s.
The prestige segment of the fragrance market, where "Madonna" brand perfume and all other celebrity fragrances are positioned, has been hurt by inexpensive imitation fragrances called knockoffs (Standard & Poor's, 1993, pp. H37-H43). "Madonna" brand perfume imitations entered the knockoff market in early-1992.
Prestige-goods are typically of a higher quality level than are other products in the same genre. This characteristic is applicable to celebrity fragrances. Even when the actual quality level of prestige-goods is not higher, there exists a perception of higher quality among those individuals included in the appropriate target market. Higher quality, or the perception thereof, is accompanied by a significantly higher price. In most cases of prestige goods, price differences are greater than quality differences. It is the prestige image created in the collective mind of the target markets that cause such price differentials to be feasible. Thus, any innovation in the way business is conducted which may impinge on perceptions by the target market of the quality/price relationship must be carefully scrutinized by marketers of prestige-goods.
Expansion into foreign markets is expected to provide for continuing growth for the North American cosmetics industry, which is expected be more than enough to overcome the saturation developing in the domestic market (Standard & Poor's, 1993, pp. H37-H43). The Far East, Latin America, Eastern Europe, the states of the former Soviet Union, and China are all considered to be markets with a strong potential (Royce, 1995, p. 815).
Social and Cultural Conditions in Brazil
Brazil has experienced and continues to experience serious economic and social problems. Some people in the first world tend to view Brazil as a country out of control. Such judgments, however, are made by people residing comfortably in developed economies, with little understanding or appreciation of wh...