<html> <head> <title>Scienceuticals August 07 Newsletter</title> <meta http-equiv="Content-Type" content="text/html; charset=unicode" /> <style type="text/css"> <!-- <style> .mid { border: thin solid #000000; } .rgt { padding-left: 10px; } .border { border: thin dotted #000000; width: 100%; } .border-top { width: 100%; text-align: left; } .botbord { border-top-width: thin; border-top-style: dotted; border-top-color: #000000: } .fonts { font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding-right: 5px; } .col-left { float: left; width: 50%; border-top: thin dotted #000000; border-bottom: thin dotted #000000; border-left: thin dotted #000000; } .col-righ { float: right; width: 50%; border-top: thin dotted #000000; border-right: thin dotted #000000; border-bottom: thin dotted #000000; border-left-width: thin; border-left-style: dotted; border-left-color: #000000; } .text { font-family: Arial, Helvetica, sans-serif; font-size: 12px; } .text img { float: left; } .text p { float: right; } .imgleft { float: left; width: auto; background-image: url(http://www.scienceuticals.com/images/julynews/artic.jpg); } </style> <meta content="MSHTML 6.00.6000.16448" name="GENERATOR" /> </head> <body> <div align="center"> <table width="767" height="1376" border="1" bordercolor="#000000"> <tbody> <tr> <td height="321" class=""> <div align="center"><img width="757" height="319" border="0" alt="" src="http://www.scienceuticals.com/images/letterhead.jpg" usemap="#Map" /></div> </td> </tr> <tr> <td width="757" height="985"> <div class="border-top"><div align="center"> <h3>July Newsletter</h3> </div></div> <div class="text"> <p> <p><strong>U.S. consumers worry about product safety and origin.</strong><br /> Safety problems with <strong>goods produced or manufactured in developing countries </strong> such as <a href="http://www.beauty-on-line.com/brd/dettaglinews.asp?ID=601">China </a> and South Africa that occurred over the past months have alerted consumers about the incidence the place of manufacture of products may have on their quality. According to a new poll, nearly two-thirds of U.S. adults lack confidence in the safety of a variety of products produced in developing nations, including <strong>personal care preparations </strong>, over-the-counter medications, prescription drugs, herbal remedies and nutritional supplements, and packaged or prepared foods. Eight in ten adults are concerned about counterfeit products that claim to be produced or manufactured in the U.S.</div> <a href="http://www.beauty-on-line.com/regulation/news-images/2007/safety-pollbig.jpg"><img src="images/augnews/pic1.jpg" border="0"></a> <div class="text">These are some of the results of an online survey of 2,071 U.S. adults, ages 18 and older, conducted by Harris Interactive between June 26 and 28, 2007 for <a href="http://www.wsj.com/health">The Wall Street Journal Online's Health Industry Edition</a>.<br> <br> When asked specifically about China's announcement that it will beef up its oversight activities in the wake of multiple product safety problems, only three in ten U.S. adults said they are confident that such measures will improve the safety of products produced or manufactured in China.<br><br> Many U.S. consumers appear to be considering <b>country of origin </b>when making purchasing decisions, on at least some occasions. Six in ten adults say they always check to see where a product is produced or manufactured (29%) or do so when making purchases they believe might directly impact their family's health and safety (32%).<br><br> Katherine Binns, Division President for Healthcare Research at Harris Interactive, comments,  <em>These findings suggest that if product safety problems continue it is likely that the general public will increasingly consider country of origin when making purchasing decisions. Furthermore, the public will not be assured that appropriate action has been taken if increased oversight only takes place in the countries that are producing or manufacturing products for the export market or if oversight is left in the hands of the companies that operate such facilities. </em></div> <em><br> </em> <div class="text"><strong>IS MASSTIGE THE NEW FRONTIER FOR US RETAILERS?</strong><br> <br>  Masstige is the new buzzword for those launching products in mature markets, and especially in the US where retail segments such as drugstore chains or home shopping retailers are upgrading the offering at a fast pace. <br><br> <em><strong>Quality concerns are growing</strong></em><br> <br> As the wealth of most US consumers - in particular baby boomer consumers - has been growing continuously over the last decades, their preferences have shifted to a higher degree of quality. This is true for foods, as it is for drinks or personal care products. However, this move to premium choices is not only motivated by a <b>higher income</b>, it is also propelled by a <b>longer product experience</b> and therefore a better ability to appreciate a product's finer qualities or, on the contrary, an exaggerated luxury claim.<br><br> Other motivations are linked to growing <b>safety concerns.</b> The fact that<a href="http://www.beauty-on-line.com/brd/dettaglinews.asp?ID=601"> cheap imported products have been recently linked to health concerns</a> should reinforce this trend. <a href="http://www.beauty-on-line.com/brd/dettaglinews.asp?ID=605">According to a recent poll</a>, nearly two-thirds of US adults lack confidence in the safety of a variety of products imported from developing nations, including <b>personal care preparations </b>, over-the-counter medications, prescription drugs, herbal remedies and nutritional supplements, and packaged or prepared foods. Eight in ten adults are concerned about counterfeit products that claim to be produced or manufactured in the US.<br><br> As a response, mass-market brands have seized this phenomenon as an opportunity to increase their products' value, and mass retailers are opening their shelves to new lines, some of them coming from the prestige segment.  Masstige , or  cheap chic , is precisely this blend of mass and prestige: a sweet spot between mass and class.</div> <div align="center"> <table width="420"> <tr> <td><img src="images/augnews/pic2.jpg"></td> </tr> </table> <br> </div> <div class="text"><strong>Grow or customize?</strong><br> <br> While consumers' preferences are becoming increasingly differentiated and are shifting to premium mass products, retailers at the same time have initiated a <b>mergers-and-acquisitions</b> strategy in order to gain critical mass for large penetration as well as achieve economies of scale. The main inconvenient of such a strategy is that it leads to<a href="http://www.beauty-on-line.com/ebn/newsletter.asp?eid=146"> uniformity in terms of merchandise offering and presentation with all buying and merchandising </a>done out of a centralized location.<br><br> The phenomenon is particularly affecting drugstore chains, in reaction to the surge of mass-retailers such as <a href="http://www.walmart.com/">Wall-Mart </a> , <a href="http://www.target.com/">Target </a> , or <a href="http://www.costco.com/">Costco </a> . Last year, <a href="http://www.cvs.com/">CVS </a> purchased 700 standalone Sav-on stores from Albertsons for USD 2.9 billion, a deal that made <a href="http://www.cvs.com/">CVS </a> the largest chain in terms of store count with a total of 6,100, and places it well ahead of its rival Walgreens whose store count of 5,200 stores was recently expanded through its first major acquisition in more than 20 year assimilating both Happy Harry's and Medic Drug stores. Rite-Aid the nation's third largest drug store also announced at the end of August that it intends to purchase 1,858 Brooks-Eckerd stores bringing its total store count to 5,000 and sales of USD 27 billion.<br><br> Department stores, which <b>market share is expected to fall from 5.5% in 1990 to 2.1% in 2010,</b> have difficulties to position their offering. Operators therefore adopted a similar strategy and began to join forces. As a result of the merger of Sears with Kmart, Sears Holdings made an impressive jump up Stores' Top 100 US retailers list, ranking 4th in 2006. Similarly, Federated Department Stores jumped from the 20th to 14th after reporting its combined sales with May Department Stores that they acquired in 2005. <br><br>However despite increased competition from department stores, drugstores and discounters, Wall-Mart still tops the US retailers' list. </div> </tr> <tr> <td height="58" bordercolor="#000000" class=""> <div align="center"><span class="text"><a href="http://scienceuticals.com/about.html" target="_blank">About Us</a> | <a href="http://scienceuticals.com/capabilities.html">Capabilities</a> | <a href="http://scienceuticals.com/contact.html">Contact Us</a></span><font class="newsletter"><br /> <span class="style5"><br /> </span></font><span class="text">&copy; copyright 2007 Scienceuticals, Inc. 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