International marketing strategies and applications

International Marketing

Rimmel is a London-based cosmetics manufacturer with a mass market strategy. The company markets primarily to younger women and has a large number of product lines. There are a large number of major competitors against whom Rimmel competes. The company's marketing strategy emphasizes the fashionability of its London origins and uses models from around the world to help promote the brand.

The prices are generally set in response to market conditions. For the most part, the buyers of Rimmel are price sensitive, although in the cosmetics industry the typical customer also expresses preferences for brands that she feels work well with her skin tone and her personal sense of style. It is only within that framework of brand preferences that a customer demonstrates price sensitivity. The strategy of appealing to the mass market demands that the company focus its efforts on cost control so that prices can be set in the range or slightly lower than those of major international competitors. Some of the company's retailers have strong buying power, so discounts to these retailers must be factored into the cost structure and pricing structure of the company. In general, it is expected that the end consumer has a fairly high degree of price sensitivity, so that an increase is prices would be expected to result in a noticeable decrease in demand.

The company should be relatively insulated from the international economy. For a large portion of the target market, cosmetics are not a luxury but a necessity. Indeed, as a lower-end producer with a good reputation for quality, Rimmel may increase its market share in the international economy struggles, as consumers trade down to Rimmel from higher-priced brands. Thus, Rimmel could benefit from a weak economy but by the same token it may not benefit in a good economy as consumers can afford luxury cosmetics under such circumstances. However, because Rimmel is positioned above the bottom of the market, it could be a trade-up brand itself during economic upswings, as consumers leave their cheap local brands for a more prestigious and internationally recognized name like Rimmel.

The means by which Rimmel cosmetics are priced is appropriate for a company with its market strategy. Rimmel needs to have a good value proposition, which implies good quality and a relatively low price. The company has a strong established name and good celebrity endorsements, so it needs to separate itself from generic cosmetics with its pricing strategy, but its total sales figures and distribution strategy demand that Rimmel avoid luxury pricing and a high degree of exclusivity. As such, the company's pricing strategy at present are appropriate.