Contents
Client Intro and Situational Analysis 2
Brand History 2
Brand image and positioning 3
Target Audience 5
Geographic Factors 5
Psychographics, VALS, Behavioral information 6
Market Analysis/ Competitor Analysis 6
Competitors 6
General Market Situation 8
Problem Statement 10
What the situation implies 11
Are There Multiple Problems To Be Addressed? 11
Campaign Recommendation 12
Campaign Budget 12
SWOT Analysis 13
Strategy Statement 15
Objectives 15
Strategies 15
References 17
Media Plan (Sephora)
Client Intro and Situational Analysis
Brand History
Sephora is acknowledged as the international prestige retail, inspiring and teaching its customers to play in the globe of Beauty. The Company is operated under the ownership of LVMH Moët Hennessy Louis Vitton which is one of the global leading prestigious and luxury goods and services. As a result, the company has been able to build its image as one of the prominent trailblazers that possess the innovation, expertise and entrepreneurial spirit. As such, at the company, beauty is one of its defining attributes since it is embedded in the company DNA (Kang 2012). Additionally, company’s revolutionary beauty retail concept which was established and initiated by Dominique Mandonnaud in the year 1970 is explained and defined by its open-sell, and distinct environment that boasts of an ever-growing assortment of services and products from brands that are exemplarily curated which encompass indie darlings, trusted classics, emerging favorites and the global Sephora Collection made by the company itself (Element Three, 2013). In the contemporary world, the company is not only at the top of the list when it comes to beauty products such as perfumes and cosmetics in France, it serves as unauthoritative beauty presence in most nations around the globe due to its unparalleled assortment of luxurious products ,interactive shopping environment, unbiased service from experts and innovation.
Sephora as a company is of the opinion that every day, swipe and stroke identifies different possibilities and the company ensures that the love of its clients is embedded in the confidence they have in their services, products and the joy they bring in their life on daily basis (Element Three, 2013). Sephora clients are able to unlock their potential in terms of beauty in every store affiliated to Sephora, Fragrance Studios, and Skincare through the employment of intuitive technology and management from intellectual and professional team of consultants that are found in the beauty (Tănase, 2011).
Sephora beauty products
Brand image and positioning
Being one of the leading cosmetics companies that possess approximately over 250 brands, the target customers are believed to be fashion-conscious women that possess active lifestyles and are trying to emulate anew and trendy distinct look. As a result, the company has unique and highly differentiated brand image (Kang 2012). In most instances, they employ the colors, white, red and black in their website and design stores. As a result, they have ensured that they remain the minds of their consumers since its customers whenever they think of Sephora, the white and black stripped visuals crosses their mind (Tănase, 2011). The colors ensure that they offer a clean but rather exciting image of the company that merges well with the services and products which encompass luxurious high-end cosmetics. Whenever they images and visuals of Sephora are seen it as customer comprehend that they are safe and that the service that will be delivered will be high-end (Kang 2012). The company also offers products that are affordable which allow include private label beside the luxurious products.
Brand and Product Lifecycle
There are different ways in which the global lifecycle of beauty and cosmetics customers has revolutionized. For instance, most of the beauty consumers tend to spend a relatively high number of their time online researching for new products something that was never the case long time ago. As a result, Sephora has moved to counter this strategy over time by focusing on relevant and innovative gifting (Kang 2012). Hence, the beauty and cosmetics business at Sephora commences with the centricity of the customer and the customers of the brand at their primary life stages. As such, by Helping customers to realize ways of improving and simplifying their beauty life without necessarily doing away with the overall results, the process at Sephora commences from the product development, purchasing experience of the customers, and their experiences (Kang 2012). As a result, this lifecycle of the product has established an environment at Sephora of reciprocity and trust between it and its customers.
Target Audience
The target audience of Sephora are high-end customers that are still going through their active stages of life. The gender of the target customers are female aged between ages 16 to 45 who are still going through an active period in their life and who would like to keep in touch with the latest fashion and trends in the beauty and cosmetics field (Element Three, 2013). Additionally, the millennials are one of the generations that are increasingly spending much of their time on shopping. As such, most of the target customers are women that are middle-aged ranking within the middle-to up class with a sizeable disposable income to spend. Quite a number of them may have just completed College or are in their first job opportunity. One reason why women and young millennials are targeted is because of they are early adapters and most of them tend to be attracted to fashionable goods and services to enable them keep with the latest trend in the industry (Tănase, 2011).
Geographic Factors
The focus of the campaign will concentrate heavily at regional level where different advertisements and promotions will be conducted for approximately one year. Most of the target market audience live in city centers and most of them tend to acknowledge the importance of good looks and make up. Besides, people living in the towns are believed to have an exemplary disposable income that they can spend on the luxurious products relative to those in the rural areas (Sherman, 2013). The regional campaign is important since it will ensure that the reputation of Sephora goes beyond borders and penetrates to new markets in Asian countries and other emerging economies around the globe.
Psychographics, VALS, Behavioral information
The beauty industry is acknowledged as one of the areas of competition where there is an increasing number of new entries that are spread from both the start-up companies that ae trying to pull the customer’s niche and the fashion brands in the form of H&M that are trying to increasing their already extensive portfolio. However, with an increasing number of beauty entrants in the modern world, Sephora has ensured that its customer possess a plethora of choices relative to what it was 15 years ago (Sherman, 2013). For this reason, most of the modern beauty shoppers at Sephora are comparatively developed in the manner in which they curate their make-up bag since they tend to try new images and brands at the suitable price-pointy for them. The current advertisement media used is the celebrity endorsements and video and televisions advertisements ensures that the company’s product gains reaches larger population which appreciates celebrity advertised products.
Market Analysis/ Competitor Analysis
Competitors
The primary known competitors for Sephora include L’Oréal and Ulta. Relative to Sephora, it is believed that Ulta is stocked with an extensive number of lower priced or cheap products. They also possess an exemplary membership program that can fit everyone. Yet the perception of the brand to its customer’s s not established relative to Sephora. In other words, their E-commerce operations as well as their stores do not attract so many customers compared to Sephora since they are less functional (Kang 2012). For instance, ULta.com as well as Sephora.com possess an exemplary level of control to its customers by offering great search engine and ensuring that their goods categories are set in detail. However, when the two websites are compared, it is easier to navigate through Sephoira.com relative to Ulta.com since it has a better design and website configuration attributes (Kang 2012). Moreover, the official website of Sephora is also easily accessible and its digitalization process is exemplary since it is embedded with more detailed products information as well as more clarity in the pictures and images of the products. However, quite an extended number of the products that are offered by Ultra are less famous when compared to the ones provided by Sephora which gives it a competitive edge.
Another common competitor of Sephora is L’Oréal. It is one of the most well-established brands what is equipped with an extensive product line. Yet Sephora is known to offer a relatively better service for its customers and provides an great conspicuous reward program to consumers (Kang 2012). L’Oréal does not offer access to several coupons and besides, most of its offers are not accessible to members that are not listed on the top half of their customer pyramid. On the other hand, Sephora is on record for issuing three samples per order via their online commerce including those consumers that have not yet registered as members of the program (Kang 2012). Lorealparisusa.com which is an official website for L’Oréal and Sephora.com have a great accessibility way for its consumers since they are filled with detailed information revolving around its products and services. However, when the two are compared, Lorealpapusa.com can be said to have rich content in terms of the product information on some services. However, in terms of free control and navigation, Sephora’s official website offers enough control to its consumers relative to L’Oréal (Kang 2012). But in terms of design attributes, the official website of L’Oréal is fancier since it is embedded with lots of features of website designs but what makes it challenging is that it is more difficult to navigate through it when it comes to searching and locating new products. As a result, more customers like to shop and buy goods and services at Sephora. Com relative to L’Oréal and Ulta since Sephora possess better offerings in terms of products, better customer service and they have a good online trading platform that attracts numerous customers (Kang 2012).
General Market Situation
It is accepted that younger consumers are now driving changes and shifts in the beauty and cosmetics retail industry around the globe (Kang 2012). As such, there is an increasing number of changing shopping habits since most consumers are now shifting venues of where they purchase their goods and beauty products and this is not only down to the growth of E-commerce.it is accepted that value-positioned retailers in the form of Target have increased their number of buyers but others such as Sephora that are highly specialized are now increasing their sales strongly (Vásquez, & Escamilla, 2014). A primary takeaway for the retailers that are selling beauty and cosmetics products is something that is applicable in a number of areas either they focus on lower prices or specialized products since the middle ground is balanced and served by different online platforms.
Figure: Polarization of Growth in the Beauty and Cosmetics industry, (Web images, 2018)
In the current market, younger millennials are driving this changing shifts for two reason; First, most millennials are seen as frugal shoppers , looking for deals, shopping around and cutting coupons to help them save money which makes them to spend a minimum amount per person on personal care and beauty products relative to the aging populations (Shen, & Bissell, 2013). Second, drugstores such as Walgreens and CVS remain some of the common or prominent retailers when it comes to beauty and cosmetics products but it only older consumers that have a high chance of purchasing their products from these stores relative to the younger millennials (Peiss, 2011).
Share of Voice
Figure 8: Net Revenue of Leading Beauty specialist retailers, 2016
USD Bill
Sephora (Est.) $4.4-$4.9
Bath & Body Works* $3.85
Fiscal year ended January 2017
Problem Statement
Sephora current market share
L’Oréal Current Target market
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What the situation implies
• With the increasing retail slump and the domination of digital platforms such as Amazon the brand image of Sephora is slowly reducing its popularity as evidenced by the drop in its opinion and familiarity
• L’Oréal which is its major competitors is slowly gaining a reasonable amount of market share
• Based on the analysis. L’Oréal is one of the major Competitors of Sephora and its threat is likely to keep it up for quite some time
Are There Multiple Problems To Be Addressed?
The major problem that needs to be addressed is the fact that Sephora is slowly losing its popularity and familiarity. The company needs to work on its brand awareness. Because of the increasing advancement in technology, so many beauty retailers are gaining ground on Sephora. There has been numerous complaints about its digital platform for quite some time now which is making the company to lose awareness in some key areas (Jones, 2010). As a result, its market share is slowly declining which is making some of its competitors such as L’Oréal to gain share values in the market. In the current target market, Ulta and L’Oréal are slowly gaining popularity which is impacting the sales revenue of Sephora and offering a scare to the once reputable position of Sephora in the market (Neuendorf, 2016). As a result, the company needs to establish campaigns that might increase the brand awareness in some of its primary markets. The best way of creating awareness is through online and social media advertisement of the company’s product to ensure it reaches large target group. Billboards and direct pitching are also effective ways of creating awareness of the product to the members of the public.
Campaign Recommendation
To help deal with the current problem facing Sephora, it is important to improve the brand positioning in the minds of the consumers to ensure that they remain loyal to the company to ensure that it keeps its number one position in the beauty and cosmetics industry. In this case, a regional advertisement and brand promotions will ensure that the perception of the consumers on the company as well as its digital platform main intact hence making tit to remain relevant in the market (Balamani, & Nancy, 2013).
Campaign Budget
Considering that Sephora has set aside approximately $ 500,000 to cater for all its promotional and marketing activities for a certain financial quarter, the budget breakdown will be as follows
Marketing technique or strategy Allocation percentage amount
Inbound Content marketing 20 to 25% $ 100,000-125000
Email marketing 5-10% $25000-$50000
SOCIAL MEDIA 20-25% $100000-$125000
Influencer marketing, SEO and Public Relations 20-25% $100000-$125000
Website 10-15% $50,000-75,000
Traditional 10-15% $50,000- 75,000
SWOT Analysis
Strengths
The following are some of the issues that Sephora does that offers it a competitive advantage in the market. First, the company has a cohesive brand image since it is able to project an interlinking and developed reputation across its channels and the company realizes this by sending consistent signals based on their brand image in all its marketing channels including social media and online platforms (Sephora, 2014). There are also beauty studios in their stores and in their official websites where an individual can practice their own make up with the Helpance of the numerous tutorial posted online.
Second, there is a sensory experience in Sephora retail stores. Its stores are known to provide a complete sensory experience to its consumers (Sephora, 2014). They are embedded by soothing light music which confirms the image of the company signature of black, gold and white colors and tits staff is friendly and stylish. Consumers are also permitted to experiment the makeup with the help of an expert that is trained on a number of issues.
Third, there is an extensive number of customer involvement in their decisions. The manner in which the stores at Sephora are designed is customer friendly since it provides an easy access to the beauty and cosmetics products. It also provides fragrance testers, Color IQ to test color that Helps the consumer identify their preferences in terms of color or elements that might define their look with the help of simple tutorials (Sephora, 2014).
Weaknesses
The first weakness of Sephora is that it is expensive. The company is one of the players in the Beauty industry whose products are extremely fragmented. As a result, the range of pricing and the number of players vary to a great extent (Sephora, 2014). Since it deals with luxurious and highly segmented goods, they are highly priced and this makes so many people not able to afford it.
Second, there is Channel Dilution, Sephora is accepted as exclusive retailer for an wonderful number of retailers which are top brands and may act as direct competitors to its products (Salpini, C. (2017). As a result, this has ensured that the reputation and image of their brand has been diluted and in the end, it is impacting on the sales and the image while also sending mixed signals among its consumers (Sephora, 2014).
Third, there is also poor market penetration in the Middle East and Asia. The market shares of Sephora in emerging economies such as China and India is low relative to its competitors since the company only makes sales and deals through its exclusive channels (Sephora, 2014). Yet, they also offer promotions to other competing brands that are able to sell their products and services with the help of other distributors.
Opportunities
Increasing possibility for growth in the cosmetics industry (Bhasin, 2018). There is a belief that the industry is in a growth mode since most women are now conscious about their appearances. Most individuals comprehend the need for different makeup based on their skins or ethnicities as well as some of the reasons why different genres fit different occasions (Sephora, 2014). Second, there is also an increasing opportunity for Sephora to explore emerging markets by ensuring that it sets up strategies that are suiting to the environment. Third, most consumers are willing to pay expensive prices for exemplary for high-end products which is an opportunity for Sephora’s luxurious products (Sephora, 2014).
Threats
The biggest threat that the company is experiencing is competition. Some of the Beauty and Cosmetics retailers in the Industry such as L’Oréal, Ulta, Estee Lauder, Versace, Ales Group among others offers stiff competition to the market share and market position of Sephora (Bhasin, 2018). Second, maintaining low costs and lower prices is a worrying trend since there is an increase in the prices of raw materials due to high inflation (Sephora, 2014). Third, most consumers are choosey and selective in the beauty and cosmetics sector which implies that attracting them needs a company to offer exemplary and high quality services and products.
Strategy Statement
Objectives
To solve the current problem facing Sephora, it is important to increase the brand positioning of the company in the minds of consumers by 15% in the first quarter. Second, increasing the number of sales in the second tier consumers by 20% by the end of the current financial fiscal y year by increasing the number of advertisement campaign. Third, to enhance the reputation of the company in Asian company by 15% by the end of the Second Quarter of its operation. To set up 10 Stores in India and China’s major centers within 3 years to help penetrate the Asian markets.
Strategies
To help realize the objectives set in the problem statement and the exploration of the inverted pyramids, it is important for Sephora to engage in heavy advertisement campaign and web content management highlighting the trendy and new products that are on display at Sephora. Since the company boasts of approximately over 15 million followers on social media, it is crucial that a reasonable amount of time is allocated in social media management , advertisements and content update when it comes to beauty products backed with tutorials that could Help the customer to choose the products of their choice (Jones, 2010). In the contemporary world, digital advertising plays a crucial role in the customer’s selection choices. As a result, improving the pictorial representation and digital design of the official website of Sephora to enable easy navigation and access by its customers may play a crucial role in solving the current problem that the company is facing (Smith, Drumwright, & Gentile, 2010). In fact, the gap between specialized beauty companies and single retailers is the digital platform. By enhancing its digital features, Sephora may be able to capture both the specialized customers and online customers which might Help it in increasing its revenues.
References
Balamani, P., & Nancy Fernandez, N. (2013). EMPLOYEE CONTRIBUTION TOWARDS ONLINE SOCIAL NETWORKS AND THE ONLINE NETWORKING STRATEGY. International Journal of Trade & Global Business Perspectives, 2(1), 308-313.
Bhasin, H. (2018). SWOT Analysis of Sephora. Retrieved from: https://www.marketing91.com/swot-analysis-of-sephora/
Element Three, (2013). 3 ways to build an industry leading Brand (and how Sephora did it). Retrieved from: https://elementthree.com/blog/3-ways-to-build-an-industry-leading-brand-and-how-sephora-did-it/
Jones, G. (2010). Beauty imagined: a history of the global beauty industry. Oxford University Press on Demand.
Kang H. (2012). Sephora-E-Commerce Analysis. Retrieved from: http://hannahkangsephora.blogspot.com/2012/12/sephora-positioning-statement.html
Neuendorf, K. A. (2016). The content analysis guidebook. Sage.
Peiss, K. (2011). Hope in a jar: The making of America’s beauty culture. University of Pennsylvania Press.
Salpini, C. (2017). 30 minutes with Sephora’s Head of marketing. Retrieved from: https://www.retaildive.com/news/30-minutes-with-sephoras-head-of-marketing/510300/
Sephora, (2014).Strengths, Weaknesses, Opportunities and Threats. Retrieved from: https://sephoracosmeticsblog.wordpress.com/2014/02/17/strengths-weakness-opportunities-threats/
Shen, B., & Bissell, K. (2013). Social media, social me: A content analysis of beauty companies’ use of Facebook in marketing and branding. Journal of Promotion Management, 19(5), 629-651.
Sherman, L. (2013).Inside Sephora’s Branded Beauty Strategy. Retrieved from: https://www.businessoffashion.com/articles/intelligence/marc-jacobs-sephora-lvmh-branded-beauty-strategy
Smith, N. C., Drumwright, M. E., & Gentile, M. C. (2010). The new marketing myopia. Journal of Public Policy & Marketing, 29(1), 4-11.
Tănase, G. C. (2011). An overview of Retail Branding and Positioning as Marketing Management concepts. The advantages of establishing a strong brand image for retailers. Romanian Distribution Committee Magazine, 2(1), 35-39.
Vásquez, G. A. N., & Escamilla, E. M. (2014). Best practice in the use of social networks marketing strategy as in SMEs. Procedia-Social and Behavioral Sciences, 148, 533-542.
