Sasa’s Business Model

1.Why do you think Sasa’s business model did not work as well in China as it did in Hong

  Kong?

• Sasa’s business model did not work well in China because there are over 3,500 domestics

      cosmetics companies in  China.

• Focused in increasing their marketing to retain market share against stiff competitor.
• Their local brands are cheaper than those offered by Sasa.
• In China, majority of consumers are still cost conscious.
• These international brands are marketed through mass-market retailers, independent retailers or counters in department stores, supermarkets and hypermarkets.
• Competition from skin care companies such as Procter & Gamble’s Olay and Avon.
• Competition from specialty stores - Sephora

What should Sasa do next if it wants to remain China?

• Sasa must create more sales to increase profit in order to cover its operating cost and taxes thus, survive in China.

• Sasa should take the opportunity of China large market in fragrance and cosmetic by emphasizing and strengthening marketing strategies on the 4P’s concepts as follows:

1. Product
2. Place or Distribution
3. Price
4. Promotion

Product

• In terms of product Sasa should offers a comprehensive product range and brand which targeted at diversified customer base
• Also develops its own-brands. By developing own product Sasa can create and build customer loyalty towards their products.
• Choose product selections that tailored to Chinese and Asians skins and needs
• Also offers value-added services, such as free skin analysis, free make-up and beauty treatments to attract more customers.

Place or Distribution 

• Diversify the distribution network by creating more Sasa store, specialty store and beauty counters in various markets.
• Locate their stores at a prime location such as in major shopping mall, supermarkets and others strategic places.
• Offer trendy and comfortable shopping environment and experience whereby customers can shop and choose different products at ease
• Appoint local distributers for the wholesale business which can help to sharpen the market penetration
• Promote shopping via Sasa.com online portal where more customers can be reached worldwide

Price

• In terms of prices Sasa should make wider range of prices from low to expensive, to cater and entertain wider customer base.
• Diversification of pricing strategy also help to reduce the impact of economic environment
• At the same time competitive prices can be offered due to:

• Strong bargaining power with bulk purchase
• Long-term relationships with vendors

Promotion 

• It was mentioned in this article that Sasa did not make promotion as much as their competitor. Therefore an aggressive promotion and effort are very important to be recognised and remembered by the consumer. Promotions can be done including print advertisements, host public relation activities and publish an online advertisement.  
• Create a Customer loyalty program that can keep customer to come back for more.
• Regular production promotions and give away free product samples is the easiest way to make consumer to try their product.

The following factors need to be considered to increase profit s by reducing the operations cost and wise managed  can contribute to profit for the company.

1. Human Resource Management
2. Brand Management
3. Inventory Management

Human Resources Management

To create professional trained staff with good product knowledge, selling and management skills.