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Cosmetic giants segment the global cosmetic market
The document discusses how major cosmetic brands like L'Oréal, Estée Lauder, and Shiseido are targeting emerging markets such as China, India, and Brazil by utilizing diverse marketing strategies tailored to cultural preferences. It examines market segmentation and consumer behavior, highlighting specific product preferences and purchasing habits in these countries. The document also raises discussion questions regarding international strategies and the effectiveness of premium versus mass-market branding.
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Cosmetic giants segment the global cosmetic market
- 1. Prepared by: Suman BHATTARAI MonikaMOCHEREK Cosmetics Giants Segment the Global Cosmetics Market
- 2. Case Overview 1. Howcosmetic giants are targeting new market segments. 2. Consumer behavior in those target countries. a. China, India and Brazil (largest population countries) 3. Different Brands and their marketing strategies. a. L’Oreal, Estée Lauder, and Shiseido.
- 3. Market Segmentation, Targeting& Positioning - is the process of dividing a market of potential customers into groups, or segments, based on different characteristics. - - a process of evaluating the segments and focusing marketing efforts on country, group or people that has significant potential to respond. - - differentiate the product or brands in the minds of target customers. Market Segmentation Targeting Positiong
- 7. Target Countries China (1.379 Billion) India (1.324Billion) Brazil (207.7 Million)
- 8. Cosmetic Preferences AroundThe World - White skin is associated with wealth. - They use whitening creams to lighten and brighten complexion. - Average use of products in the morning and evening is 2.2. - Compact foundation rather than a liquid. - Cleaning face twice a day. - Brazilian women spend more on beauty products. - Third largest global cosmetic market. - buying cosmetics from sales representatives (door-to-door). - Makeup is the jewelry of the female. - Whitening creams, sun protection creams, hair care are widely used.
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- 10. L’Oréal in ChineseCosmetic Market Localization Product Strategy: 80% of its Asian products are developed specifically for the region Differentiated Global Marketing Strategy: L’Oreal target more than one market segment, and designs a separate offering for each market segment.
- 11. Market Segmentation -L’Oreal < Geographic Segmentation Wide range of Products Tier 1 Tier 2 & 3 Tier 4 & 5 Mass-market Premium Brand < Psychographic Segmentation Female Male < Target Group
- 12. Estée Lauder inChinese Cosmetic Market “Most of Chinese are price sensitive but they are willing to pay relatively expensive for quality product.” ❖ Expensive prestige brands. ➢ Positioning: High Quality & Good Price ❖ Targeting new cities. ❖ Achieving growth. ❖ Concentrated Global Marketing Strategy. ➢ Niche market ➢ Single target group
- 13. Shiseido in ChineseCosmetic Market ★ Company that understands skin issues specific to Asian women. ★ Reputation for Advanced technologies and R&D in key areas such as anti-aging products. ★ Used the same strategy that was successful in Japan – highly trained beauty counselors offer advice on color coordination, moisture levels and related topics.
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- 15. L’Oréal in IndianCosmetic Market ● First followed Standardized Global Marketing Strategy. ○ low-price, mass-market strategy ● Shifted to premium-price, upscale strategy. ● Launching L’Oréal Excellence Creme. ● Running educational campaign. ● Promoting product door-to-door in local shops. ● Now, L’Oréal is known as profitable Company.
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- 17. L’Oréal in BrazilianCosmetic Market ❏ Focus on hair-care product. ❏ Low percentage of sales on makeup and skincare product. (15%) ❏ Creating makeup business in retail from scratch. ❏ Hired personal beauty advisors to offer shoppers in-store consultations.
- 18. Discussion Questions 1. Howdo women’s preferences for cosmetics and beauty care vary from country to country?
- 19. Discussion Questions 2. AssessEstée Lauder’s strategy for China. Does it make sense to Focus on premium brands, or should the company launch a mass-market brand?
- 20. Discussion Questions 3. Whatis the best positioning strategy for Shiseido as the company expands in Asia? High touch? High tech? Both? High tech – providing products that are sophisticated, technologically complex, and/or difficult to explain or understand. High touch – appeal to the sense more than to the intellect, products linked with the joy or pleasure found in “life’s little moments”. Consumers may feel emotional with high-touch products, the performance of which is evaluated in subjective, aesthetic terms rather than objective, technical terms.
- 21. Discussion Questions 4. Doyou think L’Oréal will succeed in changing the buying habits of Brazilian women?
- 22. 4. Do youthink L’Oréal will succeed in changing the buying habits of Brazilian women? Spend more on Beauty Products **************************** Prefer to buy their cosmetic from sales representatives who go door-to-door. **************************** Focus mainly on Hair-care Products ***************************** Hired personal beauty advisors to offer shoppers in-store consultations. ***************************** The more market develops, the less important direct sales will be...