Presented By

Mary Martin Paul

Rí na Mara Seaweed Cosmetic

Range

Rí na Mara Cosmetics• Organic, high-end seaweed cosmetic range of 6 products

• From Connemarra

• Operating for 10 years

• Selling well across Ireland, Germany, US and Dubai

• Biggest challenge: finding new sales channels post-recession and becoming e-commerce savvy.

NORWAYJust over 5 million people

Average gross salary €54,000 and net €40,000 (2014)

Neither in the EU nor the Eurozone

A member of EFTA (European Free Trade Association)

US Commercial Service, Global Edge.

NORWAY• Politically stable

• Low unemployment rate of 4.3% (July 2015)

• Oil and gas accounts for 50% of Norway’s exports

• Norway is 7th largest oil exporter worldwide

NORWAY’S STRENGTHS

•Business climate rating is A1•New oil deposits discovered•Solid banking system•Disposable income very high (approx. $22k per person)

NORWAY’S WEAKNESSES

• Dependence on oil sector

• Very high level of household debt

• Competitiveness eroded by high wages

Globaledge.msu.edu/countries/norway/risk

KEY CHARACTERISTICS OFTHE NORWEGIAN MARKET

• Consumer Trends in Cosmetics: What and how do the Norwegians buy?

• The Business Culture of Norway: What other Irish companies have found.

• Our seaweed culture vs. theirs.

Consumer trends in cosmetics:

What does Norway like to buy?

•Norwegians “view beauty products as essentials”….

….and are “sophisticated in their demands.”

(Consumer Lifestyles in Norway)

Where are the opportunities in Norway

for new products?Opportunities to “carve out a high-end niche” …….

….rather than take on established mainstream multinationals like L'Oreal.

(Euromonitor International)

Niche cosmetic market in Norway

•“Niche label” premium beauty products account for 26% of market share in Norway.

•The market niche that holds the most potential is “natural and organic cosmetics”

(Euromonitor International)

What does the typical Norwegian cosmetic consumer

want and who are they?• They consider themselves to be “friends of the

environment”• Concerned with safety of products• Aware of chemical ingredients and allergic reactions• Health conscious, outdoor types• Young Norwegian consumers “seek out organic

produce”.• Concerned with sustainability in organic products• Organic products must be of high quality

(Ecolabel)

Who buys what

in Norway?• Norwegians were the biggest spenders in Western Europe on cosmetics with “an average per capita spend of US$289 in 2006.”• The most lucrative product segment is skincare in light of the ageing population and wealth of 50+ group.• Those aged between 45 and 49 years have highest gross income in Norway.

Demand trends for cosmetics in Norway

• Female consumers want “premium grooming products”; demand has soared in recent years• Per capita sales in top end products rose by 10%

between 2008 and 2013• A willingness to pay more for safer products is in

evidence.• Male Norwegian consumers most interested in

anti-ageing products (57% of men surveyed by Nivea in 2012).

(Consumer Lifestyles Norway)

Growing Trend in Cosmetics in Norway

• Popularity of spa treatments has boomed in Norway in last five years.

• This has led to increase in buying of “superior quality products”.(Ecolabel)

• Bord Iascaigh Mhara (Irish Sea Fisheries Board) has noted this potential in export sales:“…larger volume products intended for spas and treatment centres appear to be growing in importance.”

Doing Business in Norway according to

Irish companies who already work there

• Norwegians have a strong work/life balance: work to live and family time is extremely important

• There is an openness to adopt innovative products

• Business-friendly environment with well-established infrastructure

Business Style in Norway

• Clear distinction between personal and professional relations• Direct, honest communication is vital; straight to the point• “Low context” communication style and a

reserved business culture• Norwegians, of all Nordic countries, are least relationship-focused and more deal-focused

Details are important!• Be specific in negotiating terms with Norwegians• Written contracts are favoured and binding and should be fulfilled exactly• Be prepared, structured and organised in presentations; detail is the key• Norwegians are more detail-focused than Irish people• Good market research is vital and presenting factual information in a clear, precise way is the norm

The importance of being Local in Norway•Having a local rep on the ground is vital• Someone who knows the local business environment and Norwegian language is a huge bonus• English is widely understood but having Norwegian is very important going forward in the long-term

SEAWEED CULTURE: OURS vs. THEIRS!

• Both Ireland and Norway have long-established seaweed industry for food, fertilizer and cosmetics.

• Kelp is the main type of seaweed used in cosmetics in Norway; Ireland also has kelp but a wider assortment.

• Fundamental difference: Norway harvests its seaweed mechanically. Ireland harvests its seaweed manually (on foot or by diving).

Mechanical vs. Manual Harvesting

“….in countries where (kelp) is harvested with mechanical equipment scientists appear to be concerned with the equipment’s impact on the species and also on the surrounding ecosystem”

Seaweed Industry in Europe - Netalgae

• In Ireland, the National Parks and Wildlife Service is opposed to the introduction of mechanical harvesting of seaweed.

• The Irish authorities do not issue authorizations for mechanical harvesting.

Mechanical vs. Manual Harvesting

What does Bord Iascaigh Mhara recommend?• BIM is the Irish Fisheries Board, governing the seaweed industry.

• BIM recognises that the Irish seaweed cosmetic sector has “significant growth potential particularly for export markets.”

What does Bord Iascaigh Mhara recommend?

Crucial to success in exporting our seaweed to Norway is the following:

• Scientific data to support market claims• Scientific data on water quality…. to

highlight unpolluted nature of (our) waters• Organic certification• Environmental credentials

Our Target Market

Age/Gender

All Women 16 – 65 (+?)

Some Men 16 - 40

Norway’s Population

Norway’s Demographics Profile

Norway’s Demographics

Age Distribution

Age / Gender %

Sales Outlets Health Stores

Beauty Shops

Department Stores

Hotels / Spas

Cruise Liners

Website

Social Media

Convivial

Independent

Artistic

Entrepreneurial

Athletic

Hardworking

Glamourous

Sporty

Patriotic

Cultural

Sociable

Discerning Consumers

Diligent

Elegant

Formidable

Musical

…..blant mange andre ting..!

Of course, Men are also a Target Market...

Irish CompetitorsSome of the major players…..

Norwegian Competitors

Just a few….!

International Competitors

This could take all day…..

Strategic Alliances

Distributors in Norway

Kosmetikkleverandørenes forening (KLF)is the trade association representing the cosmetic industry in Norway.

Often cosmetic products on the Norwegian market are delivered directly to the consumer sales outlets

from a central stock in another country other than Norway.

Our Product’sPotential

Natural

Organic

Affordable Irish

Healthy

Trendy

Transport Routes

Options for Market Entry

There are a number of different options available

for market entry to us.

Here are a few of them and their benefits/ downsides.

Licensing

• This option provides a contractual source of income.• It also limits the companies financial exposure.• However….• Picking a good partner can prove difficult and the wrong one could be detrimental.• It can also lead to a loss of competitive edge for the company.

Joint Venture• Similar to licensing, one of the most challenging concerns is that of relationship management.• As we are not currently operating in Norway this could prove even more difficult.• Positively…• The shared investment risk provides safety for us.• The shared knowledge and complimentary resources could be beneficial.

Foreign Direct Investment• This would allow us to maintain full control of the

product. • We could enter the market much quicker. • Greenfield investments may also be subsidised.However…• It will require substantial direct investment to a market

in which we are unsure of demand.• There may be integration and co-ordination issues. • Greenfield investments are time consuming and

unpredictable.

• To have high control over the product you must take higher risk such as a wholly owned subsidiary.

• On the contrary, generally speaking the lower the risk you take say for example with exporting, the lower the control you keep over the product in the new market.

• These were important elements for us to consider when entering this market.

RecommendationsExport.

• Some clear disadvantages of this are the transportation costs and the lack of any possible location advantages in Norway.

Its benefits however are:• No need for operational facilities in the host country• Marketing can be controlled from Ireland via phone

and internet.• No issue with trade barrier thanks to EFTA

Exporting• When going ahead with exporting a key to the success of

the project is ensuring we have a good distributor and maintain a strong relationship with them.

• The distributor should have a good market knowledge of skincare products and seaweed products if possible.

• Enterprise Ireland offers support for this through assisting with and organising places at trade shows.

Formal or Informal in Business?

• Norwegians dress casually for business in an informal way but meetings are always formal and structured.

• The hierarchy in a Norwegian company is never explicitly shown and the CEO can appear as casual as the next employee.

• They look informal but expect formality always.

Do not be late in Norway..!

• Punctuality is very important: meetings never run over time and are very structured• Norway is very much a monochronic country with respect to business• Fulfilling delivery time-frames is critical; future orders and business relationship depends on this

How will we operate in the market?• We could operate focusing solely on the upmarket Rí

na Mara products like in Dubai or USA or also offer the bargain product, Le Mara like in Germany.• Based on the research conducted showing the

conscientiousness toward health by people in Norway and there high level disposable income we recommend focusing solely on the upmarket products.• With this we will have a lower volume needed to

export, meaning reduced shipping costs and storage costs.

4 P's of Sales

Product• “It is great if you can sell sand to the Arabs or ice to

the Eskimos, but do they really need it?” (Kelly 2015)• While skincare products are not life essentials, they

are very popular in Norway.• As we are entering with just the upmarket product

our target is those who spend on luxury goods.• Unlike in the USA, Norway is not so strict in terms of

laws around branding and writing on packages, so we can focus of the Anti Age aspect which will appeal to the male market in Norway.

Price• As has already been highlighted in this report, Norwegians generally have a high level of disposable income, so being a premium product should not be a deterrent.• We would not suggest up front discounting, and instead offer back end rebates for marketing services received.

Place• We recommend to first look at placing the product in Spas and beauty rooms of 5 Star hotels.• Cruise liners are another option.• In terms of retail space we recommend pharmacy and specialised shops and not supermarkets.• However if demand is high we will have to look at warehouses in Norway for storing to meet demand.

Promotion• As already highlighted we would look at several avenues to

promote the product.• Facebook would be key to our online presence and sales and

has proven effective in the past.• E-zines newsletter are another avenue to try.• Women's magazines and men's health mags may get positive

results.• Television would incorporate too high a cost for the launch in

our opinion as research shows that Norwegians don’t generally respond well to jazzy campaigns.

• In-store promotional staff giving potential clients opportunities to trial the products could prove very effective.

Product Positioning

Product Positioning: what it is?

Not changes you make to your product….but positioning the product in the mind of your prospective customer

Product Positioning

“getting heard in ourover-communicated

society”Ries & Trout

Product Positioning

BE DIFFERENT

STAND OUT

What are pharma brands? Why do pharmacies stock them?

•“Pharma Brands” are brands distributed via the pharmacy channel and have a “medicinal” feel and function. They include upper end beauty ranges•Attract customers and increase profits•Differentiate their product range from other beauty outlets

Pharma Brands in Norway

Pharma Brands in Norway

Specialist outlets like pharmacies which sell premium and niche brands is “the leading distribution channel (in Norway) …with a 26% stake”

Euromonitor

How to position our product

for maximum gainPosition our cosmetic range in spa treatment centres in 5-star hotels in Norway

•Diversify sales channels and market segment•Sell a larger volume of product•Spa treatments are a growing sector in Norway•Gives exclusivity to our product

Positioning our product for Norwegian Consumers – Do’s &

Don'tsDon'ts:

• No flashy TV campaigns (this is successful already in the US for Ri na Mara on the shopping QVC channel)

• “…consumers in this market are…very sceptical and are not easily persuaded by flashy marketing campaigns.”

Euromonitor

Do’s:• Norwegians like to buy and research online

• “54% of Norwegians… are on Facebook” - Enterprise Ireland

• Good on-line marketing campaigns and a Norwegian website is a good investment

• E-zines and monthly newsletters

Positioning our product for Norwegian Consumers – Do’s &

Don'ts

Changes to our Marketing Mix

Packaging is fresh and neutral: vital for

Norwegian consumer who does not appreciate flashy appearance.

Traits needed to do Business in Norway• Truth, honesty and commitment are needed in building long-term business relationships in Norway

• John Roche, Enterprise Ireland Manager for Nordic Markets:

“In Norway in particular, always exercise humility, ostentatiousness does not go down well.”

Changes to our Marketing Mix• Norway not known for being a litigious

country in which to do business unlike the U.S. or Germany.

• Previously, in the U.S., Rí na Mara had to alter packaging with “anti-ageing” claim for legal reasons as per FDA in US.

• Not a problem in Norway: Norwegian men’s No. 1 issue when considering beauty products is “anti-ageing” according to Nivea survey.

• Use this claim visibly on the label/packaging.

Changes to our marketing mix• Promotions and demonstrations, marketing

brochures and banners need to be in Norwegian along with actual product labels.

• Yes they understand English but….using the local language is a basic courtesy and a winning sales tactic that is underrated.

• Personal case studies and testimonials are very valued by the Norwegian consumer and personalised endorsements should be included in the marketing mix.