Professional Summary The purpose of this situation evaluation is to determine internal and external factors that will have an effect on Estee Lauder’s bundled marketing communications program (IMC). A scenario analysis is important to determine the location Estee Lauder is currently living in, in terms of funds, promotional strategies, product range and brand picture. A thorough analysis will help identify any options and potential threats which the company can come across plus the effect that these opportunities and threats will have on their new IMC plan.
Strengths and Weaknesses may also be identified and taken into account as the new IMC program is usually developed. Within the internal examination Estee Lauder’s past promotional mix approaches will be evaluated and examined. Strengths and weaknesses will also be evaluated when it comes to brand picture and the products they offer were also identified.
Estee Lauder’s current promotional approach has a strong focus on marketing in sources of print press within press relevant to their target market including fashion magazines which include, Harper’s Bazaar and In Design. Personal Offering also performs a dominant role in Estee Lauder’s current IMC strategy. The Internet and Direct promoting has played a minimal position in Estee Lauder’s IMC program to get Australia. It was identified as a weakness nevertheless also as being a potential opportunity to expand and use these kinds of promotional tools in their future IMC plan.
Other weak points were based around poor and inappropriate promotional strategies for achieving their designed ‘youth’ industry and customers in their twenties. Brand picture, price, bundle and merchandise design looked as being “too old” to get the targeted younger customer. The new IMC program will probably be focused on overcoming these weak points and on achieving the younger target audience in the best approach. Strengths this sort of high numbers of brand recognition, trust and a strong placement in the market place have been Determined and used in the future IMC program. The external examination involved increasing insight with regards to customers and competitors.
A pilot study was executed among 18-25 year olds regarding their perceptions and encounters with Estee Lauder to be able to develop a more in-depth analysis of Estee Lauder’s customer base among young Aussie females. Competitor Analysis essential thorough research into the tactics and positions of Estee Lauder competitors in the market place. Major rivals included Loreal and Revlon, their abilities and failings were recognized and will be regarded as during the advancement Estee Lauders new positioning strategy.
Even though a company has little or no control of their exterior environment a powerful marketing connection strategy will certainly anticipate these kinds of conditions and respond to all of them sufficiently. Estee Lauder needs to consider socio-cultural forces just like consumers raising concern relating to animal tests among various other environmental and social problems. They must also be aware of the adverse affects on the IMC program which will occur in the event that any cultural expectation are breached or perhaps if virtually any legal or political regulations are breached. The environmental research also determines the opportunity for growth as a result of trend in overall full growth and specifically cosmetic growth in Australia today.
In case the following elements are considered Estee Lauder find develop a powerful IMC software that will improve its manufacturer and allow those to expand in the younger marketplace as they have been completely aspiring to accomplish. Industry and Company Data Estee Lauder is a market leader in the cosmetics and skin-care industry. This market is highly competitive and rapidly expanding, with rivals continually entering the market. They give a range of cosmetics, perfumes and skincare products. Estee Lauder is a well established manufacturer since 1946 and has grown into a mother or father company for several well known skin care and cosmetic makeup products brands.
These include MAC, Clinique, Stilla, Aveda and Bobbi Brown. This situation analysis will focus on Estee Lauder as a consumer company and not the EL Businesses empire overall (see appendix 1). Inside Analysis Today, Estee Lauder has a sound customer base all over the world including the UNITED STATES, UK, Asia and European countries. Estee Lauder’s and Clinique’s combined sales made up forty percent of the total cosmetics business, with Lancome (owned simply by competitor L’Oreal) holding the third largest business, with 13% of the cosmetic makeup products market (Bittar, 2002, l. 29).
Over the past five years, Estee Lauder’s sales possess slowed, enabling Clinique, Estee Lauder’s sister brand to find market share, replacing them because number one brand in variety store sales (Bittar, 2002, g. 29). Presently Estee Lauder’s primary goal is reposition themselves since the buyers first choice for cosmetics. In order to achieve this target Estee Lauder need to examine current advertising efforts and identify chances for further growth that will maximize and improve the reputable Estee Lauder brand. Pricing Approaches Estee Lauder’s prices are in the higher end of the price scale within the cosmetics marketplace.
This is according to many of Estee Lauder’s immediate competitors particularly Lancome and Dior together with other subsidiary brands including MAC PC and Stilla. Their prices are established 20-35% above the price points of Clinique goods. Current RRP prices pertaining to various Estee Lauder numerous be found in appendix installment payments on your Review of Firm’s previous promotional programs u Advertising – Print multimedia is the current primary promoting medium to get Estee Lauder. Some of the main channels include fashion and lifestyle mags such as Harper’s Bazaar, Style, In Style, Jessica Claire, Cleo and Cosmopolitan.
These mags are targeted toward females with various lifestyles and levels of disposable profits however they are generally image conscious and is attractive to Roy Morgan’s visible achievement segment and those who desire to be part of this group (Mindset, 1998) (See appendix 3). Estee Lauder has been offering Liz Hurley as the face area of their makeup for the past seven years and has verified successful in endorsing their prestigious brand of makeup, fragrances and skin-care, (Bittar, 2002). Estee Lauder’s current models include “the company with strength, vitality and modernity” and aiming to “connect the brand with consumers” (Staff Report, 2003).
Last monetary year, EL companies allocated $US56 million to marketing to promote the core Estee Lauder brand. This determine has been consistent over the past five years and is the largest marketing figure of any EL Company. um Internet – Estee Lauder have not used the internet within the Australian market place. Their current website is definitely targeted towards the U. T, European and Asian markets. That provide Aussie consumers using a customised details source regarding available companies new business developments. um Sales Promo – Estee lauder promotes its distributer such as Myer and David Jones with promotional gift packs since an incentive to spend as certain amount of money or perhaps buy a specific product.
They will uphold their prestigious photo by rarely discounting many. Sampling campaign has also been employed successfully to promote new products and let consumers to appreciate the product first hand, without having to invest in a purchase. However , this has not been successfully used for Estee Lauder’s latest release of “Pure Colour” range of eyeshadows and lip gloss’s.
Preliminary research done found although this new range is targeted towards the younger market, it truly is still not being recognised as the brand of preference for 17-25 year olds (see appendix 4 & 5). u Personal Providing – Every Estee Lauder sales consultant are particularly trained and also have high amounts of product expertise. Cosmetics can be described as high participation purchase and therefore requires consultants to have an detailed knowledge of all products provided by Estee Lauder. o Immediate Marketing – Currently Estee Lauder are generally not using the internet for direct advertising sufficiently. Department shops often send out promotional leaflets to opt in subscriber list clients in the event new products are released or special offers are available.
Assessment of relative pros and cons of item and company Estee Lauder as a brand · Strengthes – High manufacturer awareness – High brand recall – Trusted company – High perceived top quality – High Brand Value – Great purchaser assistance – Perceived as prestigious manufacturer · Disadvantages – Communication Strategy not in line with target audience – Price of products too much to allow for repositioning into youthful market – Brand regarded as “too old” for marketplace – Products not suitable for younger market (i. electronic. anti-ageing moisturisers) – Deal design for mainstream catalog not ground breaking and modern day, sending conflicting messages and confusing consumers · Options – Feasible expansion into younger mass markets – Ability to follow an online strategy to enhance their marketing communications by introducing online magazines and building a direct promoting database. – Ability to set up themselves because the leading cosmetic makeup products brand consist of markets including Australia, specifically targeting 20-30’s market as well as the youth segment. – Creation of new connection strategy to build upon existing brand strengths and popularity. – Options for co-branding to reach untapped markets. · Threats – Losing existing customer base my spouse and i. e. more mature market due to new marketplace direction – Possible distress for customers regarding blended promotional communications targeting the young and old market i. e. strategies are not integrated – Shedding market share – Deterioration of perceived brand quality and prestige due to changing the promotional ways to suit the younger market – Potential lack of revenue because of decreasing item prices to attract the younger clients Competitive Evaluation As Estee Lauder redirects their concentrate from the old aged females to those in a younger age group, they come across a different group of competitors. These kinds of competitors work in the mass market of cosmetics and skin care.
Each brand is continually challenged to apply an effective integrated marketing plan to be able to maintain and/or increase their share of the industry thus creating a high level of competition pertaining to Estee Lauder. Direct Competitors Revlon and Loreal Rome are both mid-range cosmetics brands that stand for Estee Lauder’s biggest risks. They are immediate competitors with the traditional ESTE Company manufacturer as the product quality, price and packaging with their products are usually more appealing to younger market. Latest annual 2000 figures showed Revlon making $1, 491, 600, 500 alone in cosmetics product sales and Loreal with $12, 051, 000, 000 via cosmetic and skin-care product sales combined (http://www.sharelearn.com/520samp.html).
Estee Lauder presently generates $2, seven hundred, 000, 000 in the reputation market, and can largely end up being attributed to a higher gross perimeter in full prices (http://www.myneweconomy.com/articles/020703/estee.htm). Indirect Competition Estee Lauder’s indirect rivals or merchandise substitutes consist only in skin-care and never in cosmetics. Face-moisturizers and cleansing products are not yet specifically designed or even targeted to younger ladies and appear to even now target mature-age women. Whereby, Loreal Paris’ offering of skin-care items specifically designed to nourish your skin of youthful women, provides a substitute for those products not catered to get by Estee Lauder.
Message and Media Strategies employed by Competitors · Loreal Paris Evidently, Estee Lauder’s principal competitor is usually Loreal Paris, france because both are competing to get leading positions in the skincare and makeup market. The Loreal Paris manufacturer was developed for infiltration into the mass market and targets young females who desire premium quality, innovative and fashion-forward beauty products at affordable prices (http://www.lorealparisusa.com/frames.asp#aboutloreal/page_a.asp). Their promotional campaign ‘Because I’m worth it’ (http://www.lorealparisusa.com/frames.asp#aboutloreal/page_a.asp), has confirmed to be a success in terms of their efforts to speak a modern and self-confident message to their audience.
They have applied a number of international spokespersons which include Andie McDowell, Laetitia Linaje, Heather Locklear, Vanessa Williams, Virginie Ledoyen, and Milla Jovovich (http://www.lorealparisusa.com/frames.asp#aboutloreal/page_a.asp), all renowned actors and models, to endorse the standard of Loreal Rome products and provide young females an image to aspire to. Using a range of international faces allows Loreal Paris to target the cultural youth market as it promotes a broad cosmetics selection suiting any skin coloring and image. This allows them to expand all their target market and remain competitive. · Revlon Revlon has a similar marketing approach since Loreal Paris.
Their corporate and business strategy should offer fresh women a sense of ‘glamour, exhilaration and innovation’ (http://www.revlon.com/corporate/corp_ca_history.asp) when utilizing these makeup products. They have recently launched their new deal with for the Revlon brand ‘Halle Berry’ a popular U. S. actor, which exerts a completely independent, confident and sexy young image for females of today. Employing this one spokesperson, they have created a unique personality for the rand name and promotes the younger industry to use the Revlon items so they can end up being perceived in a similar manner. This consistent image linked to the brand provides consumers an easy product recollect whenever they see her in movies, billboards, magazines and other channels of advertising.
Key Benefits of Opponents and their Positioning Relative to Estee Lauder’s · Loreal Rome – has established its brand name in the market place since 1907 and therefore substantial brand consciousness – significant budget devoted to R&D and ability to be on the edge of cosmetic technology – have been completely targeting younger mass industry for years and they are therefore dependable in their top quality of beauty items and known to sell at inexpensive costs – may be the global cosmetics leader with 16. 8% market share – product offering is extended to frizzy hair colouring, makeup, skin care and styling supports thereby boosting brand identification · Revlon – has built its brand name in the market place since 1932 – have already been targeting the younger mass market for years and they are therefore trusted in their top quality of beauty items and recognized to sell at affordable prices – positions 4th in the top ten global cosmetics frontrunners with several.
1% market share – item offering reaches personal care (eg. Toenail polish), scents, cosmetics thus enhancing brand equity · Estee Lauder – provides the opportunity to enter the children mass market with years of promoting and operating expertise inside the cosmetics sector – is currently ranked subsequent global cosmetics leader – extensive economic resources to conduct R&D – offers economies of scale because of the size of their pre-existing operation – dependable as a esteemed quality company – friends and family controlled business allows for consistency in advertising management decisions although zero evidence to aid this remark Consumer Evaluation Cosmetics is known as a luxury product and entails a high level of involvement through the consumer (Schiffman et ‘s, 2001).
When purchasing makeup products and skincare, consumers want to be sure that the products they are purchasing are safe and can not injury their epidermis. Estee Lauder has identified this require and features catered in this by lessening the risk engaged when getting cosmetics in pre-purchase, obtain and post-purchase stage. Knowledge at Stage of Obtain Estee Lauder Australia is definitely the third country to undergo dramatic transformations in the appearance with their counters in department stores (King, 2003). The new counters are brightly girl and have fun displays, which allows passers simply by to test goods at their own discretion without needing to consult Estee Lauder personnel.
However should certainly assistance be required with any of the products, there are always friendly, educated staff to help potential customers. All consultants are thoroughly educated and have extensive knowledge about almost all product lines. This professionalism boosts to the consumer’s experience of Estee Lauder on the point of purchase as they learn more about specific products and their particular skin type as well.
The revitalised counters can be a real feature now as they are by far the brightest and many elaborate in major department shops (namely Myer/Grace Bros and David Jones) compared to any of it is direct or perhaps indirect rivals and produces a salon like experience to get the consumer (Gold Coast Program, 2003). Client Roles and Cosmetics Contrary to products such as fragrances where buyer is usually not the consumer, the majority of the period, cosmetics buyers are the users of the merchandise. Although, this does vary around improved purchase durations such as Xmas, Easter, Valentine’s Day and Mother’s Working day when the purchaser (i. at the. husbands and boyfriends) are generally not the end users of the makeup products.
Estee Lauder has identified this and designed their particular promotional activity accordingly. Every advertising (predominantly instore advertising and print out media) features young appealing women, that many purchasing the item would observe as an aspirational figure. The more vibrant Carolyn Murphy featured in the current advertisements provides the younger marketplace that Estee Lauder happens to be trying to get over, a encounter that they can correspond with (as against Elizabeth Hurley, who Estee Lauder believed was also old intended for the younger market).
Perception of Estee Lauder The perception of Estee Lauder between younger persons is that it is just a brand pertaining to “older people” (The Country, 2003). This kind of perception of the brand will clearly take a long period of time to change, however with the latest steps carried out by Estee Lauder, they may be well on their way to turning this kind of around (see appendix 7 for Kapferer analysis of perception of Estee Lauder). As the pilot research conducted depicted, Estee Lauder’s products are priced as well highly pertaining to the younger marketplace to purchase.
If perhaps they do desire to conquer the forex market successfully, they may have to consider pricing options on certain product ranges to make this more affordable to the target market (See appendix 8). Whilst Estee Lauder is priced too highly for folks in this age group, they even now view the company as trendy, as results of the pilot research study came to the conclusion (see appendix 9). Environmental Analysis Social/Cultural In recent years consumers have developed a heightened awareness of interpersonal and environmental conditions such as animal tests. Many customers hold solid views towards animal testing and do not want to buy products which have caused dog suffering.
Subsequently consumers generally want to buy company info regarding animal testing just before they purchase the product, many cosmetic companies including Estee Lauder shy away from this questionable topic and supply confusing and ambiguous transactions regarding the matter as they are doing continuing creature testing but wish to prevent public level of resistance (http://www.buav.org/pdfs/cosmetic_experiments_-_bluf.pdf). And also being environmentally friendly consumers expect their brands to be socially responsible and to give back for the community. This force offers Estee Lauder the opportunity to sponsor charities which have been important to their target market.
Any sponsorship ought to form an integral part of Estee Lauder’s IMC in promoting the brand to be socially informed and dependable.. If a consumer perceives your own brand as being socially irresponsible they will often remove the brand from their evoked set rather than even consider them in just about any of their future purchase decisions. Political / Legal There are plenty of political and legal requirements that Aussie cosmetic corporations must conform to in order to shield consumers. “The public gets the very reasonable expectation that cosmetics should be dependable as directed on the labeled and as people would normally expect to make use of such products” (www.ASCC.com.au). Every cosmetic companies selling goods within Sydney must conform to all Australian Safety Polices.
Cosmetic businesses must also abide by the Trades Practices Act among other regulations and legislation regarding product security and ingredients (www.ascc.com.au). These kinds of rules and regulations have got enormous implications for Estee Lauder and other cosmetic businesses in Australia. It truly is imperative that these regulations will be followed as court actions can be seriously detrimental to the business financially. Further more, bad advertising as a consequence of not really following such regulations can cause irreversible harm in terms of the reputation of the brand.
Technological Because of technological developments there is a lot more information available to the buyers regarding the protection and success of cosmetic products and the elements within them. Due to the quantity of technological information and studies available to them, consumers have developed a very sceptical attitude towards cosmetic brands and their items. The implication for this is that Estee Lauder must give consumers with as much info and as much proof relating to product efficiency as possible to be able to facilitate the buying decision process.
Technology has also performed in favour of Estee Lauder because they have been ready use technology to create fresh innovative goods in try to gain competitive advantage. Inexpensive Changes on the economy could also have a very good impact on plastic sales. Makeup are categorised as a extravagance item thus when the economic system is straight down and buyers have fewer buying power cosmetics can be among the first product categories to suffer. After the events of September 10 sales lowered to a online standstill resulting in the most severe holdiay season for American retailers in years (Bittar, 2002).
Nevertheless currently Australian retail product sales has knowledgeable strong progress since May well 2003 (www.abs.com.au) (See Appendix 10). In 1998-99 $4. 1 billion dollars was used on cosmetics, perfumes and toiletries (www.abs.com.au).
These kinds of statistics show it is a healthier growing industry giving companies the opportunity to enhance sales and expand product lines.