Chapter 5 CONCLUSIONS and MANAGERIAL APPLICATIONS
5.1 A Summary of Major Findings
5.1.2 Market Challengers: ESTEE LADUER, LANCOME and KIEHL’S
The company began in 1946 when Joseph Lauder and his wife Estée Lauder began producing cosmetics in New York City, New York. The science behind its products leads to effective results, and also helps the company gain worldwide reputation over the years for its innovative line of simple yet elegant and luxurious products. In 1979, it expanded into Taiwan and has earned a leading position in the market.
Product
Similar to SHISEIDO, ESTEE LAUDER also has a wide product line but using a single brand name of “ESTEE LAUDER”. Besides, it claims that all ESTEE LAUDER beauty products are dermatologist and allergy tested. The most popular products are the pore minimizing skin refinisher, foaming cleanser, anti-wrinkle radiance eye cream and multi-protection sun lotion for face and body.
Price
The price range is from NT850 to NT4,500 which is similar to SHISEIDO.
Place
ESTEE LAUDER sells its products through 49 department stores in Taiwan.
Promotion
Rather than TV commercials, ESTEE LAUDER relies heavily on printed ads such as beauty magazines in Taiwan. The company used to implement a global marketing strategy using celebrity including the famous Elizabeth Hurley and Gwyneth Paltrow.
But this year, a Chinese model Liu Wen has been signed as the first Asian face modeling for Estee Lauder. The free gift and the gift-with-purchase techniques were pioneered by
and by attracting new buyers.
Suggestion
Generally speaking, ESTEE LAUDER has high brand loyalty, perceived quality, leadership, company association and brand awareness. Still, it has relative lower evaluations on price premium attribute” Even when other brands are cheaper than this brand, I’m still willing to buy this brand.”(3.05), perceived value attribute” I think this brand is worth more than what I paid for.”(3.0), and attractiveness attribute” This brand is attractive to me.”(3.15). The first two attributes are somewhat related to consumers’
brand loyalty toward ESTEE LAUDER. Compared to SHISEIDO, they both have similar prices, but SHISEIDO’s consumers are more willing to pay for its product and feel more satisfied with what they get. Therefore, ESTEE LAUDER should try to increase its consumers’ brand loyalty. In USA market, ESTEE LAUDER is using mobile for Gift Time SMS service because mobile phones are a way to communicate with consumers. It allows the brand to keep in touch with consumers wherever they are.
It can consider launching the same marketing activity in Taiwan to increase consumers’
loyalty, too. As for brand personality attribute, using a local celebrity may help enhance its attractiveness to consumers.
Brand ESTEE LAUDER,
Parent Company
Estée Lauder Companies, Inc.
Entry year 1979
Price range NT850~NT4,500
Indicator Attribute M
Price Premium Even when other brands are cheaper than this brand, I’m still willing to buy this brand.
3.05
Brand Loyalty I will recommend this brand to others. 3.27
I will buy this brand next time when I need to buy skincare products 3.15
Perceived Quality
Compared with other brands, this brand delivers better quality. 3.24
This brand has consistent quality. 3.28
Leadership I think this brand value innovation more than other brands. 3.32 I think this brand is in its leadership position in the market. 3.54
Perceived Value
I think this brand is worth more than what I paid for. 3
Compared with other brands, this brand makes me feel a greater sense of value. 3.24
Brand Personality
It is easier for me to have a clear image toward the consumer of this brand. 3.38
This brand is attractive to me. 3.15
Company Association
I trust the brand company. 3.49
Differentiation I think the skincare product of this brand is significantly different from others. 3.24
Brand Awareness
I’ve heard about this brand. 4.35
When it comes to skincare products, I can speak out the name of this brand specifically.
4.13
LANCOME
LANCOME PARIS is a French luxury beauty brand. Owned by L'Oréal since 1964, LANCOME is part of the Luxury Products division, which offers skin care, fragrances, and makeup at higher-end price points. In 1991, LANCOME entered Taiwan market and has a strong position in the market now. LANCOME has promoted the image of French excellence successfully, from sophisticated services to the absolute in luxury products. Besides, to catch the huge Asian market, it also developed Asian product line which is tailored to Asian women’s skin and whitening concern. LANCOME has successfully combined its innovation advantage and local market needs which together generate billions of revenue in Asian market.
Product
LANCOME product line appeals to women that seek more intensive skin products (anti-aging, wrinkle release). All Lancôme products are sold under one brand name.
Price
LANCOME has a higher price range than SHISEIDO and ESTEE LAUDER from NT1,500 to NT5,500.
Place
LANCOME’s main channel is department stores. So far, LANCOME products can be found in 44 department stores.
Promotion
LANCOME is one of the top advertisers in the luxury beauty arena. You can see its advertisement in every media from TV, magazine to outdoor advertising displays. Also,
Suggestion
LACOME has relative advantages in perceived quality, brand personality, company association, leadership and brand awareness. Still, it has relative
disadvantages in price premium attribute” Even when other brands are cheaper than this brand, I’m still willing to buy this brand.”(3.07), and differentiation attribute” I think the skincare product of this brand is significantly different from others.”(3.16). Similar to ESTEE LAUDER, LANCOME has lower brand loyalty than SHISEIDO; moreover LANCOME’s price range is also higher than both SHISEIDO and ESTEE LAUDER.
These two reasons may cause its low evaluations on price premium attribute. Since LANCOME positions itself as a premium brand, it shouldn’t decrease its price range for current product line but instead it can use differentiated market coverage strategy to develop a new product extension which is less expensive than the current product line.
Besides, giving free samples after sales which can make consumers feel getting more for their money and offering professional consultation assistance to ensure consumers’
product satisfaction are both good ways to enhance brand loyalty and perceived value.
As to differentiation attribute, since LANCOME received good evaluations on leadership and brand personality, it should keep strengthening its outstanding technology used in the product and image of French Paris excellence.
Indicator Attribute M
Price Premium Even when other brands are cheaper than this brand, I’m still willing to buy this brand.
3.07
Brand Loyalty I will recommend this brand to others. 3.24
I will buy this brand next time when I need to buy skincare products 3.2
Perceived Quality
Compared with other brands, this brand delivers better quality. 3.24
This brand has consistent quality. 3.28
Leadership I think this brand value innovation more than other brands. 3.32 I think this brand is in its leadership position in the market. 3.47
Perceived Value
I think this brand is worth more than what I paid for. 3.09
Compared with other brands, this brand makes me feel a greater sense of value. 3.2
Brand Personality
It is easier for me to have a clear image toward the consumer of this brand. 3.41
This brand is attractive to me. 3.2
Company Association
I trust the brand company. 3.45
Differentiation I think the skincare product of this brand is significantly different from others. 3.16
Brand I’ve heard about this brand. 4.39
Awareness When it comes to skincare products, I can speak out the name of this brand specifically.
4.15
KIEHL’S
KIEHL'S, which is owned by French cosmetics retailer L'Oreal, has distinguished itself by offering simple packaging, non-commercial marketing, and high-quality
products. KIEHL’S was founded as an old-world apothecary in New York’s East Village neighborhood over 150 years ago and was merged to L'Oreal in 2000. In the same year, KIHEL’S began its sales in Taiwan and quickly developed itself as a strong brand in skincare market.
Product
KIHEL’S products are made with natural ingredients and perfect for sensitive skin, dry skin and problem skin. All the products are all alcohol free and without the use of animal testing. Besides, because it utilizes many natural ingredients in its unique formulations, products may vary in color and in consistency with each new batch that they make. It keeps packaging simple and recycle-with no fancy colors or names.
Price
The price range of NT500~NT2,500 is similar to BIOTHERM, but slightly lower.
KIEHL’S is also the least expensive brand among 8 brands.
Place
So far, KIEHL’S sells its product only in 10 department stores.
Promotion
With little to no advertising, KEIHL’S has grown its reputation mainly by word of mouth. Besides, KIEHL’S gained further recognition from a broad range of celebrities such 大 S, who even promotes KIEHL’S product in her books. KIEHL’S is also known for the amount of time its staff is willing to lavish upon individual customers, as well as
its eagerness to give out free samples. “Try-before-you buy policy.” has led customers to go back and purchase products. Besides, KIEHL'S also maintains an impassioned commitment to the environment and is constantly striving to further its efforts.
Suggestion
It is surprising that KIEHL’S is the youngest brand among the 8 brand but receives relative high evaluations on the 15 attributes especially differentiation and brand
personality attribute. Still, it has relative disadvantage in brand awareness, the reason being that it only now has 10 counters in Taiwan. Since KIEHL’S has little
advertisements, it should increase its availability to customer by expanding into more distribution channels. Moreover, KIEHL’S relies heavily on the word of mouth, thus it can consider blogger marketing to increase its brand awareness as well. Once KIEHL’S successfully increases its brand awareness and availability, it has a great chance to become the market leader in the following years.
Brand KIEHL’S
Parent Company
L'Oreal group
Entry year 2001
Price range NT500~NT2,500
Indicator Attribute M
Price Premium Even when other brands are cheaper than this brand, I’m still willing to buy this brand.
3.19
Brand Loyalty I will recommend this brand to others. 3.32
I will buy this brand next time when I need to buy skincare products 3.26
Perceived Quality
Compared with other brands, this brand delivers better quality. 3.21
This brand has consistent quality. 3.35
Leadership I think this brand value innovation more than other brands. 3.19
I think this brand is in its leadership position in the market. 3.08
Perceived Value
I think this brand is worth more than what I paid for. 3.11
Compared with other brands, this brand makes me feel a greater sense of value. 3.16
Brand Personality
It is easier for me to have a clear image toward the consumer of this brand. 3.38
This brand is attractive to me. 3.24
Company Association
I trust the brand company. 3.49
Differentiation I think the skincare product of this brand is significantly different from others. 3.45
Brand Awareness
I’ve heard about this brand. 4.13
When it comes to skincare products, I can speak out the name of this brand specifically.
4.4