Analysis onKiehl’s MarketingStrategy& Execution

1. What is Kiehls’s

© Miramax/Touchstone Pictures

John Kiehl

Irving Morse

EstablishedKiehl’s as a brand

First Buyer

Natural Ingredient

Aaron Morse

The Iconoclast

SolidifiedKiehl’s Differences

Unique Stores

Samples

First Men Skin Products

Jami Morse

Clever Marketer

Get Closers toCustomers

Customized Services

Community

acquired byL’Oréal in 2000

2. Kiehl’s in Madrid

since 2006

5C Analysis – Customers “Overview of Madrileños”

1.62

M

3.23

M

.80

M

MadridBarcelona

Valencia

Population Gender & Age

W M More than 40% are

30s – 50s50% 50%

GDP per Capita & Jobs

€31,00035% higher thannational average

16.5%of all jobs in

Spainallocated in Madrid

5C Analysis – Customers on “Beauty Products”

• Top 3 preferred places to buy are- supermarkets(62%)- beauty care stores(54%)- department stores(42%)- online stores(only 4%) • Main drivers of purchase is

expected benefits, price and brand

• The most renowned brands areL’Oréal, Nivea, Dove, Clinique, andLancôme

5C Analysis – CompetitorsHigh Price

Natural Ingredient

s

Low Price

ScientificMethods

KIEHL’S

CLARINSL’OCCITANE

BIOTHERMCLINIQUE

AVEDA

5C Analysis – Company

L’OREAL FAMILY

Expand Global

LONG HISTORY

164 Years in Beauty Carehaving being founded in 1851 in New York as a small pharmacy selling homeopathic and herbal medicinal as well as over-the-counter drugs

In 2000, Kiehl’s has been completely acquired by the

global beauty care giant L’Oréal. The acquisition was

seen as a vehicle

HIGH QUALITY

Products & Servicesthe company has successfully entered the men beauty care sector, in which it has quickly gained a distinctive reputation for its high-quality products and excellent service.

5C Analysis – Collaborators

9 stores out of 11in Madrid are located

in El Corte Inglés

Fashion magazines & bloggersto influence customers

5C Analysis – Context

4.46

B

2011 2012 2013

4.20

B

4.05

B

The Cosmetic and Toiletries

Market in Spain

*Source: http://www.statista.com

Population Pyramid2013 and 2023,

Spain

*Source: Instituto Nacional de Estadistica

Getting older

5C Analysis – Context

Unemployment Ratein Madrid & Spain

Average Payrollsin Madrid & Spain

Source: Madrid Statistic Institute and Ministry of Economy

In recovery trend…

SWOT Analysis

• Low Brand Awareness• Unclear brand positioning• Limited distribution• No advertising

• Hipster and metrosexualculture

• Men grooming• Loyal customers• Word-of-mouth

• Over-crowded market• Competitors’ high spending

on advertising• Poor presence outside big

cities

S OW T

• Medical knowledge• Heritage• Low price within

premium segment• Owned by L’Oréal

Target

DEMOGRAPHICS

• Young adults & 30~45 years old• A bit more attention to men• Middle-to-upper class• Living in big cities

PSYCHOGRAPHICS

• Open-minded• Professional & Travellers• Care of their appearance and well-

being• Close to hipster and metrosexual

Positioning

• Pharmaceutical experience

• More than 150 years of expertise and tradition

• Customized service

Points of difference Points of parity

• Natural ingredients

• Effective treatments.

“To young adult, affluent global citizens, Kiehl’s is the only beauty care premium brand that solves every specific skin and hair need because of its centuries-old natural pharmaceutical experience and its service personalized to customers’ necessities.”

What the productdoes for me

How I would describe the product

How the brand makes me look

How the brand makes me feel

Facts and symbols

Brand Personality

Core Brand Promise

American roots

Foundedin 1851

Origins in New York

Owned by L’Oréal

Natural

Kiehl’s provides customized natural

solution to skin and hair needs

Skeleton Mr. Bones

Harley Davidson

Apothecary legacy

Customized

Effective

Premium

Daily Routine

Global

Modern

PharmaceuticalHerbal

Personalized

Skin Check

Grooming

Stylish

Satisfied

Skin and hairconcerns solved

Relieved

Nice

Charming

Helpful

Customer-centric

Joking

Innovative

Environmentally safe

Proud

3. How Kiehl’s Doing in Madrid?

4P MIX - Product

“ingredients are the single most important component”

Natural Ingredients

Package DesignUnlike other luxury skincare brands, they are

• selling in bottles with very basic shape & color

• are crowded with contentsthose texts are usually very long and are written with a basic font, using different font sizes and effects (bold, underlined), which make them clumsy and difficult to read, as well as similar to pharmaceutical products and 19th century medicinal

Kiehl’s Clarins

Customers on Products

• 50% are familiar with the brand

• People recognized Kiehl’s for- pharmaceutical look (23%)- natural ingredient (17%)- quality (17%)

• Most purchased items arecleansers, moisturizers and shaving products

• Kiehl’s products are appreciated fortheir efficacy and natural ingredient

Customer research

#1

4P MIX - Price

• Higher than mass-market ones.

• From the survey, people considered the price of Kiehl’s asnormal or slightly expensive

Price Rangeof basic products

€9.5~ 60

€8~ 154

€9~ 106

• Priced at the low level of the premium beauty care segment

4P MIX – Points of Sales

Flagship Store Department Store Online Store

Supermarket Hypermarket Beauty Shop

4P MIX – Points of SalesFlagship

StoreDepartment

Store

• No Test• No Samples

(before we requested)

• No Harley Davidson(in some stores)

• No Friendship• Not welcomed

We got every things

we expected!!

=

4P MIX – Promotions

Unlike other luxury skincare brands,

• We don’t use celebrities to endorse us

• We’re reluctant to advertise on TVs, newspapers, of fashion magazines,

We are more focusing on social mediaand on word-of-mouth.

WE’RE SODIFFERENT!

The page is targeted at women

from 25 to 35 years old

Our FB communication is

personalized, informal,

addressed to the customer

directly, and localized!

Customers on Communication

• Main sources of information aboutKiehl’s

(Including Expatriates)-Kiehl’s stores-Magazines-A word-of-mouth

(Spaniards only)-A word-of-mouth-Magazines-Beauty care professionals-The last response was Kiehl’s stores

Customer research

#2

4. Problems & Recommendations

Problem #1Inconsistency of customer in-store experiences

Excellent Service

Less than

Expected

Problem #1Inconsistency of customer in-store experiences

Two happycustomers

Nine unhappy

customers

Problem #2 Inconsistency in Branding

Website SocialMedia Store

Hyper-modern Modern19th centuryAmerican apothecary

Discrepancy in key images from different channels

Problem #3 Low Brand Awareness

Unsatisfied in-store experience

Inconsistency in brand

communication

No word-of-mouth effect Dilution of the brand

Low Brand Awareness!

Recommendations1. Improve consistency of

customer in-store experiences

• Provide additional training for in-store consultants in El Corte Ingles

• Implement a “secret shopper” program

• Ask some customers to fill out electronic surveys after an in-store experience

Recommendations2. Increase consistency

of website branding• Make website images consistent with the

brand’s intended positioning

3. Increase brand awareness

• Advertise more, especially in specialized magazines

• Sponsor non-controversial venues and events