Why?
The beauty business is one of the most profitable markets in the world. The beauty industry experiences tremendous amounts of growth despite economic challenges faced throughout the globe. Annually, people in the United States spend eight billion dollars on cosmetics alone. (Matters of Scale- Spending Priorities, 1999) Estee Lauder is a pioneering company that is internationally known for its cosmetics.
The company has made major contributions to the cosmetics industry for the sixty-seven years that it has been in business. Estee Lauder was established in 1946 by a woman named Josephine Mentzer who had an interest in beauty and the beauty industry. (Inc., 2013) However, what makes the company stand out against the competition?
What?
Estee Lauder focuses on the marketing, manufacturing and the selling of skin care, fragrance, makeup and hair care products throughout the world. (Gale) Estee Lauder Companies Incorporated generates over ten billion dollars a year from being sold in over 130 countries with over twenty companies it owns. (LLC™, 2013) Their products are very accessible by being available in establishments like Macy’s, Bloomingdale’s and Nordstrom’s. Their products are also available in their freestanding stores and online. The company offers a variety of products for the customers to choose from making it thus more attractive to a customer than a company that has limited assortments. Estee Lauder provides quality products while providing appropriate quantities to its distributors. It instills trust with its customers so that when they purchase an Estee Lauder product, the customer will less likely have buyer’s remorse due to customer satisfaction.
How?
Estee Lauder’s legacy plays a large role in the company’s succ...
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... L. (2013, December 05). About Estee Lauder. Retrieved from Estee Lauder: http://www.esteelauder.com/cms/about/index.tmpl
Inc., E. L. (2013). Makeup Estee Lauder Official Site. Retrieved December 8, 2013, from Estee Lauder: www.esteelauder.com/cms/product/supercat/makeup.tmpl?CATEGORY_ID=CAT631
Inc., E. L. (2013). Skincare Estee Lauder Official Site. Retrieved December 8, 2013, from Estee Lauder: www.esteelauder.com/cms/product/supercat/skincare.tmpl?CATEGORY_ID=CAT681
LLC™, 2. F. (2013, September 9). Estée Lauder -- A Beauty Company To Be Reckoned With. Retrieved November 28, 2013, from Forbes: http://www.forbes.com/sites/walterloeb/2013/09/09/estee-lauder-a-beauty-company-to-be-reckoned-with/
Singer, N. (2011, March 26). Business Day. Retrieved December 9, 2013, from The New York Times: http://www.nytimes.com/2011/03/27/business/27lauder.html?ref=esteelauder&_r=1&
Daumeyer, Rob. "Beware of Too Much Business" Cincinnati Business Courier (June 1996): 9pars. 28 June 1996
The company chosen to demonstrate the marketing mix has been a leader in the industry for many years as well as an innovator in product advertising design. Starting out as a soap and candle manufacturer, more than earned their place in the market place. The company is Proctor and Gamble (P&R) and their earliest beginnings are rooted in strong family tradition and humility from the early 1800s. The Proctor and Gamble of today is far different than the founding company operating in a global marketplace, in 140 countries, distributing their products and services to consumers two billion times a day.
Horst Rechelbacher founded Aveda in 1978. Aveda started with one product shampoo that Rechelbacher had created in his kitchen sink leading to the development of conditioners and all other products. Aveda is now a successful business with 5000 employees, and has store locations in 33 different countries and 7231 beauty shops. All of Aveda’s products are manufactured in their factory in Minnesota; the Estee Lauder Company now owns Aveda. Estee Launder purchased Aveda in 1997 for $350 million, since then Aveda has doubled their annual sales.
...he oldest companies producing skin care and pharmaceutical products, it has a high level of customer care in order to create high value from their products and high customer satisfaction.
United Kingdom. Committee of Advertising Practice. Committee of Advertising Practice. Accessed November 18, 2013. http://www.cap.org.uk/Advice-Training-on-the-rules/Advice-Online-Database/Cosmetics-The-use-of-production-techniques.aspx.
Cosmetics: The Lost Years : Notable women who paved the way for today's cosmetic industry.(Annie Turnbo Malone and Madame C.J. Walker)
The beauty industry has great opportunities for companies wanting to profit from the growth and resiliency of the sector. Finding the right niche is important for becoming visible in the industry. Communicating the unique selling point to the target group will distinguish the company from the competition so it can survive. Also, product sales are needed to earn revenue beyond the service income. The success of Sugar Wax Salon will rely on its ability to offer a beneficial service, create the right products, and promote them to the right people at the right price.
Avon Products, Inc. (Avon) is based in New York. The firm engages in the manufacture and marketing of beauty and complimentary products primarily in North America, Latin America, Europe, and Asia Pacific (Yahoo Finance, 2005). Avon's products are classified into three product categories: Beauty, Beauty Plus, and Beyond Beauty. The Beauty category consists of cosmetics, fragrances, skin care, and toiletries; Beauty Plus includes fashion jewelry, watches, apparel, and accessories; and Beyond Beauty comprises home products, gift and decorative products, candles, and toys (Ibid). The company sells and markets its products through a combination of direct selling, marketing by independent Avon representatives, and via its consumer Web site, avon.com.
L’Oreal is the largest beauty company in the world and in the past 100 years that it has expanded, it has supplied to 130 countries with offices in 58 different countries. This global company is the number one premium cosmetic product in the world today and has taken the core and beauty of people’s everyday lives since 1907, the beginning of L’Oreal. The superior leadership of a guy named Eugene Schueller started this strategic company with basic products such as hair care and also the first man-made hair color product. Five years later you could find these products in Austria, Italy, and the Netherlands. In 1934 Eugene invented the first mass market of soap less shampoo and this led the success of L’Oreal in the country of Europe which soon recognized them as the leader in body care and hair coloring products. Finally soon after World War II L’Oreal moved into the United States and the company seemed to change. When L’Oreal expanded the competition was more involved and more growth was needed in order for the company to be more successful. With problems like this, the strategy and planning that has been applied in L’Oreal has been huge for the success of the company. L’Oreal realized they needed to expand in other fields of the beauty market and target markets in order to stay alive and successful. This would mean that L’Oreal would need to acquire other companies as part of their expansion and through this they have kept the constancy of the leading company with acquisitions of many small companies. Finally in the 1980s they started their globalization into new markets all around the globe by acquiring new companies that would form the cosmetics that we know today. Although the role of acquisitions has never been the main focus of the company, internal growth and strategy was the number one reason for L’Oreal becoming such a big name. The main strategy was to adopt new companies and expand it from within believing that the brand could be taken globally and benefit their overall brand portfolio. The main role of acquisitions was to increase and lengthen the internal growth rate. L’Oreal started acquiring companies from the beginning of their name. They started with the basics of their own brands such as L’Oreal Professional, L’Oreal Paris, Kerastase, and Club des Createurs de Beaute.
· Strong Brand name/ image of products- A wide range of leading brands in its products portfolio such as; Dove soaps and shampoo, Lipton teas, Slim-fast, Ben and Jerry’s ice-cream.
What resources and capabilities do you think it would take to become the top direct seller of cosmetics and beauty-related items? Does Avon Products seem to have any of those? What would it take to make its capabilities distinctive?
Lets start at the beginning Makeup Art Cosmetics or MAC was created in 1984 by two men, Frank Tosken a seasoned makeup artist and photographer and Frank Angelo a successful business owner of a chain of salons in Toronto. They found that cosmetic products that were readily available were not performing well under the intense environment of studio lights & perspiration, had little color payoff, and were constantly having to be touched up. So, they created cosmetic formulas and colors that met these specific needs. By using them backstage on models and performers news traveled fast about how wonderful these products were. At first MAC was only available to the professional makeup artist. Then by word of mouth news spread to the general population and was maid available to the public and in 1994 was purchased by the Estee Lauder who owns many of the world's favorite cosmetic brands. MAC continues to be a testimonial brand of cosmetics, meaning that there is no paid advertising for MAC to promote their traditional product. They rely solely on testimonials and word of mouth advertisement. However you may find that MAC does advertise only one product and that is Viva Glam Lipstick. This is their charity lipstick and it comes in five different shades.
The first fashion advertisement that was selected was Maybelline, who is owned by L’Oreal. Maybelline is the manufacturer and is a nationwide brand; therefore all their advertisements are national. This specific ad came from a June 2015 Cosmopolitan magazine. The second advertisement selected was by Covergirl, which is owned by Procter and Gamble. CoverGirl is the manufacturer who is known nationally as well.
By 2002, Moet Hennessy Louis Vuitton was the world’s largest luxury products company, enjoying annual sales of 12.2 billion euros. LVMH carries the most prestigious brand names in wine, champagne, fashion, jewelry, and perfume. Upon entrance of this luxury product industry, LVMH was aware that they produced products that nobody needed, but that were desired by millions across the world. This desire in some way fulfills a fantasy, making consumers feel as though they must buy it, or else they will not be in the moment, and thus will be left behind.
Beauty product can be defined as cosmetics; materials and devices made and sold for the purpose of enhancing the physical attractiveness of users or in other words, as any product, especially a cream or lotion, intended to improve a person's appearance . We live in society where people nowadays are very obsessed with beauty and spending so much money on beauty products. Since we were children, the society taught us that beauty is happiness, wellness and everything. This creates a mindset that only attractive physical appearance is beauty, even though ‘beauty’ is a very subjective word where it can apply to many things. It is a rare sight these days to