ojected to reach 23 percent (Royce, 1991).
Economic Factors Affecting Industry Performance
Cosmetics are by and large discretionary products. Thus, retail sales are heavily influenced by both advertising and new product introductions (Standard & Poor's, 1990). Product differentiation through advertising is essential in the successful marketing of cosmetics. Cosmetics, however, are relatively recession proof, and demand tends to remain strong during economic downturns (Royce, 1991).
In the contemporary market, skin care products are strongest, while fragrances are weakest (Standard & Poor's, 1990). Demand for other personal care cosmetics and toiletries remains strong.
The prestige segment of the fragrance market has been hurt by inexpensive imitation fragrances called knockoffs (Standard & Poor's, 1990). Additionally, changes in packaging and distribution processes have created some problems for prestige level cosmetics.
Prestige goods are typically of a higher quality than are other products in the same genre. Even when the actual quality of prestige goo
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