COURSE PROJECT Malachi Alston, Lindsey Creel, Arden Li, and Wenyuan Su FASH-763-OL1 Summer 2020 Professor Cory Quach
BRAND ANALYSIS
@loewe Instagram
Loewe: Lipstick Brand Extension Loewe introduces a small lipstick collection, building upon its existing brand extension into perfumes and its recent home scents collection The lipstick line will complement the perfume line but will also help pilot whether Loewe could eventually create an entire beauty line Product visuals will align to the current packaging of Loewe perfumes for cohesiveness and to maintain the brand's image A marketing campaign will be developed, drawing upon Loewe’s existing perfume campaigns
The Product The Loewe brand extension packaging is inspired by recent campaigns from Loewe perfume, Loewe home scents, and Loewe Paula’s Ibiza perfume. When researching potential packaging for Loewe, a few key principles stood out. First, the product had to feel special. Loewe typically achieves this in carefully curating vintage and modern aesthetics. The products feel new while evoking a sense of nostalgia. The product also needs to feel sophisticated while remaining playful. There is an air of refined simplicity to Loewe’s logo and current extensions. By pulling elements from Loewe’s visual closet, Loewe lipstick looks at home in the brand story while still maintaining its own identity. The packaging is feminine, fresh, playful, and timeless, just like the women who will wear it. Based upon market research, we decided upon a mauve shade for the initial collection (see slide 38).
Loewe Ibiza Perfume
The Product: Visual Inspiration Loewe Home Scents
Loewe Perfume
Loewe: Brand Snapshot Established in 1846 in Madrid, Spain, making the brand eight years older than Louis Vuitton Founded by the German leathermaker Enrique Loewe Roessberg The brand's name is German and pronounced "lo-weh-vay" Loewe began as a leathermaking collective, eventually specializing in leather purses and handbags Launched ready-to-wear (RTW) collections in 1965 Source: LVMH
@loewe Instagram
Loewe: Brand Snapshot Cont.
Loewe's logo
Acquired by LVMH in 1996 Stuart Vevers was appointed creative director in 2007 and brought Loewe into the luxury RTW conversation with flowing, feminine garments Still, the brand wasn't as well-known as more established luxury maisons in Italy and Paris and had a reputation as a somewhat stodgy brand Jonathan Anderson, already known for his eponymous brand 'JW Anderson', took over as creative director in 2013, injecting playfulness, youthfulness, and spontaneity into the brand Under Anderson, Loewe's brand image is refined but contemporary, and the brand is collecting more fans with each collection, including celebrities and young followers Sources: LVMH; Greenwood
Loewe iPhone cases
SWOT Analysis: Strengths @loewe_perfumes Instagram campaign
* By revenue, $59 billion in 2019. Source: Dominic-Madori
LVMH purchased Loewe over 20 years ago, so the brand is well integrated into the largest luxury conglomerate * LVMH owns 14 beauty brands Includes several brands from luxury fashion maisons (e.g., Parfums Christian Dior and Givenchy Parfumes) Includes several young, dynamic brands (e.g., Fenty Beauty by Rihanna and Kenzo Parfms) (LVMH) Loewe had annual revenue of $279 million in 2018, up over $80 million from the prior year (D&B Hoovers) Perfumes Loewe launched in 1972 and has taken 10 different scents to market, so the brand has experience in the beauty space (LVMH) Loewe has existing distribution channels for its perfume, including direct-to-consumer, which it can also utilize for the lipstick extension The brand can market the lipstick to its existing fashion and perfume customers Loewe has an Instagram following of 2.2 million through which it can promote the new lipstick While Loewe's perfume Instagram account only has 22.6k followers, the brand has an established marketing strategy for its perfumes that it can leverage for the lipstick extension
SWOT Analysis: Weaknesses
Loewe only has experience managing a line of perfumes LVMH may not allow Loewe's creative team free reign to merchandise and market the lipstick, which may result in a lack of cohesiveness with the brand's existing fashion and perfume products and marketing Loewe may have little or no existing employees with experience in lipstick and beauty products, so merchandising and marketing, even if kept in-house, may show signs of that inexperience Loewe is not known as a player in the broader beauty space, so creating awareness of the lipstick extension - past existing fashion customers - may prove difficult and expensive, resulting in poor return on investment (ROI) and a low conversion ratio Perfumes sold by Loewe are carried across a wide and dizzying array of retailers and platforms, including Walmart and Amazon, potentially diminishing the brand's luxury image The lipstick brand extension may confuse and alienate the brand's core fashion consumer
SWOT Analysis: Opportunities
Hermès lipstick
Prior to the pandemic, the luxury beauty industry was expected to grow by more than 5% annually and exceed $81 billion by 2026 (Thorat et al.) Prior to the pandemic, luxury lipstick pricing was rising, with Hermès launching a $67 dollar lipstick to much fanfare (Strugatz) In the current recession, consumers may be willing to indulge in affordable luxury, which gives way to the term "lipstick effect", describing the phenomenon that during an economic downturn, consumers may feel comfortable splurging on purchases of within-reach luxury items like lipstick (Gerstell et al.) Launching the lipstick extension may give the brand valuable insights into whether a broader extension in beauty is advisable
SWOT Analysis: Threats
Glossier Generation G lipstick
The beauty space, although growing, is becoming crowded, and some experts predict a bubble may be forming (Gerstell et al.) The pandemic has depressed Q1 sales in the beauty segment and there have been widespread store closures (Gerstell et al.) There is a challenging and complex media advertising landscape for beauty brands, with a trend toward social media advertising hampered by increasing costs, leading to new marketing channels such as TV streaming platforms (Sandler) Given the current social justice movement around Black Lives Matter, a merchandising and marketing challenge may be presented as Loewe will need a broad range of lipstick shades and a marketing campaign that is racially inclusive (Schiffer) The beauty industry is becoming increasingly fragmented and may be difficult for a new entrant to understand the nuances of various customer profiles (Deloitte)
Competition YSL Beauty Glossier Lancôme Lancôme Lipstick
YSL Beauty Logo
Competition: YSL Beauty
Owned by beauty powerhouse L’Oréal Group, was founded in 2000 Like Loewe's lipstick extension, YSL Beauty is an extension of Yves Saint Laurent, a French luxury fashion maison founded in 1961 (Kering) From 2014-2019, the brand had double-digit sales growth (Sandler) The brand has developed a strong social media presence, with 7.7 million Instagram followers (just shy of the 8 million Instagram followers for the YSL fashion account) YSL Beauty has deep experience in pop-ups, a strategy it has invested in since 2016 and has used to introduce new products (Sandler) The brand is increasing its association with YSL, a brand which reported revenue of over $2.2 billion in 2019 (Sandler) YSL Beauty recently broke the Tmall record for most sales by a beauty brand on its first day of operations, in large part due to the cult-like status of its lipstick (Chitrakorn)
YSL Beauty Pop-up
Competition: Glossier
Glossier Lip Gloss
Digitally native beauty brand founded in 2010 and valued at $1.2 billion (Berger) The brand has strong relationships with celebrity influencers, including Beyoncé and Michelle Obama (Wolf and Bhasin; Coates) It is a master of hype, specializing in frequent product drops - it releases a new product every six to eight weeks - to keep its customers in a frenzy (Wolf and Bhasin) The brand has a strong Instagram presence with 2.8 million followers Glossier is an expert in user-generated-content, drawing Instagram followers into the conversation and creating repeat customers (Baird) The brand even named its wildly popular lipstick after its customers, whom it calls "Generation G" (Turk) Glossier is particularly strong with one segment: Millennials (Meltzer) As a direct-to-consumer brand, Glossier isn't as dependent upon its wholesale partners (Strugatz) Opened its own retail stores, giving it another traditional distribution (and marketing) channel, in addition to Nordstrom (Tyler)
Competition: Lancôme
Originally a French fragrance house, Lancôme was founded in 1935 (Chesters) Just two years later, the brand expanded into cosmetics with a pinky-red lipstick scented with roses that remained a best-seller for decades (Chesters) The brand was acquired in 1964 by the beauty conglomerate L’Oréal Group (Chesters) Annual revenue for the brand exceeds $3 billion (L'Oreal) The brand has a strong social media presence, with 4.9 million Instagram followers Lancôme has a mature marketing presence and has utilized countless celebrities, recently working with Emma Watson and Zendaya The brand has developed selling channels globally, including directto-consumer and numerous wholesale relationships
Lancôme Lipstick
Competition: Perceptual Map
Higher Priced Lipstick
More Mature
Less Mature
Lower Priced Lipstick
* Loewe can be considered a more mature beauty brand as its perfume line launched in 1972
Among the competitors analyzed, there is little or no correlation between price of lipstick and maturity of the beauty brand While YSL Beauty, like Loewe's lipstick (and perfume), is a brand extension from a luxury fashion maison, Loewe's lipstick can be set to a higher price point, not because Loewe has greater brand equity, but because lipstick prices are on the upswing and YSL Beauty may be underpricing its lipstick (Strugatz) Loewe's lipstick can be priced higher than Lancôme because Loewe will not have a mass selling strategy A slightly elevated price will guard against dilution of Loewe's broader fashion brand image from the lipstick extension Loewe's lipstick prices will be complementary with its perfume prices and will retail between $45 to $55
Target Market The brand is interested in expanding its brand awareness in the U.S. above short-term financial gain (Foley). That it is owned by luxury conglomerate LVMH helps bolster this strategy. Loewe’s interest in appealing to all stops at its price tag, with t-shirts retailing at $450 (Loewe.com). The brand will struggle in widely expanding its reach without offering an invitation to new customers. By introducing lipsticks in the U.S., Loewe can reach increase brand loyalty with existing customers and potentially draw in new ones with promotions around the extension
“[LOEWE is] not thinking in terms of target customers. We try to be quite open, quite approachable. Obviously, we try to make luxury that makes people interested or that makes them feel curious and excited.” - Pascale Lepoivre, CEO (Socha)
Brand Persona: The Intern Name: Kole Hughes Age, Location: 26, Houston TX Occupation: First-Year Associate at Vinson & Elkins LLP Income: $160,000 Family Size: Single Education: Bachelors in Economics, Yale; Law School, University of Texas Interests: Works comes before all for Kole. On the off-chance she has time to herself, she enjoys boating in Galveston or drinking with friends at the high-end hot spots of Houston. She is interested above all in establishing herself in her career. Kole believes in dressing the part and seeks out luxury brands with history and the purpose she wants to embody. Buying motivation: Kole is a first-year associate at a high-volume law firm in Houston. She is expected to produce outstanding work and brings this need for perfection into her purchasing habits. Kole has only recently become a Loewe customer, opting for the Heel handbag as opposed to apparel. She is looking for compact items to bring luxury with her wherever she goes.
Loewe Heel Bag
Name: Amy Martin Age, Location: 36, Brooklyn, NY Occupation: Gallery owner Income: $250,000 Family Size: Married, one child Education: M.F.A. in Arts and Cultural Management, Pratt Interests: Amy explores the outer boroughs for undiscovered treasure. She is the first to know about the best restaurants, secret shows, and artists on the rise. She makes people-watching a hobby. Amy knows when she finds someone or something worth investing in. Buying motivation: Amy aims to stay ahead of trends. She diligently researches the companies she purchases from to ensure she is getting a high-quality product regardless of price point. Amy believes in buying into a brand the same way that she buys into her artists. Amy seeks out products with a story she can insert herself in and expects the packaging to be as good as the product. With her love of design, Amy follows Loewe campaigns and appreciates the vintage and imaginative imagery they depict but has yet to become a customer. She is all about history, craft, and the cool factor - making her the perfect Loewe’s lipstick customer.
Brand Persona: The Gallerist
Brand Persona: The Collector Name: Margo Thomas Age, Location: 45, SoHo NYC Occupation: Retired socialite, volunteer at MoMA Income: Family wealth - infinite Family Size: Married, two children Education: Bachelors in Classics, NYU Interests: Margo enjoys a low-key lavish life; exploring the Botanical Gardens, vacationing in the Hamptons, and early cocktails with friends at SoHo House. Buying motivation: Margo is a discriminating yet frequent luxury shopper, and is particularly receptive to fine materials and the minor details that make pieces special. She appreciates craftsmanship and considers every purchase an investment. She has seen it all and is difficult to impress. Margo has bought into the new Loewe look and currently owns several show garments and the everpopular “Puzzle Bag.” Margo considers her closet her collection, and she approaches beauty products with the same regard. She has a well-organized army of luxury makeup and will forever be on the hunt for the perfect shade of nude.
Loewe Puzzle Bag
Brand Persona: The Elitist
Name: Robert Singer Age, Location: 31, Los Angeles Occupation: Director of Photography (television) Income: $210,000 Family Size: Engaged, no children Education: Incomplete degree from UCLA Interests: Robert has a passion for vintage motorcycles, playing guitar, and spending time with his soon-to-be wife. He considers time at home a luxury, and has filled his apartment with a mix of vintage and modern pieces. He has a love of history and design and a slight addiction to buying jackets online. Buying motivation: Robert is a thoughtful gift-giver. He believes that the people he surrounds himself with deserve to feel showered with luxury, and only buys into products he knows will make an impression. Robert seeks out quality items for his fiancé, focusing on brands with history and staying power. In his eternal hunt for rehearsal dinner gear that felt fresh but not juvenile, he stumbled upon Loewe menswear. Robert is not a Loewe customer yet, but a black patch pocket parka has been in his cart for weeks.
Loewe Black Patch Pocket Parka
Demographic Segmentation
Geographic Segmentation
Income: Middle-income to wealthy Age: 25-45 Location: In-store or dedicated online shopper. Loewe has been investing more resources and increasing product offerings for its direct-to-consumer e-commerce platform over the past six years (Foley). Due to the increased availability of goods online, the Loewe customer no longer has to live in a fashion capital to experience the brand. The lipstick extension will be carried and prominently featured at Loewe.com. Merchandising: Loewe currently carries menswear, womenswear, leather goods, accessories, shoes, and perfume, appealing to a large swath of fashion-minded luxury shoppers. This broad customer base provides an ample existing audience to target for the lipstick extension.
Loewe has strategically opened flagship stores in fashion capitals such as Tokyo, London, Hong Kong, and New York (Foley). Loewe sells in 211 stores worldwide, which includes 130 own-stores. The brand has been heavily updating its store layouts to align with the new look and feel of the brand under Jonathan Anderson (Berezhna). The brand has a strong presence in Spain and Japan. (Foley). While the U.S. is not currently a major source of revenue for the brand, it has opened 15 stores in the U.S., sells in the U.S. through Nordstrom, Bergdorf Goodman, Saks, and Neiman Marcus, and plans to expand exposure in the U.S. and eventually have U.S. sales place second (Foley). The lipstick extension will be offered in the U.S. only to pilot the collection and help build buzz for the brand in the U.S.
Pshychographic Segmentation Loewe's target customer base is wide, due to global sales channels, a strong social media presence, and the brand's offering of menswear, womenswear, accessories, and fragrance. (Ilchi). Loewe's target woman is used to standing out in a crowd. She enjoys new twists on classic ideas and looks for items that feel fresh yet oddly familiar (Bardas). She places quality and craftsmanship above trends but is delighted by innovative design. She is by design difficult to define: a sincere lover of past and future, sensual but not overtly sexual, and playful with an odd edge (Greenwood). She is not afraid of color or volume but retains respect for neutrals. She considers lipstick the final layer of her outfit.
Sociographic Segmentation Customers are able to satiate different needs at Loewe. Older customers may find joy in Loewe's craft competitions or close-ups of hand-woven leather goods. Younger customers may get lost in the sea of smiley faces or daring drag collaborations. There is something for everyone at Loewe's... if you can afford it. Enter lipstick.
Loewe Craft Prize 2020 Finalist
Loewe Smiley Face Bag
Benefit Segmentation Quality along with price. Paying for status and craftsmanship. With a heightened sense of care for sourcing and ingredients, Loewe’s beauty customer base has the potential to bring Loewe to millions of new customers who have considered but not committed to its fashion price point. Lipstick customers can gain satisfaction from owning a product from an established luxury brand. Established customers get to bring more Loewe into their lives. Prospective customers get the push they needed to buy into the 174-year-old luxury machine for the first time.
THE IMC PROCESS A
@loewe Instagram
Business Issue Description With the brand extension, Loewe will introduce a small lipstick collection, building upon its existing brand extension into perfumes. Perfumes Loewe launched in 1972 and has taken 10 different scents to market, so the brand has experience in the beauty space (LVMH). The lipstick line will complement the perfume line and help Loewe determine whether an entire beauty line is feasible. It is also our hope that the new product line and extension will increase the brand's relevance and address the needs of a more specific audience, i.e. the beauty consumer. (Kapferer, p. 263). Keeping in mind the HOE model, the primary goal of the IMC will be to make consumers aware of the lipstick collection. Because Loewe is an existing luxury clothing and accessories brand, it can capitalize on its current core customer and social media following to focus its marcom.
Loewe Perfume
Signage from Loewe Perfume Boutique
@loewe Instagram Perfume Promotion (Funneling)
Key Success Factors A key success factor will be creating an effective marketing campaign that capitalizes on Loewe's existing core customer and creates awareness and buzz for the lipstick collection. Loewe is active on Instagram with a following of 2.2 million. Loewe will seek to promote the new lipstick through @loewe similar to how the brand promotes its perfumes, directing its core customers to the perfume Instagram account, @loewe_perfumes. For the lipstick collection, a new Instagram account - @loewe_lipsticks - will be created to funnel customers and introduce them to the extension. Just like the perfume, which initially was sold only at Loewe boutiques but quickly found a larger audience and sold internationally (LVMH), the lipstick extension can attract and support its own customer base, capitalizing on the strength of the Loewe brand. Loewe perfumes now even has its own microsite and its own boutiques (Loewe; LVMH).
Key Success Factors Cont. While we have discussed a want to successfully leverage the Loewe core customer and make them aware of the lipstick extension, there is another key success factor, which is leveraging the Loewe brand assets (awareness, quality, affect, and image) to have the core customer attribute those concepts to the new brand extension, thereby accelerating through the Affective stage of the HOE model and moving toward the Conative or trial stage. (Kapferer, p. 280, Figure 12.7). Like many true luxury brands, Loewe is known for its craftsmanship, quality, and creativity. (Berghaus et al., p. 4). With Loewe's brand history as a leather goods house, and the injection of creativity and youth brought to the brand by Jonathan Anderson, the brand's creative director, the brand can capitalize on its brand equity to convert its core customers to lipstick customers. We are focusing our IMC on the perfume extension as this line has a proven track record. Research supports that a luxury brand’s profitability will usually increase as the 'premium degree' (i.e. the perception that the goods offer more value) increases - but only if the brand is extended into product categories adjacent to the core brand. (Reddy and Tertblanche). We can surmise that a lipstick extension will resonate with the Loewe core customer, just as the perfumes have - if we keep consistency and cohesiveness of the brand's image and story.
Opportunities and Challenges Opportunities with the lipstick extension lie in the strength of the brand's existing story and the growing beauty and lipstick market. (Thorat et al.; Strugatz). We will not rely upon marketing to customers of competitors or positioning Loewe as a pure player in the beauty space. Instead, we will position the lipstick collection as an extension of the Loewe brand itself, thereby borrowing from the core brand's equity to elevate the status and trustworthiness of the lipstick extension. The fit of the lipstick, both from a product and marketing perspective, is critical. Pierre Cardin offers a cautionary tale of misguided brand extensions. The brand's extensions into perfumes and cosmetics in the 1960s was very successful, but only because the product extensions were adjacent to the brand's core products. Pierre Cardin, unaware of the roots of its initial success in extending the brand, quickly began granting product licenses. By 1988, it had granted more than 800 licenses in 94 countries, generating a $1 billion annual revenue stream - but its profits plummeted. (Reddy and Terblanche). As Cardin told the New York Times in 2002, "I’ll do perfumes, sardines. Why not? During the war, I would have rather smelled the scent of sardines than of perfume. If someone asked me to do toilet paper, I’d do it.” (Dike). The brand eventually lost its appeal, with the designer failing to sell the brand in 2011. (Dike).
Opportunities and Challenges Cont. While the strength of the Loewe brand does offer opportunities, there are weighty challenges for the lipstick extension. The brand must overcome communication barriers in the ad campaign and in its attempt to build awareness for the new extension. The brand will also face an uphill battle against the inertia of lipstick purchasing habits of even its core customer. With the wide array of pure cosmetic brands, including beauty stalwarts Estée Lauder and L'Oréal, as well as DTC darlings Glossier and Drunk Elephant, Loewe is unlikely to attract much attention from, much less convert, beauty customers from their brand of choice with a single product offering. Women in the United States (where the lipstick extension is focused) spend roughly $3,000 on cosmetics annually. (Cvetkovska). Further, the lipstick extension will fight against noise and clutter, both from traditional beauty brands, including those with a strong social media presence, and from the Loewe brand itself. For example, even if @loewe promotes the lipstick in a series of posts, Instagram is increasingly cluttered (Lieber), so even core customers and followers of @loewe may see a post only once or not at all, and then the lipstick extension is left to fight on its own, lest the brand overpopulate the @loewe page with images of the new lipstick. In addition, while Loewe will rely upon its core brand to support the brand extension, there is risk that in doing so, the lipstick extension will suffer from a lack of differentiation, both from the core brand and from other lipstick products on the market. The challenge is to design and market a product that is adjacent to the core brand, yet can stand on its own.
@loewe_perfumes
Research Goals Because the primary goal of the campaign is to create awareness of the lipstick extension, and Loewe has already displayed success with a beauty extension (perfume), our primary research goal is to discover how @loewe_perfumes Instagram followers learned of the perfume brand extension. We focused on Instagram followers because of the brand's most-used social media channels (*Facebook - 633,535 followers; Pinterest - 638.5K followers; and Twitter - 81.9K followers), it is most active on Instagram and has the highest number of followers on that platform (*2.2m followers). We also focused on Instagram as that social media channel has buoyed nascent fashion and beauty brands to success, including for the DTC model, where consumer awareness starts from scratch. (Lieber). * Followers as of July 22, 2020 @loewe_perfumes
Research Format We designed an interview-based, qualitative study to find out patterns of consumer behavior, with the goal again to ascertain how @loewe_perfumes followers learned of that brand extension. We selected this primary source research method as we wanted to hear directly from admires of Loewe perfume. While we could have utilized secondary sources alone to gain insights into the broader beauty or lipstick market, that more general snapshot is not as relevant to our campaign goals (awareness of the lipstick extension). While we chose to utilize unstructured questions (Hauge et al, p. 128), we expect a narrow range of responses to our questions. We considered our research exploratory, so opted to allow respondents to answer without the constraints of structured questions. (Hauge et al, p. 129). Each of our questions is behavioral, ultimately focusing on consumer purchasing habits. (Hauge et al, p. 130-131). We chose open-ended questions because this is a qualitative study. (Hauge et al, p. 208). Finally, we made the questions as simple as possible, avoiding jargon, so as not to confuse participants. (Hauge et al, p. 129). Were the brand to undertake the brand extension, it may wish to supplement this qualitative study with a quantitative study, utilizing closed-ended questions. (Hauge et al, p. 201).For example, if the interviews support that the Loewe perfume follower learned of that brand extension by following @loewe, the brand can seek to replicate and validate the findings, and even find with more particularity how they discovered the extension. Was it a particular post? Did a promotional e-mail aide awareness? A splash-ad on the Loewe website? A sponsored link to the brand's microsite for the perfume?
Research Design We conducted our research from an audience of social media followers and, more specifically, followers of @loewe_perfumes. While we believe there is a small target audience of men who may gift the lipstick to a woman, we focused our questionnaire exclusively toward women as they are our core customer. We created an Instagram account and targeted users who liked and/or commented on posts from @loewe_perfumes, as we assume these individuals are more engaged and may therefore represent our core customer for the lipstick extension. Our questions were as follows: Have you shopped Loewe in the past 12 months? What brands do you shop for lipstick? How did you discover Loewe perfumes?
Research Design Chart Consumer Insights
Structured
Primary
Secondary
SemiStructured
Unstructured
Behavioral Attitudinal Classification @loewe Instagram
Research Design Chart Cont. Behavioral Questions
Women
Instagram Followers of @loewe_perfumes Focus on followers who 'like' or 'comment'
@loewe Instagram
Men
Research Analysis Our consumer analysis is aimed at receiving responses from 25 followers of @loewe_perfumes. At the time of this submission, we have received nine responses. To arrive at these nine responses, we direct messaged on Instagram 123 users who had permitted us to follow them and direct message them. We will factor in the response rate (7.3%) in continuing the reach our stated goal. We will be conducting consumer research in this manner through the final submission of this group project. Once again, we asked each respondent the following questions: Have you shopped Loewe in the past 12 months? What brands do you shop for lipstick? How did you discover Loewe perfumes? Our initial results found that a slight majority (56%) of @loewe_perfumes follower-respondents have shopped Loewe in the past 12 months. This helps to confirm our hypothesis that users active on the brand's Instagram page do shop the brand. For lipstick brands shopped, Mac, Dior, and Pat McGrath were tied for the most responses (2), which supports our premium price point for the lipstick extension. Instagram itself was the most cited referral channel (60%), confirming our strategy to use Instagram to create awareness for the lipstick extension.
Research Analysis Cont. Shopped Loewe in Last 12 Months (%)
Lipstick Brands Shopped*
How Became Aware of Brand
Yes
56
Mac
2
3
No
44
Dior
2
Subscription Box
1
Pat McGrath
2
Personal Referral
1
Chanel, Charlotte Tibury, Peripera, Heme, 3ce, Glossier
1
No Response
4
*Respondents were permitted to include two or more brands. One interviewee did not respond to this prompt.
Loewe Logo
Positioning Strategy
Loewe Lipstick in Mauve
Based upon our perceptual map (see slide 16), pricing strategy, and our primary consumer research, we will position the lipstick extension at $45 to 55 and primarily target women in the United States. Loewe’s goal is to increase brand awareness in the U.S. and it is patient in doing so. (Foley). Women, naturally, are the target customer for a lipstick (Kunst), though we do expect a portion of sales would be as a gift (O’Connell). In order to successfully position the lipstick at a premium price point, it is important to be intentional about both merchandising and marketing the product. The U.S. has a wide variance of most popular lipstick shades (Rodewald-Sulz), but a 2015 study from WWD found that a mauve color offered by Sephora was the most popular shade for that brand (Shapouri). The most popular lipstick in the U.S. in 2019 (Shahbandeh), L'Oréal’s Colour Riche, also offers the mauve shade – ‘saucy mauve’, to be precise (L’Oreal). We've therefore selected a mauve color for the initial collection.
Positioning Strategy Cont. @loewe_perfumes Instagram
Also, in order to justify the price point and aide the success of the lipstick extension, it is important that we position the product within Loewe’s existing brand story. It is helpful then that the brand has decades of experience in the perfume category and has recently launched a smaller home fragrance collection. Like other perfume offerings from luxury fashion brands, Loewe’s perfume has likely “increased its brand awareness and dream value, a prerequisite before other extensions”. (Kapferer, p. 268). To successfully position the lipstick extension, we must transfer the emotional assets of the perfume to the lipstick (Kapferer, p. 279). We will seek to achieve this through packaging and marketing that is harmonious with the brand’s image as well as the advertising campaigns and social media presence for the brand’s perfume and home fragrance collections.
@loewe Instagram
Thank you!
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