Pure Magic
A cosmetics company that was started at home in 1997 has made it into its sector's middle league, thanks to smart cost control and marketing.
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Entrepreneur: Will Evans, Founder and Technical Director
Company: The Purist Company
Business type: Natural skin and hair care products
Founded: 1997
Employees: 10 full-time equivalent
Turnover: (2005 - 2006) Retail sales of about $15M
Head office: Lane Cove, Sydney
Contact details: +61 2 9420 7400
The Purist Company Story
As a rapidly growing and award-winning developer of natural products, The Purist Company doesn't get into philosophical questions on whether it is engaged in the marketing of science or the science of marketing. It has what might be seen as a rather Eastern view that the two approaches are inextricably linked - like yin and yang.
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Key learning points:
- Business costs - Consider whether you can't turn some of your fixed production costs into variable ones by intelligent outsourcing.
- Dare to dream - The Purist Company started on a kitchen table just 10 years ago; today it is making an international name for itself. Vision counts.
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Purist's general manager and marketing director, Catherine O'Keefe, puts it in straightforward Aussie terms: "It's all very well having a good product, but you have to have the sales side sorted out."
The origins of the business date back to when cosmetics chemist Will Evans was creating and manufacturing at home. Of course, that had its limitations, so he found an investor and The Purist Company was formed in 1997.
Its hair, skin and body products are naturally based, using ‘skin friendly' ingredients. The A'kin and Al'chemy brands are promoted as being free from substances commonly found in mainstream products. A list of those substances is nerve-racking: sulphates, ethoxylates, parabens, propylene glycol, petrochemical cleansers, silicones, phthalates, mineral oils, diethanolamine and artificial colours.
The products are vegan, using certified organic ingredients where possible, 100% natural botanical aromatherapy oils and formulations free of animal ingredients and animal testing.
The Challenge
There was no doubting the quality of the range as the company concentrated on the science, but marketing and sales skills were somewhat lacking. "The company's first distribution effort was through pharmacies," O'Keefe says. "But that was too crowded, and the health-food store distribution channel was soon added."
Even so, the range had to make its way against many competitors, and a sound marketing strategy was essential to capitalise on the care that goes into the products.
The Solution
O'Keefe's appointment five years ago was part of the answer, adding expertise in sales, marketing and consumer issues to the board's experience in chemistry and the corporate sector. Turnover was approaching $1.5 million at retail level.
When she arrived the most obvious marketing issues were an inward focus and a certain inconsistency in the product range, both of which stemmed from the company's organic growth. O'Keefe says: "There was not much communication with consumers, as the company was basically in survival mode. So the board decided to focus on excellence in two areas - product development and marketing.
"We buy our ingredients and outsource the manufacturing to contractors, but we oversee all the processes. We also outsource warehousing, distribution and part of the sales function.
"That way we don't tie up large amounts of cash. The funds go into stock, business development and marketing. The board has a frequently asked question: ‘Do you have the money for marketing?'"
The marketing strategy includes ‘call to action' product and institutional advertising in consumer magazines and trade advertising. The company also employs point-of-sale display units, posters, counter merchandising and shelf-space planners that promote uniformity and make it easier for reps to assess replacement stock.
O'Keefe says stringent financial metrics are crucial and there are monthly reports to the board. Much of the profit is re-invested for the longer term, and every year management lock themselves away for three days of strategic planning.
The personnel now include a financial controller, assistant brand manager, supply chain manager and logistics administration officer. Management systems have been upgraded to include the Pronto enterprise resource planning software package.
As part of its customer-focused approach, the company researches market trends, develops new products in its own laboratory and conducts consumer testing.
The Result
The Purist Company's latest annual turnover was $15 million at retail level. But perhaps the most public indication of progress is its success with industry awards.
In the 2006 Telstra Business Awards in New South Wales the company won the MYOB Business Award for entities with six to 20 employees.
The citation mentions product distribution to more than 1500 stockists across Australia, plus exports to Brunei, China, Hong Kong, South Korea, New Zealand, Taiwan, the United Kingdom and the United States.
Also last year, industry experts in the UK voted A'kin gentle body wash as the best non-food product at the Natural Trade Show awards in Harrogate. "It's hard keeping up with demand," O'Keefe says. "We are planning for a growth surge of 25% a year, and exports will continue to play an important role. It may seem obvious, but one of the keys to success is to constantly exceed customer expectations."
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Case study by Performing Words www.performingwords.com.au
First published: 19 March 2007.
Last updated: 19 March 2007.