The Estee Lauder Companies Inc. is considered as one of the leading manufacturers in the world of products including hair care, quality skin care, fragrance and make-up. The company is also considered as one of the world's leading marketers of these products. In this paper we have looked at their products with a totally new perspective and decided how their products would achieve higher brand shares if promoted today. The paper deals with a set of recommendations on proposed advertising for the leaders in Cosmetics -- Estee Lauder Inc. We have first reviewed the company and its products. Then we have looked at the different market segments it appeals to. Then we have chosen a few segments where we feel a change in strategy may help the products to achieve greater market shares.
The company was fist founded in New York City in 1946 by Estee Lauder, by whose name the company is known for and her husband Joseph Lauder. It was the effort of Mrs. Lauder, which brought the company to its pinnacle success. Estee Lauder started from the very bottom -- selling skin creams concocted by her uncle. The products were good, but similar products were available in the market. Estee succeeded because of her marketing strategy and she worked hard to achieve her success. Estee Lauder was a very much quality conscious, but her ability to compete in terms of a saleswoman was much more convincing. Her management skills are extraordinarily appreciative. Through her efforts, she first got counter space at Saks Fifth Avenue in 1948. She utilized the space to the hilt by her innovative personal selling. She was ambitious and had decided that she would reach the top. And her efforts have bore fruits. The products of the company are now sold under different and well-recognized brand names, which are Estee Lauder, La Mer, Prescriptives, Tommy Hilfiger, Aramis, Stila, Donna Karan, under well-recognized brand names, including Clinique, MAC, veda, Origins, Jo Malone, Bumble and bumble, Bobbi Brown essentials, and jane. (Gerson; Gerson, 2002)
These products are now sold in 120 countries all over the world, for $3.6 billion, which is a marvelous success. Thus the notion of Estee lauder of to think globally and to act globally is achieved. The region of Americas was able to show a performance of net sales worth 61%, and their operating income came to 56% during the fiscal year 2000. In the regions of Europe, Middle East and Africa, the net sales were 26% and the operation of income was 33%. Beauty Queen Estee Lauder applied classy sales methods to develop beauty into a big business. Whatever the lady knew about perfumes was correct, and the basis of her marketing strategy remains unchanged even today. She was also one of the few to give away samples so that the consumers could try her products, like them and buy them.
Today the company business controls 49% of the cosmetics market in the U.S. Estee's business is now worth $6 billion. This is a remarkable growth for a business that had only one employee. Estee Lauder answered all telephone calls and doubled up as the billing clerk or the shipping department as needed. She believed in hands on selling, and she visited every new counter opened, and kept visiting special stores till the end. The technique invented by her was to tie up the potential customer by offering her free something that the customer really cared for. She kept trying to attract the people who mattered. The organization developed as a result of her remarkable marketing strategies.
The headquarters of Estee Lauder companies are today in the 40th floor of the General Motors Office in Manhattan. The company has 20,000 employees worldwide. The products of Estee Lauder remain creative and are still essentially feminine but not the latest in fashion. She did not try to appeal to the fashionable women. Maybe, she knew that fashion was transient at best. She wanted her products to appeal to her clients for a long, long time. She made clear that the users of her product loved to be feminine, ultra feminine. Estee Lauder products gave women an opportunity to feel beautiful. The brands of the company from its latest brands to its oldest brands the company remains at the top. By inventing new and advanced technologies in manufacturing of its products, the company has been investing heavily in its marketing field to promote its products. The products are well-known -- Estee Lauder, Presciptives, Clinique, Origins, Aramis. They have even bought over new lines, which they thought could be their rivals one day -- M.A.C., Bobbi Brown Essentials, and Tommy Hilfinger. (www.time.com/time)(www.esteelauder.com), (www.elcompanies.com )
In the Estee Lauder range some perfumes have the best ratings from the customers. These should be treated as a separate group for advertising and sales promotion. We would recommend a different strategy for these products. These are:
1. Pleasures for Women by Estee Lauder -- 1 oz. At $41
2. Estee Lauder Intuition 1.7 oz. perfume at $40
3. Beautiful Estee Lauder Women 2.5 oz EDP Spray Fragrance & Beauty
Women's Perfume Beautiful for Women by Estee Lauder at $53
4. Same as above -- 1 oz. At $36 Second Ranked Perfumes
5. Estee Lauder Pleasures 0.5 oz EDP Spray
Estee Lauder, Women's Perfume Lowest price: $28
6. DAZZLING SILVER Women / ESTEE LAUDER 1 oz FRAGRANCE & BEAUTY|WOMEN'S PERFUMES|DAZZLING SILVER For Women By ESTEE LAUDER
Estee Lauder, Women's Perfume Lowest price: $35
7. SPELLBOUND / ESTEE LAUDER WOMENS 0.5 oz EDP S. FRAGRANCE & BEAUTY|WOMEN'S PERFUMES|SPELLBOUND For Women By ESTEE LAUDER
Estee Lauder, Women's Perfume Lowest price: $24
8. KNOWING / ESTEE LAUDER WOMENS 2.5oz EDP SPRAY FRAGRANCE & BEAUTY|WOMEN'S PERFUMES|KNOWING For Women By ESTEE LAUDER
Estee Lauder, Women's Perfume Lowest price: $53
9. Estee Lauder Private Collection 1.7 oz spray TESTER by Estee Lauder
Estee Lauder, Women's Perfume Lowest price: $28
10. Estee Lauder Youth Dew 2.25 oz spray TESTER by Estee Lauder
Estee Lauder, Women's Perfume Lowest price: $19
11. Estee Lauder Intuition 3.4 oz spray by Estee Lauder
Estee Lauder, Women's Perfume Lowest price: $48
12. Estee Lauder Intuition 6.7 oz fragrant body wash by Estee Lauder
Estee Lauder, Women's Perfume Lowest price: $17
13. Estee Lauder Dazzling GOLD 2.5 oz spray by Estee Lauder
Estee Lauder, Women's Perfume Lowest price: $43
14. Estee Lauder Beautiful 2.5 oz spray by Estee Lauder Lowest price: $50
15. Estee Lauder Intuition for men 3.4 spray by Estee Lauder Lowest price: $43
We have just taken a few of the Estee Lauder range of perfumes, over a 100 in number. We see that only a few of their products are well ranked. 4 of them are ranked among the top, and another 11 are ranked at all. The rest of the perfumes have no ranking. The question is how does this happen? Estee Lauder has over 40% market share. We know that they are good in-shop activities. Estee Lauder herself was a master at that. What other media can be attacked with good effect, and still not hurt the brand image the existing ranked perfumes. The experience of Estee Lauder and Avon says that perfumes are a product that requires a lot of hard selling, and product sampling to make the first sale. One of the world leaders in cosmetics marketing is Avon. They sell their cosmetics only through direct sales ladies. These ladies form a team starting right from the top. The material is supplied to the ladies against cash advance payment. Then these ladies sell the product at a higher price and the difference is their income.
In turn, the ladies recruit other ladies under them, and all the people higher up in the chain also get a commission on the sales made by the ladies in the chain under them. The ladies are taught how to invite their people lower in the chain how to organize some types of home parties and invite people there. They then try to sell Avon products in these parties. This has now become a part of consumer marketing folklore. Even people dealing in other consumer goods are trying to adapt this system to their requirements. The customer will normally not change the brand he or she is using, unless they are convinced that the new product they are going in for offers a much better deal. The deal cannot be quantitative pricing, because the prices of perfumes are related to the image they want to project, not their cost of production. All perfumes are mixes of various perfumes in small quantities to produce end results. Different people then try these. Some are liked, and some are not liked.
The ones, which are liked, are then tested more scientifically among larger populations. Once they are liked in the test they may be thought of in production. Then the packaging and colors…