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Strengths and Weaknesses will also e identified and taken into account as the new MIMIC program is developed. As part of the Internal analysis Esteem Ladder’s past promotional mix strategies will be assessed and evaluated. Strengths and weaknesses will also be evaluated In terms of brand Image and the products and services they offer were also identified. Esteem Ladder’s current promotional strategy has a strong focus on advertising In sources of print media within medal relevant to Its target market such as fashion magazines including, Harpers Bazaar and In Style.
Personal Selling also plays a dominant role in Esteem Ladder’s current MIMIC strategy. The use of the Internet and Direct marketing has played a minimal role in Esteem Ladder’s MIMIC program for Australia. This was identified as a weakness but also as a potential opportunity to expand and use these promotional tools in their future MIMIC program. Other weaknesses were based around poor and inappropriate promotional strategies for reaching their intended ‘youth’ market and consumers In their twenties. Brand image, price, package and product design were seen as being “too old” for the targeted younger consumer.
The new MIMIC program will be focused on overcoming hose weaknesses and on reaching the younger audience In the most effective way. Strengths such high levels of brand awareness, trust and a strong position In the market place have been Identified and utilized in the future MIMIC program. The external analysis involved gaining insight regarding customers and competitors. A pilot study was conducted among 18-25 year olds regarding their perceptions and experiences with Esteem Lauder in order to develop a more in-depth analysis of Esteem Ladder’s customer base amongst young Australian females.
Competitor Analysis squired thorough research into the strategies and positions of Esteem Lauder competitors In the market place. Major competitors included L’Oreal and Revolve, their strengths and weaknesses were identified and will be considered during the development of Esteem Ladders new positioning strategy. Although a company has little or no control over their external environment an respond to them sufficiently. Esteem Lauder needs to consider socio-cultural forces such as consumers increasing concern regarding animal testing among other environmental and social issues.
They must also be aware of the adverse affects on he MIMIC program that will occur if any social expectation are breached or if any legal or political regulations are breached. The environmental analysis also identifies the opportunity for growth due to the trend in overall retail growth and specifically cosmetic growth in Australia today. If the following factors are considered Esteem Lauder have the opportunity to develop an effective MIMIC program that will strengthen its brand and allow them to expand into the younger market as they have been aspiring to do.
Industry and Company Information Esteem Lauder is a market leader in the cosmetics and skin-care industry. This market is highly competitive and rapidly expanding, with competitors continually entering the market. They offer a range of cosmetics, fragrances and skincare products. Esteem Lauder is a well established brand since 1946 and has grown into a parent company for many well known skincare and cosmetics brands. These include MAC, Clique, Stills, Veda and Bobbie Brown. This situation analysis will focus on Esteem Lauder as a consumer brand and not the EL Companies empire as a whole (see appendix 1).
Internal Analysis Today, Esteem Lauder has a solid customer base in many countries including the USA, I-J, Asia and Europe. Esteem Ladder’s and Clique’s combined sales made up 40% of the total cosmetics market share, with Lance (owned by competitor L’Oreal) holding the third largest market share, with 13% of the cosmetics market (Bitter, 2002, p. 29). Over the past five years, Esteem Ladder’s sales have slowed, allowing for Clique, Esteem Ladder’s sister brand to gain market share, replacing them as number one brand in department store sales (Bitter,2002,p. 9). Currently Esteem Ladder’s primary objective is reposition themselves as the consumers first choice for cosmetics. In order to achieve this objective Esteem Lauder need to analyses current marketing efforts and identify opportunities for further expansions that will increase and improve the reputable Esteem Lauder brand. Pricing Strategies Esteem Ladder’s prices are at the higher end of the price scale within the cosmetics market.
This is consistent with many of Esteem Ladder’s direct competitors namely Lance and Dior along with other subsidiary brands including MAC and Stills. Their prices are set 20-35% above the price points of Clique products. Current RPR prices for various Esteem Lauder products can be found in appendix 2. Advertising – Print media is the current primary advertising medium for Esteem Lauder. Some of the main channels include fashion and lifestyle magazines such as Harpers Bazaar, Vogue, In Style, Marie Claire, Cleo and Cosmopolitan.
These magazines are targeted toward females with various lifestyles and levels of disposable income however they are all image conscious and is appealing to Roy Mooring’s visible achievement segment and those who aspire to be part of this group (Mindset, 1998) (See appendix 3). Esteem Lauder has been featuring Liz Hurley as the face of their cosmetics for the past even years and has proven successful in endorsing their prestigious brand of cosmetics, fragrances and skin-care, (Bitter, 2002). Esteem Ladder’s current models infuse “the brand with energy, vitality and modernity” and aiming to “connect the brand with consumers” (Staff Report, 2003).
Last financial year, EL companies allocated $JUS million to advertising to promote the core Esteem Lauder brand. This figure has been consistent over the past five years and is the largest advertising figure of any EL Company. O Internet – Esteem Lauder have not utilized the internet within the Australian marketplace. Their current website is targeted towards the U. S, European and Asian markets. It does not provide Australian consumers with a customized information source regarding available products and new company developments. Sales Promotion – Esteem lauder endorses its distributed such as Meyer and David Jones with promotional gift packs as an incentive to spend as certain amount of money or buy a specific product. They uphold their prestigious image by seldom discounting their products. Sampling promotion has also been used successfully to promote new products and allow consumers to experience the product first hand, thou having to commit to a purchase. However, this has not been successfully used for Esteem Ladder’s recent release of “Pure Color” range of eyeshades and lip gloss’s.
Pilot research conducted found although this new range is targeted towards the younger market, it is still not being recognized as the brand of choice for 17-25 year olds (see appendix 4 & 5). O Personal Selling – All Esteem Lauder sales consultant are specifically trained and have high levels of product knowledge. Cosmetics is a high involvement purchase and therefore requires consultants to have an in depth knowledge of all products offered y Esteem Lauder. O Direct Marketing – Currently Esteem Lauder are not using the internet for direct marketing sufficiently.
Department stores often send promotional brochures to opt in mailing list clients if new products are released or special offers are available. Esteem Lauder as a brand ; Strengthen – High brand awareness – High brand recall – Trusted brand – High perceived quality – High Brand Equity – Good customer service – Perceived as prestigious brand ; Weaknesses – Communication Strategy not in line with target market – Price of products too high to allow for repositioning into young market Brand perceived as “too old” for target market – Products not designed for younger market (I. . Anti-ageing moisturizer) – Package design for mainstream product lines not innovative and modern, sending conflicting messages and confusing consumers ; Opportunities – Possible expansion into younger mass markets – Ability to pursue an online strategy to enhance their marketing communications by introducing online catalogues and creating a direct marketing database. – Ability to establish themselves as the leading cosmetics brand in other markets including Australia, specifically targeting 20-ass’s market and the youth segment.
Creation of new communication strategy to build upon existing brand strengths and reputation. ; Threats – Losing existing customer base I. E. Older market due to new market direction – Possible confusion for consumers regarding mixed promotional messages targeting the young and older market I. E. Strategies are not integrated – Losing market share – Deterioration of perceived brand quality and prestige due to changing the promotional strategies to suit the younger market – Potential loss of revenue as a result of decreasing product prices to attract the younger customers Competitive Analysis
As Esteem Lauder redirects their focus from the older aged females to those in a younger age bracket, they encounter a different group of competitors. These competitors operate in the mass market of cosmetics and skin care. Each brand is continually challenged to apply a successful integrated marketing plan so as to maintain and/or increase their share of the market thus creating a high level of competition for Esteem Lauder. Direct Competitors Revolve and L’Oreal Paris are both mid-range cosmetics brands that represent Esteem Ladder’s biggest threats.
They are direct competitors of the traditional EL Company rand as the quality, price and packaging of their products are more appealing to the younger market. Recent annual 2000 figures showed Revolve making $1 alone in cosmetics sales and L’Oreal with $12,051 from cosmetic and skin-care sales combined (http://www. Shareholder. Com/sampan. HTML). Esteem Lauder presently generates $2,700,000,000 in the prestige market, and can largely be attributed to a higher gross margin in retail prices (http://www. Macroeconomic. Com/articles/020703/ esteem. HTML).
Indirect Competitors Esteem Ladder’s indirect competitors or product substitutes consist only in skin-care ND not in cosmetics. Face-moisturizer and cleansing products are not yet specifically designed or even targeted towards younger women and appear to still target mature-age women. In which case, L’Oreal Paris’ offering of skin-care products those products not catered for by Esteem Lauder. Message and Media Strategies used by Competitors ; L’Oreal Paris Evidently, Esteem Ladder’s primary competitor is L’Oreal Paris because both are competing for leading positions in the skin-care and cosmetics market.
The L’Oreal Paris brand was developed for infiltration into the mass market and targets young males who desire high-quality, innovative and fashion-forward beauty products at affordable prices (http://www. Allergist’s. Com/frames. Asp#butterball/ page_a. Asp). Their promotional campaign ‘Because I’m worth it’ (http://www. Allergist’s. Com/ frames. Asp#butterball/page_a. Asp), has proven to be a success in terms of their efforts to communicate a modern and self-confident message to their target audience.
They have used a number of international spokespersons including India McDowell, Leticia Cast, Heather Locker, Vanessa Williams, Virginia Alloyed, and Mila Jovanovich (http://www. Reliquaries. Com/frames. Asp#butterball/page_a. Asp), all famous actors and models, to endorse the quality of L’Oreal Paris products and give young females an image to aspire to. Using a range of international faces allows L’Oreal Paris to target the cultural youth market because it promotes a wide cosmetics range suiting any skin color and image. This allows them to expand their target market and remain competitive. Revolve Revolve also has a similar marketing approach as L’Oreal Paris. Their corporate strategy aims to offer young women a sense of ‘glamour, excitement and innovation’ (http://www. Felon. Com/corporate/corp._ca_history. Asp) when using these cosmetics. They have recently launched their new face for the Revolve brand ‘Whale Berry’ a famous U. S. Actor, whom exerts an independent, confident and sexy young image for women of today. By using this one spokesperson, they have created a unique identity for the brand and encourages the younger market to use the Revolve products so they can be perceived in the same way.
This consistent image associated with the brand gives consumers an easy product recall whenever they see her in movies, billboards, magazines and other channels of advertising. Key Benefits of Competitors and their Positioning Relative to Esteem Ladder’s brand awareness – large budget committed to R&D and ability to be on the edge of cosmetic technology – have been targeting the younger mass market for years and are therefore trusted in their quality of beauty products and known to sell at affordable prices – is the global cosmetics leader with 16. % market share – product offering is extended to hair coloring, cosmetics, skin care and styling aids thereby enhancing brand recognition – has established its brand name in the market place since 1932 ranks 4th in the top ten global cosmetics leaders with 7. 1% market share – product offering extends to personal care (egg.
Nail polish), fragrances, cosmetics thereby enhancing brand equity ; Esteem Lauder – has the opportunity to penetrate the youth mass market with years of marketing and operating expertise in the cosmetics industry – is currently ranked 2nd global cosmetics leader – extensive economic resources to conduct R&D – has economies of scale because of the size of its pre-existing operation – trusted as a prestigious quality brand – family controlled enterprise allows for consistency in marketing and management sections although no evidence to support this observation Consumer Analysis Cosmetics is a luxury product and involves a high level of involvement from the consumer (Coffman et al, 2001). When purchasing cosmetics and skincare, not harm their skin . Esteem Lauder has identified this need and has catered for this by decreasing the risk involved when purchasing cosmetics at pre-purchase, purchase and post-purchase stage.
Experience at Point of Purchase Esteem Lauder Australia is the third country to undergo dramatic transformations in the appearance of their counters in department stores (King, 2003). The new counters are brightly colored and have interactive displays, which allows passers by to test products at their own discretion without having to consult Esteem Lauder staff. However should assistance be required with any of the products, there are always friendly, knowledgeable staff to assist potential customers. All consultants are thoroughly trained and have extensive knowledge about all product lines. This professionalism enhances to the consumer’s experience of Esteem Lauder at the point of purchase as they learn more about specific products and their skin type as well.
The revivalists counters are a real feature now as they are by far the brightest and most elaborate in major department stores (namely Meyer/Grace Brows and David Jones) in comparison to any of its direct or indirect competitors and creates a salon like experience for the consumer (Gold Coast Bulletin, 2003). Buyer Roles and Cosmetics Unlike products such as fragrances where the buyer is not the user, the majority of the time, cosmetics buyers are the users of the product. Although, this does differ around increased purchase periods such as Christmas, Easter, Valentine’s Day and Mother’s Day when the buyer (I. . Husbands and boyfriends) are not the end users of the cosmetics. Esteem Lauder has identified this and designed their promotional activity accordingly. All advertising (predominantly inshore promotion and print media) features young attractive women, that many purchasing the product would see as an aspirations figure.
The more youthful Carolyn Murphy featured in the current advertisements provides the younger market that Esteem Lauder is currently trying to conquer, a face that they can relate to (as opposed to Elizabeth Hurley, who Esteem Lauder felt was too old for the younger market). Perception of Esteem Lauder The perception of Esteem Lauder amongst younger people is that it is a brand for “older people” (The Nation, 2003). This perception of the brand will clearly take an extended period of time to change, however with the current steps undertaken by Esteem Lauder, they are well on their way to turning this around (see appendix 7 for Seafarer analysis of perception of Esteem Lauder).
As the pilot research conducted depicted, Esteem Ladder’s products are priced too highly for the younger market to purchase. If they do wish to conquer this market successfully, they will have to insider pricing options on certain product ranges to make it more affordable to the this age bracket, they still view the brand as fashionable, as results of the pilot research study concluded (see appendix 9). Environmental Analysis Social/Cultural In recent years consumers have developed a heightened awareness of social and environmental conditions such as animal testing. Many consumers hold strong views towards animal testing and do not want to buy products that have caused animal suffering.
Consequently consumers often want to acquire company information guarding animal testing before they buy the product, many cosmetic companies including Esteem Lauder shy away from this controversial topic and provide confusing and ambiguous statements regarding the topic as they are guilty of continuing animal testing but wish to avoid public opposition (http://www. Beau. Org/PDF/ cosmetic_experiments_-_bluff. PDF). As well as being environmentally friendly consumers expect their brands to be socially responsible and to give back to the community. This force gives Esteem Lauder the opportunity to sponsor charities that are important to their target market.
Any sponsorship should form an integral part of Esteem Ladder’s MIMIC to promote the brand as being socially aware and responsible.. If a customer perceives a brand as being socially irresponsible they will often remove the brand from their evoked set and not even consider them in any of their future purchase decisions. Political / Legal There are many political and legal obligations that Australian cosmetic companies must comply with in order to protect consumers. “The public has the very reasonable expectation that cosmetics should be safe to use as directed on the label and as people would normally expect to use such products” (www. SACS. Com. AU). All cosmetic companies selling their products within Australia must comply with all Australian Safety Regulations.
Cosmetic companies must also comply with the Trades Practices Act among other regulations and legislation regarding product safety and ingredients (www. Sacs. Com. AU). These rules and regulations have enormous implications for Esteem Lauder and other cosmetic companies in Australia. It is imperative that these regulations are followed as court action can be seriously detrimental to the company financially. Further more, ad publicity as a consequence of not following such regulations can cause irreversible damage in terms of the reputation of the brand. Technological consumers regarding the safety and effectiveness of cosmetic products and the ingredients within them.