Women share different tastes and preferences when buying skin care products. The distinctions become more pronounced when you consider people from different countries. Different geographical conditions, prices, and cultures have impacted the consumption trend of cosmetics. This knowledge of location and skin requirements is crucial for a cosmetic firm since it can tailor the product to fit the final consumer.
Must Buy Cosmetics in Japan
Japan is the second largest cosmetics consumer in the world. Women in Japan will apply a compact foundation, which is one of the top cosmetics in Japan, instead of a liquid because of the longer lasting effects which withstand the high humidity in the county. L’Oreal researchers have also found out that Japanese women cleanse their faces twice on average hence much care is devoted.
Culture Aspects in China for Cosmetics
Culture aspects for cosmetics in China is that the white skin is associated with wealth hence whitening products are abundant in the market. Women primarily apply their makeup in the morning and evening using 2.2 products (Cosmetics Giant Segment). The market is price sensitive, but consumers are willing to pay top dollar for high-quality products with a global reputation. Many Chinese women have been observed to make purchases of mens perfumes when they are out shopping. The appearance of men is becoming an important issue since it is increasingly associated with their success.
Cosmetics Business Opportunities in India
L’Oreal has shifted to a premium priced upscale marketing strategy over the mass marketing and low price approach. However, competitors are selling lotions to the price sensitive sector at $0.7-$0.9 while the premium products go for $9. There is an emphasis on hair darkening products in India as women are not satisfied with available methods of shading graying hair.
Cosmetics in Brazil
Brazil women spend more on makeup than any other country on a per capita basis. One of the barriers to trade in Brazil in cosmetics is that Brazilian women primarily purchase their cosmetics from door-to-door salespeople, which makes it a challenge for companies that distribute via stores. Make-up and skin care sales are lesser compared to hair-care products (Cosmetics Giant Segment).
Marketing Strategies for Cosmetic Products
Assess Estee Lauder's strategy for China. Does it make sense to focus on premium brands, or should the company launch a mass-market brand?
Estee Lauder has adopted an aspirational marketing strategy that targets the wealthy consumers in China. Their market and psychological research have identified that Chinese consumers are willing to invest in expensive consumer items because of their superior quality and confidence in the future. The upscale prestige market is a unique niche since tier 1 cities like Shanghai and Beijing hold a paltry 9% of the Chinese population.
Approximately 200 million people are living in tier one, two, and three to justify a significant market for the premium products. Two-thirds of the cosmetic retail sales in China comes from three-quarter of the urban population, which comes from outside the top two tier cities. Estee Lauder's aspirational strategy is advisable since the upmarket sector's demand is set to grow with the improving economy of the country. Tier two and three cities offer a ready market and the best prospects of growth for Estee Lauder through awareness-building and expansion. Spending on premium brands is a status symbol in China, and hence the company has a definitive target market. However, setting its sights on such a narrow segment could prove to be disastrous in case of a global credit crunch that restricts spending habits (Beard & Lubel). Therefore, Estee Lauders should also venture into the mass-market for cosmetics to take advantage of the lower tier cities, which are the most populous and price sensitive.
What is the best positioning strategy for Shiseido as the company expands in Asia? High touch? High tech? Both?
Shiseido is the second largest cosmetics company in Japan, and it has an innate understanding of the market. Its primary competitive advantage lies in the fact that the company has researched the Asian skin in the areas of anti-ageing. Shiseido should use the product attributes to market its cosmetics and tell the consumer why they are of superior quality. As Shiseido expands in Asia, it should utilize the Global consumer culture positioning since it identifies the firm's products as part of an international entity (Hackett).
Shiseido should utilize high touch positioning due to the high involvement with consumers. The focus on whitening lotions makes the products unique to the Asian market. High touch consumers appreciate the person-to-person communication (Welsch). The brand trust and image will receive a significant boost since most consumers will develop a sense of loyalty. Shiseido should also use high-tech positioning since they have designed an anti-ageing lotion that is rare in the market. The formula used to develop the makeup should be complicated to improve brand trust. It is a unique selling point that will resonate with the consumers. The anti-wrinkle technology will be a big hit amongst the aging population.
Do you think L’Oreal will succeed in changing the buying habits of Brazilian women?
Brazil offers attractive prospects for any cosmetics manufacturer by way of being the largest consumer per capita. L’Oreal will find it quite challenging to alter the buying habits of women in Brazil. The central reason is that people hardly break away from established routines and practices. Brazilian women get their cosmetics via door-to-door salespeople while LOreal is multinational that solely distributes through pharmacies and departmental stores. The company has been running its Brazilian operations for decades, but the primary focus has been on hair care products. Skincare items account for 50% of L'Oreal's global sales compared with only 15% in Brazil (Cosmetics Giant Segment).
It will take some time before Brazilian women switch from the door-to-door sales representatives and opt for department stores. As the make-up market in Brazil grows, the direct sales will gradually become insignificant, and hence L'Oreal will achieve success in the long run. L'Oreal has also hired beauty advisors who are located at each store that carries its make-up products. The presence of these consultants will renew the interest of store shopping since women get the chance of receiving professional advice on matters like skin tone. It will make more women willing to venture to the stores rather than relying on the door-to-door sales representatives. L'Oreal has a sound knowledge of the Brazilian market, and hence I believe that they can alter the buying habits of the consumers.
Beard, Randall, and Liana Lubel. Finding the Sweet Spot Between Mass Market And Premium. Harvard Business Review, 2016, www.hbr.org/2016/10/finding-the-sweet-spot-between-mass-market-and-premium. Accessed 12 February. 2018.
Cosmetics Giant Segment the Global Cosmetics Market. Case 7-2. Accessed 12 February. 2018.
Hackett, Jon. The Importance of Cultural Positioning In Market Research. Linkedin, 2014, www.linkedin.com/pulse/20141020115739-127909852-the-importance-of-cultural-positioning-in-market-research. Accessed 12 February. 2018.
Welsch, Penny. High-Touch Clients in A High-Tech World: What's an Agency to Do? Blog.Hubspot.Com, 2016, www.blog.hubspot.com/agency/high-touch-clients-high-tech. Accessed 12 February. 2018.
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