Chapter 5 CONCLUSIONS and MANAGERIAL APPLICATIONS
5.1 A Summary of Major Findings
5.1.3 Market Followers: SKII, CLINIQUE and BIOTHERM
SK-II is a Procter & Gamble Beauty brand, launched since 1980 in Japan. SK-II is often considered one of the most expensive beauty brands in the world. SKII has been successful with its secret key “Pitera”. In 1985, it expanded into Taiwan market targeting at sophisticated, wealthy women in the 30s and 40s. Actually, Taiwan was SKII’s first successful oversea market. In recent years, SK-II is dispelling the image that the products are targeted at older Asian women by using younger endorsement. In September 2006, the People's Republic of China halted all imports of SK-II products, after a consumer found two toxic metals, chromium and neodymium, in nine SKII products. By December of the same year, the brand was back in China stores, still this crisis had led to a long term loss to SKII’s credibility and sales in Asian market.
Product
The product line is developed based on its patented ingredient, Pitera, which are
designed to address specific needs especially anti-aging and whitening.
Price
Positioned as a prestige skincare brand, SKII sells its products at higher prices ranged from NT1,400~NT4,250.
Place
SKII sells products through 4 kinds of distribution channels including department stores, Watson’s, retail distribution and licensed stores, which together amount to more than 200 counters.
Promotion
P&G started advertising SKII heavily in the mid-1990s with TV and print advertisements featuring local celebrities like Hong Kong star Carina Lau, as a result, sales rose dramatically. SKII’s ads are in the form of celebrity testimony. In the ad, the celebrity shares her personal testimony of how SK-II facial treatment has been her constant companion throughout the years. Besides TV commercials, SKII also starts to utilize blogger marketing to promote its products. The company invites some famous bloggers to use its samples of new products and write down their using experiences on the website of each blogger.
Suggestion
On the contrary to KIEHL’S, SKII which has been developing in Taiwan market for more than 25 years and has enjoyed leading position during the past few years, receives, on average, lower evaluations on 15 attributes. Until 2006, SKII had been in the top 3 ideal brands in Taiwan, but facing with the damaged reputation and decreasing market share, SKII seems to be losing its competitive advantages in Taiwan. From the table below, we can see that SKII still has relatively higher scores in differentiation attribute, brand personality, and brand awareness. These results come from its successful pricing and positioning strategy. Yet, its brand loyalty attributes “
recommend this brand to others.”(3.09), “I will buy this brand next time when I need to buy skincare products.”(2.92) are lower than its competitors. Besides, SKII also got low scores on price premium attribute” Even when other brands are cheaper than this brand, I’m still willing to buy this brand.”(2.96), and perceived value attribute “I think this brand is worth more than what I paid for.”(2.84). To increase its brand loyalty, SKII needs to spend time fixing its brand image and reputation. Also emphasizing on
consumers’ life value instead of “product value” can help enhance consumers’ perceived value, that is, SKII should persuade the consumer to buy its premium product not only because of its outstanding effects but also the consumer deserve this premium product.
Brand SKII
Indicator Attribute M
Price Premium Even when other brands are cheaper than this brand, I’m still willing to buy this brand.
2.96
Brand Loyalty I will recommend this brand to others. 3.09
I will buy this brand next time when I need to buy skincare products 2.92
Perceived Quality
Compared with other brands, this brand delivers better quality. 3.17
This brand has consistent quality. 3.21
Leadership I think this brand value innovation more than other brands. 3.16 I think this brand is in its leadership position in the market. 3.49
Perceived Value
I think this brand is worth more than what I paid for. 2.84
Compared with other brands, this brand makes me feel a greater sense of value. 3.24
Brand It is easier for me to have a clear image toward the consumer of this brand. 3.46
Personality This brand is attractive to me. 3.22
Company Association
I trust the brand company. 3.33
Differentiation I think the skincare product of this brand is significantly different from others. 3.32
Brand Awareness
I’ve heard about this brand. 4.3
When it comes to skincare products, I can speak out the name of this brand specifically.
4.21
CLINIQUE
Established in 1968, Clinique, owned by the Estée Lauder Corporation, was the first who offered to consumer products developed by dermatologists in the segment of reputed cosmetics. BIOTHERM has started sales in Taiwan since 1990. Clinique differentiated its brand from other cosmetic makers by establishing a no-nonsense, utilitarian image evidenced by salespeople in lab coats.
Product
CLINIQUE offers clinically proven skin care products and is well known for its development of three-stage leave concepts which are cleanse tone and moisturize.
Clinique tests its product for allergic reactions by applying it to 600 people 12 times, with a standard of zero reactions.
Price
Price range is from NT750 to NT2,900.
Place
CLINIQUE has 38 department store counters in Taiwan.
Promotion
CLINIQUE created a so-called Clinique computer, like an integrated quiz
combining the most common questions and popular solutions to help customers find the
product best suited to their skin condition. Besides, unlike other competitors, in the core of its advertizing campaign for over forty years is the product itself but not a celebrity who happily and trustingly announces how she uses the product. Moreover, it is also well known for its sales persons in white lab coats who offer customers with
professional consultation.
Suggestion
Generally speaking, CLINIQUE receives relative low scores on 15 attributes, except brand awareness. Compare to other competitors, it has weak brand loyalty, perceived value, differentiation and attractiveness. Since the skin care trend is rapidly heading towards the medical field, CLINIQUE should promote the medical skin care concept and meanwhile emphasize its image of dermatologist-guided medical skincare products to improve its performance on leadership and brand attractiveness. On the other hand, its professional sales persons in white lab coats may look quite scary to some customers. Thus, convincing consumers that there will be higher skin care product satisfaction in experiencing greater consultation quality and having the options found within the wide variety of product line will help the company gain more customers and brand loyalty.
Brand CLINIQUE
Parent Company
Estée Lauder Companies, Inc.
Entry year 1990
Price range NT750~NT2,900
Indicator Attribute M
Price Premium Even when other brands are cheaper than this brand, I’m still willing to buy this brand.
2.97
Brand Loyalty I will recommend this brand to others. 3.02
I will buy this brand next time when I need to buy skincare products 3.05
Perceived Quality
Compared with other brands, this brand delivers better quality. 3
This brand has consistent quality. 3.14
Leadership I think this brand value innovation more than other brands. 3.04 I think this brand is in its leadership position in the market. 3.04
Perceived Value
I think this brand is worth more than what I paid for. 2.99
Compared with other brands, this brand makes me feel a greater sense of value. 2.96
Brand Personality
It is easier for me to have a clear image toward the consumer of this brand. 3.11
This brand is attractive to me. 2.97
Company Association
I trust the brand company. 3.29
Differentiation I think the skincare product of this brand is significantly different from others. 3.03
Brand Awareness
I’ve heard about this brand. 4.21
When it comes to skincare products, I can speak out the name of this brand specifically.
4.05
BIOTHERM
BIOTHERM is a skincare brand owned by L'Oréal under the Luxury Products division. BIOTHERM originated from mineral water. BIOTHERM which entered Taiwan market in 1996 has been developing well in this market. BIOTHERM is also the leading brand for men’s skincare market in Taiwan.
Product
BIOTHERM products are formulated with a unique spa ingredient from Thermal Spring Water and offer a complete range of skincare for the face and body.
Price
Similar to CLINIQUE, BIOTHERM has a price range of NT750~NT2,700.
Place
BIOTHERM is sold in 46 department stores throughout Taiwan.
Promotion
Under the L'Oreal brand's umbrella, BIOTHERM used to adopt international models as its spokesperson. But since 2004, BIOTHERM has changed its celebrity endorsement policy; it started to use local celebrities as its spokespersons. For example, from 2005 to 2007, Vivian Hsu had endorsed BIOTHERM and the sales also reflected good response to this endorsement. Besides, BIOTHERM’s advertisements have always featured young flawless skin and a watery feel. Similar to CLINIQUE sales
representatives who wear lab coats, BIOTHERM sales girls are required to wear white uniforms to keep the “clean” image.
Suggestion
Overall speaking, BIOTHERM has median performances on 15 attributes. Its relative low evaluations are on price premium attribute “Even when other brands are cheaper than this brand, I’m still willing to buy this brand.”(2.99), brand loyalty attribute “I will buy this brand next time when I need to buy skincare products” (3.03), leadership attribute “I think this brand is in its leadership position in the market.”(3.08) and sense of value attribute “Compared with other brands, this brand makes me feel a greater sense of value.”(3.07). Having a clear image of “natural beauty products”, BIOTHERM should emphasize on the benefits and effects of its patented spa ingredient to make consumers realize the value of its products. Meanwhile, it should strengthen its advantage on the attribute ”Better value than price” so that it can gain more brand loyalty from its main consumers in Taiwan, young segment.
Brand BIOTHERM
Parent L'Oreal group
Company
Entry year 1996
Price range NT750~NT2,700
Indicator Attribute M
Price Premium Even when other brands are cheaper than this brand, I’m still willing to buy this brand.
2.99
Brand Loyalty I will recommend this brand to others. 3.17
I will buy this brand next time when I need to buy skincare products 3.03
Perceived Quality
Compared with other brands, this brand delivers better quality. 3.13
This brand has consistent quality. 3.23
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. 3.04
Compared with other brands, this brand makes me feel a greater sense of value. 3.07
Brand Personality
It is easier for me to have a clear image toward the consumer of this brand. 3.29
This brand is attractive to me. 3.16
Company Association
I trust the brand company. 3.32
Differentiation I think the skincare product of this brand is significantly different from others. 3.13
Brand Awareness
I’ve heard about this brand. 4.26
When it comes to skincare products, I can speak out the name of this brand specifically.
4.14