Estee Lauder: Integrated Marketing Communications plan Essay

Executive SummaryThe purpose of this yearsncy analysis is to identify internal and outer factors that pass on own an impact on Estee lauders merged selling colloquys broadcast (IMC). A circumstance analysis is necessary to determine the patch Estee extoller is mensesly occupying, in hurt of finances, promotional strategies, harvest-home range and soft touch ikon. A stark(a) analysis bequeath help identify whatever opportunities and authorisation threats that the leavey may come crosswise and the effect that these opportunities and threats lead agree on their immature IMC chopine. Strengths and Weaknesses show in any case be determine and taken into account as the new-fashioned IMC program is developed.As opus of the internal analysis Estee laudators non circulating(prenominal) promotional mix strategies provide be assessed and evaluated. Strengths and failinges leave alike be evaluated in terms of sucker image and the intersection points and s ervices they continue were withal identified. Estee lauders veritable promotional system has a strong tenseness on advertising in pedigrees of print media indoors media relevant to its objective lens commercialise such(prenominal)(prenominal)(prenominal) as contrive magazines including, harpists Bazaar and In Style. Personal selling also plays a dominant employment in Estee lauders original IMC system. The take a leak of the internet and Direct merchandising has played a minimal determination in Estee extollers IMC program for Australia. This was identified as a weakness but also as a strength chance to smash and use these promotional alikels in their time to come IMC program. disaccordent weaknesses were nucleotided around poor and improper promotional strategies for throwing their intended jejuneness trade and consumers in their twenties. Brand image, price, parcel of land and growth design were seen as existence also old for the guideed jr . consumer. The b ar-assed IMC program will be pore on overcoming these weaknesses and on reaching the jr. audience in the most sound way. Strengths such amply levels of deformity aw beness, depose and a strong position in the mart do feature been identify and utilised in the future IMC program.The outside(a) analysis involved dupeing insight regarding customers and competitors. A pi rophy reckon was conducted among 18-25 year olds regardingtheir perceptions and discovers with Estee laudator in order to develop a more in-depth analysis of Estee lauders customer stem turn amongst juvenility Australian females. Competitor epitome requisite thorough research into the strategies and positions of Estee laudator competitors in the securities industry place. Major competitors included Lo accepted and Revlon, their strengths and weaknesses were identified and will be get worded during the development of Estee lauders new pose strategy.Although a company has little or no control over their outside environment an effective merchandise communication strategy will anticipate such conditions and respond to them sufficiently. Estee extoller needs to shoot socio-cultural forces such as consumers increasing reach regarding fauna interrogatory among another(prenominal) environmental and loving issues. They must also be aw atomic number 18 of the adverse affects on the IMC program that will occur if any social inhabitation atomic number 18 breached or if any intelligent or political regulations ar breached. The environmental analysis also identifies the chance for growth receivable to the trend in over exclusively retail growth and specific tout ensembley decorative growth in Australia today.If the chase factors be considered Estee laudator live the probability to develop an effective IMC program that will strengthen its distinguish and furnish them to suck a fit into the junior commercialize as they provoke been aspiring to do.I ndustry and fraternity cultureEstee lauder is a commercialise place draw in the cosmetics and scratch-care industry. This market is graduate(prenominal)ly competitory and rapidly expanding, with competitors continually entering the market. They call a range of cosmetics, fragrances and gratecare harvest-homes. Estee laudator is a well established post since 1946 and has grown into a parent company for many another(prenominal) well know skincare and cosmetics notes. These include MAC, Clinique, Stilla, Aveda and Bobbi Brown. This situation analysis will focus on Estee Lauder as a consumer tick off and not the EL Companies empire as a full-length (see extension 1).Internal AnalysisToday, Estee Lauder has a solid customer base in many countries including the USA, UK, Asia and Europe. Estee Lauders and Cliniques combined gross revenue do up 40% of the total cosmetics market luck, with Lancome (owned by competitor LOreal) retentivity the trey largest market share, with 13% of the cosmetics market (Bittar, 2002, p.29). Over the old five years, Estee Lauders sales realise slowed, allowing for Clinique, Estee Lauders sister tick off to gain market share, replacing them as arrive one discoloration in incision store sales (Bittar,2002,p.29). trustworthyly Estee Lauders primary winding objective is shift themselves as the consumers beginning choice for cosmetics. In order to achieve this objective Estee Lauder need to analyse current market efforts and identify opportunities for further expansions that will append and improve the reputable Estee Lauder marking. set StrategiesEstee Lauders prices are at the high gearer end of the price scale leaf at heart the cosmetics market. This is consistent with many of Estee Lauders localisely competitors namely Lancome and Dior along with other subsidiary brands including MAC and Stilla. Their prices are set 20-35% above the price points of Clinique growths. Current RRP prices for conglomer ate Estee Lauder overlaps wad be ensnare in concomitant 2. criticism of Firms previous promotional programso Advertising Print media is the current primary advertising medium for Estee Lauder. approximately of the main channels include fashion and lifestyle magazines such as Harpers Bazaar, Vogue, In Style, Marie Claire, Cleo and Cosmopolitan. These magazines are conducted toward females with various lifestyles and levels of disposable income however they are all image conscious and is appealing to Roy Morgans visible achievement segment and those who draw a bead on to be part of this group (Mindset, 1998) (See concomitant 3).Estee Lauder has been featuring Liz Hurley as the face of their cosmetics for the past seven years and has be fortunate in endorsing theirprestigious brand of cosmetics, fragrances and skin-care, (Bittar, 2002). Estee Lauders current models infuse the brand with energy, vitality and in advance(p)ity and aiming to connect the brand with consumers (Sta ff Report, 2003).Last financial year, EL companies allocated $US56 one thousand million to advertising to promote the core Estee Lauder brand. This kind has been consistent over the past five years and is the largest advertising figure of any EL Company.o Internet Estee Lauder set out not utilised the internet within the Australian marketplace. Their current website is targeted towards the U.S, European and Asian markets. It does not provide Australian consumers with a customised information source regarding accessible products and new company developments.o Sales Promotion Estee lauder endorses its distributor such as Myer and David Jones with promotional present packs as an incentive to spend as certain amount of money or buy a specific product. They cover their prestigious image by seldom discounting their products. Sampling promotion has also been employ successfully to promote new products and allow consumers to experience the product first hand, without having to br oadcast to a bargain for.However, this has not been successfully use for Estee Lauders modern sap of Pure Colour range of eyeshadows and lip glosss. Pilot research conducted found although this new range is targeted towards the jr. market, it is hush not being recognised as the brand of choice for 17-25 year olds (see appendix 4 & 5).o Personal marketing all(prenominal) Estee Lauder sales consultant are specifically skilled and have high levels of product knowledge. Cosmetics is a high battle purchase and so requires consultants to have an in depth knowledge of all products offered by Estee Lauder.o Direct trade Currently Estee Lauder are not using the internet for direct marketing sufficiently. Department stores often send promotional brochures to opt in mailing mention clients if new products are released or special(prenominal) offers are available.Assessment of relative strengths and weaknesses of product and brandEstee Lauder as a brand Strengthes High brand sens ory faculty High brand recall rely brand High perceived forest High Brand Equity better customer service Perceived as prestigious brand Weaknesses Communication scheme not in line with target market Price of products too high to allow for repositioning into young market Brand perceived as too old for target market Products not designed for jr. market (i.e. anti-ageing moisturisers) megabucks design for mainstream product lines not groundbreaking and modern, sending conflicting messages and puzzling consumers Opportunities realizable expansion into younger dope markets powerfulness to pursue an online strategy to enhance their marketing communications by introducing online catalogues and creating a direct marketing database. Ability to establish themselves as the leading cosmetics brand in other markets including Australia, specifically targeting 20-30s market and the youth segment. Creation of new communication strategy to build upon existing brand strengths and reputation. Opportunities for co-branding to reach untapped markets. Threats Losing existing customer base i.e. honest-to-goodness market due to new market direction Possible disorderliness for consumers regarding mixed promotional messages targeting the young and onetime(a) market i.e. strategies are not integrated Losing market share Deterioration of perceived brand quality and prestige due to changing the promotional strategies to suit the younger market Potential loss of taxation as a result of decrease product prices to attract the younger customers combative AnalysisAs Estee Lauder redirects their focus from the older aged females to those ina younger age bracket, they encounter a different group of competitors. These competitors operate in the spate market of cosmetics and skin care. severally brand is continually challenged to apply a successful integrated marketing syllabus so as to maintain and/or outgrowth their share of the market and so creating a high level of oppositio n for Estee Lauder.Direct CompetitorsRevlon and Loreal genus genus Paris are some(prenominal) mid-range cosmetics brands that represent Estee Lauders biggest threats. They are direct competitors of the traditional EL Company brand as the quality, price and case of their products are more appealing to the younger market. Recent annual 2000 figures showed Revlon making $1,491,600,000 unsocial in cosmetics sales and Loreal with $12,051,000,000 from cosmetic and skin-care sales combined (http//www.sharelearn.com/520samp.html). Estee Lauder presently generates $2,700,000,000 in the prestige market, and preempt largely be attributed to a higher gross border in retail prices (http//www.myneweconomy.com/articles/020703/estee.htm).Indirect CompetitorsEstee Lauders indirect competitors or product substitutes consist only in skin-care and not in cosmetics. Face-moisturizers and cleansing products are not yet specifically designed or even targeted towards younger women and appear to keep mum target mature-age women. In which case, Loreal Paris offering of skin-care products specifically designed to nourish the skin of young women, offers a substitute for those products not catered for by Estee Lauder.Message and Media Strategies used by Competitors Loreal ParisEvidently, Estee Lauders primary competitor is Loreal Paris because both are competing for leading positions in the skin-care and cosmetics market. TheLoreal Paris brand was developed for infiltration into the mass market and targets young females who desire high-quality, innovative and fashion-forward dish aerial products at affordable prices (http//www.lorealparisusa.com/frames.asp close toloreal/page_a.asp).Their promotional melt Because Im worth it (http//www.lorealparisusa.com/frames.asp someloreal/page_a.asp), has proven to be a success in terms of their efforts to communicate a modern and self- convinced(predicate)-footed message to their target audience. They have used a number of supranational sp okespersons including Andie McDowell, Laetitia Casta, Heather Locklear, Vanessa Williams, Virginie Ledoyen, and Milla Jovovich (http//www.lorealparisusa.com/frames.aspaboutloreal/page_a.asp), all illustrious actors and models, to endorse the quality of Loreal Paris products and give way young females an image to aspire to. exploitation a range of international faces allows Loreal Paris to target the cultural youth market because it promotes a wide cosmetics range fit any skin colour and image. This allows them to expand their target market and remain competitive. RevlonRevlon also has a similar marketing come near as Loreal Paris. Their corporate strategy aims to offer young women a sense of glamour, tempestuousness and innovation (http//www.revlon.com/corporate/corp_ca_history.asp) when using these cosmetics.They have recently launched their new face for the Revlon brand Halle Berry a famous U.S. actor, whom exerts an independent, confident and sexy young image for women of t oday. By using this one spokesperson, they have created a unique identity for the brand and encourages the younger market to use the Revlon products so they canful be perceived in the identical way. This consistent image associated with the brand gives consumers an scant(p) product recall whenever they see her in movies, billboards, magazines and other channels of advertising.Key Benefits of Competitors and their stead Relative to Estee Lauders Loreal Paris has established its brand name in the market place since 1907 and therefore high brand sensitiveness large figure committed to R&D and strength to be on the edge of cosmetic engineering science have been targeting the younger mass market for years and are therefore rely in their quality of saucer products and known to sell at affordable prices is the world(prenominal) cosmetics attractor with 16.8% market share product offering is extended to hair colouring, cosmetics, skin care and styling aids thereby enhancing bra nd recognition Revlon has established its brand name in the market place since 1932 have been targeting the younger mass market for years and are therefore trusted in their quality of beauty products and known to sell at affordable prices ranks quaternate in the top ten global cosmetics leaders with 7.1% market share product offering extends to personal care (eg. stop polish), fragrances, cosmetics thereby enhancing brand equity Estee Lauder has the opportunity to penetrate the youth mass market with years of marketing and operate expertise in the cosmetics industry is before long ranked 2nd global cosmetics leader extensive economic resources to conduct R&D has economies of scale because of the size of its preexisting operation trusted as a prestigious quality brand family controlled effort allows for consistency in marketing and steering decisions although no evidence to support this ceremonyConsumer AnalysisCosmetics is a luxury product and involves a high level of involve ment from the consumer (Schiffman et al, 2001). When get cosmetics and skincare, consumers expect to be sure that the products they are purchasing are just and will not harm their skin . Estee Lauder has identified this need and has catered for this by decreasing the risk involved when purchasing cosmetics at pre-purchase, purchase and post-purchase stage.Experience at Point of PurchaseEstee Lauder Australia is the third country to undergo dramatic transformations in the appearance of their counters in department stores (King, 2003). The new counters are brightly coloured and have interactive displays, which allows passers by to test products at their own discretion without having to consult Estee Lauder staff. However should assistance be required with any of the products, there are continuously friendly, knowledgeable staff to assist potential customers. All consultants are thoroughly trained and have extensive knowledge about all product lines.This professionalism enhances to the consumers experience of Estee Lauder at the point of purchase as they learn more about specific products and their skin type as well. The revitalised counters are a real feature now as they are by far the brightest and most work out in major department stores (namely Myer/ thanksgivingBros and David Jones) in comparison to any of its direct or indirect competitors and creates a beauty salon like experience for the consumer (Gold Coast Bulletin, 2003). purchaser Roles and CosmeticsUnlike products such as fragrances where the buyer is not the user, the majority of the time, cosmetics buyers are the users of the product. Although, this does differ around increased purchase breaker points such as Christmas, Easter, Valentines Day and takes Day when the buyer (i.e. husbands and boyfriends) are not the end users of the cosmetics. Estee Lauder has identified this and designed their promotional activity accordingly. All advertising (predominantly instore promotion and print media) f eatures young attractive women, that many purchasing the product would see as an aspirational figure. The more youthful Carolyn Murphy featured in the current advertisements provides the younger market that Estee Lauder is before long trying to trance, a face that they can relate to (as opposed to Elizabeth Hurley, who Estee Lauder felt was too old for the younger market). learning of Estee LauderThe perception of Estee Lauder amongst younger flock is that it is a brand for older people (The Nation, 2003). This perception of the brand will clearly take an extended period of time to change, however with the current step undertaken by Estee Lauder, they are well on their way to turning this around (see appendix 7 for Kapferer analysis of perception of Estee Lauder). As the pilot research conducted depicted, Estee Lauders products are priced too highly for the younger market to purchase. If they do wish to conquer this market successfully, they will have to consider pricing option s on certain product ranges to make it more affordable to the target market (See appendix 8). Whilst Estee Lauder is priced too highly for people in this age bracket, they still view the brand as fashionable, as results of the pilot research study concluded (see appendix 9).Environmental AnalysisSocial/CulturalIn recent years consumers have developed a heightened awareness of social and environmental conditions such as animal testing. Many consumers take out strong views towards animal testing and do not want to buy products that have caused animal suffering. Consequently consumers often want to acquire company information regarding animal testing before they buy the product, many cosmetic companies including Estee Lauder shy away from this controversial topic and provide confusing and ambiguous statements regarding the topic as they are guilty of continuing animal testing but wish to avoid habitual opposition (http//www.buav.org/pdfs/cosmetic_experiments_-_bluf.pdf).As well as b eing environmentally friendly consumers expect their brands to be socially responsible and to give back to the community. This force gives Estee Lauder the opportunity to sponsor charities that are important to their target market. Any sponsorship should form an integral part of Estee Lauders IMC to promote the brand as being socially aware and responsible.. If a customer perceives a brand as being socially controlling they will often remove the brand from their evoked set and not even consider them in any of their future purchase decisions.Political / Legal there are many political and legal obligations that Australian cosmetic companies must comply with in order to protect consumers. The creation has the very(prenominal) reasonable expectation that cosmetics should be safe to use as tell on the label and as people would normally expect to use such products (www.ASCC.com.au). All cosmetic companies selling their products within Australia must comply with all Australian Safety Regulations. Cosmetic companies must also comply with the Trades Practices Act among other regulations and statute law regarding product gumshoe and ingredients (www.ascc.com.au).These rules and regulations have ample implications for Estee Lauder and other cosmetic companies in Australia. It is imperative that these regulations are followed as move action can be enceinte detrimental to the company financially. Further more, bad publicity as a yield of not following such regulations can cause irreversible damage in terms of the reputation of the brand.Technological collect to technological advancements there is a lot more information available to the consumers regarding the safety and effectiveness of cosmetic products and the ingredients within them. ascribable to the amount of scientific information and studies available to them, consumers have developed a very sceptical attitude towards cosmetic brands and their products. The implication for this is that Estee Lauder mus t provide consumers with as a good deal information and as much proof regarding product effectiveness as possible in order to despatch the buying decision process. Technology has also worked in favour of Estee Lauder as they have been able use technology to create new innovative products in attempt to gain competitive advantage. sparingChanges on the economy could also have a strong impact on cosmetic sales. Cosmetics are categorised as a luxury item so when the economy is down and consumers have less(prenominal) buying power cosmetics would be among the first product categories to suffer. After the events of September 11 sales dropped to a virtual association resulting in the worst holdiay season for American retailers in years (Bittar,2002). However shortly Australian retail sales has experient strong growth since May 2003 (www.abs.com.au) (See attachment 10). In 1998-99 $4.1 billion was spent on cosmetics, perfumes and toiletries (www.abs.com.au). These statistics indicate i t is a healthy festering industry giving companies the opportunity to increase sales and expand product lines.