1. Beauty Prestige Market Analysis Kristen L. Prazenica Marketing Co-op Fall 2010

3. Where are consumers investing in skincare?

4. Stores Where Facial Products were Purchased in Past 5 Years  For anti-aging serums and regular cleansers, home shopping network purchases have slightly increased over the past year  Eye products and facial moisturizers have slightly declined in purchasing trends over the past year  Prestige beauty products are suffering in launch dollars  Over the course of 2 years, has dropped from $223 to $213 million

5. The Prestige Skin Care Market is Down

6. Ways to fuel innovation in Skincare  The Key, Mass Acceleration Innovation  Unique delivery systems  Specialization  Anti-aging winners  Tools “CONSUMERS VALUE BEST PRICE FOR THE PRODUCT GETTING A DEAL.”

7. 2009 Segment Results

8. Results  Sets & Kits grew 7%  Anti-aging sets grabbed top 40 out of 50 ranked sets

9. The Anti-aging Prestige Beauty Market Defined  More than 50% of women are anti-aging seekers  86% of anti-aging seekers are striving for wrinkle reduction results  74% are seeking firming/lifting skin results  59% of anti-aging users find products ineffective

10. Expansion in the “Sensitive skin” Market  49% of women have sensitive skin  62% of 18-24 year olds  61% of all African American women  Consumers in this market favor hypoallergenic, fragrance-free, and SPF strong products  Kits are the most appealing  Rely on natural face care products the most  Most likely to purchase from companies that give back to charities

11. What are women searching for when purchasing skin products?

12. Natural Brand Report from 2009 Natural Skin care Brands have grown significantly since 2006

13. How do we get a female shopper to buy and use?  54% of women rely on friends, family, and coworkers to help them in their beauty product decisions  47% admit to being influenced by experts  40% by magazine articles  29% by internet and blogs  12% by home shopping networks and infomercials

14. Planned vs. Unplanned Shopping Trends Anti-aging serums, treatments, and moisturizers

15. Skin Care Summary  Consumers are beginning to cut back on beauty purchasing  Shifting to preferences of interaction/personal engagement before making purchase  Skincare has gained in relevance to consumers  Make-up has declined in the eyes of the consumer  Kits are a hot commodity  Anti-aging is a strong market that is not declining  Most decisions to purchase are made on impulse  Women are remaining faithful to their brands