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Analysis Of The Cosmetic Industry

1524 words - 6 pages

Mid term précis and analysis of the cosmetic industryPrior to discussing any creative industry, it is crucial that we first define 'creativity'. Creativity refers to the course of producing something original, or in the least, with original elements. Thus, a creative industry refers to economic activities that involve the creation of new, original materials.The cosmetic industry is one of such industries, of which will be analyzed according to Richard Caves' economic properties. According to the Food and Drug Administration (FDA) of the United States, cosmetics are "articles intended to be... applied to the human body for cleansing, beautifying, promoting attractiveness, or altering the appearance." By this definition, cosmetics include a wide range of products, such as makeup, skincare, hair products, perfume, and body care products like lotions and body wash.First of all, the cosmetic industry clearly illustrates Caves' economic property of "infinite variety". The variety of cosmetic products available for consumption nowadays can easily blow one's mind. Cosmetics do not only include the makeup products that we see in pharmacies and department stores, but also skincare and hair products, which are all generally designed to enhance one's appearance. Cosmetics products come in all shapes and sizes, along with different forms of usage. Taking makeup as an example, we can always see almost identical products in women's makeup bags or over makeup counters. To those unfamiliar with the intricacies of the world of makeup, little would they know that makeup is actually classified by the location of its usage. In other words, makeup is not really just a bunch of lipsticks, eyeliners and blushes, but more so an array of products targeted for your eyes, lips and cheeks respectively. The possibilities do not just stop at this point, where eye makeup products, for instance, further consists of mascaras and eye shadows, and the list goes on.Although numerous cosmetic products seem to perform the same functions, the property of infinite variety is demonstrated in the details of every individual product. A red lipstick manufactured by brand A would not look any different from that manufactured by brand B. The two products are very much similar in the eyes of consumers, yet they are not exactly the same. Brand A's lipstick may carry a scent different from that of brand B, and brand B's lipstick could be shaped differently, affecting consumers' ultimate purchase. From an economic point of view, these lipsticks are vertically differentiated.Similarly, producers of cosmetic products have a virtually infinite variety of production methods to choose from. Using the same lipstick example, brand A may choose to infuse their lipsticks with a certain essential oil typically excluded from other lipsticks sold in the market. Consumers that happen to have tried the brand's lipstick may then discover that the quality of this lipstick is better in comparison to the...

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