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Introduction.

In recent years, consumer attitudes towards wellbeing are driving the


growth of the organic beauty market and the demand for clean label products. At the same
time, women’s changings lifestyles and increased social media presence have been driving the
need for more customizable products. And often times, when customization is offered by large
players in the industry, it refers to personalized service and packaging rather than customized
formulations.
Customer Value Proposition. Beauty Apron offers a Cosmetics “cooking” journey
starting from natural products, allowing customer to be in control of the ingredients. Also, by
adapting the product to the customer’s color preferences, Beauty Apron strikes a balance
between high degree of customization, affordability, and the use of natural ingredients, without
compromising effectiveness. The product portfolio includes Matching Make-Up Sets
composed of “Nail polish + Eyeshadow + Lipstick”. Variations of shades and finish can be
explored at a later stage. The venture is based on a differentiation strategy and can reasonably
leverage price discrimination methods along with high levels of customization.
Beyond the recipes and how-tos, Beauty Apron also promotes fun social experiences
through Workshops, intended for families, groups of friends and female co-workers to connect
over a shared experience—learning, testing, and conversing over a signature lipstick shade they
created together. This social aspect also allows to promote Beauty Apron through word-of-
mouth.

Hypothesis. To investigate the viability of this venture, I start by assuming that my


target customers are close in interests and demographics to ABC cooking studios’ customers:
 They appreciate the preparation process as much as the finished dish.
 They want to experiment mixing ingredients and learn new skills.
 They are inclined to be sharing the experience with their families, friends and co-workers.

Based on this assumption, I plan to negotiate a strategic partnership with ABC Cooking Studios
for the promotion of Beauty Apron products and workshops. I assume it’s a Win-Win as it will
allow ABC to potentially diversify and secure an additional stream of revenue, and I would be
able to have access to their facilities and customer base without risk of cannibalizing their
business. Moreover, ABC Cooking studios are present in other Asian countries (Singapore,
Indonesia, Malaysia, China, Taiwan, Thailand, Korea), which could allow to potentially export
the concept overseas.
Disclaimer 1. I assume an agreement can be reached with ABC cooking studios with
mutually favorable terms.

Disclaimer 2. Although the pool of potential customers from which the sample is drawn is
likely to be similar to the addressable market, this experiment in not intended to yield
generalizable results directly, but rather explore a niche market. To have greater confidence in
the generalizability of the results, Beauty Apron would need to collect data on individual
respondents at multiple events in the 126 different ABC locations nationwide to refine the
target market (e.g., by age, education level, income, etc.).

Hypothesis Testing (The Conversion funnel)


1- At least 1000 people exposed to Beauty Apron advertising campaigns through ABC
cooking studios will sign-up to the mailing list.

2- Of those, at least 30% will attend introductory workshops and pay a small fee of ¥500.

3- Of those, at least 70% will purchase the products they made, at 80% of the target price
point.

Falsifiable hypothesis
1- If less than 1000 people exposed to advertising campaigns sign-up to the mailing list.

2- If less than 30% attend the workshops and pay a small fee of ¥500.

3- If less than 70% purchase the products they made, at 80% of the target price point.

Experiment Design.
First, promotional campaigns of Beauty Apron will be run via ABC’s online platforms
(Website & Social Media) as well as their physical stores. If at least 1000 people sign-up to
the mailing list, hypothesis 1 will be validated.
If the concept arouses enough interest (1000 people), these will receive an invitation

to a Beauty Apron Introductory Workshop (1h session at a small fee of ¥500 that goes to

ABC). The workshop is intended to introduce the concept, make customers participate in
formulating their customized product, and collect their impressions. The attendance will allow
me to learn about who is actually coming into the space, their demographics, etc. If at least
30% of the prospects who signed-up and received an invitation to the workshop (300 people)
actually show-up, hypothesis 2 will be validated.
Finally, customers are likely to place high value on products they partially created,
hence leading to a purchasing decision (Ikea effect). To test this final hypothesis, customers
will be involved in making their “Signature Lipstick” using natural ingredients. A software
(e.g. Photoshop) will be used to pull the desired color (either from online image, or picture of

their outfit), and a customized 3D printer (HP 6100, ¥8000, With Edible, vegetable based ink

compatible with government's regulations) will produce the desired lipstick within a few
minutes (MVP). Customers will then be offered the option to purchase it at 80% of its target
price point. If at least 70% make a purchasing decision, hypothesis 3 will be validated.

Because of the conservative nature of this MPV test, i.e. focusing only on Lipstick with
fewer color options rather than the fully matching set “Nail polish + Eyeshadow + Lipstick”
with different shades and finish (e.g. Mat vs Shiny), the probability of a false negative increases
as a much lower proportion of potential customers may decide to buy during the experiment
than they would actually once the fully matching set is available, with a higher degree of
customization. On the other hand, the probability of a false positive may come from the 20%
lower price, as the customers’ willingness to pay may decrease at the actual price point.
Because the sample is randomly drawn and the test is numeric, the actual probabiliy of a false
positive and a false negative can be directly computed using a statistical software package.

After evaluating MVP test results and customers’ feedback, I will be able to decide whether to
persevere, pivot or perish the Beauty Apron Venture.