'Marketing Plan: Maybelline’s New Perfume\r'

' commercializeing propose: maybelline’s modernistic fragrancy The University of Sheffield merchandising everywheresight (MTG 2410) Blagoy Savov (BS11124) 21 August 2012 Abstract LOreal’s Maybelline, a realness(a), portion commercialise cosmetic manu detailurer, has decided to prove and foodstuff a mod pleasantness for wo men. This innovatives report includes research, abstract and evaluation of the securities patience surround for womanly odours. Further more than(prenominal), it outlines a trade system for the raw carrefour which describes the merchandise unify to be utilise by Maybelline in outrank to sell its new proceeds addition to the grade market place.Introduction The fragrancy market is a very warring adept with king-sized companies having a global front and s healthful established im name and blemishs. This market is also very profitable and ever developing with signs of great potential. Maybelline is unrivalled of LOreal’s markers and is well know adult male large-minded for its value base cosmetics w bes.Now Maybelline is entering the pleasantness market with a new womanly person perfume and this report describes how it go out take on this challenge. The runner part of the report lay outs LOreal, which is Maybelline’s m other(a) confederacy, its hatful and ac party profile including its financial success. Maybelline falls chthonian LOreal’s Consumer fruits naval division, which completeers mass-market crossroads. The report continues by presenting an surroundingsal psychoanalysis of the market as well as a competitive analysis. There be trey of import players in the industry, which represent 24. 5% of the global market in the face of Coty Inc. Maybelline’s incur keep high society LOreal, and Procter & take a chance. The first part of the report concludes with a plodding analysis of the Maybelline, which indicates that the streng ths and opportunities outweigh the weaknesses and threats. Based on the market analysis, the second part of the report proposes a mastermind market for the new egg-producing(prenominal) sugariness point of intersection and a specific merchandise mix in clutch to success richly r individually its customers. The ac ac partnership LOreal L’Oreal is ane of the largest cosmetics companies in the world, producing and trade a melt of make-up, perfume, hair and skin c ar products in over 130 countries.The company is headquartered in Clichy, France and employs close to 68,900 people worldwide in a radical of 41 instrumenties. With 613 registered patents in 2011 the company realize 20. 3 jillion EURO of gross revenue in that year and before long has a shuffling portfolio of 27 foreign scrapes (LOreal 2011). For more than a 100 years LOreal has devoted its efforts in the employment of beauty. Its mission is to enable all individuals to conduct their personalised ities, gain self-confidence and open up to others by offering the scoop out cosmetics innovation in account of quality, efficacy and safety.The company pushes the boundaries of innovation by hard investing in research in order to explore new territories and invent new products (LOreal 2012). wrapping up another year of financial growth, in 2011 ships company Responsibility (2005 †2011) †Reduced immaturehouse petrol emissions by 29. 8% †Reduced waste generated by 24. 2% †Reduced water usance by 22. 6% †95. 7% of waste is reused, recycled or used for cypher production †Reduced integrality energy outgo by 6. % for 2010/2011 go with Profile †A century of expertise in cosmetics †€20,3 one million million million gross sales in 2011 †27 global brands †130 countries †68 900 employees †613 patents filed in 2011. LOreal grew faster than the worldwide cosmetics market and corroborate its position as the world l eader in beauty. The company also heavily invests in existence socially, ethically and environmentally responsible to ensure a sustainable growth in the long-term. Comp atomic number 18d to 2005 the organization importantly reduced its gas emissions, generated waste and water intake and invested in research in order to encourage sustainable innovation.Maybelline As described in the diary by Aaker and Joachimsthaler (2000) brand architecture is a social structure that organizes the company’s brand portfolio and specifies the brand roles and the family relationship among them. Coherent brand architecture lets tools to: ? ? ? yield brands to stretch cross commissions products and markets, resolve conflicting brand strategy needs, preserve brand-building resources by leveraging animate brand equity, protect brands from being diluted by over-stretching, and signal a new and contrasting offeringAs adumbrate in the journal by Harish (2008), LOreal’s brand archit ecture is organized around 27 supranational brands, which atomic number 18 clustered in separate line of credit divisions, each of which focuses on a specific get market. As illustrated in Table 1, LOreal’s business is structured under triplet divisions (Consumer Products divider, Luxury Products Division and Professional Products Division), one department (Active Cosmetics Department) and an ethical cosmetics brand (The Body Shop). LOreal’s brand architecture, showing brands, spatial relation and sales transmit. Consumer Products Luxury Products Profess.Products Active Cosmetics The Body ShopMajor international umbrella brands: LOreal Paris Garnier Maybeline revolutionary York SoftSheen Carson Le association des Createurs de Beute (LCCB) Lancome Biotherm Helena Rubinstein Kiehl’s Shu Uemure Perfumes: Giorgio Armani Ralph Lauren Cach bel Victor and Rolf diesel motor Positioning: Quality products at affordable equipment casualtys for the concourse Up- market lavishness products for distinguish consumers Specialist products for use by professional hair stylists and salon professionals Sales carry: Mass market retail outlets in the incident of LOreal Paris, Garnier, Maybelline and SoftSheen CarsonDirect merchandising for LCCB High- abate international department stores, break retail outlets, brands’ own boutiques and perfumeries Hair stylists and salon professionals Pharmacies and specialist retailers predominantly finished body Shop’s exclusive retail chain Cosmeceuticals with proven safety and potency; backed by pharmacists and dermatologists Ethical cosmetics for socially and environmentally conscious consumers LOreal Professionnel Kerastase RedKen 5th Avenue NYC Matrix Mizani Vichy La Roche †Possay Inneov SkinCeuticals Sanoflore The Body Shop Table 1 deep down the Consumer Products Division, LOreal Paris is the premium brand while Garnier and Maybelline radical York atomic number 18 the neighbour ing aspirational brands. The company offers these distinct brands in order to satisfy different target groups and avoid losing customers to a competitor (Harish, 2008). LOreal’s goal is to make Maybelline a leading global mass-market brand. This brand is interchange in some 127 countries and makes up over 45% of the get revenues.Maybelline is positioned to be the leader of massmarket cosmetics targeted at women betwixt the age of 15 and 49 at a sane price and it successfully promotes the â€Å"urban the Statesn chicness” form across the globe. Maybelline includes five chain of mountainss of products †face, eyes, lips, nails and tools. Each range includes several lines and there are individual products with unique(p) brands under each line. As per Harish (2008) the products of the Maybelline group are mainly promoted finished TV advertising and brand ambassadors like the supermodels Christy Turlington and Adriana Lima. Since 1915, the brand has been empo wering women everywhere with the impactful slogan â€Å"Maybe she is born with it. Maybe it’s Maybelline. Today Maybelline New York is the leading makeup brand worldwide, which combines technologically move cosmetics with trendy expertise to induce accessible products with a spirited style that empower women to make a averment by exploring new tools, experimenting without risk, and flaunting their own art (LOreal, 2012). LOreal has a licensing agreement with five different sugariness brands, which complement the firm’s 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 spicy-end department stores, travel outlets and boutiques. LOreal is now developing a ceasely new perfume under its own Maybelline product line. environmental Analysis Market AnalysisThe sweet market go through a steady growth in sales in the period between 2006 and 2011. Furthermore the boilers suit market growth is expected to accelerate in the next five year period. In 2010 the global redolence market generated thoroughgoing revenues of $36. 3 billion resulting in a compound annual growth rate of 4. 2% for the period spanning 2006 †2010 shown in encrypt 1 (Datamonitor globular, 2011). Global smells market stack: jillion units 40000 35000 30000 25000 20000 4. 2 3. 1 5. 6 7 6 5 3. 9 4 3 2 $ million % growth 15000 10000 5000 0 2006 2007 2008 foretell 1 1 0 2009 2010 Consumption volume in the odour market ontogenesisd with a compound annual growth of 4. % between 2006 and 2010 resulting in 1. 3 billion units in 2010. By the end of 2015 the consumption volume is expected to rise to 1. 6 billion units. As shown in skeletal system 2 female pleasantnesss showed the highest sales subprograms generating $23. 1 billion of revenues in 2010, equivalent to 63. 8% of the market’s boilersuit value (Datamonitor Global, 2011). Global fragrances market div ision by type: % share 5% 64% Female fragrance Male fragrance androgynous fragrance 31% systema skeletale 2 The fragrance market segmentation is distri scarcelyed between the three major continents.As shown in Figure 3 atomic number 63 leads the consumption of fragrances by 45. 1% meeted by the Americas with 38. %, Asia-Pacific by 10. 5% and Africa and the mall East by 6. 4% (Datamonitor Global, 2011). Global fragrance market segmentation by role: % share 6% 11% Europe Americas Asia-Pacific Affrica and Middle East 45% 38% Figure 3 Overall the current fragrance market origin and curiously the sub-category of female fragrances shows to be positive and creates prospect for new product additions, which is an advantage for Maybelline’s 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 postulate market strategy planning process includes electing the lift out opportunities and developing a strategy that result pass on superior value to the potential consumer and a competitive advantage to the company itself. In order to retrieve the outmatch prospect and create a market strategy, the company has to analyze and evaluate the important elements of the market environment and the occurring trends. Perreault et al (2011) continues by stating that there are different forces that create the market environment. These forces include the direct market environment comprised of the customer, the company, and the competitors and the outside market environment comprised of the economical, technological, political, efficacious, cultural and social aspects.In order to create the best marketing mix (product, steer, 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 affect the right smart consumers (individual customers? ) and businesses consume. Changes in the miserliness in habitual in certain industries or parts of the world could set out an impact on the consumption. Technological Environment engine room uses the application of science to convert resources into output.In particular it affects marketing by creating opportunities for new products and new processes. Technological advances appropriate for divulge communication and promotion opportunities and it furthers globalization. It also provides for more effective and efficient meanss of producing and delivering products and services (Perreault et al, 2011). governmental Environment The political environment of a e res publica is affected by the attitudes and reactions of people, social critics, and the government. The political environment can affect selling opportunities at dickens local and int ernational levels. In whatsoever markets superpatriotic 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 of different variables including: language education morality style ho utilize view on work, trade union 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 t hey are not a needed product unless 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 delinquent to the fact that the country is coming out of the recession and into better economic conditions. The consumption of perfumes in Asia is relatively low, off from Hong Kong and Singapore, due to the economic conditions and the perception of perfumes and heavy scents being used as a way to robe body odour.However, the growth potential in these demographics is immense, especially as Asian women are adhering to the Western trends in fashion and personal compassionate, and are receptive to using well-known brands for building their self- frame (ReportLinker, 2012). The penetration 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. Sup pliers are targeting the younger cosmos in order to attract new customers, due to the changing age structures in the country. To this day, Chinese consumers promote specialty stores when shopping for fragrances, which is an important consideration for companies lacking(p) to be successful in this market (ReportLinker, 2012). war-ridden 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 in the particular industry. There are four fundamental kinds of competitive market situations: Pure rival A market state where buyers and sellers trade a consistent commodity such(prenominal)(prenominal) as wheat, copper or financial securities and no iodin 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 few se llers who are highly sensitive and alert to each other’s marketing strategies and pricing.In this market it is difficult for new sellers to enter. Monopolistic rival A market state where many 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, personal 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 adit prevent other firms from entering the market to compete.The fragrance market is definitely 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 mar keting tools. The global fragrance market is greatly fragmented with the top three selling companies accounting for 24. 5% of the market value. most of the leading companies are either large manufacturers of personal care products or large fashion houses and are geographically diversified. As most companies operate large production facilities, fixed costs are high in this market the vast business variegation eases the competitive pressure.In conclusion the rivalry in the fragrance market is moderate. 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 balance of the market is divided between much smaller fragrance vendors and account for 75. 5% of the market (Datamonitor, 2011). Global Fragrance Market pct: % 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 co mpany 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 free shops. The company record total revenues of $25. 8 billion in FY2010, an improver of 11. 6% over the previous year. Revenues from the fragrance product category for the company reached $2. 2 billion in FY2009. North 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 Even though LOreal is the mother company of Maybelline it still needs to be considered as a competitor in a way since it does hav e 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 billion 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. nerd Analysis of MaybellinePerrault et al (2011) describes SWOT analysis as a marketing tool used to create a marketing strategy which identifies screening criteria (and identifies) and outlines the company’s strengths and weaknesses, and its opportunities and threats. The analysis has two categories: internal factors such as strengths and wea knesses, which analyze the company’s 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 company’s strengths and opportunities while avoiding its weaknesses and threats.SWOT analysis is usually illustrated with a draw consisting of four squares and each one of them summarizes the company’s strengths, weaknesses, opportunities and threats. Maybelline’s SWOT analysis is illustrated in Figure 5. Helpful insidious Strengths ? Owned by the biggest cosmetics company in the world Solid financial backing Distributed in 127 countries attracter in mass-market beauty products ? ? open image Established production and distribution infrastructure fadednesses Lack of expertise in manufacturing fragrances Product division completely focused on f emales Lack of expertise in producing natural and constituent(a) products Internal Opportunities Growing presence in emergent markets (Asia, South America) Natural and organic fragrances Men’s 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 owned by the biggest cosmetics company in the world in the name 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 al fake 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 fem ale perfumes. The brand is well known for making and selling makeup, but the fragrance industry poses its own unique challenges. Maybelline’s complete product set is targeted only towards female’s including their research and marketing departments. This is considered a weakness since the men’s fragrance segment of the market is (still) emerging, which is outline in the opportunities section of this paper. Another opportunity, which Maybelline is not ready for is the emerging segment of natural and organic products, which makes it a weakness 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 keep in emerging countri es 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 w then 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 woolly revenue and 555 million EURO in lost profit. The cause 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 inc luding fixed companies with an established image. This makes it difficult for Maybelline to penetrate the market with merely another new product.Currently, the global economy in general is struggling and especially in nigh European countries and the United States. As fragrances and cosmetics in general are not a ‘need’ but rather a ‘want’ product, the effects of spurn income and higher unemployment rates are posing a threat to this industry and Maybelline itself. SWOT Conclusion 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 rawness 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 Strategy Perrault et al (2011) describes that to plan a marketing strategy is to find attractive opportunities and develop a profitable marketing strategyThere are two be parts to a marketing strategy and they are the target market and the marketing mix. As specify 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 variables include the characteristics of the product, the place where the product go away be sold, the price the Figure 6 product exit be offered at and the promotion that would be used to market it. As illustrated in Figure 6 at the sum 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 al l 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 testament be targeted to a narrower target, which is women between the ages of 18 and 34 living in Europe.Although as outlined prior in this report, the men’s 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 brand will follow that image and target females only. The decision to initially 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 spread out 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 t hat are either single or freshly married with little 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 P’s (product, place, price and promotion).1. The first P for Product may involve a physical replete(p) (a perfume in our case), a service, or a blend of both as well as its branding, packaging, and warranties. The basic idea is that the product has to satisfy a specific 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 getting the product sold.3. The third P is for Promotion and it describes the way the product will be marketed or sold to the customer, which includes advertising and public relations.4. The after part P is for worth 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 Maybelline’s new female fragrance follows. Product call off Maybelline’s 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 desired, the scent is exquisite, the product is natural and the connection with it is intimate.Scent The scent of the perfume will be electric arc and fresh, to be worn by females with an active lifestyle when going to work or being active. It is meant for familiar use and does not intrude, since the individual wearing it will be around people interacting. The perfume will only be available in Eau de Parfum sprayer since it is the lighter and more affordable version of the lord scent. Ingredients An increasing trend in the market is the expect for natural products; therefore the DENI perfume will be made out of natural ingredients. This will peradventure raise the production cost but cook up with a differentiating factor and the increasing demand for such products. Packaging DENI will be offered only in a 50ml glass bottle, which is compact and utilizing a gaoler 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 company’s 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 good recycled. The bottles are packaged in a cardboard box made completely from recycled paper and multi-color with natural paints. The bottle can also be ret urned to one of the stores where DENI is offered for a refill. Place DENI perfume will be manufactured at the current Maybelline engraft 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. Price DENI will cost 38 EURO for the 50ml bottle to the final customer. The perfume is a mass-market product under LOreal’s 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 close to double compared to the price of an equivalent DENI bottle. The product nonetheless cannot be the cheapest since it has to be corresponding to LOreal’s 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 introduced and advertised to the target market. As mentioned above, the target is women\r\n'