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Industry Selection and Naics Code

By:   •  November 29, 2012  •  Essay  •  843 Words (4 Pages)  •  1,243 Views

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Industry Selection and NAICS Code

The industry that was selected for review is the hair care product manufacturing industry. Specifically, we are researching the products of shampoos and conditioners.

The North American Industry Classification System (NAICS) code for the hair care products manufacturing industry is 325620 – Toilet Preparation Manufacturing. According to the official NAICS description, this industry includes "establishments primarily engaged in preparing, blending, compounding, and packaging toilet preparations, such as perfumes, shaving preparations, hair preparations, face creams, lotions (including sunscreens), and other cosmetic preparations." The NAICS code is rather broad and encompassing. There is a sub-category under this code that represents "Hair preparations (e.g., conditioners, dyes, rinses, shampoos) manufacturing."

The Standard Industrial Classification (SIC) code for this industry is 2844 – Perfumes, Cosmetics, and Other Toilet Preparations. As is with the NAICS code, there is a more specific SIC code of 28440104 which represents "Toilet Preparations – Shampoos, Rinses, and Conditioners: Hair".

Narrative on Industry

Our team selected the hair care products industry due to the broad consumer spectrum of this product. Hair care products are needed and utilized by almost all members of society. It is an industry that consists of products consumed by all demographic groups, crossing genders, all age groups, various socio-economic categories, and multiple other demographic boundaries. Hair care products are indispensable to most individuals' daily hygiene routine. In addition, the need to purchase shampoos and conditioners are unchanged by economic conditions; even in periods of economic down turn, individuals need to continue standards of personal cleanliness. This industry is essentially "recession-proof".

We are also interested in the hair care industry because it requires companies that are innovative and can adapt to change. Research indicates that most hair care products are on the shelves of retail stores for an average of four years before they are replaced by updated products. This rapid turnover of products requires that companies remain aware of societal trends and adapt accordingly.

In addition, we wanted to research an industry experiencing growth. According to a recent study by Global Industry Analysts, the world market for this industry in 2010 is expected to reach $42.5 Billion. The following graph illustrates the world market for Hair Care products over the last sixteen years

Table 1. World Market for Hair Care Products

SOURCE: HighBeam Business , February 5, 2010

In researching the industry, we found that there are many different companies manufacturing hair care products. The market leader is Proctor & Gamble who produces a wide range of hair care brands including Aussie, Herbal Essences, and Nioxin. The four other major competitors in this industry are Unilever, L'Oreal, Alberto-Culver, and Johnson & Johnson. An interesting perspective of this industry is that many of the competitors produce a broad spectrum of products that range from the standard quality that can be purchased in drugstores and other discount stores, to the upper-end professional grade products that can only be purchased in salons.

Project Plan, Milestones, and Timeline

The project was divided into three major parts: Prospectus, Industry Analysis, and Marketing Plan. Each major part has an associated deadline. These major parts were subdivided into smaller more manageable sections. Each section was distributed to group members based on their individual strengths and research interests. These sections have an associated due date to submit to the "File Manager". There are some parts of the project that will be worked by the Group rather than individually. The File Manager is responsible for compiling each of the four team member contributions into a master document and then submitting the final document to the group by an assigned "due date". Various meetings have been scheduled to discuss the project. Meetings will be held after class on alternating weeks. Weeks that do not have a class meeting will require either a conference call or email status report to the group.

t.h.e. Project Plan, Milestones, and Timeline

Prospectus 2/13/2010

Group Members & Assigned Roles Group 2/2/2010

NAICS Code XXXX 2/2/2010

Project Plan & Milestones Group 2/2/2010

Narrative on Industry XXXX 2/8/2010

Create Logo Design XXXX 2/8/2010

Compilation of Materials XXXX 2/11/2010

PowerPoint Presentation XXXX 2/11/2010

Industry Analysis 3/13/2010

Template Design XXXX 2/17/2010

Industry Overview XXXX 2/22/2010

Customer Analysis XXXX 2/22/2010

Market Analysis XXXX 2/22/2010

Competitive

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