To set a reasonable income target for NARS, several factors need to be considered:
Market Analysis:
• Assess the current market size and growth trends of the cosmetics industry. Determine NARS' market share and potential for expansion. For example, if the global makeup market is projected to grow by 5% annually and NARS currently holds a 3% market share, this provides a baseline for estimating potential growth.
• Analyze competitor performance. Look at similar high-end makeup brands and their revenue growth rates. This can help set a target that is both ambitious and achievable compared to rivals.
• Consider regional markets. Different regions may have varying demand and growth potential. For instance, emerging markets might offer greater growth opportunities due to increasing disposable incomes and a rising interest in beauty products.
Product Portfolio:
• Evaluate the performance of existing products. Identify best-selling items and areas for improvement. For example, if NARS' blush and lipstick lines are popular, consider setting higher sales targets for these categories.
• Plan for new product launches. Estimate the potential revenue contribution of upcoming products based on market research and consumer demand. For instance, if NARS is planning to launch a new eyeshadow palette, research similar products' success and set a reasonable sales target for the new launch.
• Consider product diversification. Explore opportunities to expand into related beauty categories or target different consumer segments. This could increase revenue streams and reduce reliance on a single product line.
Marketing and Promotion:
• Allocate resources for marketing campaigns. Determine the impact of advertising, social media promotion, and influencer partnerships on sales. For example, if a previous marketing campaign resulted in a 10% increase in sales, plan for similar or more extensive campaigns to drive growth.
• Leverage brand image and reputation. NARS is known for its high-quality products and trendy image. Capitalize on this by collaborating with fashion events, celebrities, and influencers to increase brand visibility and attract new customers.
• Monitor consumer trends and preferences. Stay updated on the latest makeup trends and adapt marketing strategies accordingly. For example, if there is a growing demand for natural and sustainable beauty products, highlight NARS' efforts in this area to appeal to conscious consumers.
A reasonable income target for NARS could be set as a percentage increase over the previous year's revenue. For example, a target of 10-15% growth might be achievable if market conditions are favorable and the brand executes its strategies effectively. This could translate to a specific dollar amount based on the current revenue base.
It's important to regularly review and adjust the income target based on actual performance and market changes. This ensures that the target remains realistic and motivating for the brand and its stakeholders.