Cliniques’ Happy fragrance one of the brands under the Estee lauder group of companies is renowned for setting the pace in the beauty industry. It (Estee Lauder) is producer and marketer of several lines of perfumes, fragrances, moisturizers as well as a whole range of beauty products. Mrs. Estee lauder found these products, a great believer in personal selling. The company and its brands target high end clientele and in its initial stages. The word of mouth strategy or ‘tell a woman strategy’, personal selling and the issue of free samples which its competitor ridiculed and claimed that the company would go broke were the main tools used in its early days a trend which has been carried on to its present day products.
Nivea is a skin care brand that is owned by the Biers doffs Company in Germany. Despite Nivea having been in the skin care business, it was mainly dealing with skin care products for women. However, in the 1980’s, Nivea developed Nivea for Men line. Market research had shown that men wanted a product that would soothe the irritation that came after shaving. They took advantage of the knowledge base they had with skin care products and came up with an after shave that was alcohol free that became very popular with the new breed of metro sexual males: men who wanted to take care of their skin as opposed to the older generation of men who viewed skin care as solely being a female activity.
Nivea developed a new marketing plan in order to increase its market share. This involved market research in determining the taste and preferences of the target consumer, (men) as well as the existent of competing products. In the same stride in developing a market strategy for Nivea for Men marketers had to consider the female perspective of the Nivea for Men range of products since women were major buyers of the products for their male partners and men also sought the opinion of women when purchasing their products.
CHANGES IN MARKETING STRATEGIES THAT MAY IMPROVE BRAND PERFORMANCE
For the Nivea and Clinique brands to not only remain successful but to also increase sales and market share they must:
- Adopt suitable marketing strategies.
- Maintain a healthy rapport between the consumers and the brand and timely response to consumer queries
- To make sure that they keep up the brand image even when it is difficult to d so as a faltering brand image does create any brand loyalty.
- Never underestimate the power of the right promotional mix
Market strategies involve the interlocking of three main components the consumer, the corporation and the competitor. A good marketing strategy should be characterized by a clear market definition and a good match between corporate strengths and the needs of the market, and a superior performance relative to its competitors. Market needs and consumer needs are dynamic and require that companies keep a brief with changes lest they lose their market share to their competitors. Companies may acquire new market strategy through innovation by a competent market team or by “borrowing” from the market leaders as well as innovative and fast growing companies. Estée Lauder had successfully positioned itself for 30 year-old and older, high-end customers. With increasing competition and specialization in the market, is this still the right position to take?
The purpose of this report is to outline the improvements that can be made in order to improve the brand performance of the products Clinique fragrance and perfume from the Estee lauder group of companies while comparing its marketing strategies to that of Nivea.
RELAUNCH OF NIVEA FOR MEN SKIN CARE PRODUCTS
SWOT (Strength, Weaknesses, Opportunities and Threats) analysis.
- Nivea was one of the leading brands in skin care products which meant that it had an already existing customer base.
- Nivea had a sound financial base that meant that it would put together an effective marketing plan.
- Nivea was in the skin care products for a long period of time, therefore they had a group of skill-full scientist who would come up with the sought of skin care product that the consumers required. Coupled with a strong team of marketers then the Nivea for Men range of product was likely to increase its market share.
- Was the market research relevant given the rapidly changing consumer habits and a wide range of products to choose from
- Did they have the right distribution outlets that would ensure the product reached the intended consumer?
- Was the product still relevant?
- There was an increase in the demand for skin care products and Nivea wanted part of the market share.
- The emergence of the metro sexual man who paid more attention to his looks as well as the shift in the way of thinking that skin care products were for men or homosexual men.
- There was increasing completion from other brands that wanted a part of the market.
- Easily accessible information made the consumers more aware of offers and promotions by other companies, therefore constantly demanding for discounts.
- There should be increased advertising of the brand so as to create awareness to consumers who do not know about it. Given that it has established a market base with the younger generation it should focus on the older generation or those men who still think that use of its products is a preserve of women.
- Given that women are likely to buy the men this products, use of free samples may be helpful..
- Improve on the response to the consumers’ feedback which would lead to product innovation and improvement.
- In order to be successful in rolling out of new products it has to maintain its brand image of reliability, user friendliness and value for money.
- It may also broaden its market base by increasing its internet presence through use of online shopping capabilities and use of search engine capabilities.
- Creation of a mail order and promotional form that is mailed to Nivea database.
- A complete review of distribution channels, including chemists, pharmacies and departmental stores.
The market strategy for Nivea for men relaunches involved setting SMART objectives (Specific, Measurable, Attainable, Realistic and within a given Time). The marketing team used forecasting models to predict market growth within the next three years.
- Attain increased sales and a greater market share.
- The strategy was aimed at getting men to stop considering skin care products to actually buying the products.
- It also aimed at increasing the sale of skin care products for men to women as they were the initial purchaser of these products as well as develops the Nivea for men Brand image.
The market team chose two strategies to help achieve the objectives this was to improve the quality of Nivea products and to extend the Nivea for men product range. This emphasis on product development and consumer needs is the reason behind Nivea for Men range of skin products being a success. Another marketing strategy was promotions and the use of free samples and advertising on male magazines, radio and television They further went on to adopt experiential marketing as a promotional tool. Experiential marketing involves creating a rapport between consumers on a face to face basis and creating an emotional attachment to the product. It also created a promotional mix using above the line and below the line promotional mix.
Above the line refers to incurring of direct expenses in advertising, while below the line advertising refers to indirect costs in advertising such as Nivea’s sponsorship of grass-root football events. The use of sport helped create brand affinity which is important. Promotions on the other hand were used to attract new customers. By building awareness and creating familiarity with the brand.
CLINIQUE’S SWOT ANALYSIS
- Over thirty years of experience in the overseeing the design and the initiation of new products
- High quality products that are free of harsh products and are never tested on animals
- Aggressive, well funded marketing programs.
- In terms of personnel, Clinique believes firmly in the quality of its product and corporate philanthropy initiatives.
- Financial support from the parent company which has seen consecutive growth in revenue in its 45years of existence.
- A research and development team of highly qualified personnel comprised of biologist, dermatologists, physicists, and chemist who ensure the manufacture of the best of products.
- All members of the board are from the parent company Estee lauder this does not expose them to diverse skills that outside board members would offer.
- The products of Estee lauder are rarely discounted.
- A large amount of finances are used in research and development of new products. Cliniques other products are fragrance and allergy inducing chemicals free which involve a lot of research which is expensive.
- Product is marketed towards the high-end market as a research product that is highly researched thus better for your skin and personalized to individual preferences.
- Clinique’s products can be bought anywhere in the world through online shops and in the U.S they can be delivered to your doorstep.
- Clinique’s products are highly tested to ensure that they meet the required regulatory standards.
- Consumers feel that they are paying too much for a product that they would purchase elsewhere at a discount.
- Competitors are fest developing similar products with additional benefits and qualities.
PESTLE ANALYSIS (POLITICAL, ECONOMIC, SOCIOLOGICAL, TECHNOLOGICAL, LEGAL, ENVIRONMENTAL)
Clinique is centered in the United States of America that enjoys political stability that ensures that the company’s growth is not interrupted by periods of political upheaval and uncertainty. The consumers are protected by the vigilant FDA standards that ensure all the products are fit to be used by the consumers.
In this instance, cyclical changes in the economy may affect the purchase of these products significantly as they are priced at a premium and in periods of economic downturn consumers will first give-up expensive products and shift to those priced at a discount.
Clinique’s products are not mass marketed and therefore are normally produced for the upper middle class women whose incomes are not likely to influence significantly by changes in business cycles. According to the value and lifestyle analysis study Clinique’s consumers are actualizers; they have a large amount of money and enjoy the finer things in life as is characteristics of actualizers. They are well educated and well aware of what their needs are know what to look for in a product. They are women who feel the need to not only look but feel beautiful as is required of someone in their status.
For these women, wearing a fragrance from a brand such as Clinique is a way of asserting their lifestyle. They maybe high-powered women in the corporate world or stay at home mums who still want to look beautiful and would therefore appreciate the convenience of online shopping. Clinique and its parent company are also involved in activities that benefit society and this has gone down well with consumers who now want to consume products from companies that are socially responsible.
Clinique has largely invested in research and development to ensure that they keep up with an ever changing cosmetic world and equally innovative competitors. Clinique has also taken advantage of increased use of online shopping. When it comes to online shopping they have set of web marketing and merchandising team that has products branded in the local language. Search engines are driven by words and phrases used by the shopper in each country. It has adopted a hassle free form of marketing, from being molested by sales agents badgering you with the product to a more subtle method of smart technology, for instance by placing touch screens and tablets at their express counters so that consumers can learn more about the products as they shop.
e) LEGAL ENVIRONMENT
Clinique’s products are sold in a market that is keen to follow up on patents and copyright laws. Consumer rights are also highly protected and there has also been an increase in concern for consumer safety.
SEGMENTING –TARGET-POSITIONING ANALYSIS
Market segmentation process is the creation of a specific market mix to fulfill the needs, as well as market conditions of each specific target segment (Kotler, 1994). The cosmetic market is a highly fragmented market; it is not even a plausible strategy to cover too broad a range of the spectrum. Successful brands are very carefully establishing and protecting a clear image. They make sure every detail is consistent with their image.
The Estee lauder has realized that one size does not fit all. Differential or segmented marketing is strategy refers to market coverage strategy where the company creates different market segments and designs separate offers for each. Estee Lauder is proficient in segmenting markets: There is the original blue and gold packaging which appeals to the older women. Then there is Clinique which is the most popular brand, for the busy moms who do not have much time for themselves.
Differential marketing offers the company greater sales than a market that is undifferentiated, differentiating markets leads to increased costs from market research for the different market segments, branding, forecasting, sales analysis, and promotional planning and channel management. Market segmentation helps the firm provide higher value to its customers through developing a market mix that tackles the specific concerns and needs of the chosen segment. That is the firm creates monopolistic or oligopolistic market conditions through the utilization of various curves of demand for a specific product category (Ferstman, C., & Muller, E., 1993).
Consequently it puts a the manufacturing company at a loss because it does not get to enjoy the benefits of economies of scale since producing one hundred units of 10 different products is more expensive than producing one hundred units of the same product. A company must therefore ensure that the benefits of the differential marketing outweigh the associated costs.
TARGET AND POSITIONING
Targeting is the actual selection of the segment you want to serve while Positioning is the use of marketing to enable people to form a mental image of your product in their minds (relative to other products). The target niche for Clinique’s products is upper middle class suburban women who are drawn to Clinique’s products. These are the consumers who are more likely to buy the product at a premium. It’s true that Clinique appears to primarily (and implicitly) target young women, the brand still benefits substantially from a widened customer age group, since when these customers get older many still choose to stick with the brand because of the already established confidence of the brand’s quality.
Product positioning and product differentiation go hand in hand, Clinique’s products are differentiated from those of its competitors by: allergy tested products which have never been tested on animals, strong brand image, a competent Research and development workforce and easy to obtain merchandise through up-market departmental stores and online website. Its advertisements should therefore be consistent with building such a brand image by emphasizing laboratory development and the product itself. A diluted brand image could only hurt sales.
I. A well defined segmenting-target-positioning mix will automatically give a brand a unique selling position.
A unique selling position goes to help the consumer more it helps the consumer identify exactly what they need from a product. When a products are backed by a strong brand image that has continued of long periods of time such as that of Clinique through its parent company that is well known for products that put the consumers needs first then they develop a niche for themselves that is characterized by loyal customers. Although most of these customers are repetitive consumes, they are loyal since the products shift from being mere consumables to necessities.
II. Trendiness-the brand needs to adopt a trendier look
Clinique’s products are has been marketing itself as a chic brand with famous models to pose exclusively as a “face” for the brand thus losing its identity bit by bit
Estée Lauder put so much emphasis on its models that the product itself sometimes gets lost. A recent move to hire Tom Ford, a former Gucci fashion designer, is clearly an effort to achieve a trendy status.
III. The wrong slice of the pie - It should expand its target market.
The high-end market used to be the best part of the cosmetic pie. That is where the best and most customers used to be. For long, beauty products were a symbol of luxury. However, while more American women are taking better care of their skin, they are also looking for alternative retail channels in place of expensive department stores which are bad news for Estée Lauder which is dependent on department stores where sales are declining and selling costs are high.
IV. An aging brand –revitalizes the look and removes it from “classis” status
Baby boomers are no longer the only ones willing to pay extra Women in their late 20s and 30s, who are taking a proactive approach to long-term skin health, are gravitating increasingly towards products with advanced anti-aging ingredients. To these women, Estée Lauder is too old.
V. Romance and sexiness-Another option for Estée Lauder would be to position the brand so that it is appealing for those women who desire the romance and sexiness that is associated with cosmetics.
- Achieve a trendy look that will appeal to all.
- Ensure this brand is not to be confused with one with medicinal properties due to the use of the word Clinique which may be confused with clinic.
- In a world that is becoming increasingly frugal a brand that produces only high end products may suffer it should thus consider producing for mass markets which have more clientele.
- Clinique relies on departmental stores for distribution which are under threat and should thus change tact so as to ensure efficient distribution
Marketing strategies is an interlock of the three C’s; consumer, competitor, and corporation. The introduction of a new product should be done with all the above in mind. A challenge that may be faced by a company is attaining the right marketing mix for the product. The brand producing the product should have in mind the 4 P’s Product, price, Promotion, place.
The company should look at its lifecycle, its introduction, growth and maturity. Since this are beauty products and are subject to fluctuations due to consumers shifting tastes and preferences, the company should ensure that it maintains it at maturity stage where it will have attained a proper market base and loyalty.
This is important as it plays a number of roles such as high prices suggesting high quality goods, competitive edge by under-pricing and sales promotions through coupons and discounts. To maintain its high-end clientele, Clinique is best suited to adopt the high price-high quality strategy. However, the price chosen by any brand should yield consumes satisfaction and an acceptable level of profit which can be achieved through segmenting markets to ensure they reach even those with shallow budgets
The product should be at the right place at the right time and ensuring that the right distribution channels are adopted
This is done through advertising, sales promotions, personal selling, publicity and public relations. The parent company was well known for free samples. For example, The Estée Lauder Spa gives the Estée Lauder brand an opportunity to jump into the “well-being” market. However, whole treatment systems that cover beauty, exercise and diet which include spa visits is a growing market. The growing trend is to seek natural cures instead of chemicals and to place an emphasis on being fit instead of thin.
Marketing strategies are not scientific, they do not have definite answers, and it’s a trial and error basis situation. The Nivea brand and Clinique have very good marketing strategies that have enabled them to be market leaders; however there is room for improvement due to the dynamic nature of their industries. They may serve them well now, but they need to keep abreast with the new market trends and change their marketing strategies accordingly In fact, as a response to the problem of department stores losing popularity, Estée Lauder has already begun to take actions to horizontally diversify its distribution channels. As today’s information explosion has made beauty products’ description, users’ comments and reviews readily accessible by virtually everyone, the need of individual assistance, which is typical of department stores, has become less necessary.