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Cosmetics Case Study Marketing Segmentation

The cosmetic packagingindustry is witnessing a high degree of competition with numerous competitors relying on innovations to stay ahead of their competitors in the packaging space. With packaging becoming more of a necessity, its importance is growing broadly in line with the global economy. To identify the potential target segments and enhance their offerings in the market, leading businesses in the cosmetic packaging space are relying on product segmentation strategies. Though product segmentation, consumers can profile the right customers and channelize their efforts and resources accordingly. Also, with the help of such solutions, various cosmetic packaging companies can increase market shares, improve revenues, and further reduce costs. Product segmentation can also be leveraged to identify opportunities to discontinue specific products that are not performing well in the market.

To identify the products that resonate with the target market, leading businesses in the cosmetic packaging space are approaching companies like Infiniti. With expertise in offering a plethora of solutions, Infiniti’sproduct segmentation solution helps companies in the cosmetic packaging space devise robust segmentation strategies to meet the preferred traits of each market. Furthermore, organizations can further understand the demand-supply parameters to achieve economies of scale.

The Business Challenge

A renowned client in the cosmetic packaging industry with a considerable number of manufacturing units spread across the globe was facing predicaments profiling the key segments. The client wanted to analyze the regulations and investment options in the cosmetic packaging space to secure potential customers. Also, the client wanted to gain better transparency into the market space and devise effective strategies to improve sales performance. Also, the client wanted to identify their potential competitors and their product positioning strategies.

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Our Approach

To get the desired information on the cosmetic packaging space, the industry specialists carried out an extensive research comprising interviews and discussions with leading stakeholders in the market space. Also, to profile the key target segments, the client compiled information from a wide array of sources such as paid industry databases, company presentations, and industry forums.

Product Segmentation Solution Benefits:

  • Focused the marketing efforts on the most promising groups
  • Leveraged the use of demographic parameters to segment the target effectively
  • Understood the customer values, personality traits, interests, and attitudes of the customers
  • Divided broad target segments into subsets of consumers with similar desires and needs
  • Predicted the likeliness of the customers buying patterns in the future
  • Cultivated better relationship with the customers

Benefits of Our Integrated Approach

With the help of the product segmentation solution, the cosmetic packaging client was able to showcase new products and penetrate across niche market segments. Also, the engagement helped the clients devise a marketing plan to distribute their products effectively across the potential markets. Furthermore, the client was able to leverage innovations to improve product launches and enhance brand awareness.

A must-read case study for strategy experts and decision makers looking to develop an understanding of the cosmetic packaging industry.

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Amway did recognize the need for a special India-specific pricing strategy and there were just a fewmarginal cuts in the prices, which were still almost 20% higher than its competitors.

They roped in their Indian distributors through NRI’s living abroad.

They were given introductorykits which included samples of the products, sales material, information on the products etc. But these kits were used by the distributors themselves rather than using them to promote itsprospective consumers. Because of this volumes demanded after did not pick up.

The product quality was sometimes poor.

Problems like distributor attrition, a false 'premium' image had customer dissatisfaction surfacing.

Sales people often used a 'hard sell' for their products, moreover the sales people were poorly trainedand lacking in motivation.

Lack of networked banks, toll free phone lines and online shopping was another cause for Amway not doing well.

Since the sales depend entirely on the independent distributors , the company has to pay hugecommission. This results in the increased cost of the product. Hence the products become expensiveresulting in lower sales.

In a value conscious country like India, the expensive tag of Amway products is the singular reasonfor the lack of popularity of its products.

The Distribution Network was far from reach from common man.Amway used centralized marketingof all products worldwide never focused on the market in the smaller towns.

Distributors and sales team did not know the value of the products they were selling, this aspect wasoverlooked by the company.