Kiehls Brandstorm

By

The Urban Union

James Badenhorst, Anastasia Cressy, Danielle De Kock

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Contents • Macro Environment

Pg 3-17

• Micro Environment

Pg 17-27

• Market

Pg 28-30

• Competitive Landscape • SWOT Analysis • Key Issues

Pg 31-41

Pg 42-44 Pg 45

• Target Market • The Positioning

Pg 45-46 Pg 47-49

• The Big Idea/Marketing Objectives • The Marketing mix

Pg 51-54

• The IMC Strategy: Phase One

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Pg 50

Pg 54-58

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The Brief Develop a new product to reach the South African male market.

Create a new men’s only in-store experience.

Develop an interactive and comprehensive multi-channel strategy in order to appeal to the South African male market and increase brand awareness.

Macro Environment Political Environment: South Africa is a very politically stable country, and there is not very many laws or policies against the skin and hair products industry in South Africa, so the boundaries for entry are very low if any at all. (Worldbank.org, 2014).

Due to the Rand weakening against all other major currencies and continuous rising fuel costs, imported products are becoming more and more expensive leaving people in south Africa with less disposable income to spend on premium goods than before, although in SA it seems that people do like to spend money on more expensive products that make them “feel better” and people believe that Kiehl’s offers value to its customers.!%&'()*+,-(.*(,/01234'5*6-')7!#8"#96! !

Because this is such a large brand and is in a category, which is not really affected by price change, you can be assured of a pretty constant price. (Tampa Bay Times, 2014).

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Economic The Recession: Unemployment According to Hedley (2013): “ The census results do not compare employment rates over the decade from 2001, and Mr Iturralde said comparisons were difficult because each census measured employment rates differently.

There was a 2.2 percentage point of difference between the census 2011 employment rate of 56.5% and last years fourth quarter labour force surveys 54.3% (Hedley, 2013).

“Stats SA’s website shows the unemployment rate in 2001 census at 24%, according to the formal definition of unemployment” (Hedley, 2013).

The unemployment rates in South Africa experienced a decrease of 235 000 persons between the third and fourth quarter, the decrease went from 25.5% to 24.9% (Trade economics, 2013).

Despite the positive statistics regarding the decrease in the unemployment rates, people still struggle to finish the end of the month by being late on their monthly payments, not always having extra money to spend on personal ‘pleasures’ such as restaurants, skin care products. Employment and unemployment affects people in a different way, depending obviously on their income, their life situation if they have a family with children etc.

The Inflation Rate: The inflation rate in South Africa was recorder 5,90 % in February 2014 and is reported by the Statistics South Africa (Tradingeconomics, 2014).

Tradingeconomics (2014) states that: “In South Africa, the most important categories in the consumer price index are Housing and Utilities (24.5 percent of total weight), Transport (16.4 percent of total weight) and Food and Non-Alcoholic Beverages (15.4 percent of total weight)”. “The smallest components are Restaurants and Hotels at 3.5 percent; Education at 3 percent; Communication at 2.6 percent; and Health at 1.5 percent” (Tradingeconomics, 2014). !

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BRICS Development Bank: “South Africans are feeling the pinch as the knock-on effects of the international financial crisis filter down and the costs of everything goes up; everything from petrol, to electricity and food, with the added cost of e-tolls looming large�

(Masters, 2013).

The discussion regarding the establishment of a BRICS development bank, a model of the growing economic power of these emerging country and the success of South-South cooperation has not yet been finalized.

Petrol and Fuel prices: With regards to the price of fuel and diesel and the effects on the South African economy, as the price of diesel increases so do many other prices within the country. When diesel prices rise, transport costs usually rise, thus pushing up prices of goods within the country. This discourages purchasing, and therefore the economy within South Africa suffers.

Figure 1: Petrol prices (AA, 2014)

Figure 2: Diesel prices (AA, 2014)

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Key South African import areas: SouthAfrica.info (2012) states that: “The sophisticated and mature nature of the South African economy is reflected in the mix of economic sectors: primary (including agriculture, fishing and mining): 13%; secondary (manufacturing, construction and utilities): 20%; and tertiary (trade, transport and services): 67%”.

“In 2011, imports into South Africa were worth R722,6-billion, up from R585,3billion the year before, reflecting the increase in demand for foreign-produced goods” (SouthAfrica.info, 2012).

From pharmaceuticals to telecommunications, South African consumers are seeking for the latest offers from international sources.

Information technology

According to the Department of trade and Industry (2013) South Africa's information technology market is the largest in Africa, ranking 20th in the world in overall market size, and eighth in IT spending as a proportion of GDP. “South Africa has one of the Middle East and Africa's most significant IT markets in terms of size and growth potential” (SouthAfrica.info, 2012).

Demand for software increased due to broadband access increases and Internet penetration expansion (SouthAfrica.info, 2012).

Green technologies The government's moves towards increased energy efficiencies and environmental measures, such as a focus on recycling, pollution control, green building technologies as well as renewable and alternative energies (SouthAfrica.info, 2012).

Due to an expanding consumer base and growing disposable income, South African consumers are prepared to pay a higher premium for international brand products (SouthAfrica.info, 2012). !

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Telecommunication services

The South African telecommunications market is the largest in Africa, in terms of both customers and revenues due to the consistent and sustainable market growth (SouthAfrica.info, 2013).

SouthaAfrica.info (2013) states that: “South Africa is one of the fastest-growing mobile communications markets in the world, rapid growth is expected to continue, driven by increased innovation and competitive activity in the markets”.

“Mobile penetration is at around 59.5-million, with around 20% of users holding more than one SIM card, Internet penetration is around 117.5%” (SouthAfrica.info, 2012).

Tourism South Africa is one of the world's fastest-growing holiday destinations since the positive outcomes during the 2010 World Cup (SouthAfrica.info, 2012).

Tourism brings a significant contribution to the economy (5% of total GDP), the development of a strong tourism industry is a high priority for the South African government (SouthAfrica.info, 2012).

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Social environment: South African ethnic groups The African population is made up of four broad groups, such as the Nguni, including the Zulu, Xhosa, Ndebele and Swazi people; the Sotho-Tswana, the Tsonga, the Venda. (Southafrica.info, 2011).

The white South Africans include the Afrikaners, descendants of Dutch, German and French Huguenot who came to South Africa in the 17th century; Englishspeakers, descendants of settlers from the British Isles; Immigrants from the rest of Europe such as Greeks, Portuguese, Eastern European Jews, Hungarians and Germans (Southafrica.info, 2011).South Africa has 11 official languages, which are Afrikaans, English, isiNdebele, isiXhosa, isiZulu, Sesotho Setswana, siSwari, Tshivenda, Xitsonga (Southafrica.info, 2011).

In terms of advertising, it is important for a foreign brand such as Kiehls to understand and acknowledge the importance of South Africa’s rainbow ‘nation culture’. When a brand decides to expand globally by selling its products in a specific country, the brand needs to analyse and have an understanding of the local aesthetic tastes, use of words and symbols to which the culture responds to, what promotions and advertising techniques they must apply in order to receive a positive feedback from the audience such as purchasing this brands products and perhaps becoming a loyal customer. Take into consideration the importance of religion and what main languages are used in advertising to avoid offending other ethic groups.

The move to urban areas Southafrica.info (2013) states that: “two-thirds of South Africa’s population now lives in urban areas, according to the most recent survey of the country released by the South African Institute of Race Relations (SAIRR) in Johannesburg on Tuesday”.

The World Bank (2013) states that: “The proportion of people living in urban areas increased from 52% in 1990 to 62% in 2011”.

Southafrica.info (2013) explains that: “ the share of those living in rural areas dropped from 48% to 38% over the same period. SAIRR identified the major causes of the trend as the post-apartheid freer movement of people and higher economic growth in urban areas, attracting people searching for employment”. !

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Demographics “were for the whole family, women, men, babies even your horse and canine friends”. (Tampa Bay Times, 2014). Kiehl’s products are made to suit the hair body and skin of all men, women and even children, so there products are not just aimed at one target market, although the prices for the products are relatively high it is lower than other prestige skin care brands. (Nytimes.com, 2001).

A little does really go a long way with the Kiehl’s products. So you are paying a bit more than your everyday skin/hair care products but it will be lasting you longer than any other premium luxury brands.

40%- 50% of Kiehls customers are males, which is extremely high for a cosmetics company, which has usually been dominated by a market of women. (Nytimes.com, 2001).

Maybe a reason for this high number of male customers has to do with the authentic real feel to their stores with having cars and bikes in their stores and it has this health and wellness approach which demystifies cosmetics and the feel of their stores not feeling like the conventional feminine skin and haircare product retailers, (Tampa Bay Times, 2014), “ It creates that cult thing versus the department store thing”, I think Kiehl’s has that feeling of no matter what kind of male you are, if you buy these products you are not going to be seen as being more “feminine” but that you are somebody who cares about their wellbeing.

The men’s skin care category in South Africa is growing enormously in recent years as men are becoming more aware about the wide range of products for men. The market for men’s skin care products in South Africa has only been growing in recent years as traditionally skin care products were only used by women, but now with the growth of the ‘metrosexual male’, men have become more aware of the importance of grooming products. (Euromonitor.com, 2013).

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South African population “According to the census 2011, the country’s population stands at 51.77 million, up from the census 2001 number of 44.8 million” “ Africans are in the majority, making up 79.2% of the population: coloured and white people each make up 8.9% of the total: and the Indian/Asian population 2.5%.

“Other” population groups make up 0.5% of the total. (Southafrica.info, 2011).

Population by province 2011 Province

Population % of total

Eastern

6 562 053

12.7%

Free State

2 745 590

5.3%

Gauteng

12 272 263 23.7%

KwaZulu-

10 267 300 19.8%

Cape

Natal Limpopo

5 404 868

10.4%

Mpumalanga 4 039 939

7.8%

Northern

1 145 861

2.2%

North West

3 509 953

6.8%

Western

5 822 734

11.3%

Cape

Cape Total:

51 770 560 "88@!

Figure 1; south African Population by Province (Statistics South Africa, 2011)

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WESTERN CAPE DEMOGRAPHICS Population The table below depicts the population across South Africa. The table also shows us the population in relation to race and gender.

Table 1: Racial composition of the South Africa (Adapted from Statsa, 2010)

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Technological Environment

A great digital experience is no longer a nice-to-have; it’s a make-or-break point for your business as we more fully enter the digital age. To a greater extent, customers’ impressions of a business are established through digital engagement forcing businesses to recognize that “software is the brand.” (Fobes,2014) Data Privacy as a trend Data privacy is becoming more important than ever. In several instances, there are entire services and businesses emerging as "data-free,"(Huffingtonpost.2014).

Kiehl’s claim on their website that they do not provide any personal Information to any third parties without specific consent, although they do share non–Personal Information, such as aggregate user statistics, demographic information, and Usage Information with third parties Digital Interactive In Store Technology as a trend.

Many brands have adopted the in store digital technologies to increase customer engagement. This rapid development of technology has greatly impacted the ways brands and retailers connect with consumers. As a result, consumers have become accustomed to this interactivity (Retailtouchpoints.2013) !

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Cosmetic Technology Galvanic facial, use a handheld device, about the size of an electric razor, and push a low voltage DC current into the skin via a conductive treatment gel that is applied beforehand. (Nuskin.com) Treatments are painless and usually take about 10 minutes. Galvanic facials deeply cleanse skin of impurities that can cause a dull and lifeless appearance. These facials are available in Cape Town and cost on average R210 per hour. (Beautyspotsalon,2014) Recently available in Cape Town is the DF II machine, which is the first of its kind to combine the use of Iontrophoresis and Sonophoresis. (Gpcid, 2014) It enhances the penetration of Vitamins A, C and E into the skin leaving the skin more elastic, with a reduction of fine lines and pores and a more even skin color / tonement. This handheld machine is specifically designed for Environ professional treatments.

Treatments, per session,range between R350-R800 (Skintherapyzone, 2014) A chemical peel is a body treatment technique used to improve and smooth the texture of the facial skin using a chemical solution that removes dead skin.

(Cosmeticweb, 2008) The regenerated skin is usually smoother and less wrinkled than the old skin. Thus the term chemical peel is derived. Some types of chemical peels can be purchased and administered without a medical license and can be done at beauty salons. These chemical peels are available in a variety of products, eg: RegimA, Dermalogica and Environ, easily accessable in Cape Town and range between 350- 750 per session, (Skintherapyzone, 2014) depending on the percentage applied. Sessions are usually require multiple visits with a maintenance peel, after the last session, every six months.

Retinoic acid peel is type of facial peel is also performed in the office of a plastic surgeon or a dermatologist in a medical spa setting (Examiner, 2009). This is a deeper peel than the beta hydroxy acid peel and is used to remove scars as well as wrinkles and pigmentation problems. It is usually performed in conjunction with a Jessner; which is performed right before, in order to open up the skin, so the retinoic acid can penetrate on a deeper level. The client leaves with the chemical peel solution on their face. The peeling process takes place on the third day. More dramatic changes to the skin require multiple peels over time. The recovery time for these peels can be up to one week with the skin being slightly red and flakey.

Individual consultations required for prices. !

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More intense chemical peels are available through dermatologists and plastic surgeons.

These generally have a recovery period of up to three weeks and are expensive.

These include Trichloroacetic acid peels and Phenol which is the strongest of the chemical solutions and produces a deep skin peel. (Ncbi, 2010) Laser resurfacing is a technique used wherein molecular bonds are disassociated by laser. It is used for the treatment of wrinkles, sun damage, scars, stretch marks and "spider veins". (Webmd, 2014) This popular treatment is available in beauty salons and laser clinics across the Western Cape. Recovery time can be up to two weeks and prices range from R300- R5000 dependant on the area surface. Laser treatment is also known for hair removal. (Laserpoint, 2013) The Belvedere Clinic in the United Kingdom are now offering analysis of the face with their newly released and patented machine for face mapping. This new technology can diagnose the amount of sun damage, aging skin, wrinkles, rosacea, age spots, acne scarring and any pigmentation giving a detailed visual analysis of visible and invisible skin conditions (Belvedereclinic, 2014) It may be possible for Kielh’s to introduce a similar in-store online ‘face mapping’ profile for customers, giving customers a digital experience whilst capturing a customer profile, allowing floor staff to see all users past and current products and requirements.

The Environment Consumer demand for environmentally friendly products and services has steadily increased over the years and many companies have adopted the ‘green’ policy.

(Environment,2014) Kiehl’s have already introduced a recycling initiative for the return of their product packaging. (Kiehl’s, 2014) 2014 Sees the World Design Capital (Wdccapetown2014.2014) in Cape Town where Kiehl’s has recently launched. This will see an increase in tourism which may bring credibility to the brand if other customers see it whilst travelling abroad.

The World Design Capital has many different projects running that are trendy and creative and may be able to align with a brand offering the same values. Kiehl’s has an opportunity to get involved with this project to create awareness within the creative and alternative community. !

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South Africa remains a divided nation (Thenewage, 2012) and in recent years many South Africans have immigrated. In 2006 the South African Institute of Race Relations estimated - by comparing the figures in Stats SA household surveys from 1995 and 2005 that 841 000 white South Africans had left the country in that period.

The countries with the highest numbers of individuals born in South Afri3ca are, as one might expect, the United Kingdom (227 000), Australia (155 690), the United States of America (78 616), New Zealand (41 676) and Canada (38 310). These figures do not, obviously, include children born to South African born parents overseas (Politicsweb, 2014). And these do not include any people who have immigrated on a passport other than South African. The major push factors, particularly for white South African emigrants, have traditionally been put down to high levels of violent crime and the racial employment policies of the African National Congress government. The pull factors have recently weakened meaning that potentially many more South African may immigrate in the near future.

What’s happening this year around us?

People in Cape Town have recently adopted a trend/event called ‘First Thursday’s’.

(Capetown.2014) The first Thursday of every month, over 30 participants within a safe, walkable area allow people to explore their art galleries and shops. A free concert on Greenmarket Square at 5.30pm kicks off the event which runs until late in the evening.

The event sees many young and trendy people attending and it may be a possible opportunity for Kiehl’s to align with this event or to create brand awareness.

During the month of November each year, the Movember campaign is responsible for the millions of moustaches around the world. (Movember, 2014) their “Mo’s” men raise vital funds and awareness for prostate and testicular cancer and mental health. As an independent global charity, the Movember Foundation’s hopes to have an everlasting impact on the face of men’s health. Movember challenges men to grow a moustache for the 30-days of November. In October, ‘Mo Bros’ sign up at Movember.com. At the end of October they are to shave off any existing moustache to start the 30 day challenge and are only to shave their moustaches at the end of November. This may be a good possible initiative for Kiehl’s to get involved with. Its is for men, it adds value by giving back to the community and the men involved with this campaign are Kiehl’s direct target market.

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Legal Environment Regulations for importers South Africa's liberal trade incentives objective is to encourage the economic growth and development (SouthAfrica.info, 2012).

It is a member of the World Trade Organisation (WTO), and the Southern African Customs Union, which allows free exchange of trade between South Africa and the other four countries (SouthAfrica.info, 2012).

Imports are a crucial part of the economy; the majority of companies mainly rely on them for their capital equipment, production materials and supplies (SouthAfrica.info, 2012).

Imports are controlled and administered by the International Trade Administration Commission of South Africa and the South African Revenue Service (SouthAfrica.info, 2012).

International Trade Administration Commission SouthAfrica.info (2012) states that: "The International Trade Administration Commission of South Africa (ITAC), a legislative body, aims to foster economic growth and development by administering international trade".

"Its core functions include customs tariff investigations; trade remedies; as well as import and export control" (SouthAfrica.info, 2012).

Trade agreements SouthAfrica.info (2012) explains that: "South Africa is a member of the World Trade Organisation, and follows the Harmonised System of import classification, which means it uses the World Customs Organisation's standardised system of code numbers for identifying products".

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Customs and border management The South African Revenue Service (SARS) manages the flow of goods into South Africa; all goods entering the country must be declared on the set bill of entry (SouthAfrica.info, 2012).

Import tariffs are levied at the first point of entry in the South African Customs Union; SARS is also responsible for levying these duties such as customs duties; anti-dumping and countervailing duties and VAT (SouthAfrica.info, 2012).

Advertising of Cosmetics South African Bureau of Standards (SABS) and Department of Health (DOH) in cooperation with the Cosmetic, Toiletry and Fragrance Association (CTFA) of South Africa have established several codes concerning the definition of a cosmetic product in order to be legally sold and promoted (ASASA, 2004).

All advertising for cosmetic must conform to the set definition of (ASASA, 2004): "A Cosmetic Product shall mean any substance or preparation intended to be placed in contact with the various external parts of the human body (epidermis, hair system, nails, lips and external genital organs) or with the teeth and the mucous membranes of the oral cavity with a view exclusively or mainly to cleaning them, perfuming them, changing their appearance and/or correcting body odours and/or protecting them or keeping them in good condition" The definition specifies six functions pertaining to cosmetic products, which are to clean; to perfume, to change the appearance, to correct body odours, to protect and to keep in good condition (ASASA, 2004).

Cosmetic Toiletry and Fragrance Association of South Africa (CTFA) brings together cosmetic manufacturers, distributor and raw material suppliers, the objectives are to maintain the high quality and safety of cosmetic products (SouthAfrica.info, 2012). " By guiding members of the Self-regulatory Codes of Practice & Standards, the CTFA provides an environment that allows the South African cosmetic industry to flourish " (SouthAfrica.info, 2012). !

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Animal Testing Many consumers are becoming aware of product processes and what effect they are having on the environment. (Epa.gov, 2013) There is currently no law against animal testing in South Africa, (Dailymaverick, 2012) however, in March 2013, the sale of cosmetics developed through animal testing was prohibited in the EU, although this may lead to a trend that other countries follow.

Kiehl’s has been been identified by PETA as a product that does conduct animal testing. (Peta.2014) Kiehl’s have released statements confirming that they never have and never will conduct animal testing. It has been confirmed by Kiehl’s that although they themselves do not conduct any animal testing, in order to provide to the Chinese market they have to comply with law and allow their product to be tested on animals by authorities. Although they are not testing on animals themselves, they are condoning it by selling in the Chinese market. If the brand was honest and transparent they would not sell in China due to their animal testing laws.

Kiehl’s have already launched in South Africa and are currently trading, therefore will have met all the required trading legalities within South Africa

Micro Environment Company (All the information below has been taken from the Kiehl’s website or from the Brief itself, unless otherwise specified) Kiehl’s is an American cosmetics brand retailer that specializes in making premium skin, hair, and body care products.

It was founded as a single pharmacy in New York City's East Village in 1851.

Kiehl's was purchased by the L'Oréal Group in 2000 and today has retail outlets in Brazil, Canada, USA, Argentina, Australia, China, Japan, Korea ,Taiwan, Hong Kong, India, Malaysia, Singapore, Thailand, Austria, Belgium, France, Germany, Italy, Luxemburg, Spain, Switzerland, Netherlands, United Kingdom, Sweden and has recently launched in South Africa. They have over 250 retail stores worldwide, and over 1000 points of sale supported by sales in high-end department stores, airport locations, as well as independent stockists and agents. Kiehl’s ranked second in the Vogue 2013 best men skin products. (Vogue, 2013) !

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The employees of Kiehl's undergo intensive training on the properties of the active ingredients and the benefits of their product range. Staff in Kiehl’s in clinical-looking lab coats for uniforms, it makes them look like professional.

According to Indeed’s website for company reviews, employees at Kiehl’s found it a fun and well managed environment within to work, the uniform is a standard though out all stores.(Indeed, 2012-2014) According to Glassdoor’s website, employee reviews there seems to be issues with computer systems not working correctly and unfair company politics. 50/50 Good and bad reviews. (Glassdoor, 2014) Kiehl’s does not rely on advertising for brand awareness and instead drives awareness through “word of mouth”: utilizing sampling, PR and digital communication.

They are committed to providing customers with exceptional service, personal consultations and a “try before you buy” policy. They also offer a 100% refund guarantee.

Kiehl’s offer a free delivery service for purchases over a required amount as well as a gifting service. The delivery charges are dependent on the country.

Kiehl’s introduced a pet range that includes a dog shampoo, conditioner and a spritzing cleanser as well as a baby cream (which is being discontinued) Products that are currently being discontinued: High potency Spot treatment, Photo age corrective moisturizer, Photo age activated toner and exfoliator, Sun Protection, Baby cream In 1997, Hand Care for a Cure introduced, first Kiehl’s product dedicated to a key philanthropic cause. Donate to American Foundation for AIDS Research.

In 1988, Kiehl’s sponsors Everest Expedition; climbers scale Mount Everest, relying on Kiehl’s products along the way.

In 2009, recycle and be rewarded program introduced. The program offered a complimentary product for every 10 returned bottles.

Kiehl’s are actively involved in charity and have CSI initiatives worldwide, the focus is 3 fold: HIV AIDS, children’s causes and environmental issues

"to improve in some way the quality of the community...making for better citizens, better firms, and better communities." R3,500 000 donated to CSI initiatives to date. !

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As a PR campaign Kiehl's teamed up with Alicia Keys who co-founded The Keep a Child Alive Foundation whose mission is to provide life-saving HIV treatment, care, nutritious food, support services and love to children and families affected by HIV. Kiehl's offered a special edition of their popular Midnight Recovery Concentrate with 100% of net profits, up to $200, 000 from the worldwide sales benefiting the Keep Child Alive campaign. One bottle of Midnight Recovery Concentrate will provide one month of HIV care, medicines and love to a child living with HIV. “Mr Bones” which is Kiehl’s recently launched global program uses the original human skeleton that was used by a founding family member, Aaron Morse. He used this skeleton during consultations to educate customers on various ailments and to show how the product would address the problems.

The Meet "Mr. Bones," program has partnered up with 13 iconic influencers from all genres including Grammy award–winning musician Alicia Keys, actor Zach Galifianakis and pop-artist Kenny Scharf. Each partner was given free reign to design and build his or her own "Mr. Bones," which was then on display throughout Kiehl’s New York metro area for 6 weeks.

In exchange for their participation in Meet "Mr. Bones," a total of $200,000 was donated through Kiehl’s Gives on their behalf to organizations supporting HIV/AIDS research, environmental issues and children’s causes worldwide.

Kiehl’s have already established an online presence through Facebook(833,447) likes, Twitter(51k followers), Instagram(9,555 followers), Pintrest and YouTube with up to date and relevant information and competitions. Kiehl’s have already established an app called ‘Snap and Shop’ that allows customers to interactively purchase Kiehl’s products in store and have them delivered to their door. The app also works out of stores for purchasing.

Kiehl’s website up to date, is easy to use and it is successful of drawing people’s attention. Kiehl’s usually put short-term incentives like promotions through social media to encourage trial or usage of their products. Their websites are fully functional and they have dedicated websites to each country that they are currently offering the product in (Except SA) Kiehl’s is a socially-conscious brand, and it always gives back to the community where it does business. Kiehl's has positive customer-based brand equity and the brand is effective in target consumers' perceived value. Although lack of the most effective tool in marketing mix like television advertising, Kiehl's also can create high brand awareness in consumer's mind. Brand awareness, brand loyalty and brand associations create competitive advantages for Kiehl's successfully. !

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Brand health analysis In order to determine the well being of Kiehl’s as a brand, a healthy brand analysis will be conducted using seven variables as indicators to gain a better understanding of Kiehl’s business model and practice.

“The focus of business can no longer remain in creating value and wealth for shareholders with vested financial interest in company. Instead, there is a movement toward a more socially minded and responsible model of business and business practice”(Cook et al, 2010).

1. Does Kiehl’s have a particular and meaningful purpose?

“Kiehl’s is an accessible and alternative luxury skin care and customer care for those who are committed to their environment and concerned about giving back”.

Kiehl’s has a strong heritage and credibility that is conveyed throughout their stores, cosmetics line and marketing efforts.

Due to its strong heritage and pharmaceutical background the brand’s products have a strong credibility in terms of offer and the authenticity of their formulas and composition. Kiehl’s emphasizes on the natural elements used to create its products and on the benefits that those can provide to any gender, age and skin type.

Kiehl’s strong capacity to convey and bring alive the look and feel of their brand is successfully achieved throughout consumer experience and packaging. The consumer is instantly immerged in Kiehl’s world when entering their stores, visiting the website or simply holding their products.

Keilh’s main objective throughout those years is to constantly give back to the community by involving everyone in order to interact and participate to subsist to those in need by donating and actively participating in several global organisations and local charities.

With each location, Kiehl’s reaches out to the communities and cultures around them. With their growth and development, the brand continues to positively impact the world and its environment.

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For example, in South Africa Kiehl’s supports ‘Stop Hunger Now Southern Africa’ part of the Hunger Eradication program as well as the “Keep a Child Alive” fighting against HIV virus endorsed by Alicia Keys (Kiehls, 2014).

Kiehl’s also conveys their ‘giving back to’ motto by enhancing consumer experience through personalised in store consultations, extensive sampling program and their 28 days ‘trial period’ (customers have the possibility to bring back a product if unsatisfied).

Keihl’s has to main purposes, one is consumer satisfaction by offering a superior quality skin care range that incorporates specific natural elements that are beneficial to the skin and hair and not for their aesthetics (Kiehl’s, 2014).

“We utilize simple, efficient, and recyclable packaging so that we may concentrate our efforts and costs on the substance and quality of the product”(Kiehl’s, 2014).

Kiehl’s second main purpose is to remain committed and to give back to the communities in which they serve by being concerned for the environment in which they operate (Kiehls, 2014).

Mark: 8/10

2. Does Kiehl’s have a unique meaning and identity?

Kiehl’s is a very unique men skin care brand due its heritage, product offering, product formulas and compositions, packaging, in store experience, advertising approach and strong commitment to the environment with its eco-friendly approach and its extensive concern and active donation to global organisations. When consumers purchase a Kiehl’s product they have a feeling of self-rewarding and belonging; its beyond the traditional purchase feeling. The consumer is associated to the brand actions, the purchase could be considered as mutually beneficial, for the consumer’s skin health and appearance and for the environment in which he/she lives.

“Kiehl’s skincare is scientifically formulated to respect, restore and strengthen the skin barrier for healthier, more radiant, younger-looking skin. Our targeted treatments are powerful, yet safe preparations which act to correct and treat your specific skin needs and concerns” (Kiehl’s, 2014). !

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Kiehl’s is a family company created by a pharmacist 160 years ago. It’s been successful because the quality of the products exists from a long history of research and innovation. Kiehl’s strong heritage and product credibility is one of it success factors.

Kiehl’s conveys its business philosophy through respect of the science, the product quality and customer satisfaction.

The service is customized depending on each customer, which shows the brand will to listen and respond to customers needs and wants.

When looking at the visual aspect of Kiehl’s brand identity such as their logo, their in-store décor, they use unique and simple designs yet very memorable among the various skin care brands.

Mark: 8/10

3. Is Kiehl’s an effective and engaging communicator?

Kiehl’s doesn’t use traditional forms of advertising such as an IMC approach but rather focuses on interaction by using social network platforms and extensive Public Relation efforts in order to directly engage with consumers and prospects.

Digital marketing enables Kiehl’s to convey and share information globally by reaching a large target audience by focusing on their promotions on their Facebook and Twitter pages. Also, that allows consumers to exchange their opinions and submit their feedbacks regarding the benefits of products they used. Each Friday, Kiehl’s selects a fan of their products and rewards them by posting a picture of them based on the number of ‘Likes’, posts and comments.

Kielh’s also runs a competition, which consists of consumers posting a picture of themselves with their favorite product and explain why they love this specific product.

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In order to pursue and maintain the apothecary heritage, Kiehl’s decided to introduce an additional element to the brand identity, which is Mr Bones using celebrity endorsement. This campaign was used to reinforce the brand’s identity and increase the brand awareness. Celebrities and artist had to design their own Mr Bones and showcase it.

Kiehl’s conveys and communicates its brand purpose through in store experience; educational brochures of the organisations they support are displayed, the staff is capable to explain what each product contains and give you a personalized consultation, each product has the list of elements used written on the bottle, extensive sampling is one of Kiehl’s marketing tool.

Due to the fact that Kiehl’s is still considered as new brand in South Africa, its brand awareness remains low in comparison to the other countries in which Kiehl’s operates; the reason is that there are no Kiehl’s stores yet but only stands in Edgars retail stores.

Mark: 7/10

4. Does Kiehl’s adds value to the lives of people?

Chris Salgardo, Kiehl’s U.S president states that: “ Kiehl’s gives a celebration of our causes, our customers, and our communities”.

Kiehl’s recycling and reward program consists of customer’s bringing back their Kiehl’s empty bottle once finished, a card is given to them, each bottle equals one stamp, after 10 stamps a complementary Kiehl’s product is offered as a rewarded to their environmental awareness (Kiehls, 2014).

Kiehl’s make sure all its employees receive a full educational training about the brand, the chemistry/ formulas of the products as well as the usage of each product according to different skin types. Employees are sent for a four weeks course to insure that they are fully immerged in the brand and can accurately assist customers and communicate the right brand identity that Kiehl’s conveys. !

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Kiehl’s (2014) states that: “For more than 160 years, Kiehl’s since 1851 has been committed to the betterment of the communities where it serves its patrons”.

“Kiehl’s Gives is an ongoing global, philanthropic initiative that supports Kiehl’s three pillar causes, HIV/AIDS research, environmental issues and children’s wellbeing” (Kiehls, 2014).

Image 1: Kiehl’s Gives (Kiehl’s, 2014) Kiehl’s strongly believes in giving back to the community, which is translated through their extensive engagement and support to local and global charities and organisations by donating a percentage of their profits made on sales.

“In service of our local communities, Kiehl’s is proud to call more than 100 local communities home around the world”(Kiehl’s, 2014).

We remain committed to the service of our patrons and to our decades-old mission of giving back to communities in which we serve” (Kiehls, 2014).

5. Is Kiehl’s transparent, does it live its promise, throughout its

value chain, in all that it does?

A negative association remains attached to L’Oréal regarding animal testing and their lack of eco-friendliness. It was already questioned why L’Oréal launched such a brand as The Body Shop, which is a very environmental driven brand with a large range of natural products. !

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Therefore, it could be questioned why L’Oréal approached Kiehl’s to become part of its portfolio, is it to decrease and shift away L’Oréal’s negative association to animal testing or to simply diversify they portfolio.

Kiehl’s products have to be tested on animals in order to be distributed and sold in Asian countries, the local authorities test the products on animals, yet Kiehl’s accepts it, which is against their company policy.

Kiehl’s consumer promise and offering is kept by providing a range of natural products; the formulas and compositions are written on the packaging, which reinforces the credibility of the products. As mentioned in the previous variables, Kiehl’s pharmaceutical heritage and use of natural elements with no added additives only shows the brand’s honesty and aim to build trustworthy, long-term relationships with its customers.

The brand is transparent by revealing their product’s composition and formulas in order to insure the consumer that ‘what they see is what they get’.

Image 2: Kiehl’s natural ingredients (Kiehls,2014).

Mark: 6/10

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6. Does Kiehl’s build sustainable relationships by never taking more than it gives?

Kiehl’s mentions that they consider they staff members as their extended family, which shows that the brand cares for they employees. In order for Kiehl’s employees to gain a full knowledge of the products and understanding of the brand, Kiehl’s sends its employees for a four weeks training so they can fully assist customers.

Consumers are becoming increasingly aware of the environment in which they live and therefore expect brands to adopt an eco-friendly set of mind by altering their product offering by using recyclable materials and use more natural elements.

“The brand lives primarily through its purpose, rather than its form a product; and account card or party membership); consequently, it is represented by its total value chain and all of its stakeholder relationships”(Cook et all, 2010).

Kiehl’s has the capacity to adapt to changes in the environment in which it operates by providing alternative luxury skin care satisfying the current needs and wants of consumers with natural, trendy eco-friendly products. Also, Kiehl’s educates its customers through a reward program by bringing back their bottles to be recycled.

Consumers feel that by taking care of themselves they also contribute to the environment in which they live.

Mark: 8/10

7. Kiehl’s believes that profit is not the driver but a consequence of all of the above.

Keihl’s doesn’t advertise extensively compare to its competitors in the beauty/ cosmetic industry. In comparison to L’Oréal whose main budget is focused on advertising, Kiehl’s believes in PR and online Marketing as being as successful tool of marketing and prioritizes its budget to the research of its products in order to constantly satisfy consumer’s needs and wants. !

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Also, a percentage of Kiehl’s sales are donated towards local charities and Global organisations.

The Mission of Kiehl’s states that we are "to improve in some way the quality of the community...making for better citizens, better firms, and better communities” (Kiehls, 2014).

Figure 2: Kiehl’s gives back (Kiehls, 2014) Mark: 9/10

Concluding point It is clear that Kiehls stands out and is unique brand that differentiates itself from L’Oréal’s portfolio, it almost seems to be a paradox that Kiehl’s is part of L’oréal considering the different approach in term of marketing and advertising, product offering, engagement to the environment and commitment to the communities.

Overall Kiehl’s is considered as healthy brand that demonstrates throughout its actions that it's a business that is not driven by profit but by being a socially responsible business model

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MARKET “Despite a moderate slowdown the beauty industry remained robust in 2013, with mass beauty outperforming premium” (Euromonitor, 2014).

Euromonitor (2014) states that: “The power shift to emerging markets will continue, with over 50% of total beauty sales by 2018 set to come from the developing world”.

The premiumisation trend continues to grow, especially in men’s skin care.

The term men’s grooming products referrers to shaving-related products such as men’s pre-shave, men’s razors and blades and men’s post- shave (Euromonitor; 2014).

Globally, the category showed remarkable developments during 2013, which resulted in a consistent growth for emerging product areas in the men’s skin care, men’s toiletries and men’s bath and shower (Euromonitor, 2013).

“Growth was fuelled by demand for shaving-related products and deodorants as well as the product novelty of men’s skin care and hair care products”(Euromonitor, 2013).

Men’s razors and blades achieve the highest current value growth (Euromonitor, 2013).

Euromonitor (2013) states that: “During low consumer spending, most consumers focused on essential products like men’s pre-shave rather than luxury products like men’s skin care, the product novelty of which has also started fading”.

“Men’s grooming products mostly comprise mass brands, which is in line with men’s lesser propensity to spend on cosmetics and toiletries compared to women” (Euromonitor, 2013).

The only areas in which men might consume premium brands are men’s preshave, men’s post-shave and men’s deodorants, as some high-income earners purchase extensions to favourite fragrances available in these formats. !

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Demand for men’s skin care products mostly comes from high-income earners due to the fact that lower-income groups would consider most of these products nonessential (Euromonitor, 2013).

Low consumer confidence reduces the penetration of men’s grooming products into low- income brackets (Euromonitor, 2013).

Beauty and Personal Care in South Africa Official statistics by Statistics SA (2012) showed that retailers of Pharmaceuticals, medical goods, cosmetics and toiletries had one of the highest annual growth rates at a 7.3% increase.

The largest retailers of cosmetics and toiletry in South Africa are Truworths, Edgars, Foschini, Woolworths and Clicks (Euromonitor, 2013).

“More than US$1-billion worth of pharmaceuticals are sold in South Africa annually, and the market is expected to grow substantially” (SouthAfrica.info, 2012).

Euromonitor (2013) statest that: “2012 proved to be a turbulent year for South Africa with economic growth stalling, the country witnessed minimal expansion in exports and a slowdown in consumer demand”.

Despite the adverse conditions, beauty and personal care increased in current value by 10% in 2012 due to aggressive competition and heavy price promotion across various categories (Euromonitor, 2013).

Despite the macroeconomic challenges, beauty and personal care remained rather resilient by the end of 2013 yet a shift was noted towards mass products in some categories (Euromonitor, 2013).

Private label in beauty and personal care Grocery retailers and para-pharmacies, drugstores have been particularly proactive in response to value for money demand introducing various private label products across different beauty and personal care categories (Euromonitor, 2013).

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Products offering value for money drive competition The leading players in beauty and personal care increasingly compete by offering products which provide value for money, make use of aggressive promotion techniques such as price discounting in order to influence consumers during their decision making process (Euromonitor, 2013).

Grocery retailers lead the distribution of beauty and personal care Grocery retailers continued to play a key role in the distribution of beauty and personal care products towards the end of 2013 due to product portfolios extension, more expansive audience reach, increase in private label products offers and extensive price promotions (Euromonitor, 2013).

The consumers of mass beauty and personal care products purchase they products at department stores and groceries retailers supermarkets, drugstores, whereas upper-middle and high LSM consumers tend to favour beauty specialist retailers, where they can purchase premium products (Euromonitor, 2013).

Growth expected in beauty and personal care Euromonitor (2013) states that: â&#x20AC;&#x153;The country is expected to see rising levels of disposable income coupled with a slowdown in inflation levels. In addition, product innovation and price promotions are expected to drive growth in the industry, stimulating growth throughout the forecast periodâ&#x20AC;?.

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Competitive Landscape Direct competitors

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Clinique: Is a skin care company that sells products for men and women of all skin types, all their products are allergy tested and 100% fragrance free and their products are not tested on animals. The company has a three- step system of cleansing, exfoliating and moisturizing. This is the basis of all Cliniques skin care products. They classify themselves as being a prestige brand. The look of their products they have kept them simple with mild colours, for the menâ&#x20AC;&#x2122;s range they have kept most of it in a dark silver/charcoal colour with black writing, which looks clean and simple.

They claim their products work because dermatologists who want to make a difference and create perfect skin have created the products. They make a variety of products for men form anti blemish serums, deodorants, moisturisers to cologne for men. (Clinique.co.za, 2014).

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Strengths They create and produce high quality products that are free of harsh chemicals and are not tested on animals. They believe strongly in the quality of their products and their philanthropy initiatives. This is a company that has great financial backing and support, which is coming from their mother company Estee Lauder. Something that is good about the company is that they have numerous manufacturing facilities around the globe, which is good due to different economic/financial crisis in different regions. So therefore if production slows at one factory they can produce more at another. The people who create and design their products are all specialists in the field.

Weaknesses Their competitor’s products are often offered to the public at higher prices, which in turn makes Clinique’s products appear to be of lesser quality. Clinique products are also rarely discounted. They have also had complaints of employees at the customer service level being inexperienced. Because they have so many manufacturing facilities around the world or their suppliers are not good they have a problem that the suppliers of their ingredients are often late. It is also a very costly venture to create products that are free of fragrance and allergy inducing chemicals. (clinique business review, 2010, p. 9,10,11).

Public relations and Advertising Clinique’s advertising strategy consists of targeted advertising and personal selling in order to have the ‘one on one’ with its consumer. 90% of Clinique’s advertising budget is used for magazine and newspaper advertisements, they are mostly advertised in high-end magazines and newspapers in order to gain the exposure to the right target audience but do use television adverts. They present their adverts with close-ups of their products on a white background to emphasize product and design. It is done this way in order to create the image of cleanliness, technology and quality. With their personal selling aspect they get their sales people to wear lab coats when they interact with the consumer and help them find a product that best suits their specific needs because then the customer perceives this employee to be highly professional and to know what they are talking about.

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Product development Clinique is a cosmetics company that has emphasized on technology and their carefully selected ingredients involved in making their products, they create and develop their skin-care products according to these standards. Clinique has numerous scientists and other specialists that develop and test the products in their High-Tec laboratories. All of their products have to be tested by dermatologists, allergy tested, 100% fragrance free and they must be appropriate for people of all ages and all skin types.

Pricing Their prices range from: R200 - R1500

Environment Estee Lauder who owns Clinique strives for zero waste, defined as 100-percent efficiency of energy, material, and human resources. They try to do as much as they can to reduce their carbon footprint.

“Estee Lauder's packaging program is based on the SPC's definition of sustainable packaging. It designs packaging that: •

Meets marketing criteria for performance and cost.

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Is sourced, manufactured, transported, and recycled using renewable energy.

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Maximizes the use of renewable and recycled source materials.

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Is manufactured using clean production technologies and best practices.

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Is physically designed to optimize materials and energy.

Can be effectively recovered for re-use as a resource after the product has been consumed”. (Atkinson, 2008).

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Source:!http://www.4all.my/amanurbeautyspa/images/standard_ratio_logo.jpg

Environ:

Environ is a South African skin care brand which believes in not fooling their consumers, they offer products which offer real results and glowing, healthy radiance. Their vision has always been to make the best skin care in the world, through a philosophy of well-researched, scientific skin care. â&#x20AC;&#x153;Our products are effective, proven, cost-effective and inspired through teamwork. (Environ.co.za, 2014).

They strive on integrity and keeping the meaningful promises we make to our consumers by offering the most effective skin care range that science permits.

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Product development Environ is one of only a few companies in the world with their own dedicated manufacturing facility. Maximum efficacy of formulations is maintained by prevention of exposure to light, heat, air and irradiation. All products are tested by independent laboratories who have certified facilities for, microbiological and vitamin analysis.

Because their focus is a beautiful skin for a lifetime, they strive to deliver the freshest products possible. Environ products are, mostly non - fragranced and colorant free. No preservatives are added during manufacturing process and the final products are never tested on animals. Environ is never compromised by marketing trends; scientific principles underlie the selection of all ingredients.

Pricing Range Environ prices their products from: R120-R1500

Advertising The brand believes that the brand should not focus all its money on advertising, they would rather focus on giving the consumer a product that works for them.

Where they do advertise is in specific magazines in order to connect with the correct target market, social media, Youtube and through promotions.

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Source:!http://www.beautynet.de/media/catalog/category/LAB_SERIES_LOGO.jpg

LAB series: Lab Series Skincare for Men has long understood that men require products formulated specifically for them. For decades, men have come to rely on Lab Series for formulas powered by technology, backed by scientific research, and reinforced by years of success in addressing men's skincare and grooming needs. Knowing how men want to approach and use skincare is just as important as what their skin needs, even from one region of the globe to another.

Understanding men's skin physiology and knowing their unique skincare concerns has led us to create our CLEAN-SHAVE-TREAT System for simple results-oriented skincare. In addition, our BODY line and PRO LS ALL-IN-ONE FACE TREATMENT, with advanced formulations, fit any lifestyle. Our high-tech approach allows men to take a high-performance approach to life.

We offer simple educational tools to help men understand exactly how to address their skincare needs, and provide the knowledge and the assurance to solve any problems that arise - from acne to aging. Best of all, Lab Series easily fits into any active lifestyle, allowing men to work hard, play harder and look better.

Lab Series Skincare for Men continues to introduce innovative new products that reinforce our leadership position in high-tech, high-performance skincare for men; including the latest in anti-aging, brightening, shaving, moisturizers and sunprotection. (Labseries.com, 2014). !

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Strengths A strength for LAB series is that because they are owned by the Estee Lauder group they have an extremely strong distribution network (the products are sold to a limited number of stores that compliments the image of the brands such as department stores, upscale perfumeries, specialty stores, professional hairdressers etc. LAB series has a strong brand reputation (The brand is associated with luxury & quality and also has an extensive range of products for men). The brand, including Estee Lauder have strong and powerful marketing techniques which are used by the firm which, they include: Free gift, gift with purchase and events for trying out the products.

Weaknesses A weakness that relates to the whole Estee Lauder group is that they lack the concentration regarding to customer value and you can see that profit is their main driver which also causes them to loose sight of the customers wants and needs.

Their distribution network also lacks of reach to other viable markets. (Studies, 2012).

As LABseries is less expensive compared to its competitors, thus many consumers perceive LABseries products to be of lower quality than its competitors as they equate price with quality.

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Potential Competitors

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Nivea:

Nivea is one of the leading skin care companies worldwide who specialize in skin and beauty care, who offer a variety of product for both men and women. Nivea offer a broad range of over 500 products to suit the needs of their consumers. Nivea products are based on reliable quality, user friendliness, and good value for money.

(Slideshare.net, 2010). In the male skin care range they have products such as shower gels, moisturizers, deodorants and shaving products.

Niveaâ&#x20AC;&#x2122;s main objective is to be able to deliver its products to its consumers wherever they are in the world without a change in quality, So consistency is key and they understand that each market has their own specific needs. (Nivea.co.za, 2014)

Pricing Their pricing ranges from R20 â&#x20AC;&#x201C; R450

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The basic elements of the promotional mix that Nivea uses: Public relations For Nivea PR is one of the most important aspect of the promotional mix for them as it allows them to communicate their company message across to the consumer, by doing this they are creating a good brand image for themselves and creating a bigger customer basis.

Sales promotions For Nivea sales promotions are a brilliant way especially in the time of economic and financial hardship for Nivea to still generate sales. There are various ways in which nivea uses its sales promotions, some are such as giving out free samples in magazines or the “buy one get one free” that way customers are becoming loyal to the brand and the consumer is trying their products.

Advertising Advertising is the way in which Nivea will communicate its brand to the consumer, it can do this through various ways including print media, billboards, television, internet etc. They seem to advertise in all types of the media. In that way they are reaching a broad audience and creating awareness about their brand.

Personal sales Personal-sales is a way of creating a relationship and a close connection with your customer. This is where one of Nivea’s employees would directly contact a customer to generate a sale or just to inform the consumer/future customers about their products or specials they are having at that moment. (nivea's promotion in marketing mix, 2011).

Strengths Nivea’s strengths is that of how in every store you enter that sells beauty and skin care products will have Nivea in it and it will be clearly labeled with the Nivea brand and its specific coloring. !

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You may go anywhere in the world due to their strong distribution network and you will find any Nivea product that you are looking for with the same quality. It also has around 20 product categories and over 500 products to offer.

Weaknesses For Nivea the weaknesses are that they are trying to expand their product ranges very quickly due to a very competitive skincare market but it is proving difficult as they are seen more as the skin care brand and not thought of in the consumers mind when they think of buying any other kind of product off the shelf.

(Mbaskool.com, 2012).

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Loreal men: Loreal makes a range of products for skin and hair treatment for both men and women. The menâ&#x20AC;&#x2122;s range (Loreal man expert) offers advice, skin, hair and facial treatments for men to deal with the problems of everyday stress and signs of ageing. They use celebrities to advertise their products on their website where the actors talk about their problems that they have with their skin and which product you should use for your skin type. %ABC4DEF!GE4,(7!#8":96

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Strengths Loreal is able to innovate and create new products for the market, they have also been very creative in the way they have positioned themselves is good because they have such a well segmented portfolio, which include a variety of different priced products which has allowed them to drive the growth of Loreal products even in time of economic difficulty. They also keep their consistency throughout their products.

Weaknesses Loreal has not had such a strong presence in the natural/organic market, which is appealing to consumers more and more. With their hair care product range they have been struggling and it has bought down company growth, as there is such strong competition from much larger companies such as Proctor & Gamble and Unilever who have greater market share. Loreal also has to depend on their third party retailers in order to sell their products.

(Markuz, 2014)

Advertising Loreal is a very trusted brand amongst its consumers; they have gained this trust of the consumer by educating them on how to use their products properly, and also advice and tips. They do a lot od DIY videos and provide facts to consumers. Loreal tries to empower their customers by promoting its self as more than just a beauty and cosmetics brand but as a source of strength and confidence for its consumers.

They promote themselves at high-class events such as the golden globes and fashion shows to establish itself as the product to buy if you want to improve yourself and reach higher goals. (Comings, 2013).

Pricing Their pricing ranges from R40 â&#x20AC;&#x201C; R550

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SWOT Analysis Strengths: •

Strong brand identity and heritage and therefore reinforces its credibility

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Strong commitment to the community through their recycling reward program, extensive donations to their three main pillars and local charities

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World wide they have strong brand awareness through the use of social media platforms and public relations, which enables them to reach large target markets

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Kiehl’s extensive product range enables them to satisfy all skin types and needs, which will allow the brand to appeal to all the different ethnic groups within South Africa

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One of their main purposes is consumer satisfaction by offering a superior quality skin care range that incorporates specific natural ingredients, which are beneficial to the skin and hair.

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Diverse and extensive product offering with unique product offerings and formulas to suit all types of skin and needs.

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Unique packaging, packaging reveals the product formula which reassures the consumer and reinforces the brand promise

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Unique in-store experience, with personalized in-store consultations.

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Kiehl’s is a memorable brand amongst its consumers due to its strong brand identity elements such as their logo, in-store d`ecor and authentic designs.

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Enhanced consumer experience through an extensive sampling program.

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Kiehl’s has a 28 day ‘trial period’

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Kiehl’s is strongly committed to the environment in which it operates by constantly donating to the local charities and through the ‘Kiehl’s Gives’ ongoing global philanthropic initiative to their ‘3 pillar causes’, HIV/AIDS research, environmental issues and children’s wellbeing.

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Kiehl’s shows its commitment to the environment through their recycling reward program. Which educates consumers on becoming more aware of the environment that we live in.

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With kiehl’s growth and development, the brand continues to positively impact the grooming industry and its environment.

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Kiehl’s utilises simple, efficient and recyclable packaging in order to concentrate their efforts and costs on the substance and quality of their product.

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Kiehl’s uses celebrity endorsement

Weaknesses: •

Kiehl’s has to test on animal in order to distribute in Asian countries which can jeopardise the brands transparency and company ethics

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Kiehl’s has a low brand awareness within the South African market

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Extensive product offering can confuse the consumer’s decision-making process.

Opportunities: •

Premiumisation trend continues to grow especially in men’s skin care.

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Men’s grooming products showed remarkable development since 2012

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Men’s razors and blades was the most dynamic category and also achieved the highest sales

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The power shift to emerging markets will continue to grow

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Despite adverse conditions, beauty and personal care increased in South Africa

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Upper middle and high LSM consumers tend to favor beauty specialist retailers, where they can purchase premium products

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South Africa is expected to see rising levels of disposable income as well as a slow down in inflation levels

Threats: •

The men’s grooming industry is highly competitive and a very cluttered market

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Low consumer confidence reduces the penetration of men’s grooming products into low-income brackets.

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Proctor & Gamble is the leading company in male grooming products.

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Low growth in the market size of men’s grooming products in South Africa

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Pharmaceuticals, medical goods, cosmetics and toiletries had one of the highest annual growth rates in South Africa.

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The largest retailers of cosmetics of toiletries and cosmetics are Truworths, Edgars, Foschini, Woolworths and Clicks

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Demand for men’s skin care products mostly emanates from high-income earners.

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Lower income groups consider skin care grooming products as non essential

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During a year of low consumer spending most consumers focused on essential products like men’s pre shave rather than luxury products like men’s skin care

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Men have a lesser propensity to spend on cosmetics and toiletries compared to women

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There has been a moderate slowdown in the beauty industry which has led to mass beauty out performing premium in South Africa

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South Africa witnessed minimal expansion in exports and a slow down in consumer demand

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Chronic high unemployment, poverty and income inequality continue to effect the dynamic in the economy

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Aggressive competition and heavy price promotion across men’s grooming product category

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Adverse economic conditions resulted in increased pressure on consumer expenditure

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Leading players in beauty and personal care increasingly compete by offering products that provide value for money to cash strapped and price sensitive consumers

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Aggressive promotion continue to play a key role when influencing the consumers decision making process

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Increase in fuel and petrol can critically effect the distribution channels nation wide

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Import tariffs, taxes and exchange control are the most crucial factors for Kiehl’s to take into consideration, which could lead to possible delays due to customs stopping a container and the restricted accessibility into the country.

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Local Strikes can delay the distribution channel which would impact the availability of the product in store

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South Africa has such a diverse ethnicity that it could be a challenge to appeal to such a large target audience in terms of communication efforts.

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South African Internet infrastructure is not as developed as first world countries, therefore resulting in slower Internet speeds.

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Key issues •

Taking into consideration, how could Kiehl’s increase brand awareness in South Africa when their only retail outlets are within major department stores?

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With the extensive product range and the current low brand awareness in South Africa, should Kiehl’s be concerned with the development of a new product range?

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Taking into consideration that Kiehls’ main segment of their target market is ubersexual, how could Kiehl’s alter their current perceptions of male grooming products?

The Target Market Kiehl’s main target market is men between the age of 25 and 44 years old, ranging from all ethnic groups. Due to Kiehl’s diverse product range designed to suit all types of skin, the brand will appeal to all ethnic groups within the LSM segment.

They live in urban areas, they are aspiring working professionals with high middle to high income, LSM’s 7 to 10. They are single bachelors or married.

They are brand loyal, they like to compare prices and seek for the best offer in terms of quality, value and price.

They have a socially active lifestyle throughout the day and the night; they are users of innovation and interact through social media.

They seek for brands that offer efficiency, quality, trustworthiness, delivering promises and reliability.

They are conscious and aware of their physical appearance, they try to enhance and maintain it by eating healthier and gym few times a week.

They are ‘go getters’, free thinkers, ambitious and driven.

The younger segment of the target market is considered as metrosexual, they make use of men skin care products on a daily basis whereas, the older segment of the market (35-44) are ubersexual who need to incorporate skin care products into their daily life and alter their current perception of men’s grooming products. !

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The difference between metrosexuals and urbersexual is that metrosexual men purchase and use skin care products to enhance their appearance for aesthetic purposes, while ubersexual men purchase don’t consider skin care products as a necessity in comparison to fragrances and shaving products.

Among ubersexual men, their partners tend to advice them or purchase products on their behalf.

Day in the life Zak is 32 years old, he lives in Cape Town in the city bowl, and he works at an Advertising agency as copywriter.

In the morning, he wakes up at 6.30 am, he prepares a fruit smoozie, while having his Nespresso coffee he reads the news on his Iphone 5S on Media 24 and checks his emails. He packs his bag for the day and drives his Audi A3 to the gym, which is Virgin Active. His gym outfit consists off Adidas sneakers and Nike sportswear.

When he is done with his session, he showers at the gym using his Nivea Hydrating shower gel and his L’Oréal shampoo.

On the way to work he purchases The Migrate, he listens to 5FM or KFM and is exposed to media such as food promotions and billboards.

At lunchtime he eats at Crave and tags his location on Facebook.

On his own home, he stops at Woolworths to purchase some food for supper.

Once, at home he drinks a Peroni to relax after his long day of work, while checking his Facebook, Twitter account, the news and watches an American series.

At night, he meets up with his male and female friends for drinks at a lounge bar. He wears ZARA jeans, Paul Smith shoes and Ralph Lauren polo.

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The Positioning ! Perceptual Map:

! Positioning Statement: “Kiehl’s is an alternative luxury skin care brand whose aim is to consistently satisfy its costumers by offering innovative, trendy, unique, product formulas that focus on the maintenance of a healthier skin.” !

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Ansoffâ&#x20AC;&#x2122;s product-market matrix Product

CURREN T

CURRENT

NEW

MARKET PENETRATION

PRODUCT DEVELOPMENT

Increase brand awareness

Develop a new

within the South African

product within the

market and retain male

existing pre/post

customers, create a new

shaving category. A

men`s only in-store

gel to apply after

experience, develop an

shaving in case of

online engagement through

cuts and skin

social media platforms,

reactions to heal,

develop a loyalty

incorporate

programme, use cross

moisturizing agent

channel- communication

for a double healing

and merchandising to reach

result.

the target market.

MARKET

NEW

MARKET DEVELOPMENT

DIVERSIFICATION

Target a new and younger

Kiehlâ&#x20AC;&#x2122;s could develop

market; 18-25 years old,

a vitamin product

students, they like outdoors

range that will

and social events such as

incorporate different

music festivals in order to

nutrients, plants and

escape from their mundane

vitamins to dilute

life, they are early adopters.

with water.

They interact through social media platforms; they seek for value for money products and innovative products.

NEW !

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Strategic Option: Market penetration, Increase brand awareness within the South African market and retain male customers, create a new men only in-store experience, develop an online engagement through social media platforms, develop a loyalty program, use cross channel- communication and merchandising to reach the target market.

The reason for choosing market penetration a strategic option is in order to respond to the briefâ&#x20AC;&#x2122;s objectives as well as to solve the existing issues regarding low brand awareness within the male South African grooming market. The different advertising chosen tools will enable to increase Kiehlâ&#x20AC;&#x2122;s brand awareness and to recruit and retain male costumers in order to build a long-term relationship.

Communication Objectives The communication objectives will be based on the AIDA model, Awareness, Interest, Desire and Action. ! Generate awareness through interactive IMC campaign, incorporating online engagement points including digital and social media marketing. ! Through various promotional techniques such as online competitions and promotions interest will be generated as an aim to induce trial.

! The use of digital marketing and brand activations will create a word-of-mouth effect, in order to reach the target audience and increase brand awareness.

!

:?!

The Big Idea “Daily problem solver”

The Consumer Promise “Male’s shaving routine irritations will disappear with the cut healer”.

Supporting Evidence: In their shaving routines men tend to cut themselves, which results in different forms of discomfort. Skin inflammation and irritation due to the cut from shaving Delay in schedule by arriving late at work, meeting or interview Lower self-confidence due to the embarrassment of wearing a plaster or a piece of cotton.

The Marketing Objectives ! Kiehl’s needs to develop a new innovative, healing, post shaving product, that appeals to the 25-44, male, South African market, and have it developed by the end of September 2014. ! Kiehl’s needs to initiate an interactive marketing and digital strategy to reach the target audience by November 2014. ! Kiehl’s needs to reach 40 % of its male target market, by mid 2015 with the new product.

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The Marketing Mix Product Below is a prototype of The Gel Healer:

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Bellow is a prototype of The Gel Healer promotional samples:

The Gel Healer is a concentrated gel that is used in the case of post-shaving cuts and skin reactions such as inflammation or skin irritation. The gel eliminates the risk of infection and generates a better and more rapid healing of the tissues. The gel also prevents the formation of scarring.

The Gel Healer contains chitosan, witch hazel, Vitamin E, Aloe Vera; the soothing agents with the chitosan combined will act as a double healing process for a more effective result. ! Chitosanâ&#x20AC;&#x2122;s action mechanism:

!

-

Minimize scarring Provide support for cell growth Encourages natural blood clotting

-

Strengthens new tissue Provides protein for healing Absorbs fluids from inflammation Blocks nerve endings to reduce pain ;#!

! Witch Hazel contains procyanadins, resin and flavonois, which help it, work as a soothing, anti-inflammatory agent; the astringent properties are substances that can dry, tighten and harden tissues ! Vitamin E is an antioxidant that protects and repairs the skin; help the skin to stay healthier, more supple by preventing damage collagen in order to maintain and enhance the skin health and appearance.

! Aloe Vera is useful in treating wounds, minor skin infections and cuts; it also acts as a moisturizer, because of its nutritional qualities and antioxidant, the skin heals quicker.

The packaging will stay in line with Kiehlâ&#x20AC;&#x2122;s existing brand identity visual elements and the descriptive product formulas printed on the packaging.

The packaging and product itself will have a medical feel to reinforce the credibility and maintain Kiehlâ&#x20AC;&#x2122;s heritage, the chosen colors are white and tones of blue such as navy and a pastel turquoise colour.

The sterile gel is presented in a 20mg aluminum tubes.

The Healer Gel would logically fall under the shaving r anger

as

an

extended

product.

Price The price of the product is estimated at R95.00 excluding VAT. The price was decided based on the provided product quantity as well as taking in consideration the local and global markets.

Place The product will be distributed in South Africa at the existing Kiehlâ&#x20AC;&#x2122;s stands at the retail outlets where they are currently situated. !

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Promotion In order to increase brand awareness within the South African market different advertising methods will be employed by respecting Kiehl’s existing marketing strategy. The different tactics and platforms of communication will be in-store experience, an interactive and digital campaign using online competitions on social media platforms, brand activation and a loyalty program.

The IMC STRATEGY Phase 1: The Launch What?

A brand activation, a branded old school caravan will be designed using Kiehl’s visual identity elements. The Kiehl’s caravan will recreate the in-store experience.

Consumers will go through a unique experience by getting shaved by a professional barber to convey Kiehl’s New York based apothecary heritage.

In order to get shaved the individual will have to donate a minimum of R10 and more if willing to: The chosen organisation will be one of Kiehl’s pillar causes. This will enable the individual to become familiar with the ‘Kiehl’s gives’ mission. A GPS/locator will be placed inside the truck/caravan to enable the consumers to ‘geotag’ themselves on Facebook and Twitter A picture of the person will be taken while getting shaved, his email address will be requested in order to send him the picture, this will enable Kiehl’s to create a database.

Where?

In South Africa, nationwide one truck per Metropolitan city such as Cape Town, Johannesburg, Pretoria and Durban. Cara- van will be strategically placed in !

;:!

professional districts and by strategic locations such as trendy bars.

When?

Starting end of October until mid December 2014, focus on November due to the Movember trend, which creates awareness for male illness.

Why? To create brand awareness, to introduce the new Gel Healer product.

How? A teaser using the Kiehl’s caravan visual will be posted on Face- book and Twitter to announce the arrival of the Kiehl’s caravan in the chosen cities. A week after the launch of the campaign a map will be created to show the route of the caravan.

Samples of The Gel Healer will be handed out as a taster to induce to trial.

What?

Brand activation in the malls by familiarising consumers with the Kiehls personalised consultation by offering a mini treatment. A stand will be placed to recreate Kiehl’s in-store experience, brand heritage and identity (incorporate and make use of spa’s furniture).

Where?

At the malls in South Africa where there existing Kiehl’s stands are.

When?

Mid December 2014- January 2015 Why? To induce trial, to increase brand awareness, to generate word of mouth.

!

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Phase 2: The Digital experience What?

Throughout the two brand activations people will be able to tag themselves or post a Twitter about their Kiehl’s experience.

During the caravans campaigns the shaving experience will be recorded by one of the Kiehl’s staff. The best videos will be posted onto Kiehl’s official Facebook page.

A monthly online competition will take place; the concept will be for male consumers to submit a video of how The Gel Healer helped them to avoid their usual issues encounter when cutting themselves while shaving.

The best stories will be rewarded offering a day doing an adventurous experience such a shark diving or extreme climbing.

When?

The social interaction and posting will take place throughout the campaign.

The competition will take place during 3 months, from January to March 2015.

Where?

On Kiehl’s social media platforms such as Facebook and Twitter.

Why? To enable Kiehl’s to gain feedback from consumers experience with The Gel Healer and about the brand itself.

To create word of mouth, to increase the brand visibility and to reach the target audience.

How? Kiehl’s pop-up ads suggested on people’s home page to ‘Like’ the page.

Through Kiehl’s posts and ‘Twitts’ and videos, teasing campaign to announce the competition and the launch of the caravan event !

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Suggested Loyalty ‘Postcard programme’

WHAT? A loyalty program, the concept is a postcard service exclusively for Kiehl’s customers allowing them to send a Kiehl’s branded postcard to any other Kiehl’s retail outlet when purchasing a product. This initiative would allow the person to have a personalized (in store photograph that is printed on the postcard) sent to friends or family and delivered to their nearest Kiehl’s outlet.

WHEN? During festive season (December 2014) and throughout the campaign.

WHERE? At all the Kiehl’s stands and stores around the world.

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HOW? The already set up systems in store will have a webcam attached and a photo printer. The person will have a picture taken to stick to the postcard as a timber.

Kiehl’s employee will locate the closest branch on the system for the recipient will collect its postcard. The customer will handwrite his personal message.

The customer will provide the recipients Facebook name or email to Kiehl’s employee to notify the recipient. The recipient will be notified by either an email or Facebook inbox. The Kiehl’s consumer can tag his friend or family member during the postcard process by localizing himself/herself at the Kiehl’s store.

WHY? The ease and use of technology tools such as Skype and instant messaging enable to connect with our loved ones abroad but feeling of disconnection.

Technology does not provide a tangible memory of the communication experience and because the South African postal service is renowned to be unreliable many of South Africans are reluctant to send post.

To convey Kiehl’s sense of giving back to the community, to increase brand visibility through the social media tagging option.

To convey the in-store experience to prospects, to induce them to trial in order to convert them to consumers.

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