THE COSMETICS MARKET TIERNEY KELMAN 1103597 EFMM:6001 mAJOR PROJECT RESEARCH pART ONE: ILLUSTRATED REPORT 9 DECEMBER 2013 MARY CARSON
2
CONTENTS Executive Summary Introduction Market Sector 1.1 Current Market Analysis 1.2 Market share 2. Macro Marketing Analysis 3. Demographics 3.1 Demographic group changes and developments 3.2 Marketing Typologies 4. Market Trends 4.1 Retailing 4.2 Marketing/Promotional trends Quantitative Research 5.1 Results from Questionnaires 5.2 Synthesis of Findings 6. Evaluation of Gap in the Market 7. Qualitative Research 7.1 Focus Group Results 7.2 Synthesis 8. Competitor Research 9.Rationale for Proposal 10.1 The Product Proposal 10.1 The Product 10.2 The Price 10.3 Branding 10.4 Ansoff Matrix 11. The Consumer 11.1 Typologies 11.2 Research Results 12. Marketing and Promotion Strategy 13. SWOT Analysis Bibliography Appendices 3
EXECUTIVE SUMMARY
4
5
INTRODUCTION
6
7
1. MARKET SECTOR
8
9
1.1 CURRENT MARKET - global
122.2 €
the global luxury goods market size in 2012 was worth
bn
(Mintel, 2013)
the annual growth rate was up
15.9%
(Mintel, 2013)
35.3 €
global luxury cosmetics and fragrance market in 2012 was worth
bn
(Mintel, 2013)
top 10 players in global luxury perfumes and cosmetics market (Mintel,2013) 20.5 20.3
Estee Lauder
18.1 19.7
Shiseido 15.8 15.1
L’Oreal Luxury Division LVMH
10.2 10.0
Chanel
5.0 4.3
Puig
4.0 4.0
Clarins
3.6 3.6
Polo Ralph Lauren
0.8 0.7
Hermes
0.5 0.5
Giorgio Armani
0.4 0.4 21.1 21.3
All Others 0
5
10 2012
10
%
15 2011
20
25
global luxury market by product segment 1.7%
Fashion & Leather
24.1%
Perfumes & Cosmetics 45.3%
Watches & Jewellery Other (Mintel,2013)
28.9%
• 5 of the key players began as fashion housesand only once established developed into cosmetics and fragrance; LVMH, Chanel, Polo Ralph Lauren, Hermes and Giorgio Armani. • Beauty accounts for nearly a 1/3 of all luxury market sales. • There are no british brands in the global luxury perfumes and cosmetics market. • The luxury cosmetics and fragrance market is worth a vast amount at 35.3billion€ (Mintel, 2013) showing that the world heavily invests in luxury beauty.
11
1.1 CURRENT MARKET - uk The UK’s COLOUR COSMETICS market is worth
£1.5 3.5% 8.3% bn
Growth SLOWED down in 2011 by
(Mintel,2013)
(Mintel,2013)
compared to GROWTH in 2010 which was
(Mintel,2013)
Colour cosmetics manufacturers marketshare in uk July 2013 (Mintel,2013)
L’oreal 15%
Others 36%
Boots 15%
Estee Lauder 10% Avon 7% P&G 8%
Coty 9%
“The UK colour cosmetics market is defined as: ● Face make-up: foundation, blushers, illuminators, face-bronzing lotions, creams and powders, loose and pressed powders, mineral powders. Although BB creams can incorporate brands not necessarily solely confined to face make-up, a market estimate is included and treated as part of this market.
12
●
Eye make-up: eye shadows, eyeliners, eyebrow pencils, kohl and mascara, mineral powders.
●
Lip make-up: lipstick, lip glosses, lip pencils, lip plumpers, pots and palettes.
●
Nail make-up: nail varnishes and polishes, hardeners and strengtheners, base and top coat.” (Mintel,2013)
Product share segmentation in uk 2013 • Foundation boasts the heaviest usage for the face make-up segment. (Mintel 2013)
Face 38%
• The UK colour cosmetics market as a whole has shown great growth and is expected to grow 4% each year from 2013 to 2018 (Mintel, 2013). This shows there this opportunity for a brand to develop into this market.
Nails 16%
segmentation of face make up sales (Mintel,2013)
600 500 £million
Lips 16%
Eyes 30%
400 300 200 100 0 Foundation
2012 Face Powder
2013 est. Concealer Blusher/Bronzer
The colour cosmetics market is forecasted to grow year on year to 2018 by (Mintel,2013)
4%
The prestige section of the colour cosmetics market is
35%
(Mintel,2013) In q1 of 2013, products with Anti-aging claims totalled
6%
(Mintel,2013) women believe there are higher standards of beauty 83% oftoday, than there were in the past (Warc, 2013)
13
2. MACRO MARKETING ANALYSIS
14
15
Poltical
• Women in politics are continuously criticised over their appearance • No matter how they are described, if effects their standing in the voting system • Women used their appearance as a way to respond to each other (The Atlantic, 2013)
• Malala respresents women in a bright light by showing her inner beauty through the use of confidence and bravery. • This contributes to the developments of women’s rights and could promote the emotional beauty in women (BBC, 2013) • Venezulan have a strong divide in their polictcal beliefs • There is such an obsession with beuaty that they take place in schools, army barracks and even prisons • Beauty pageants are a key part of average citizens after 2/3 of tv viewers watched the search for “Miss Venezuela” (Yahoo, 2013)
16
Economical
• Women are spending on smaller indulgences rather than big products • People are buying these little luxuries whether they can afford them or not • “Lipstick effect” from the slowing economy
(Business TIme, 2013)
• Borrowing has pushed consumption rather than the growth of income • An ageing population and labour force will slow the economy
(BBC, 2013) • The chancellor George Osbourne announced the pension age will rise to 68 • People will now have to work longer saves the • This government £1.3 billion per year
(BBC, 2013)
17
Social
• Alice writes about the lives of women and girls • Human spirit is a theme in her work • The win of the nobel prize award is another progression for the development of women’s rights and independence (BBC, 2013)
• Prada celebrated the launch of the reopening of its’s Paris store • Held 24 hour pop-up museum showcasing classic sculptures with reference to contemporary divas
(Vogue, 2013)
• Burberry is in a dispute over their trademark check with Chinese brand Polo Santa Roberta • The battle has continued for 9 years • It has caused huge damage to Roberta’s production and sales (China Realtime, 2013)
18
Technological
• African men are almost twice as likely to have access to the internet than women. • Technology is becoming increasingly used within beauty therefore this will help brands reach out to global consumers
(LSN Global, 2013)
• American vogue created an editorial for readers to match outfits to the new iPhone 5C • Links the technology world and fashion which are becoming further integrated.
(LSN Global, 2013)
• US based Environmental Working Group launched new app called Skin Deep • Allows customers to scan barcodes of products and understand the ingredients • Women are exposed to 168 chemicals in products every day, in comparison to men who are exposed to 85. (CBC, 2013)
19
Environmental
• Shanghai has been covered in heavy smog from pollution. • Vehicles were withdrawn from the roads • Sales of protective masks and purifiers rised
(The Gaurdian, 2013)
• Farmers are being assaulted by those who hare opposed to the badger cull • Campaign groups want to be seen as nonviolent
(BBC, 2013)
• Liberal Democrat Paddy Ashdown warns climate change needs to be addressed • He warned children at highest risk of disease and trauma linking it to the devastation of typhoon Haiyan have • Governments agreed to put targets in to lower emissions (The Gaurdian, 2013)
20
LEgal
• China is updating its laws on animal testing • China is one of the last countries that makes animal testing essential • EU has already banned animals testing
(Independent, 2013)
• Lush is suing megabrand Amazon after the company re-driect consumers to alternative product rather than Lush’s when searching the brand. • Lush is “accusing the US giant of trademark infringement” (Telegraph, 2013)
• Payday loans will be capped in new law • Will be more than a year before the cap is introduced reason is • Key irresponsible lending • Christmas is a time when payday loans up their marketing (Independent, 2013)
21
PESTEL ANALYSIS
The macro enivronment show four key drivers which directly relate to the luxury cosmetics market: • Women will always be united by beauty • Brands are continuously developing their relationship with technology • Consumers experience nostalgia for British heritage brands • Luxury is accessible to more people
22
23
3. DEMOGRAPHICS
24
25
3.1 demographic group changes and DEVELOPMENTS Employment 13.8million Women will be in work by 2018.
(Mintel, 2013)
12.6%
decrease in the number of females who will be unemployed by 2018. (Mintel, 2013)
25%. of the world ‘s populations will be over 50 by 2020 (Euromonitor, 2011)
Generation Y 45%
of consumers have requested an email from a luxury brand.
25%
(LSN Global, 2013)
have followed brands on Twitter or ‘liked’ a brand on Facebook.
under 25s
(LSN Global, 2013)
most experimental with colour cosmetics to align with their lifestyle and spend the most on all make-up segments . (Mintel, 2013)
26
4 in 10 high earners wear make-up to look more professional (Mintel, 2013)
79% of women used face and eye make-up in the last 12 months (Mintel, 2013)
Only 17% of Londoners agree that cheaper make-up products are just as good as more expensive ones (Mintel, 2013)
88% of those living households with an income in higher than £50,000 use face products (Mintel, 2013)
• With employment level rising, this suggests that there will be an increase in women’s disposable income. • The increase in age means women will be in work longer therefore will be wearing make-up to look more professional in the workplace (Mintel 2013). • Generation Y are key consumers with the sector spending the most on make up. • With only a small percentage of Londoners believing cheaper products are as good as more expensive ones (Mintel, 2013) it suggests they are still willing to buy prestige beauty.
3.2 TYPOLOGIES
new luxury millenials • New Luxury Millenials are defining a new wave of luxury spending. With most being from Generation Y they are much more likely to have purchsed a luxury item. 83% in fact have purchased from the segment in the past. (LSN Global, 2013) • For NLMs, online means mobile, they like a modern and minimal with a traditionally luxurious look. They seek heritage, luxury and a level of decorum when socialising and because they spend little time at home and tend to eat out, NLMs only buy fresh, organic produce when they shop. (LSN Global, 2013) 28
29
Baby boomers • Baby Boomers have redefined every life stage show no signs of slowing down in their later years. They feel “ageless” and want to be engaged and feel useful. (WGSN, 2013) • With this age group growing due to the extension of lifespans, the boomers are changing the dynamics of society by working longer, having more generations of their family live under their roof and even branching out into new careers. (WGSN, 2013)
30
31
emerging luxury millenials • Well-travelled, online and obsessed with good service, the New Luxury Millennials (NLMs) have sophisticated tastes and an appetite for established luxury brands. (LSN Global, 2013) • Purchasing from trusted international brands, NLMs like to flaunt their status but also to experience the service and quality associated with the luxury sector. (LSN Global, 2013) • New Luxury Millennials tend to be culture vultures, choosing vibrant destinations for holidays and taking long country walks. (LSN Global, 2013) 32
33
4. MARKET TRENDS
34
35
4.1 RETAILING trends pop up stores “The pop-up has risen to success filling badly designed, over-priced, or wrongly marketed spaces, bringing life and regeneration to an otherwise soulless retail strip – at least on a temporary basis - whilst satisfying ever-growing consumer appetite for new and exciting brand experiences.” (Jackson, 2013)
Dior’s Pop Up beauty store, Covent garden Opened in November 2013
36
chanel’s Pop Up beauty store, Covent garden Opened in July 2012
37
Technology in Cosmetics The way cosmetics are sold has become increasingly interactive with the integration of iPads and devices designed to find the perfect products for each customers individual needs.
“Cosmetic names have been extending their reach by embracing technology.” (LSN Global, 2013) The Bobbi Brown, Selfridges, London. • Consumers can recreate looks from tutorials using iPads, Beats headphone and illuminating mirrors.
• Boots, No7. ‘Match Made’ service, September 2012. • Device takes an image of the skin, matches the pigments to one of the 17 colours on offer.
• Clinique experience bar, Selfridges. • 27 iPads available to have a private skincare consultation, enabling consumers to receive a bespoke “prescription” for their skins needs.
38
The move to online Cosmetics brands are developing the way they sell their goods to consumers. More companies are taking the leap to go multi-channel with the extension of an e-commerce site “There is greater potential for e-commerce to develop as a significant channel for lower-value items . . . P articularly cosmetics and perfumes.”
(Mintel, 2013) • Chanel, e-commerce site for cosmetics available in the US • Offers videos and tutorials to recreate looks.
• Major online distributor, Amazon extended its portfolio • Specialised segment of its website dedicated to beauty. • Proves that a megabrand has recognised the potential in this retail channel. • Net-a-Porter, the online luxury fashion destination introduced beauty to its offerings in March 2013. • Managing director of the brand, Alidson Loehinis claimed “The move is a natural evolution of our business.” (Vogue 2013)
39
4.2 MARKETING/ PROMOTIONAL trends
40
Famous faces “Celebrity endorsements can help beauty brands connect with consumers by matching the celebrity’s attributes and style to those of the brand and its products. Sincerity and authenticity are important in a celebrity endorsement of a beauty brand, and on that basis, the relationship can be built for greater equity, collaboration and partnership. Social media is an excellent outlet for the collaboration between celebrities and beauty brands.” (GCI Magazine, 2012)
“A celebrity influencer can do a lot for awareness and reach for a brand but a true, passionate advocate might have an even greater role in the purchasing decision, even if they only have a small audience” (Financial Post, 2013)
41
Rise of the British brand
“European brand’s are amongst the most desirable in the world”
(Mintel, 2013)
• British brands are currently having great success due to their heritage • Even though Marks and Spencer has had a turbulent few years in the past, the AW13 campaign aimed to revive the brand by featuring ten key British women in the public eye at the moment. • Burberry is another British brand which has developed its place in the market through innovative marketing campaigns and British icons such as Kate Moss, Emma Watson and Sienna Miller. • Barbour “has enjoyed booming success, thanks to the popularity of a new range of designs targeted at a younger generation” (Telegraph, 2012) • Somerset born Mulberry as also recently had a great achievement with 32% annual sales growth in the last three years (Mulberry Group plc, 2013)
‘In these uncertain economic times, people are pulling back from ‘global’, Instead, they are thinking and buying local because it feels simpler, purer, more environmentally sound.’ (Hales, 2011)
42
43
5. QUANTITATIVE RESEARCH
44
45
5.1 results FROM questionnaires Question 1. What age category are you? Age
Under 16 16-15 26-35 36-45 46-55 Over 55 0
3 Age
Under 16
6 9 Response Count
12
15
16-15 Everyday necessity 26-35 36-45 Occasional treat 46-55 Over 55Only as2. Question a gift 0
3
6
9
How do you view premium cosmetics? Response Count
12
15
Waste of money Everyday necessity
0
5
10
15
20
25
30
Response Count Occasional treat
Only as a gift
Waste of money
0
5
10
15 Response Count
46
20
25
30
Question 3.
Question 4.
How much do you spend on premium cosmetics a month?
Do you feel premium cosmetics are priced correctly?
More
-10
th an £ 0
£81
100
£51-80
Yes 30%
60 Sometimes 54%
Under £30
50
£30-50
No 16%
40 30
Question 5. What are the top 3 brands 20purchase Brand aspire to you aspire to purchase from? 25
10
5
Brand Image
Cost
15
12
Respondent Count
15
Self Image
Quality
0
9
6
3
0
Dior Mulberry Chanel Prada Givenchy Saint Laurent Louis Vuitton Burberry Alexander McQueen Miu Miu Gucci Marc Jacobs Victoria Beckham Roksanda Ilincic Stella McCartney Dolce & Gabbana Armani
Response Count
20
Promotional Offers
10
0
A
B
C1
Socio Econ
Brand
47
5.2 sYTHnthesis
Q1. The graph shows an even spread of age ranges suggesting that no matter how old a consumer is, they are interested and have an opinion in cosmetics Q2. This question suggests that premium cosmetics are important to women and aren’t seen as not worth buying. With the most popular response being “an occasional treat,” further research will endeavour to specify how frequent this is. Q3. From this question it is clear that consumers spend less than £30 a month on premium cosmetics. This could be due to the length of time premium cosmetics last for that they do not need to be re-purchased that often or that premium products are priced too expensive. A focus group would determine the thoughts on pricing as well as the frequency of purchasing. Q4. Following on from question 3, the response from asking if consumers believe premium products are priced correctly is 54% feeling that they are sometimes. This result could suggest that consumers may be willing to spend different amounts for various products therefore would imply that a broad pricing architecture would achieve consumers wants and expectations. Q.5 Question 5 is key in the development of the brand proposal. Clearly, most aspirational brand is Chanel. Following in second place is Mulberry. Suggesting that, due to Chanel already having a cosmetics brand, Mulberry could be a likely contender to expand into this market.
48
49
6. Evaluation of gap in the market
50
51
Evaluation of gap in the market
• After analysing the global luxury market, research showed that 28.9% was owned by cosmetics and fragrance (Mintel, 2013). 5 of the top key players in this segment were beauty brands that have evolved from fashion houses. • The UK has a strong position in the beauty sector, with colour cosmetics estimated at £1.5billion. Mintel’s forecasting predicts the segment will increase by 4% every year to 2018 (Mintel, 2013). Within the UK market 38% of colour cosmetics is demanded by face products (Mintel, 2013). • These figures all suggest that the cosmetics market shows opportunity to expand into due to is strong financial position as well as its prediction. • Demographically women’s views are developing; 83% now feel standards are higher than previous years (Warc, 2013) and 40% say they wear make up to look more professional (Mintel, 2013). In addition, with the age of the population increasing and rates of employment of women on the rise, women are progressively becoming conscious of keeping up their appearance. • Retailing trends suggest developing into an online market has great potential especially for cosmetics and perfumes due to the limited availability of e-commerce sites that enable consumers to purchase beauty goods (Mintel, 2013). Cosmetic brands have also been “extending their reach by embracing technology” suggesting the market need to keep innovative in how they retail their products to consumers (LSN Global, 2013). • Endorsement from famous faces is still seen as an enhancement for brand which “can help beauty brands connect with consumers by matching the celebrity’s attributes and style to those of the brand and its products (GCI magazine, 2012). • Furthermore, British brands are having a time of success due to the drive of localism after the instability of the global economy (Hales, 2011). Burberry, Mulberry, Marks and Spencer and Barbour have all seen a progress in the last few years. • Primary research has indicated that women do believe in the quality of premium cosmetics with over 40% women questioned purchasing at least once every 6 months or more frequently ( see Appendix). The results also implied that Mulberry would be a brand to consider to develop as it was voted the 2nd most aspirational brand (see section 5, question 2). 52
53
7. Qualitative research
54
55
7.1 focus group results Sarah O’connor 19 Retail manager Works in Essex Lives in Essex Cherrie Butcher 22 Beauty Consultant Works in London Lives in Kent
Q1:
You have decided to clear your make up bag and start a fresh, where do you go to purchase new products?
Cherrie:
Sarah:
John Lewis. Firstly, I want foundation, need to hide the blemishes.
I’ll go to House of Fraser.
I like flawless but natural. I’d be willing to spend between £35 to £45 and expect that to last 6 or 7 months.
Foundation is a key product because it give you a good base, coverage, but I don’t like looking too matte, I like it to be a little bit dewy.
It’s Quality over quantity.
Q2:
What is the next key thing you look for?
Sarah:
Cherrie:
I use a powder[for brows]I like it to look a bit natural
Eyes and brows.
I go for dark browns, blacks or nudes I’d rather go for a lighter eye, a brown eye then a plum lip
Sarah:
I use an eyebrow pencil I like a brush on the end, as long as it has a comb I don’t like garish colours; I am the queen of nude. I’d choose lips over eyes. I like liquid liner in a pot.
“When I find a Foundation, that’s it; I stick to it.” 56
Q3:
What do you prefer when it comes to lipsticks and glosses?
Cherrie:
Sarah:
Matte lipstick. All day, every day
You have got to have a lip liner; I prefer a darker coloured lipstick or a complete nude.
I want one [lip liner] that completely matches my lipstick. I love the ombre lip, where it is a dark lip liner but that’s more for a night out, I wouldn’t do that for daytime.
Lip liner has to be one that goes with that lipstick, one that completely matches. I’m more adventurous with my lipsticks. When I find a foundation, that’s it. I stick to it
I like a nude, a proper nude. [I’d expect to pay] £20-£25 for a lipstick, £18/£19 for a lip liner
I’m more adventurous with my lipsticks.
Cherrie: “A lipstick is like an accessory”
Q4: Is having the right tools important? Sarah: I don’t want a brush that leaves hair on my face See my foundation brush is an expert face brush from real techniques. It’s amazing, I love it, it’s a short stumpy brush and hair doesn’t come out of it once and I’ve had it since last Christmas
Cherrie: I don’t think there is any point in having good foundation, good bronzer if you are going to apply it and its going to look naff because of the brush you are using You have got to invest in a good make up brush above everything
Q5: How important are brands? Sarah:
Cherrie:
I’ll research stuff by going onto blogs, YouTube and I see what the bloggers and the make–up artists are using.
I buy into the brand because it’s quality without having to research it
I care about what I’m going to get for it [money].
Someone that I trust, then I won’t think twice about
57
7.2 synthesis
From the focus group conducted, there are key points which stand out: • Foundation is the most important product as it is the item that was first on the list. Foundation also has to give a “flawless but natural” look as well as not “looking too matte.” • The eye area is another significant section, with brows a main focus. Again the main focus is for a natural look as well as packaging and tools. As one partaker said “as long as it has a comb” it could be suggested that combining tool with the product is a strong selling point. • The next subject area is lips, with lipstick being the winner over lip gloss. Lip liner also a must with the colour being one “that completely matches” the lip stick. • With regards to purchasing, consumers rarely alter their foundation; “When I find a foundation, that’s it. I stick to it.” However “lipstick is like an accessory” and is bought on a more frequent basis. • Tools must be of high quality with the belief that there is no point of having good products “if you are going to apply it and it’s going to look naff because of the brush you are using.” • The importance of brands had divided opinions. One bought into a “brand because it is quality without having to research it....Someone that I trust, then I won’t think twice about.” Whereas the other opinion was more towards researching what top bloggers are using and whether the consumer will get her money’s worth. 58
59
8. Competitor research
60
61
price style matrix
62
Lipstick
Nail Polish
competitor Key product pricing Burberry Chanel YSL Dior Burberry Chanel YSL Dior
Foundation
Mascara
Burberry Chanel YSL Dior Burberry Chanel YSL Dior 0
10
30
50 Price £
70
Competitor Key Product Pricing • Each brand has a coherent pricing architechture • Dior has the highest exit price for foundation, as well as the highest exit price of all products with a make up extra priced at £109 • Lowest priced items are lip liners and nail polish • Highest priced items are foundation and brushes
Price Style Matrix • Key competitors for Mulberry in the colour cosmetics market are circled in red • Mulberry would be placed towards the higher priced brands in the colour cosmetics section
63
SWOT analysis
EVAUALTIVE SUMMARY
64
65
9. Rationale for proposal
66
67
Rationale for proposal
Mulberry was established in 1971, in Somerset by Roger Saul after he receiving £500 for his birthday. He named the brand after the Mulberry tree he walked past on his walk to school. The brand started with leather accessories and has developed to be loaded with subtle English references, yet still totally modern. Mulberry has grown into a respected and successful global brand with an international presence. It remains true to its founding principles: the flagship factory base in Somerset, the dedication to quality that can be seen in every Mulberry item, the combination of beauty and practicality, and the unwavering passion for leather craft. (Mulberry, 2013)
From researching the UK colour cosmetics market, retailing trends in addition to primary research from target consumers it has become apparent that the market is missing a British branded premium cosmetics line. Mintel outlined the premium cosmetics market in the UK is worth 35% of the entire sector with growth expected to rise 4% each year to 2018. (Mintel, 2013) With British brands having major success in these economic times, more people are pulling away from ‘Global’ and going local (Hales, 2011) as well as European brands still being amongst the most desirable in the world (Mintel 2013). Primary research indicates Mulberry as the second most aspirational brand to purchase from (See section 5, question 2) as well as consumers wanting to buy into a brand because of its renowned quality (see section 7, question 5). Therefore the luxury fashion and accessories brand Mulberry is the appropriate brand to take forward and extend their product portfolio into the beauty sector due to the British heritage and established quality credentials. By creating a new entry the level product line this will allow shoppers to make a purchase and help curate long term loyalty to a particular brand” (Mintel, 2013). 68
69
10. Product proposal
70
71
10.1 The product Colour cosmetics range to include: • Foundation • Powder • Blusher • Bronzer • Mascara • Eye shadow • Eye liner • Eye brow • Lipstick • Lip liner • Lip gloss • Extras: Brushes and tools
Eye shadow
S K I N I LLU M IN ATIN G F O U N DATIO N
Foundation 72
Powder
Mascara
Mulberry spring summer 2014
Colour palette
• Collection colour palette to be based upon natural shades with highlights from the brand’s current ready-to-wear and handbag collections.
Lipstick
• Seasonal collections to be released in conjunction with other brand activities.
10.2 Price Structure
Mulberry Cosmetics Pricing Structure Extras
• Lowest entry price £14
Nail Polish
• Highest exit price £55
Lipliner Lipgloss
Product
Lipstick Eyeliner Eyeshadow Mascara Bronzer Powder Blusher Concealer Foundation 0
10
30
50
70
90
Price £
• Research has suggested consumers are willing to pay for quality goods • After looking at competing cosmetics brands, Mulberry will be priced in line to enable market penetration • Pricing will also be varied for each cosmetic product and the range with in that
74
110
ht pi
75
10.3 Branding packaging • Mulberry’s current branding is based upon a grey tone with the iconic mulberry tree logos embossed onto packaging in gold. • To keep branding consistent, the proposal will follow through with this for packaging of products, gift boxes, bags and promotional leaflets.
76
COSMETICS ‘The cool of the city and the craft of the countryside’
logo • The current logo will be used for the cosmetic range with the addition of ‘cosmetics’ underneath to differentiate the new product line • The Mulberry tree will be heavily used in product packaging to make them easily identifiable 77
10.4 Ansoff Matrix
Market Penetration
Product development
Existing Product
New Product
Existing Market
Existing Market
Market development
Diversification
Existing Product
New Product
New Market
New Market
• Mulberry cosmetics will mainly come under the product development sector as this proposal “relates to developing new product for an existing market.” (Posner, 2011:100). This method allows growth by capitalising on the Mulberry brand name (Posner, 2011:100). • The new range could also be considered as diversification as the line is “developing new product for a completely new market” (Posner, 2011:100) in terms of what the Mulberry portfolio already offers.
78
79
11. The consumer
80
81
rosie • Rosie is 18. Studying her A-levels at college she has aspiration to become a successful businesswoman • Without a large income she treats herself with more affordable luxuries such as premium cosmetics and popular high street stores • She enjoys nights out with friends as much as she enjoys a pamper evening in with her cat by her side 82
83
cherrie • Cherrie is 26. As a business manager she likes to keep up her appearance to look professional in the office. • Working full time and soley renting a 2 bed flat she is able to afford to treat herself to high quality brands with a heritage background. • Independence is an important aspect of her life yet she loves to socialise with her friends in her leisure time 84
85
Jenny • Jenny is 46 and a married mother of 3. She lives with her family and often throws friends dinner parties. • Holidaying in hotter climates and keeping up her appearance are two indulgences in life. • Cosmetics are always in her handbag so she can always touch up. • Quality brands are important as this is more important than quantity. 86
87
Julie • Julie is 61. Living at home with her husband she has had a comfortable life and had the financial ability to treat herself to the finer things in life • Coffee mornings and walks in the local park fill her time as well as keeping up to date with the worlds news and latest books • Health and a youthful appearance are important to her inner confidence therefore she only purchases from recognised brands 88
89
12. Marketing & promotional strategy
90
91
Marketing Key marketing activities: • Famous face to represent the brand in advertising campaigns: From research it is also proven that “the advertising that women gravitate towards tends to have a story and spokesperson that women genuinely connect with”(Warc, 2013). • Felicity Jones would be an appropriate ambassador as she has previously supported the brand by attending fashion shows as well as being an actress from British heritage. • Social Media: Youtube tutorials, Facebook, Instagram, Twitter and Pinterest are all media to promote the Mulberry cosmetics line. • Target press: All glossy monthly and weekly magazines, newspapers and supplements, bloggers and a selected list of celebrities. • Extra promotion: breakfasts and dinners with key members of press, gifting to celebrities, beauty editors and directors, launch party for pop-up store
92
93
13. Swot analysis
94
95
strengths • Mulberry cosmetics would be one of the few British branded premium beauty ranges in the UK colour cosmetics market • Mulberry is well established and renowned for it’s quality products which would be resonated in the extension line • The brand has a distinctive heritage with its story of origin reflected by its Mulberry tree logo • Strong inspirational motto: ‘Cool of the city and craft of the countryside’ • Mulberry has a loyal customer base across a broad demographic spectrum
weaknesses • Cosmetics is a completely new market for Mulberry, therefore the brand may not have enough knowledge of the the sector • With Mulberry being a strong supporter of keeping production of goods in the UK, it could be seen to be unloyal if the manufacture of cosmetics was to be overseas • Due to the colour cosmetics market being saturated with well established premium brands it could be difficult for Mulberry to penetrate the market • With the expense of developing such a line and marketing it, Mulberry may lose focus in their overall business targets7 • Mulberry may find that key members of the fashion business have to extend themselves to overseeing the cosmetics project resulting in overstretched employees
96
Opportunities • With many competitors having cosmetics, skincare and fragrance, if the beauty line is launched successfully these could be the next areas for Mulberry to development into • Collaborations with famous faces to name or promote the new products within the range (similarly to how Mulberry name accessories after famous faces) • Expand the cosmetics line to overseas markets • Support British trade and economy by producing the products in the UK • By taking advantages of the progress in science and technogy, products could be created with the latest developments
threats • The cosmetics market rate of growth could slow down • Competitor brands may overtake due to Mulberry entering the market later • Larger holding companies could buyout Mulberry’s beauty segment due to their extensive knowledge and success in the industry • Consumers loyalty may stay with certain brands and favour certain products making them uninterested in trying the new range • Laws on ingredients and testing of products could alter production
97
14. Bibliography
98
99
100
101
102
103
104
105