Abstract

Background: The main aim of the research is to focus on the market potential of the cosmetic brands
in the market of Aruba, Bonaire and Curacao (ABC islands). These islands are located in the Caribbean
Sea in front of the coast of South-America. Before starting to expand, international companies first
search for potential suitable markets to invest in. This thesis attempts to find out if there is a potential
market for the cosmetic products of the companies on the ABC-islands.
Purpose: The purpose of the Master thesis is to find out if there is a potential market for new cosmetic
products on the ABC islands. To achieve the purpose, the research addresses the market potential
analysis.
Conclusion: The market of Aruba and Curacao offer a great number of potential clients and a good
future prospect. These findings are also supported by research that was conducted in 2007 by the
Icongrouponline. Majority of the consumers on the islands are willing to try new professional cosmetics
products. Additionally, the tourism industry plays an important role when assessing the market potential
on these islands for professional cosmetics products.
Key words: Internationalization, market selection, market potential and development, entry mode,
cosmetics products, Aruba, Bonaire, Curacao i
Table of Contents
1 Introduction .......................................................................... 1
1.1 Introduction ................................................................................... 1
1.2 Research Problem ......................................................................... 3
1.3 The Purpose of the Research ....................................................... 3
1.4 Limitations ..................................................................................... 3
1.5 Literature Review .......................................................................... 4
1.5.1 Choice of Literature ............................................................ 4
1.5.2 Market Potential .................................................................. 4
1.5.3 Professional Cosmetic Industry .......................................... 6
1.6 Disposition ................................................................................... 10
2 Theoretical Framework ...................................................... 11
2.1 Theoretical framework Introduction ............................................. 11
2.2 The Market Potential ................................................................... 11
2.3 The Four-Step Market Model ...................................................... 12
2.3.1 Preliminary Market Screening – Step 1 ............................ 12
2.3.2 Macro-Segmentation – Step 2 .......................................... 14
2.3.3 Estimation of the Market Size – Step 3 ............................. 15
2.3.4 Market Segmentation – Step 4 ......................................... 15
2.4 Market Potential According to Hollensen ..................................... 16
2.4.1 Estimation by Analogy ...................................................... 16
2.5 Porter’s 5 Forces Model .............................................................. 17
2.5.1 The Threat of New Entrants .............................................. 17
2.5.2 The Threat of Substitute Products .................................... 18
2.5.3 The Bargaining Power of Buyers ...................................... 18
2.5.4 The Bargaining Power of Suppliers .................................. 18
2.5.5 The Extent of Competitive Rivalry ..................................... 19
2.6 Theoretical Framework Summary ............................................... 19
3 Methodology ....................................................................... 21
3.1 Introduction ................................................................................. 21
3.2 Research Philosophy .................................................................. 21
3.3 Research Approach ..................................................................... 22
3.4 Research Population ................................................................... 22
3.5 Sampling Method ........................................................................ 23
3.6 Data Collection ............................................................................ 23
3.7 Pilot Testing ................................................................................ 24
3.7.1 Survey .............................................................................. 24
3.7.2 Interview Questions .......................................................... 25
3.8 Survey Sample Size .................................................................... 25
3.9 Statistical Analysis ....................................................................... 25
3.10 Reliability and Validity ................................................................. 26
4 Empirical Findings ............................................................. 27
4.1 Introduction to Empirical Findings ............................................... 27
4.2 Background Information Worldwide Cosmetic Market ................. 27
4.2.1 Background Information Cosmetic Market Bonaire and Curacao
................................................................................ 27 ii
4.3 Background Information for Empirical Findings ........................... 28
4.3.1 Aruba ................................................................................ 28
4.3.2 Cosmetics market in Aruba ............................................... 29
4.4 Bonaire ........................................................................................ 29
4.4.1 Cosmetic market Bonaire ................................................. 29
4.5 Curacao ....................................................................................... 29
4.5.1 Cosmetics Market in Curacao ........................................... 29
4.6 Tourism sector............................................................................. 30
4.6.1 Tourism Sector of Aruba ................................................... 30
4.6.2 Tourism sector of Bonaire ................................................. 30
4.6.3 Tourism sector of Curacao ............................................... 31
4.6.4 Economic Growth in Aruba and Curacao .......................... 31
4.7 Primary data collection ................................................................ 32
4.7.1 Interview findings .............................................................. 32
4.7.2 Interview summary ............................................................ 34
4.8 Survey Findings........................................................................... 36
4.9 Survey Data Output ..................................................................... 36
5 Analysis............................................................................... 41
5.1 Market Potential Analysis ABC-islands ....................................... 41
5.1.1 Macro-Economic Factors .................................................. 41
5.1.2 Industry ............................................................................. 42
5.1.3 Tourism Sector ................................................................. 43
5.2 Primary External Data ................................................................. 44
5.2.1 Competitors ...................................................................... 44
5.2.2 Intermediaries & End Customers ...................................... 45
5.3 Porter’s 5 Forces Analysis ........................................................... 46
5.3.1 Threat of New Entrants ..................................................... 46
5.3.2 Threat of Substitute Products ........................................... 46
5.3.3 The Bargaining Power of Buyers ...................................... 46
5.3.4 The Bargaining Power of Suppliers .................................. 47
5.3.5 Competitive Rivalry ........................................................... 48
6 Conclusion .......................................................................... 49
7 Discussion .......................................................................... 51
8 List of references ................................................................ 52
9 Appendices ......................................................................... 58