Slayt 1

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E-BusinessCase reflect.com
Maryam Keyarsalan
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P R E S E N T A T I O N P L A N

• PREFACE
• COSMETIC INDUSTRY OVERVIEW
• Online Consumer Trends
• Competition
• PROCTER GAMBLE
• Project Mirror
• REFLECT.COM
• Independence Day"Burn the Ships
• The Site
• CROSSROADS
• EPILOGUE / COMPETITIVE ADVANTAGES

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PREFACE

• an e-commerce site that allows women to
  customized beauty products.
• needed a capital infusion from its original
  investors, which included the consumer packaged
  goods leader Procter Gamble.
• The funds were needed to redesign the website and
  improve the consumer purchase process.

Ginger Kent,CEO of reflect. COM

• Your state-of-the-art skin care, hair care and
  cosmetic products don't exist until you create
  them.
• Simply create your beauty profile and our
  scientific process then blends your requests with
  the best technology to custom make your
  products.
• Delivered free. Unconditionally guaranteed. !!!

reflect.com
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COSMETIC INDUSTRY OVERVIEW

• 24 billion market
• the fastest growing and most profitable sectors
  in the U.S.
• online beauty sales 360 million by 2003.

• The total cosmetics market (app.10 billion in
  sales) comprised two segments
• The mass market Mass products were sold through
  drug stores, grocery stores, health and beauty
  stores, and mass merchandisers.
• The prestige market Prestige products were sold
  through department stores and upscale retailers.
  Market sales were 6.5 bill.

• Online Consumer Trends
• half of Internet users in 1999. (27 million
  women online in the U.S.)
• Approximately 58 percent of new Internet users
  were women
• The most popular purchases were in the bath and
  body category, least-purchased category was color
  cosmetics.
• Buyers were not very experimental, 6 of buyers
  bought things they had never tried before.

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COSMETIC INDUSTRY OVERVIEW

• Competition Chaos in Online Cosmetics
• - shakeout
• Traditional manufacturer competitors
• - Procter Gamble
• - LOreal
• - Estee Lauder
• Online competitors
• Beauty.com
• Beautyjungle.com
• Beautyscene.com
• Eve.com
• Gloss.com.
• Sephora.com

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PROCTER GAMBLE

• started in 1837 as a soap manufacturer in
  Cincinnati
• offered over 300 brands of consumer packaged
  goods in nearly 140 countries
• is a global leader in the industry with sales
  topping 38 billion annually
• 's beauty care segment included three cosmetic
  labels
• Cover Girl(1960), Max Factor(2002),
  Oil of Olay
• The Beauty category included noncosmetic brands,
  such as hair care, including VS Vidal Sassoon,
  Pantene, and Physique

• Project Mirror
• A corporate known for innovation and brand
  marketing prosess, leader in new product
  development. Changes product development process
  as
• new collaborative technologies to promote sharing
  ideas and info. (video conference) "collaboration
  chat rooms.
• Global e-mail systems (93,000 users). (creating
  virtual libraries)
• Developing an internal innovation fund.
• 10 brand managers came up with a plan, developed
  tech. to customize products, and created a
  prototype website.
• The idea of Project Mirror was born, by PG's
  Interactive Marketting Team

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REFLECT.COM

• Project Mirror was born
• a mass customization website that would allow
• women to make their own formulations of
• - make up
• - shampoo
• - fragrance
• Reflect.com was financed with 35 million from
  PG and 15 million from
• Institutional Venture Partners (IVP)
• Independence Day, Burn the ships
• On October 1, 1999, to make the Web venture more
  authentic, PG forced employees to resign from
  the consumer goods giant, a team of 15 people
  left PG to join Reflect.com
• Denis Beausejour has presented each team member's
  spouse with one share of Reflect.com stock.
• They don't have a lifeline back to PG, have only
  Reflect.com stock and their teammates.
• (PG's worldwide VP of marketing for
  beauty care)

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REFLECT.COM

• The Site
• The Reflect.com launched in December 1999 as a
  personalized line of beauty products and
  services, using a patent-pending system for a
  mass customization model,
• Capability to create more than 300,000 different
  products and packages,
• By asking the consumer a series of questions and
  letting her control the experience,
• Company was able to produce product in very small
  lots, and reduced changeovers to 5 to 7 min. The
  industry average was 90 min.
• Reflect.com also enjoyed the benefits of lower
  inventories and reduced cost of sales,
• Customer's order was shipped, first time buyers
  received a live orchid as a thank you,
• Browsers who registered on the site and created a
  product but did not buy it received a surprise
  "delight sample" with their name on the bottle,
• If a customer was not satisfied with the product,
  Reflect.com would customize it until she was.
  However, did not accept returns.

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SUMMARY

• BUSINESS MODEL

• PROFIT SITE B2C, on-line retailer
• SCOPE The firm targets all people, who needs
  beauty product, have different type skin, hair,
  expectations.
• CUSTOMER VALUE
• By Differentiation
• Product Features reflect.com allows user to
  create their own formulates
• Product Mix It presents all kind of beauty
  product.
• Brand Name Reputation The firm sells the PGs
  products.

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SUMMARY

• BUSINESS MODEL

• CUSTOMER VALUE
• Low cost Prices are not expensive than its
  competitors.
• PRICE Menu Pricing Prices changes according to
  your choice. Ever you can buy or leave your
  product. Affiliative Program
  over certain purchasing in a month, you will not
  pay for posting.
• REVENUE RESOURCE
• Directly from the product that firm sold.
• SUSTAINABILITY
• By Customer feedback, innovation, promotions.

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COMPETITIVE ADVANTAGES

• PG had long been a leader in product
  development (innovation brand making skill)
• Project Mirror a mass customization website
  that would allow women to make their own
  formulations. (Women want and deserve
  individualized attention),
• Affilliate Program It's easy, generate revenue,
  free to join.
• Structure of site easy access, navigation bar,
• PG was more interested in information, than
  sale. (Customer feedback) Use an interactive
  question-and-answer.
• Promotions buyers received a live orchid as a
  thank you.

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Thank you