of Contents
I. INTRODUCTION: ................................................................................................................................. 3
II. BODY: ..................................................................................................................................................... 3
1. Strengths: ............................................................................................................................................. 3
2. Opportunities: ..................................................................................................................................... 5
3. Weaknesses: ......................................................................................................................................... 6
4. Threats ................................................................................................................................................. 7
III. CONCLUSION:..................................................................................................................................7 P a g e | 3 I. INTRODUCTION:
Balea, a private-label brand affiliated with the German company dm-drogerie markt
dominating Europe with over 4000 physical stores, has established a significant
presence since its inception in the early 1990s. Introduced in 1995, Balea initially
focused on personal care and hygiene products but swiftly expanded its range to
include various fields. Praised for its affordability without compromising quality,
Balea has become a preferred choice for consumers seeking dependable yet cost-
effective alternatives to branded products. Through continuous innovation, trend
adaptation, and the integration of sustainability practices, the brand has sustained its
appeal over time. Today, Balea enjoys a robust presence not only in its native
German market but also across various European countries where dm-drogerie markt
operates, solidifying its reputation as a trusted and easily accessible brand for
everyday essentials. Renowned for its extensive product range encompassing facial
care, body care, hair care, and makeup products, Balea products are recognized for
their gentle formulations, making them suitable for a wide range of customers. In
terms of market segmentation, Balea targets valueconscious consumers across
Europe who prioritize affordability while still seeking quality, indicating a likely
price sensitivity but a continued interest in effective personal care products. II. BODY: 1. Strengths:
a. Diverse Product Portfolio
Balea offers a wide array of personal care and beauty products, catering to various skin and hair needs:
• Facial care: Balea's research and development team continuously updates and
innovates products to meet the diverse needs of consumers, from dry skin, and oily skin to sensitive skin.
• Body care: Balea's body care products include shower gel, body lotion, and
certain skin care products such as hand and foot cream.
• Hair care: Balea provides many hair care products such as shampoo,
conditioner, and hair moisturizer. These products are designed to help nourish
and protect hair from damage, leaving it soft and smooth.
• Makeup: Balea provides makeup products such as primer, foundation,
powder, and eyeliner. Balea makeup products are often affordable but still
ensure quality and effectiveness. P a g e | 4 b. Affordability
Balea products are known for their affordable prices, making them accessible to
many consumers. This affordability enhances the brand's competitiveness in the market.
This pricing strategy helps Balea attract a large number of consumers, especially
those with limited budgets who still want to use quality skincare and beauty products.
Having an affordable price also creates a competitive advantage for Balea in the
market compared to other brands with higher prices.
Balea not only focuses on low prices but also offers products at many different price
points, from cheap products to more high-end products. c. Quality Ingredients
Despite its affordable price, Balea maintains and enhances the quality of its
products. The quality of Balea products is highly appreciated in the cosmetics
industry and trusted by many consumers.
https://www.statista.com/forecasts/1339928/balea-deodorants-brand-profile-in-germany
• Selected ingredients: Balea always selects high-quality ingredients and is
thoroughly tested before using them in the production process. Care in
selecting ingredients helps ensure that Balea products meet safety and effectiveness standards. P a g e | 5
• Continuous research and development: Balea constantly researches and
develops new formulas to improve product quality and meet the increasingly diverse needs of consumers.
• Strict quality testing: Balea complies with strict quality testing standards,
from production processes to packaging and storage processes. This ensures
that every Balea product brought to market achieves the highest levels of safety and effectiveness. 2. Opportunities
a. Expansion into New Markets:
Balea has the opportunity to expand its presence into emerging markets where
demand for personal care products is growing. Strategic partnerships and
distribution agreements can facilitate market entry. This is because the demand for
cosmetics and skin care products is increasing.
According to Mintel, a global market research company, the Vietnamese cosmetics
market is worth about 2.3 billion USD.
Among them, skin care products are the most popular, with more than 60% of
consumers using them every day. In the same vein, Statista research shows that the
growth rate of the number of cosmetic stores nationwide will increase by 40%, from 87 in 2021 to 124 in 2022.
Major international cosmetic brands are paying a lot of attention to the domestic
market. Many leading European and Asian businesses, such as the UK, France,
Korea, and Japan, are actively looking for opportunities to join and expand business
activities in Vietnam. With different business strategies, the brand will offer
appropriate business models to effectively exploit the potential of Vietnamese customers. P a g e | 6
https://nielseniq.com/global/en/info/consumer-spending-data/
b. Innovation and Product Development
Investing in research and development can enable Balea to innovate and introduce
new product lines to meet evolving consumer preferences. This includes developing
eco-friendly and sustainable product options to align with growing environmental consciousness.
c. Digital Marketing and E-commerce
Leveraging digital channels and e-commerce platforms can help Balea reach a
broader audience and engage with consumers directly. Online marketing initiatives,
such as influencer collaborations and social media campaigns, can boost brand
visibility and awareness. Online businesses will spend most of their operating costs
running marketing campaigns on media, social networks or ecommerce platforms.
In terms of cosmetics and skin care products, once trusted by customers, e-commerce
will be the most convenient shopping channel. This is a typical advantage of the online business model.
However, doing business online does not mean that businesses do not operate
physical stores. Most cosmetic brands are integrating both models, online and offline,
in parallel. They see flagship stores as a channel to attract customers and ecommerce
as a platform to supplement revenue. 3. Weaknesses
a. Limited Brand Recognition P a g e | 7
Compared to major competitors, Balea may suffer from limited brand recognition,
particularly outside its primary market. This could hinder its ability to attract new
customers and expand into new regions.
In Cosmetic Brand Ranking, the Balea brand is not in the top 50 recognized cosmetic
brands in the world. Instead, Nivea and Syoss, which also focus on the low-class
customer and Germany brand like Balea, are in the top 50. It proves that Balea's
brand awareness is very limited when entering the world cosmetics market.
b. Dependency on Parent Company Lead to Limited Distribution Channels
As a private brand owned by DM-Drogerie Markt, Balea's success may be closely
tied to the strategies and decisions of its parent company, which could limit its
autonomy and agility in responding to market changes (Müller-Stewens & Kunisch,
2019). Balea's distribution channels may be limited compared to larger competitors,
impacting its ability to reach a broader audience and compete effectively in the
market. Balea in Vietnam lacks local distribution support from DM stores, making
it difficult to get products to users. This leads to a natural consequence of making
less profit without support from the parent company, creating a fatal weakness when
competing with other competitors in the industry in the world market.
c. Product genuineness:
Balea's authenticity is often difficult to distinguish for new users, because they are
likely to buy counterfeit products imported from China. Because there is a lack of
distribution of goods from DM stores in the world market, customers can only search
for goods on e-commerce distribution channels such as Lazada, Shopee, Tiki, etc.
However, most of these Balea products at the above distribution channels are all genuine.
When consumers purchase counterfeit Balea products, it damages their perception
of the brand and influences their purchasing choices. This is particularly detrimental
for Balea, a young company reliant on building a positive reputation among
consumers. As counterfeit goods from China are prevalent, customers can only
access authentic Balea products through Amazon Germany, creating a limitation for consumers. 4. Threats a. Intense Competition P a g e | 8
The beauty industry offers lucrative opportunities with high demand and attractive
profits, but it's also fiercely competitive. While the easy entry into the market fuels
competition among big brands and small businesses, it benefits consumers by
providing a wide range of innovative products. To succeed in this dynamic landscape
shaped by social media and growing health consciousness, businesses must stay
agile, innovate, and prioritize high-quality, natural, and cruelty-free options.
The beauty industry is highly competitive, with numerous established brands and
new entrants vying for market share. Balea faces the threat of losing customers to
competitors offering similar or superior products.
b. Changing Consumer Preferences
Shifts in consumer preferences towards, vegan, natural, organic, or cruelty-free
products could pose a threat to Balea if it fails to adapt its product offerings to meet
these evolving demands (Kapferer & Bastien, 2012).
With the rapid change of consumers, customers tend to use products that are not
tested on animals and do not mention whether the product ingredients are natural
or organic or vegan. This will lead to the risk of not being able to adapt to the trend
of consumer consumption choices, resulting in Balea possibly being kicked out of
the industry. This is a scenario that can happen when the choice trend becomes more and more ethical. htt
ps://glamafricbeautyshop.com/difference-between-cruelty-free-vegan-organic-and-natural-cosmetics/ c. Economic Downturn
Global growth is projected to stay at 3.1 percent in 2024 and rise to 3.2 percent in
2025. Elevated central bank rates to fight inflation and a withdrawal of fiscal support
amid high debt weigh on economic activity. Inflation is falling faster than expected
in most regions, amid unwinding supply-side issues and restrictive monetary policy.
Global headline inflation is expected to fall to 5.8 percent in 2024 and 4.4 percent in P a g e | 9
2025, with the 2025 forecast having been revised down. But Covid-19 is the
unpredicted scenario, Covid-19 or the same scenario will be a fiction is worthy of
wonder that may occur again in the future.
https://www.forbes.com/sites/billconerly/2023/08/05/recession-forecast-still-right-for-late-2023-or-early- 2024/?sh=75919a1d5cf1 III. CONCLUSION
In conclusion, Balea, a well-known German brand operating under dm-drogerie
markt, boasts a diverse product range encompassing personal care, skincare, haircare,
body care, and household items. Despite its array of offerings and affordability,
Balea struggles with limited brand recognition beyond the European market. This
lack of awareness extends to regions such as Asia, where information about the brand
is scarce. The primary factor contributing to this challenge is the brand's restricted
distribution channels, which are predominantly limited to online platforms and dm-
drogerie markt stores. Consequently, Balea's reach remains confined to European
consumers. However, amidst these limitations lie opportunities for growth. Balea
has the potential to expand into new markets, particularly in Asia, leveraging digital
marketing and e-commerce platforms to broaden its audience reach. Nevertheless,
Balea faces several threats, including fierce competition from established brands,
evolving consumer preferences, and economic uncertainties. Despite these
challenges, Balea possesses the potential to navigate the dynamic market landscape
by capitalizing on its strengths and seizing emerging opportunities for expansion and innovation.
Solutions to improve the brand: P a g e | 10
Balea, a brand offering diverse personal care and beauty products, can improve its
market standing by aligning with evolving consumer preferences. Researching Gen
Z beauty trends, such as new lipstick colors and innovative mask formulations,
enables Balea to adapt effectively. Maintaining its pricing strategy while enhancing
product quality to appeal to consumers seeking higher quality options is crucial.
Expanding into new markets, particularly Asia, presents significant growth
opportunities. Diversifying distribution channels beyond DM-Drogerie Markt,
including partnerships with retail chains and online platforms, broadens market
reach. Implementing authentication measures like tamper-evident packaging and QR
codes enhances product trust, particularly in Asian markets. By focusing on product
development, pricing, market expansion, distribution, and authentication, Balea can
better meet the diverse needs of beauty consumers and strengthen its competitive position. 11 P a g e | REFERENCES
Kapferer, J. N., & Bastien, V. (2012). The specificity of luxury management:
Turning marketing upside down. Journal of Brand Management, 19(7), 523-540.
Kotler, P., & Armstrong, G. (2020). Principles of marketing. Pearson.
Kotler, P., & Keller, K. L. (2016). Marketing management. Pearson.
Müller-Stewens, G., & Kunisch, S. (2019). Strategy Safari: The Complete Guide
Through the Wilds of Strategic Management. Campus Verlag.
Statista - Personal Care Market Size and Growth Trends
Mintel - Beauty and Personal Care Market Report
Euromonitor International - Beauty and Personal Care Industry Analysis
Balea Official Website - Product Catalog and Brand History