Marketing Plan: Maybelline’s New Perfume

food commercialiseplaceing Plan Maybellines forward-lookingly redolence The University of Sheffield Marketing Manage ment (MTG 2410) Blagoy Savov (BS11124) 21 August 2012 Abstract LOreals Maybelline, a globose, mass commercialize cosmetic manu accompanimenturer, has decided to develop and grocery a cutting redolence for women. This chronicle includes look, abbreviation and evaluation of the grocery environment for womanish aromas. Furthermore, it startlines a food trade strategy for the tonic ingathering which describes the merchandise commingle to be used by Maybelline in rescript to sell its upstart harvest-home addition to the designate mart.Introduction The fragrancy securities industry is a precise competitive unrivaled with large companies having a global heraldic bearing and hygienic established images and put ups. This food market is in any case very economic and ever growing with signs of heavy(p) authorization. Maybelline is peerl ess of LOreals brands and is well know world panoptic for its value based cosmetics harvests. nary(prenominal) Maybelline is entering the olfactory property market with a sensitive female perfume and this report describes how it bequeath take on this gainsay. The first part of the report informs LOreal, which is Maybellines puzzle family, its vision and community profile including its financial success. Maybelline reconciles under LOreals Consumer harvest-tides office, which fractures mass-market intersection points. The report continues by presenting an environmental analytic thinking of the market as well as a competitive analysis. thither be 3 main players in the manufacturing, which roleplay 24. 5% of the global market in the face of Coty Inc. Maybellines mother party LOreal, and Procter & take a chance. The first part of the report concludes with a fig up analysis of the Maybelline, which indicates that the strengths and opportunities outweigh the weakne sses and threats. Based on the market analysis, the second part of the report proposes a repoint market for the new female bouquet proceeds and a specific merchandise mix in social club to successfully reach its nodes. The participation LOreal LOreal is one of the largest cosmetics companies in the world, producing and trade a aim of make-up, perfume, bull and skin c atomic number 18 growths in all over one hundred thirty countries.The company is headquartered in Clichy, France and employs near 68,900 populate worldwide in a score of 41 factories. With 613 registered patents in 2011 the company earned 20. 3 cardinal EURO of sales in that category and currently has a brand portfolio of 27 international brands (LOreal 2011). For more than a 100 years LOreal has devoted its efforts in the note of beauty. Its mission is to enable all individuals to express their personalities, gain dominance and open up to others by offering the best cosmetics innovation in terms of quality, efficacy and safety.The company pushes the boundaries of innovation by heavily spend in enquiry in order to explore new territories and nominate mentally new products (LOreal 2012). Wrapping up another year of financial growth, in 2011 fellowship Responsibility (2005 2011) Reduced greenhouse gas emissions by 29. 8% Reduced waste generated by 24. 2% Reduced water manipulation by 22. 6% 95. 7% of waste is reused, recycled or used for energy production Reduced fundamental energy white plague by 6. % for 2010/2011 Company Profile A century of expertise in cosmetics 20,3 one million million sales in 2011 27 global brands 130 countries 68 900 employees 613 patents filed in 2011. LOreal grew instantaneous than the worldwide cosmetics market and confirmed its position as the world attracter in beauty. The company also heavily invests in existence socially, ethically and environmentally responsible to ensure a sustainable growth in the long-term. Compared to 2005 the organization signifi cornerstonetly cut back its gas emissions, generated waste and water consumption and invested in enquiry in order to foster sustainable innovation.Maybelline As described in the journal by Aaker and Joachimsthaler (2000) brand architecture is a structure that organizes the companys brand portfolio and specifies the brand roles and the relationship mingled with them. Coherent brand architecture provides tools to ? ? ? permit brands to stretch across products and markets, work out conflicting brand strategy needs, preserve brand-building resources by leveraging breathing brand equity, protect brands from being diluted by over-stretching, and signal a new and different offeringAs outlined in the journal by Harish (2008), LOreals brand architecture is organized around 27 international brands, which are clustered in separate business divisions, each of which focuses on a specific draw a bead on market. As illustrated in Table 1, LOreals business is s tructured under three divisions (Consumer Products Division, Luxury Products Division and Professional Products Division), one department (Active Cosmetics Department) and an ethical cosmetics brand (The Body snitch). LOreals brand architecture, video display brands, positioning and sales channel. Consumer Products Luxury Products Profess.Products Active Cosmetics The Body ShopMajor international umbrella brands LOreal Paris Garnier Maybeline red-hot York SoftSheen Carson Le Club des Createurs de Beute (LCCB) Lancome Biotherm Helena Rubinstein Kiehls Shu Uemure aromas Giorgio Armani Ralph Lauren Cacharel Victor and Rolf Diesel Positioning Quality products at affordable tolls for the peck Up-market luxury products for discerning consumers Specialist products for use by professional hair stylists and salon professionals Sales Channels Mass market retail outlets in the case of LOreal Paris, Garnier, Maybelline and SoftSheen CarsonDirect trade for LCCB High-end international dep artment stores, travel retail outlets, brands testify boutiques and perfumeries Hair stylists and salon professionals Pharmacies and specialist retailers Predominantly done body Shops exclusive retail chain Cosmeceuticals with proven safety and military strength backed by pharmacists and dermatologists Ethical cosmetics for socially and environmentally conscious consumers LOreal Professionnel Kerastase RedKen fifth Avenue NYC Matrix Mizani Vichy La Roche Possay Inneov SkinCeuticals Sanoflore The Body Shop Table 1 Within the Consumer Products Division, LOreal Paris is the premium brand while Garnier and Maybelline New York are the neighbouring aspirational brands. The company offers these distinct brands in order to satisfy different seat groups and avoid losing customers to a competitor (Harish, 2008). LOreals goal is to make Maybelline a leaders global mass-market brand. This brand is sold in about 127 countries and makes up over 45% of the total revenues.Maybelline is positi oned to be the leader of massmarket cosmetics rear ended at women mingled with the age of 15 and 49 at a reasonable price and it successfully promotes the urban American chic image across the globe. Maybelline includes louver ranges of products face, eyes, lips, nails and tools. Each range includes several lines and in that location are individual products with bizarre brands under each line. As per Harish (2008) the products of the Maybelline group are mainly promoted through TV advertize and brand ambassadors like the supermodels Christy Turlington and Adriana Lima. Since 1915, the brand has been empowering women everywhere with the impressful shibboleth Maybe she is born with it. Maybe its Maybelline. Today Maybelline New York is the leading makeup brand worldwide, which combines technologically advanced cosmetics with trendy expertise to create accessible products with a spirited style that empower women to make a statement by exploring new tools, experimenting without risk, and flaunting their own artistry (LOreal, 2012). LOreal has a licensing reason with fiver different fragrance brands, which complement the firms wide spectrum of product offerings. As described in Table 1 these brands fall under the Luxury Products Division, target discerning consumers and are sold in high-end department stores, travel outlets and boutiques. LOreal is now underdeveloped a completely new perfume under its own Maybelline product line. Environmental Analysis Market AnalysisThe fragrance market experienced a beauty growth in sales in the period amongst 2006 and 2011. Furthermore the overall market growth is expected to accelerate in the next five year period. In 2010 the global fragrance market generated total revenues of $36. 3 one million million million resulting in a compound one-year growth rate of 4. 2% for the period spanning 2006 2010 shown in realize 1 (Datamonitor planetary, 2011). Global fragrances market tawdriness million units 40000 35000 30000 25000 20000 4. 2 3. 1 5. 6 7 6 5 3. 9 4 3 2 $ million % growth 15000 ten thousand 5000 0 2006 2007 2008 Figure 1 1 0 2009 2010 Consumption raft in the fragrance market emergenced with a compound annual growth of 4. % between 2006 and 2010 resulting in 1. 3 zillion units in 2010. By the end of 2015 the consumption volume is expected to rise to 1. 6 billion units. As shown in Figure 2 female fragrances showed the highest sales twists game generating $23. 1 billion of revenues in 2010, equivalent to 63. 8% of the markets overall value (Datamonitor Global, 2011). Global fragrances market segmentation by pillowcase % lot 5% 64% Female fragrance Male fragrance Unisex fragrance 31% Figure 2 The fragrance market segmentation is distri provideded between the three major continents.As shown in Figure 3 europium leads the consumption of fragrances by 45. 1% followed by the Americas with 38. %, Asia-Pacific by 10. 5% and Africa and the Middle East by 6. 4% (Datamonitor Global, 2 011). Global fragrance market segmentation by region % share 6% 11% Europe Americas Asia-Pacific Affrica and Middle East 45% 38% Figure 3 overall the current fragrance market condition and especially the sub-category of female fragrances shows to be positive and creates opportunity for new product additions, which is an advantage for Maybellines caprice to introduce a new perfume (Datamonitor Global, 2011). Market Environment In the book by Perreault et al (2011) it is described that when creating a new product the required marketing strategy planning process includes electing the best opportunities and developing a strategy that pass on provide superior value to the potential consumer and a competitive advantage to the company itself. In order to rule the best opportunity and create a marketing strategy, the company has to test and evaluate the important elements of the marketing environment and the occurring trends. Perreault et al (2011) continues by stating that there are d ifferent forces that create the market environment. These forces include the direct marketing environment comprised of the customer, the company, and the competitors and the external market environment comprised of the economic, technological, political, legal, cultural and social aspects.In order to create the best marketing mix (product, place, promotion, price and personalization) for the new female fragrance of Maybelline, the marketing environment has to be analyzed. Economic Environment As per Perreault et al (2011) the economic environment refers to macro-economic factors, including economic growth, national income and inflation which match the way consumers (individual customers? ) and businesses consume. Changes in the economy in usual in accredited industries or parts of the world could have an impact on the consumption. expert Environment Technology uses the application of science to convert resources into output.In particular it affects marketing by creating opportun ities for new products and new processes. Technological advances allow for better discourse and promotion opportunities and it furthers globalization. It also provides for more effective and efficient ways of producing and delivering products and go (Perreault et al, 2011). Political Environment The political environment of a orbit is bear on by the attitudes and reactions of people, social critics, and the government. The political environment can affect change opportunities at both local and international levels. In some markets flag-waving(prenominal) feelings can reduce or block marketing activities, which creates a challenge for companies (Perreault et al, 2011).Cultural and Social Environment These two factors have a significant impact on the marketing environment. The cultural and social environment affects the way people live and behave, which in turn affects their consumption behaviour as well as the economic, political, and legal environments. These factors consist o f different variables including language education devotion style housing view on work, marriage and family The growth of the fragrance market is different across the various geographic zones depending on the economic conditions in that area. The consumption of perfume is largely dependent on demographics and life-style trends, in particular the importance of luxury and status.If a particular country is experiencing difficult economic conditions, usually the luxury products suffer the most, as they are not a needed product just now rather a nice to have (ReportLinker, 2012). In contrast mass-market, value products are not as impacted by the economy. The US, with the highest market share of 33%,shows steady growth partly due to the fact that the country is advent out of the recession and into better economic conditions. The consumption of perfumes in Asia is relatively low, digression from Hong Kong and Singapore, due to the economic conditions and the perception of perfumes and heavy scents being used as a way to mask body odour.However, the growth potential in these demographics is immense, especially as Asian women are adhering to the Western trends in invent and personal care, and are receptive to using well-known brands for building their self-image (ReportLinker, 2012). The brainstorm of private fragrance labels in China stands at the low 5%. Brand loyalty and higher levels of disposable income provide popularity for the European fragrance products. Suppliers are targeting the unripeneder population in order to attract new customers, due to the changing age structures in the country. To this day, Chinese consumers favor force stores when shopping for fragrances, which is an important consideration for companies wanting to be successful in this market (ReportLinker, 2012). Competitive AnalysisPerreault et al (2011) defines the competitive environment as the number and types of competitors the company is facing and the way these competitors behave i n the particular industry. There are 4 basic kinds of competitive market situations sublimate contest A market state where buyers and sellers trade a uniform commodity such as wheat, copper or financial securities and no superstar buyer or seller has much effect on the market price. In its pure form this market state eliminates the purpose of marketing research, product development, pricing, advertising and promotion. Oligopoly A market state with a some sellers who are highly sensitive and alert to each others marketing strategies and pricing.In this market it is difficult for new sellers to enter. Monopolistic competition A market state where galore(postnominal) buyers and sellers trade over a range of prices, rather than a single market price. The range of prices occurs due to the fact that the sellers offer a differentiating factor of their product to the buyers. The differentiating factor can be achieved through segmenting, price fluctuations, branding, advertising, pers onal selling and other marketing tools. Pure Monopoly A market state where a single firm produces a product, for which there are no close substitutes and in which significant barriers to debut prevent other firms from entering the market to compete.The fragrance market is by all odds a monopolistic competition in which many vendors sell to many buyers and there is a range of prices based on differentiating factors created through segmenting, branding, advertising and other marketing tools. The global fragrance market is greatly abrupt with the top three selling companies accounting for 24. 5% of the market value. some of the leading companies are either large manufacturers of personal care products or large fashion houses and are geographically diversified. As most companies drop dead large production facilities, fixed costs are high in this market the vast business diversification eases the competitive pressure.In conclusion the contestation in the fragrance market is moderat e. Shown in are the top three leading players in the fragrance market, which are Coty Inc. with 10. 2% share, LOreal S. A. with 7. 7% share and Procter & Gamble Company with 6. 6% share. The rest of the market is divided between much flyspecker fragrance vendors and account for 75. 5% of the market (Datamonitor, 2011). Global Fragrance Market Share % share, 2010 10% 8% 7% Coty Inc. LOreal S. A. Procter & Gamble Company Others 75% Figure 4 Coty Inc. Coty Inc. is a privately held company that manufactures and markets fragrances, color cosmetics, toiletries, skincare, sun care and personal care products.It is headquartered in New York City, employs more than 8,500 people and distributes its products to around 90 countries. The company distributes its products utilizing different channels including department stores, specialty retailers, upscale perfumeries, pharmacies, mass market retailers and duty salve shops. The company save total revenues of $25. 8 billion in FY2010, an increas e of 11. 6% over the introductory year. Revenues from the fragrance product category for the company reached $2. 2 billion in FY2009. coupling America accounted for 32% of total revenues, whereas Europe as its largest ? geographical market accounts for 57% of the total revenues in FY2010, Asia with 7% in FY2010 and the rest of the world with 4% in FY2010.LOreal in time though LOreal is the mother company of Maybelline it still needs to be considered as a competitor in a way since it does have five fragrance brands under its umbrella. These brands are placed under the Luxury Product Division and include Giorgio Armani, Ralph Lauren, Cacharel, Victor and Rolf, and Diesel. Procter & Gamble Company (P) P manufactures and markets consumer products with over 300 brands in over 180 countries. The company is headquartered in Cincinnati, Ohio and employs about 129,000 people. The company offers its prestige fragrance products under its beauty division which recorded revenues of $20. 2 bil lion in FY2011, an increase of 3. 4% over the previous year. P earned 36. 9% of its revenues in the United States and 63. 1% internationally. SWOT Analysis of MaybellinePerrault et al (2011) describes SWOT analysis as a marketing tool used to create a marketing strategy which identifies binding criteria (and identifies) and outlines the companys strengths and weaknesses, and its opportunities and threats. The analysis has two categories internal factors such as strengths and weaknesses, which analyze the companys resources and abilities external factors such as opportunities and threats, which are observed by analyzing the external market environment, customers, and competitors. This marketing tool helps the marketing department create a marketing strategy that takes advantage of the companys strengths and opportunities while avoiding its weaknesses and threats.SWOT analysis is usually illustrated with a diagram consisting of four squares and each one of them summarizes the company s strengths, weaknesses, opportunities and threats. Maybellines SWOT analysis is illustrated in Figure 5. Helpful Harmful Strengths ? Owned by the biggest cosmetics company in the world Solid financial backing Distributed in 127 countries drawing card in mass-market beauty products ? ? Established image Established production and statistical diffusion infrastructure dimnesses Lack of expertise in manufacturing fragrances Product division completely focus on females Lack of expertise in producing natural and radical products inner(a) Opportunities Growing presence in appear markets (Asia, South America) Natural and complete fragrances Mens fragrances Threats Counterfeit of fragrances Established strong competition Weak economic conditions worldwide External ? ? Figure 5 Strengths Maybelline enjoys a few significant strengths when it comes to its entry into the female fragrance market. One of them is the fact that Maybelline is have by the biggest cosmetics company in the world in the attend of LOreal, which has a solid financial foundation, an established image and existing production facilities and distribution channels. Maybelline itself has strengths in terms of its already established image and worldwide presence in the mass-market of beauty products. WeaknessesThe most significant weakness of Maybelline is the fact that it has no realistic expertise in developing and manufacturing fragrances and specifically female perfumes. The brand is well known for making and selling makeup, but the fragrance industry poses its own unique challenges. Maybellines complete product set is targeted exactly towards females including their research and marketing departments. This is considered a weakness since the mens fragrance segment of the market is (still) emerging, which is outlined in the opportunities scratch of this paper. Another opportunity, which Maybelline is not ready for is the emerging segment of natural and organic products, which makes it a weakn ess for the company.The production of natural fragrances requires investment in research and development and different know-how and expertise, which Maybelline has not fully developed. Opportunities By the year 2020 countries in Asia and South America (emerging market) may represent more than 50% of the total cosmetics market, which directly affects the fragrance portion of the market. Currently, people living in emerging countries consume fewer cosmetics products than the rest of the world (Western Europe, North America, Japan, etc. ), but as their GDP is increasing, the consumption level should increase accordingly creating a great potential for penetration (Marketline, 2012). This presents a serious opportunity for Maybelline to offer its new fragrance in these demographics. Threats According to Global Insight Inc. 2007) and research performed by the Global AntiCounterfeiting Group, counterfeit perfumes and cosmetics cost the industry 3. 0 billion EURO annually in baffled revenu e and 555 million EURO in lost profit. The effects of counterfeiting include loss of profit, reduced investment and innovation, and an overall slowing down of the economy as a result of lost jobs and reduced tax revenues. Counterfeiting poses one of the biggest threats to Maybelline and its plans to introduce a new female fragrance on the market. Another threat is the long-time established competition in the female fragrance market including stable companies with an established image. This makes it difficult for Maybelline to penetrate the market with yet another new product.Currently, the global economy in general is struggling and especially in some European countries and the United States. As fragrances and cosmetics in general are not a need but rather a want product, the effects of frown income and higher unemployment grade are posing a threat to this industry and Maybelline itself. SWOT result By performing a SWOT analysis for the opportunity for Maybelline to introduce a new female fragrance into the market, it becomes apparent that the strengths and opportunities outweigh the weaknesses and threats. An already established company such as Maybelline is more than halfway of creating and marketing a new fragrance regardless of its inexperience with this specific product type.The struggling global economy and counterfeit products are challenges that every fragrance company faces, still this industry is strong and has the potential for growth. Market dodging Perrault et al (2011) describes that to plan a marketing strategy is to find irresistible opportunities and develop a profitable marketing strategyThere are two interconnected parts to a marketing strategy and they are the target market and the marketing mix. As defined in this book, a target market is a fairly similar group of potential customers to whom the company wishes to appeal. A marketing mix is the controllable variables the company puts together to satisfy this target group.These variabl es include the characteristics of the product, the place where the product leave alone be sold, the price the Figure 6 product will be offered at and the promotion that would be used to market it. As illustrated in Figure 6 at the centre of the marketing mix is of course the target customer. Perrault et al (2011) states that the customer is placed in the center of the diagram to show that the customer is the target of all the marketing efforts. Target Market Currently, Maybelline targets women between the ages of 15 and 49 in more than 127 countries worldwide. Based on this wide market the new fragrance being introduced will be targeted to a narrower target, which is women between the ages of 18 and 34 living in Europe.Although as outlined earlier in this report, the mens fragrance market is rapidly growing and has great potential, Maybelline offers products only to the female part of the population and has an already Figure 7 established image as such a brand. The new perfume bran d will follow that image and target females only. The decision to ab initio introduce the product in Europe only is based on the fact that this is the strongest market for fragrances. If the product succeeds in this market its reach can be expanded to North America and even Asia. Furthering the definition of the target market, Maybelline will focus its marketing efforts on women between ages of 18 and 34 that are either single or freshly married with bittie or no children, have an active lifestyle and are young professionals. The target market is summarized in Figure 7. Marketing MixAs described in the book by Perrault et al (2011) the marketing mix specifies the details of the new product being developed and includes four Ps (product, place, price and promotion).1. The first P for Product may involve a sensible good (a perfume in our case), a service, or a mix in of both as well as its branding, packaging, and warranties. The basic idea is that the product has to satisfy a spec ific customer need.2. The second P is for Place, which defines how the product will reach its customer when and where it is needed. This includes the distribution channels used for gain ground the product sold.3. The third P is for packaging and it describes the way the product will be marketed or sold to the customer, which includes advertising and public relations.4. The fourth P is for Price and specifies the amount of money a customer has to pay to acquire the product. When setting the price, the producer must account for the competition in the target market and the cost of producing and marketing the product. Based on the marketing principles and the research described above in this document a marketing mix for Maybellines new female fragrance follows. Product Name Maybellines new perfume will be called DENI which is an abbreviation for Desire, Exquisite, Natural and Intimate. The name describes what the perfume stands for. When a woman wears the DENI fragrance, she is desir ed, the scent is exquisite, the product is natural and the affiliation with it is intimate.Scent The scent of the perfume will be light and fresh, to be fatigued by females with an active lifestyle when going to work or being active. It is meant for everyday use and does not intrude, since the individual wearing it will be around people interacting. The perfume will only be forthcoming in Eau de Parfum spray since it is the lighter and more affordable version of the victor scent. Ingredients An increasing trend in the market is the demand for natural products thence the DENI perfume will be make out of natural ingredients. This will possibly raise the production cost but compensate with a differentiating factor and the increasing demand for such products. Packaging DENI will be offered only in a 50ml glass bottleful, which is compact and utilizing a rear end on cap.The bottle design is meant for being carried in a small purse or a bag without the possibility of the cap coming off and being sprayed inside. To keep with the companys green ideology, the bottle utilizes an aluminum removable pump, which can be separated from the glass bottle before disposal, so the glass bottle can be considerably recycled. The bottles are packaged in a cardboard box made completely from recycled paper and painted with natural paints. The bottle can also be returned to one of the stores where DENI is offered for a refill. Place DENI perfume will be manufactured at the current Maybelline plant located in North Little Rock, Arkansas.There will be an additional facility built for the manufacturing of the new perfume adjacent to the current massive factory. The administrative and transportation functions of the existing plant will be utilized for the new product as well as the distribution channels. DENI will be sold in Specialist Retailers, Department stores (including Duty-Free Shops), supermarkets and hypermarkets as it is a mass-market product with a low profit-margin. Pri ce DENI will cost 38 EURO for the 50ml bottle to the terminal customer. The perfume is a mass-market product under LOreals Consumer Product Division and it is meant for everyday use and hence the price must be lower than the more luxurious products that the company itself offers as well as the competition.Table 2 shows a comparison of the prices for 50ml Eau de Parfum spray bottles of some of the bestselling perfumes on the market. For instance Chanel No. 5, as one of the best perfumes on the market costs well-nigh double compared to the price of an equivalent DENI bottle. The product however cannot be the cheapest since it has to be corresponding to LOreals image of offering high quality products. Perfume price comparison (EURO per 50 ml) 79 62 43 43 40 38 36 30 Table 2 Promotion Even if Maybelline creates the best product at the best price, no one would buy it if customers do not know about it. A very important part of the marketing strategy is the way the product will be introdu ced and advertised to the target market. As mentioned above, the target is women