Denysse Montano Natalia Beridze Humayra Nasir

IntroductionIn this final project we want to come up with a men’s skin care line for Estee Lauder. The brand already has a luxury name in the women’s skin care industry. From our research we found that there is a big segment of population, which are the men & especially the baby boomers men who are really interested in functional skin care products but very few company make skin care products just for men.

Business Description(Estee Lauder Group)The Estée Lauder Companies Inc. is an American manufacturer and marketer of 222 prestige skincare; makeup, fragrance and hair care products. The company has its headquarters in Midtown Manhattan, New York City. Beautician and business executive Estée Lauder, born in Queens, New York, in 1908 started a beauty company with a skin cream developed by her chemist uncle. After years of selling products on her own, she officially formed Estée Lauder Cosmetics Inc. in 1946.

Brand Mission & Vision

MissionThe guiding vision of The Estée Lauder Companies is "Bringing the best to everyone we touch". By "The best", we mean the best products, the best people and the best ideas.

VisionThe vision of the company is to seek to address particular consumer needs, preferences and aspirations.

Brief History Of The Business

Josephine Esther Mentzer was born at the beginning of the 20th century in New York City. The name Estée came from a variant spelling of her nickname, Esty, and Lauder from Joseph Lauder whom she married in 1930 and later went into business with.

• Estée Lauder, was launched with four

products: Super Rich All Purpose Crème, Crème Pack, Cleansing Oil, and Skin Lotion.

Brief History Of The Business

Although the principal brand began with Estée Lauder the company progressed to a great deal more.

• Aramis, a line of high prestige fragrance and grooming products for men, in 1964.

• Clinique, the first allergy-tested,

dermatologist-guided, fragrance free cosmetics brand, followed in 1968.

.

Brief History Of The Business

• Prescriptives, a color authority with an

advanced collection of highly individualized products, was founded in 1979.

• In the 1990s the Company acquired two

important makeup artist brands: MAC and Bobbi Brown.

.

Business Structure

Target Customer

Estée Lauder holds 18 company brands and 10 licensee brands, which allow them to market to any gender, age or specific product type consumer.

Competitors

Estée Lauder’s main competitors in the personal products industry are Coty Inc. & The Procter & Gamble Company.

Business Structure

Current 4 P’s

Products

1. Skin care: 43% overall2. Make-up: 38% overall3. Fragrance: 13% overall 4. Hair Care: 5% overall5. Others: 1% overall

Prices:

1. Skin Care: $20 - $620.2. Make-Up: $17 - $250.3. Fragrance: $30 - $200.4. Hair Care: $15 - $60.5. Men’s Grooming Products:

$18 - $65.

Current 4 P’s

Placement

Current 4 P’s

Promotion

• Magazines• Website• Facebook• iPad App

Competitive Advantages

The company has a competitive edge when compared to its competitors. • It has a huge financial stability.• It has a significant focus on creativity &

innovation.• Unrivaled creativity, superb technology

and customized. • A broad group of customers compared to

its competitors.• Strong distribution channels all over the

world.• Talented & experienced workforce.

Brand Extension

Marketing Objectives & Goals

Objectives

The main objective of this brand extension is to cater a new market segment, which are the men in this case by providing them quality skin care products & expand the brand awareness of Estee Lauder Men’s skin care products.

Goals• Increase revenue & gross margin by entering the men’s

skincare market as it is booming.• Broaden the target market by catering a new sect of

consumers.• To be more competitive in the current skincare market

& have a larger market share.• Educate men about skincare products.

Situation Analysis

Macro-Environment Analysis

.

Political Factors:• Government instability• Foreign trade regulations: Export/Import

Policies• Privatization and the Security measures: safe

products that do not contain any harmful substance or are not harmful for the consumers.

Economic Factors: • Interest Rate• Unemployment and inflation

Situation Analysis

Macro-Environment Analysis

.

Sociocultural Factors:• The three most important social issues to Boomer

include poverty in the US (33%), education (29%), and physical health- related issues (28%). Among the one in five Boomers who go out of their way to buy from companies/brands that support issues they believe in.

• more Boomers are concerned with online privacy and security .

Technological & innovation Factors: • New technological advancement. Ex: m-

commerce & e-commerce.• New innovative skin care product of

competitors.

Situation Analysis

Macro-Environment Analysis

.

Environmental Factors:

• Pollutant problems• Waste disposal• Environmental pressure

Legal Factors: • Consumer Product Safety Act 1971.• Fair Packaging & labeling Act 1966• Labor Dispute

Microenvironment

Current Size

• Current market size for the sale of beauty products reached $37 billion in 2013

• Facial skincare alone is a 5.7 billion dollar market making up more than 15.6% of the beauty industry.

Growth Potential• Men starting in their early fifties and on are more concerned with their

appearance and are taking measures to achieve a certain look in order to feel good about themselves or for their partner.

• Men are now shopping for moisturizers and other facial care products to maintain a well groomed as well as a nice skin appearance.

Industry Trends • Common trends in the beauty industry today

include:– loyalty programs, technological

integrations, social and environmental considerations, and consultation.

• The beauty industry relies heavily on – referrals and brand loyalty– free sample and discounts

• Technology plays a role– Some factors enhanced through technology

include,• engaging smartphone apps, social

interactions, customizable products, and new creative products.

Geographic Locations• Biggest markets for skin care market• 51.2% of baby boomers live in just

nine states:– California, Florida, New York, Texas,

Pennsylvania, Illinois, Ohio, Michigan, and New Jersey.

Seasonality Factors• As a result of harsh weather, sales of

skin care during the winter season are higher than others.

• Sales for beauty and skin care during the holiday seasons increased by 7% from the baby boomer segment.

Profit Characteristics• The profit margin for Estée Lauder in the skin care segment is

currently 6.64%, which is healthy compared to the other segments.

Distribution Channels

• The current distribution channels of the men’s skin care:– Department stores, specialty

stores & travel retail stores in major airports around the world.

– Online distribution channels are very small & limited.

Situation Analysis

Micro-Environment Analysis

Basis Of Competition

• To innovate closest to our most discerning consumers by developing locally relevant products and services.

• Innovate products that would prevent the affect of pollution rather than treating the symptoms of pollution.

• educate our consumers about the product ingredients & their usage.

Company Analysis

The Estée Lauder Companies Inc. is an American manufacturer that holds the number one position with a market share of at least 50% in the U.S. prestige beauty market, with a 55% share in makeup and skincare and 30% in fragrances. Since Estée Lauder is technologically so developed in their skin care industry & also the men’s skincare industry is coming into limelight but very few brands are catering to this segment. So, it only makes sense for the company to invest in the men’s skincare market.

Company Analysis

4 P’s Of The Brand Extension

Products

• Anti-aging/Wrinkle-Free Cream• Moisturizer for all skin types• Serum• Facial Cleanser• Acne Treatments• Special Skin Care Products for redness, burning, irritation.

Company Analysis

4 P’s Of The Brand Extension

Price

• Moisturizer: $35 - $50.• Anti-aging: $65 - $85.• Serum: $75 - $100.• Cleanser: $25 - $40.• Acne Treatment: $35 - $50.• Special Skincare Treatment: $120 -

$230.

Company Analysis

4 P’s Of The Brand ExtensionPlacement

Travel Retail Store Department Store

Company Analysis

4 P’s Of The Brand ExtensionPromotion

• E-commerce & M-commerce.• Social Media Campaign• Digital Marketing• Magazines• TV during “Super Bowl”.• Mobile App.

Company Analysis

Operational Competitiveness

Among many of Estee Lauder’s current operational competitiveness we would like to use the followings:• Their technologically sound R&D department to innovate new men’s care

products.• Their distribution channels.• Their current customer base.

Competition Profile

Major Competitors

Men Product Category:• Cleanser: $23 - $30.• Moisturizer: $30 - $36.• Special Care Products: $33 - $65.

Men Product Category:• Moisturizer: $35 - $46.• Anti-aging creams$45 - $87.

Men’s Product Category:• Moisturizer: $26 - $32.• Special Care Products: $45 - $60.

Men’s Product Category:• Special Care Products: $89 - $176.

Competition Profile

Indirect Competitors

• Special Care Spa: • Laser Skin Care/Surgery

Current Target Market Description(B2B & B2C)

In our case, the men’s skin care brand for Estee Lauder would be both B2B & B2C market as we would sell our products directly to other retailers as well as to our customers. Estee Lauder has their stores in department, specialty & travel retail stores where they sell their products directly to their consumers.

Consumer Characteristics• The US population aged 55+ is scheduled to outpace growth of the overall

population by 2018. Adults aged 55-64 will grow by 8%.• Interested in health and wellness related products in this category. • Have doubts about the functionality claimed by the skin care brands.• Looking for products and packaging that is easy to open.

Demographic and Geographic Characteristics• 316.1 million with baby boomers

accounting for 27% of this number• 21 million baby boomers earning

more than 100k• Majority of Baby Boomers are

White and non-Hispanic and one in ten are Black and a similar share is Hispanic

• Two thirds are married and only about one in ten has never married

• Divorced, and divorce rates among those aged 50+ are on the rise

Conti.• Median household income is above the average • Younger Boomers have the highest median household income• Households that fell into the Baby Boomer age range were $150K+• Higher incomes are consistent with experience and achievements made

over more than 20 years in the workforce

Psychographic and Behavioral Characteristics

• Boomers say that buying something that makes them feel “good about myself” is at least somewhat important

• Younger Boomers seek satisfaction through – Discounts

• Donates a portion of proceeds to support a cause or those that claim to go the extra mile in terms of being environmentally friendly

• Boomers agree that they like to use their leisure time to be productive:– Exercise– Listen to music – Gardening

SWOT Analysis

Strength1) Estée Lauder operates a segmented portfolio to address different market

niches. The segmented portfolio helps develop clear brand identities and strong bonds with consumers.

2) One of Estée Lauder's growing advantages is its financial clout, Allowing it to invest significantly in product development and marketing.

3) Estée Lauder has its own R&D department, which gives the new extension (men’s skincare) an added advantage to experiment new products.

4) Estée Lauder has its existing distribution channel through which we can distribute our men’s skincare products.

5) Since Estée Lauder is also a luxury name in beauty & skincare market, the promotion of the new brand would be easier & cost effective.

Weakness1) Estée Lauder is known for its women’s skincare products, so it may be a

bit challenging to change that façade of the brand.2) Many of its competitors are also doing men’s skincare products. So, the

competition is high & it needs to compete against global power brand houses such as LVMH, L’Oreal & Shiseido.

3) Estée Lauder only operates in the premium landscape. So, it misses the opportunity to be benefited from the mass market.

Opportunity1) Since Estée Lauder is a global brand in future we can expand our men’s

skincare line in countries other than USA & Asia.2) As the company has its own research center, new innovation in men’s

skincare can be developed, which can be revolutionary.3) We are now manufacturing products only for the baby boomers but in future we can also come up with new products for other segments of the

population with a more reasonable price line.

Threat1) Any economical, social or legal changes can affect the revenue of our

new market.2) Since men’s skincare is still a new market it may be quiet a challenge to

convince consumers to buy skincare products.

Competitive Advantage

• The ability to cultivate a diverse & intensive culture.

• Strong financial stability.• A very dedicated & experienced

workforce.• A strong digital customer

involvement & advertisement.• The ability to develop locally

relevant personalized products & services through research.

• Many technologically well-equipped research centers scattered all over the world.

Strategic Decision Analysis(Justification)

Among all other brands under this group we chose Estee Lauder for the brand extension of men’s skin care products because • The brand already has a luxury name in the

women’s skin care industry. People know this brand because of its quality & functionality.

• Strong R&D to make innovative skin care products.

• Research shows there is a big opportunity to for men’s skin care products. Especially for those catering to baby boomers.

• Few brands cater to this market segment especially in USA.

Unique Selling Proposition

Unique selling proposition describes the unique advantages of a company’s service over the competition, and what makes the company special, memorable, and stand apart from its competitors. In our case the unique selling propositions are as below:• Unique Feature• Advantage: technologically sound research &

development center• Services & Benefit to the customers• Image• The best product & the best solution to skin care

problems

Brand Overview & Strategy

Brand DescriptionOur new extension is the men’s skincare line for Estee Lauder. It is under the Estee Lauder group with the same distribution channels. We are offering men’s skin care products such as moisturizers for different skin type, serum, anti-aging cream, acne treatment, eye serum & special skin care products such as after surgery recovery products.

MissionThe mission of our brand would be to anticipate, meet and exceed our consumer’s desires for exceptional prestige beauty products and High-touch services to provide him with what he wants and how he wants it.

Branding Strategy

Brand Concept Statement

Estee Lauder men’s skincare gives men the skincare products, which transforms their dream of looking young into reality.

Do you feel less masculine when you apply skincare products? Wouldn’t it be great to look young forever & have a healthy skin without undergoing any cosmetic surgery? The Estee Lauder men’s skincare products allow you to have a wrinkle-free & healthy skin as well as protect you from the harmful UV ray of the sun & also keep you young. The reasons why Estee Lauder men’s skincare products keep your skin healthy & young is because we use the magical ingredients of a singular blend of vitamins, amino acids, proteins & organic acids working together to enhance the natural renewal process of the skin. Beside, all our ingredients are naturally extracted & tested in our own laboratory through the use of advanced technology.

Try our new men’s skincare product & stay young forever & see the difference.

Branding Strategy

Brand Personality

In our case, for the skincare for baby boomers men, we chose George Clooney as our brand personality. Our brand represents a man who is wise & matured, sophisticated, established, goal-oriented, confident, charming & loves life & stay attractive no matter what. We feel that George Clooney perfectly reflects these personality traits that our brand shares.

Branding Strategy

Brand Concept Board

Branding Strategy

Brand Identity

Logo

Tag Line

“Because younger looking skin never goes out of fashion.”

AdvertisementSocial Media

Branding Strategy

Branding Materials

Shopping Bag Container & PackagingColor

PANTONE 21 19 - C PANTONE 10 101 - C

Branding Strategy

Branding Materials

Store Exterior & Interior

Target Customer Profile

Primary Target Market • Why Baby boomer men ?

– This niche has the largest population in the United States. – Have significant impact on the beauty skincare retailing market – Men in the 35-54 age range are likely to begin noticing their skin

beginning to age – Nearly half of men with income of at least $75,000 annually are

comfortable to use skincare products that guarantee benefits. – About four in ten men use moisturizers, creams and or serums

and out of those, four in ten middle-aged men are the most likely users

Demographics • Income: $150K+ Higher incomes. • Education: About six in ten have at least some college;

and more than one in ten have earned an advanced degree

• Age: The age of an average baby boomer is 45-64 years of age.

• Race: Most of the baby boomers are white with a small portion of them Hispanic, Black or Asian.

• Marital Status:– 67% of the baby boomers are part of a couple – Followed by 18.9% who are divorced

Geographic’s • Home to the largest concentration of

older Boomers– Fort Myers, Naples, Marco Island and the

Florida Panhandle locale of Panama City Beach are Followed by Alpena, Michigan, Glendive, Montana, Wilmington, N.C.; Medford, Ore.; and Johnson City, Tenn.-Bristol, Va, Alpena and Medford

Psychographics and behavioral characteristics• Baby boomers do not appreciate getting overwhelmed by

businesses through direct marketing • Want incentive or rewards to be offered

– discount coupon codes, invitations to preview sales, or free products and services

• Concerns related to online shopping and its privacy as well as security

• Companies or brands that don’t communicate with their customers using technology

• leisure and hobby participation– enjoy listening to music in their pastime, reading books and

cooking for fun – they have interest in cooking healthy, fresh produce meals

Secondary Target Market • Why millennial men ?

– men aged 18-24 spend more time on their appearance than they used to

– big buying power & who prefer functional products to regular items

• They need to improve their appearance either for work or out of interest in pursuing a relationship

• Use facial cleansing products and just 20% of men consider themselves well informed about personal care products

• Concerned about their appearance and dealing with skin issues• Spend $1.4 trillion annually in the US

Demographics • Income: $30,600+• Education: bachelor’s degree or have earned an associate degree • Age: 18 – 36 Years old• Race: non-White

– more likely than Boomers to be Hispanic, as 10.7% of Boomers are Hispanic, compared to 19.4% of Millennials

• Marital Status: living alone or with an unmarried partner – About seven in ten Millennial men have never been married, compared to about six in ten

Millennial women

Geographics • Millennial’s reside primarily in the west

coast, as well as many southern portions of the country

• The states of California, Utah, Texas, Arizona, Louisiana, Mississippi, as well as some parts of Florida, are common locations for Millennials

Psychographics and Behavioral characteristics • Spend more on entertainment

– they spend half of their entertainment budget on audio-visual and video gaming equipment and 57% spend downtime in front of an electronic device

• Nearly nine out of ten currently exercise or want to • Seeking the most value for their money and a positive shopping experience• More than four in ten want offers

– discount, coupon code, or an invitation to a special sale. • Positive experience in stores when making a product or service purchase • Researched the product and pricing before they shop

– Half use a smartphone daily to go online

Tertiary Target Market • Why Millennial and Boomer women?

– concerned about functional skin care products – have a strong buying power – don’t mind spending more for functional products

• More than four in ten women who use facial skincare products use them to look better for their age

• Four in ten women aged 25-36 use anti-aging serums • They also buy these products for men

Demographics• Income: $51k +• Education: 23.2% have bachelors or graduate degrees. • Age: 25-65 years old • one in four Millennials are non-White and about one in five

are Hispanic• Most baby boomers are white with a small portion of them

Hispanic, Black or Asian• Race: racially diverse• Marital Status & Stage Of Life: 63% have never been married

and about four in ten have children• Millennial households account for 32% of all households with

children• 67% of boomers women are part of a couple

Geographic’s • A large percentage of women ages 25-65 reside in the

perimeter states, such as California, Florida, New York, and Texas

Psychographics and behavioral characteristics

• One of the most physically fit and health-conscious

• 14% devote leisure time to using social media. • Savvier when it comes to beauty shopping• Like to try products in-store before buying

something• More likely to try the latest beauty products • Women from higher-income households are

more likely than other groups to shop at Macy’s, Nordstrom, Bloomingdale’s, and luxury department stores

Customer Lifestyle Board: Primary Customer

Secondary Customer

Tertiary Customer

Meet our Primary Target Customer Joseph

• Background– Divorced but dating – Owner of an Art Gallery – Has a 401K – Lives in Palm Beach, Florida

• Demographics– 60 years old– Average income of 150K+– Has a college degree from FSU and an MBA from University of

Miami • Psychographics

– A Hopeless romantic – He enjoys long walks by the beach, reading entrepreneur

magazine and Forbes magazine – Shops at Whole Foods and likes organic products – Has concerns about wrinkles and not staying in shape – Enjoys traveling

Meet our Secondary Target Customer Max • Background

– Single – Financial Analyst – Lives in New Jersey

• Demographics– 27 years old– Average income of 85K+– Has a college degree and an MBA from Duke University

• Psychographics– Slight narcissist personality – Big spender on accessories – Enjoys going to restaurants and eating quality food– Uses concealer for blemishes – Pass time is going on Facebook and watching sports games as well

as playing NCAA football – Health conscious – Has concerns with acne scarring and the next presidential election

& Pablo • Background

– Corporate Business Consultant – In a relationship – Lives in Laguna Beach, Ca

• Demographics– 35 years old– Has a college degree USC and an MBA from Princeton

University – Average income of 100k+

• Psychographics– Believes in honesty – Enjoys yachting and golfing – Enjoys outdoor activities and shopping – Frequently uses social media as a pass time – Likes going to Spa’s – Has concerns with aging skin

Meet our Tertiary Target Customer Veronica

• Background– Assistant Buyer for Fendi– In a relationship – Lives in Manhattan, New York

• Demographics– 27 years old– Average income of 50k+ – Has a college degree and an MBA from NYU

• Psychographics– Believes in Core Values – Enjoys Shopping– Enjoys exercising and going to Spa’s – Frequently uses social media as a pass time – Enjoys attending social events – Has concerns with reduction of collagen in the skin

& Linda • Background

– Married– Flight Attendant– Lives in Chicago, Illinois

• Demographics– 65 years old– Average income of 38k+

• Psychographics– Believes in living life with no regrets – Enjoys shopping– Enjoys going to the Spa – Enjoys cooking – Enjoys attending social events

Competitor Analysis

Competitor Analysis

Competitor Analysis

Competitor Analysis

Product Strategy

Merchandising Mix & Product Category

Men’s skin care products would fall in to either category. They are as follow.1. Basic Products2. Functional Products Skin Care

Products

Basic

Normal

Moisturizer

Cleanser

Toner

Dry

Moisturizer

Cleanser

Toner

Oily

Moisturizer

Cleanser

Toner

Combo

Moisturizer

Cleanser

Toner

Functional

Anti-Aging

Anti-Aging Moisturizer

Anti-Aging Eye Serum

Anti-Aging Toner

Revitalizing Moisturizer

Acne

Anti-Blemish

Dark Spot Corrector

Post Surgery

Vitamin A Serum

Soothing Moisturizer

Intense Reconstruction-

Internal Growth Factor Cream

Product Strategy

Merchandising Mix & Product Category

The Men’s skincare category:

1. Anti-aging/Wrinkle-Free Cream: 20% of the total product mix.2. Anti-Blemishes Cream: 20% of the total product mix.3. Skin Lifter: 10% of the total product mix.4. Moisturizer for all skin types: 10% of the products mix. 5. Eye Serum: 10% of the products mix. 6. Facial Cleanser & Toner: 15% of the product mix.7. Acne Treatments: only 5% of the total product mix.8. Special skin care products: 10% of the whole product mix.

Distribution Strategy

• Fort Myers, Macro Island, & Florida Panhandle locale of Panama city followed by Alpena, Mich, Glendive & Wilmington.

Service Strategy

Promotion Strategy

Promotion Objective

The main objective of our brand extension is to educate men about the skincare products of Estee Lauder & eventually make them purchase it. Also we would like to enhance the brand awareness among our target market.

Promotion Strategy

Promotion Plan

• Advertisement in Magazines• Sales Promotion• Premiums

• TV Commercials

Promotion Strategy

Promotion Plan

• Social Media Marketing

Promotion Strategy

Promotion Plan

• Digital Marketing

Promotion Strategy

Promotion Plan

• Holiday & Other gift items• Special Events• Personal Selling

Promotion Strategy

Timeline

Promotion Strategy

Marketing Promotion Plan

35%

10%18%12%11%

14%

Advertising Budget Percentage

Print Ads Digital MarketingSocial Media Personal Selling

Print Ads $ 9,450,000.00 35%Digital Marketing $2,700,000.00 10%Social Media $4,860,000.00 18%Personal Selling $3,240,000.00 12%Special Events $2,970,000.00 11%Gift Items $3,780,000.00 14%

$27,000,000.00 100%

Financial Plan For 3 Years

Our direct competitors for the men’s skin care products are “Clinique”, & “Sheseido”. Their annual turnover in the year 2014 are $343.42 million & $632.25 million respectively for both men’s & women’s skin care products in USA. For “Clinique” men’s skin care is about 20% of their overall skin care products. For “Sheseido” its even less. It would be approximately 10-15% of their overall skins care products. So, for the men’s skin care market we can assume that their annual turnover or net sales would be $68 million dollars for “Clinique” & $75.8 million dollars for “Sheseido” in the year 2014.

Future Markets

• To distribute our men’s skin care products globally including China, South Africa and Brazil. The other emerging markets, which represent exciting opportunities in more than a dozen countries including Brazil, Turkey, Mexico and South Africa.

• Provide wider range of men’s skin care products.