International Marketing Example Wiem Azaiez Linn Mona Batool Awwad Sharzad Fereiduni Doron Rosenberg Ekaterina Moustafina Lisa Moore

Background…. Going Global… Established: 1988 Ziva Gilad – a local spa technician AHAVA = “love” in Hebrew The native mud and salts have healing and rejuvenating qualities Core business: Dead Sea mineral based cosmetics Selling in Israel Going Global… Mid 90’s – exporting to Europe and U.S. Shamrock owned by Disney Company invested in AHAVA and opened the U.S market. Opened flagship stores Europe and U.S. Currently present in over 25 countries around the world It all began in 1988, when Ziva Gilad, a local spa technician, noticed female tourists bottling mud to take home. That sparked the idea for Ahava They started small, selling plastic bottles of mud and salt crystals to tourists at the Dead Sea and, later, in stores throughout Israel. But early on, Gilad and her partners knew that Ahava needed to become an international company if it wanted to grow By the mid-1990s, Ahava was exporting its products to Europe and the U.S. It wasn't until the early 2000s, however, that Ahava started to pour the necessary resources into marketing, advertising and branding abroad. These efforts caught the attention of an American investment firm, Shamrock Holdings, which is owned by the Disney family. In 2008 Shamrock acquired a nearly 20% stake in Ahava. The company already has flagship stores in Berlin, London, Singapore and Israel and is planning to open in Los Angeles, Miami and New York City within the next five years. generating sales of nearly $150 million a year. Its largest and most profitable market is the U.S.

The Dead Sea Some interesting facts: Why “Dead”? One of the 7 wonders of the world The lowest place on earth (-400m/-1300f) Water contains minerals with healing and rejuvenating qualities Healing potential for skin, heart and lung diseases The story of Cleopatra The largest natural spa in the world As its name implies, there's little life in the Dead Sea. The water's extraordinarily high salt content prevents fish and aquatic plants from living in it. The sea has been the subject of numerous research studies on therapies for skin disorders, heart and lung problems, and other conditions. It's believed that Egyptian ruler Cleopatra and the Queen of Sheba both bathed in the Dead Sea to keep their skin looking young and beautiful.

AHAVA – Marketing Mix Product lines: Source – facial and body Men – skincare for men Time – anti-aging Pure – spa products Dermud – dry and sensitive Mineral botanic – soaps Mineral sun care Mineral makeup

AHAVA – Marketing Mix Price: Price strategy ??? Most product lines start from $30 to $100 “Time Line” is the most expensive due to high concentration of minerals.

AHAVA – Marketing Mix Promotion: AHAVA music festival Cuponrefund.com Celebrities Different approach for different markets Mud-Models at Bryant Park during New York fashion week In the past two years invested $20 million in marketing and advertising

AHAVA – Marketing Mix Distribution: Map!

SWOT Analysis Strengths: Health and skincare benefits Usage of natural ingredients R&D Ecological efforts to save the Dead sea, adding value to the brand Environmental friendly manufacturing No animal testing Profitable growth, strong operational cash flow Experienced management for domestic and international markets Expansion of product offering Manufacture located in the Dead Sea – saving transportation costs Ahava purifies its own water at its Dead Sea factory and says it employs minimally invasive techniques to harvest the mud and minerals used in its products efforts to preserve the Dead Sea -- including a plan to bring in water from the nearby Red Sea in cooperation with Jordan Experienced management: American company “Ahava North America” in total charge of the brand throughout U.S. and Canada. Expansion of products: started from mud only. Now expanded into all cosmetics, spa and a new make-up line Negligible costs for transportation of raw materials.

SWOT Analysis Weaknesses: Very small global market share High manufacturing costs (in Israel) 50% owned by Gaon Holdings Ltd. Enterprise They are not “L’Oreal” or “Clinique” in terms of global market share. Mnufacture in Israel Gaon Holdings – large company with many holdings, expert in financial services and water technology, cosmetics is not their core business. Have the largest share of Ahava and therefore are in control of the company.

SWOT Analysis Opportunities: Sustainable development of the Dead Sea natural resources (environmental-friendly) Trend toward more natural ingredients in cosmetics The only company licensed by Israeli Government to mine raw materials from the Dead Sea Situated in a tourist area Symbol of Israeli success Cooperation with TEVA (http://www.tevapharm.com/) in development of dermo-cosmetic product lines. the company refrains from testing ingredients on animals, and it packages its lotions in recyclable tubes, bottles and jars. The unique selling point for the brand is the use of Dead Sea minerals, to which our customers have responded very well According to Ahava, it's the only cosmetics company licensed by the Israeli government to mine raw materials at the Dead Sea -- which means its competitors have to buy their mud and salt from the company. Location near the Dead Sea makes it easier to promote the brand to tourists and sell at shops near the area. Symbolizes Israel, common souvenir for tourists. TEVA – world known Israeli pharmaceutical and bio-technological company. The cooperation adds much value, trust and quality to Ahava brand.

SWOT Analysis Threats: Dead Sea dehydration Political Issues Numerous competitors Low brand awareness Lack of trust from global customers Environmental Activists Exploiting Israel’s natural resources for their private profits Dead Sea is disappearing: large quantities of water evaporate in the region's hot climate. As a result, the level of the Dead Sea has dropped more than 80 feet in the past 30 years. Some scientists worry that if this trend continues, the Dead Sea could dry out and disappear in the not-too-distant future. Political issues: with Israel a politically polarized topic, and the location of the factory in the west bank, some people may be turned off by the brand’s geographical origin Competition: Although consumers are increasingly looking for products with natural or organic ingredients, they have other choices besides Ahava. Women tend to be more experimental with their makeup but less so in the case of skin-care products, where large players like Clinique are still very dominant and very much trusted.

Competitors Unlike some of its competitors, which sell in mall stands, Ahava sells its products in a handful of high-end chains like Nordstrom in the U.S. and Sephora in France. Other Dead Sea brands mostly sell in small stands or kiosks in malls for lower price, but claim to have the same features.

Conclusions: First mover advantage in marketing Dead Sea products. Quickly realized global potential Offer a wide range of unique products Strong marketing skills Succeeding despite numerous challenges Strong financial growth

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