Study: Personal Care marketers should watch their spending

2/3/2009

LITTLE FALLS, N.J. Personal care marketers will be affected by the ability to increase retail prices, unless unique product benefits are highlighted, according to research firm Kline & Company.

The research firm, which released a study entitled "Personal Care: U.S. Competitor Cost Structures 2008", points out that most companies have only an 11 percent operating margin, since personal care marketers spend over half of their budget on marketing. This, combined with the perpetual need to spend significantly on advertising and promotions in order to drive consumer awareness and demand in highly competitive categories, will continue to lead to margin pressures for personal care marketers.

Additionally, companies whose product lines are heavily focused on luxury products, such as Estee Lauder, will feel the sting of the recession more than those whose products tend to be priced lower, such as Avon, Johnson & Johnson, and Procter & Gamble.

The study also concludes that high oil prices over the past two years drove production and distribution costs for personal care marketers up significantly.

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