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Fashion 119 Introduction

to Marketing
Brand Report
Jacqueline Trunks, Gemella Ali-Ridha, Stephanie Griffith,
Tamara Hoeflaak-Timonthy, & Olympia Dominguez

FASHION 119 INTRODUCTION TO MARKETING 1

Table of Contents
STEP ONE: INRTODUCTION

BRIEF INTRODUCTION OR ABOUT SECTION

STEP TWO: CONDUCT SECONDARY & PRIMARY RESEARCH

4-18

BRAND LEADER ANALYSIS SECTION


MARKET SHARE ANALYSIS
SECONDARY RESEARCH
PRIMARY RESEARCH
DIRECT COMPETITIVE ANALYSIS SECTION
SUMMARY OF ALL DIRECT COMPETITORS
SUMMARY OF 3 DIRECT COMPETITORS
LATEST TRENDS/NEW PRODUCT DEVELOPMENT ANALYSIS SECTION
PRIMARY RESEARCH SECTION
FOCUS GROUP

4-7
4
5
6-7
8-11
8-9
10-11
12-13
14-19
14-19

STEP THREE: TARGET MARKET & POSITIONING

20-22

TARGET MARKET PROFILE SECTION


POSITIONING STATEMENTS & POSITIONING MAP SECTION

20-21
22

STEP FOUR: PRODUCT/BRAND

23-34

PRODUCT DESCRIPTION SECTION


PRODUCT ANALYSIS
STRENGTHS & WEAKNESSES
FUTURE RECOMMENDATIONS
BRAND NAME SELECTION SECTION
CONCEPT TESTING SECTION
IN DEPTH INTERVIEWS
SUMMARY OF FINDINGS

23-24
23
24
25
26
27-36
27-31
32-36

STEP FIVE: PRICING, PROMOTIONS, & DISTRIBUTION


PRICING ANALYSIS SECTION
PRICING ANALYSIS
STRENGTHS & WEAKNESSES
FUTURE RECOMMENDATIONS
MARKETING COMMUNICATIONS (PROMOTION) ANALYSIS SECTION
MARKETING COMMUNICATIONS ANALYSIS
STRENGTHS & WEAKNESSES

37-46
37-39
37
38
39
40-41
40-41
42
43
44-48
44-46
47
48

FUTURE RECOMMENDATIONS
DISTRIBUTION (PLACE) ANALYSIS SECTION
DISTRIBUTION ANALYSIS
STRENGTHS & WEAKNESSES
FUTURE RECOMMENDATIONS

BIBLIOGRAPHY

49

STEP ONE: INRTODUCTION


BRIEF INTRODUCTION OR ABOUT SECTION
The product category is based on skincare and cosmetics for women in their 20s
who are entering the anti-aging world, but may still be battling with younger skin
concerns, such as acne. Women in their 20s range from students, to young
professionals, to women who are established in their careers, all of who juggle a
hectic schedule. This product is designed to be a simple, multi-use product that
eliminates confusion and enables ease of use. This product will allow women to
target any aging skin concerns that begin to appear in this age bracket with the use
of one simple product, ultimately providing convenience to the busy twentysomething year old woman.

FASHION 119 INTRODUCTION TO MARKETING 3

STEP TWO: CONDUCT SECONDARY & PRIMARY RESEARCH


BRAND LEADER ANALYSIS SECTION
MARKET SHARE ANALYSIS SECTION

STEP TWO: CONDUCT SECONDARY & PRIMARY RESEARCH


BRAND LEADER ANALYSIS SECTION
SECONDARY RESEARCH

OLAY REGENERISTS MARKETING MIX:


PRODUCT

PRICE

PROMOTION

PLACE

Advanced, appearance
correcting anti-aging
skin care products that
help regenerate skins
appearance without
drastic measures
Includes:
o facial moisturizers
o specialty
treatments
o facial cleansers
Contains aminopeptides, B3 complex,
vitamin E, pro-vitamin
B5, green tea extract,
allantoin, and glycerin
Predominantly red,
white, and black
packaging

Prices range
from
approximately
$10-40
Well-priced to
increase
availability to
the mass
market

Marketing communications
include use of:
o TV commercials (some
with celebrity
endorsement)
o Magazine ads
o Internet promotional
website
o Outdoor/transit ads (i.e.
bus shelters, subways)
o Social media
o Mobile marketing (i.e.
emails, mobile search)
o Email marketing Club
Olay
o Online skin
consultations
o Advergaming
(King.coms Facebook
game Bubble Saga)

Drugstores (e.g.
Shoppers Drug
Mart)
Grocery/superstores
Online (promotional
website that
provides links to
other transactional
websites)

FASHION 119 INTRODUCTION TO MARKETING 5

STEP TWO: CONDUCT SECONDARY & PRIMARY RESEARCH


BRAND LEADER ANALYSIS SECTION
PRIMARY RESEARCH
Why Olay is the Brand Leader
Olay Regenerist is anti-aging skincares brand leader for many reasons. For one,
they have been around as a skincare company for over 60 years since the 1950s.
Brand loyalty has thus been passed down through the generations, from
grandmothers to their daughters and now to their grandchildren. They have
maintained their popularity over the decades by constantly adding product lines to
their product mix. Olay added the Regenerist line of anti-aging skin care to its
product mix in April 2003 and it has since been the highest-grossing anti-aging
skincare brand on the market. After visiting Shoppers Drug Mart it is evident that
Olay is the brand leader when it comes to anti-aging products, as Olay Regenerist
and its other product lines dominated the shelves. Olay is a trusted company that
creates products that have proven results for their claims. This is because they have
an elite team of researchers and dermatologists that utilize some of the most
innovative and scientifically advanced ingredients compared to other competitors.
Finally, over the years they have utilized a very effective marketing strategy that has
penetrated the target market thoroughly. Their successful and thorough use of
advertising, mainly television commercials and magazine advertisements, has
positioned the brand positively in its target markets mind.
Product Life Cycle
Olay as a company has been around for approximately 60 years and is in the
maturity stage of the product life cycle. Most consumers are aware of Olays
presence in the anti-aging market and Olays general marketing objective works to
obtain brand loyalty from their customers. Despite the existence of many
competitors in the market, Olay ensures that their products are innovative and
constantly changing, and that they emphasize product differentiation versus the
competition. Product lines are widely available in a range of distribution outlets and
pricing and sales promotions are frequently used to increase sales. Olay is one of
Proctor & Gambles highest-grossing companies with overall maximized profits.
Competitive Advantage
Olay products hold a competitive advantage in that they are relatively inexpensive,
visible, convenient, and reliable. Compared to higher-end brands that are sold in
department stores or at Sephora, Olay Regenerist is inexpensive in comparison.
Compared to other drugstore brands sharing the shelves, Olay Regenerist products
are more researched and developed, due to scientific backing and innovative
ingredients, thus making it a more reliable brand. The brand is well trusted due to a
long and successful history in the market. Olays thorough and effective use of
advertising has made it a highly visible brand, which has resulted in in-demand
products that are available in many distribution outlets making them convenient.
6

What Can Be Learned From Olay


Our brand can learn from Olays marketing mix and its marketing communications
such as their pricing strategy. Olay is very appropriately priced for their target
market, which has contributed to its high-grossing sales. As well, they have a highly
successful advertising campaign, which has effectively gained awareness for the
brand and its expanding product mix. Their use of celebrity endorsement adds
brand equity and contributes to their extensive brand loyalty. Olay has achieved
international distribution, which has ultimately resulted in extraordinary profit
margins, as they are a multi-billion dollar company. Their use of segment marketing
has attracted a large and stable consumer base, as they have developed many
products within different product lines and categories that meet a variety of needs
for different target markets.

FASHION 119 INTRODUCTION TO MARKETING 7

STEP TWO: CONDUCT SECONDARY & PRIMARY RESEARCH


DIRECT COMPETITIVE ANALYSIS SECTION
SUMMARY OF ALL DIRECT COMPETITORS
COMPETITORS

DESCRIPTIONS

PRICE
POINT

ADVANTAGES
&
SPECIALIZED
FEATURES

MARKETING COMMUNICATIONS

DISTRIBUTION

Olay
Regenerist

Advanced,
appearance
correcting, antiaging skin care
products that
help regenerate
skins
appearance
without drastic
measures

$10-40

Formulated w/
an exclusive
Olay aminopeptide & B3
complex; also
has vitamin E,
pro-vitamin B5,
green tea
extract,
allantoin, &
glycerin

Drugstores (e.g.
Shoppers Drug Mart)
Grocery/superstores
Promotional website
provides links to
other transactional
websites

Neutrogena
Healthy Skin

Daily
$6.49moisturizers
22.99
proven to reduce
the signs of aging
in just 4 weeks

TV commercials Celebrity
endorsement
Internet
Magazine ads
Outdoor/Transit ads (i.e. bus shelters,
subways)
Social media
Mobile marketing (i.e. emails, mobile
search)
Email marketing- Club Olay
Online skin consultations
Advergaming (King.coms Facebook
game Bubble Saga)
TV commercials Celebrity
endorsement
Internet
Magazine ads
Social media
Mobile marketing (i.e. mobile search)
Email marketing

Vitamin C & E,

lightweight,
non-greasy, oilfree, UVA/UVB
suncscreen

FASHION 119 INTRODUCTION TO MARKETING 8

Drugstores (e.g.
Shoppers Drug Mart)
Grocery/superstores
Promotional &
transactional website

LOreal Derm
Expertis Age
Perfect

Increase

$15-40

Clinique

De-aging

$30-70

resilience,
minimize age
spots and
hydrate deeply

Enriched with

precious oils,
calcium,
dermo-peptide,
beta hydroxyl
acids,
UVA/UVB
sunscreen

powerhouses
work to repair &
help slow visible
aging 24/7, as
well as
protecting skin
from the visible
effects of
environmental
stresses & helps
skin rebuild
firming natural
collagen to
appear smoother
& more lifted

TV commercials Celebrity
endorsement
Internet
Magazine ads
Social media
Mobile marketing (i.e. emails, mobile
search)
Email marketing
Online skin consultations
Online video advertising (e.g.
YouTube)

Hypoallergenic, TV commercials (few)


fragrance-free,
UVA/UVB
sunscreen

Internet
Magazine ads
Email marketing
Online skin consultations
Insiders Club

FASHION 119 INTRODUCTION TO MARKETING 9

Drugstores (e.g.
Shoppers Drug Mart)
Grocery/superstores

Sephora
Department stores
(e.g. The Bay, Sears)
Higher-end
drugstores (e.g.
Beauty Boutique @
Shoppers Drug Mart)
Promotional &
Transactional website

STEP TWO: CONDUCT SECONDARY & PRIMARY RESEARCH


DIRECT COMPETITIVE ANALYSIS SECTION
SUMMARY OF 3 OTHER DIRECT COMPETITORS
COMPETITOR
PRODUCT
Daily moisturizers proven to reduce
Neutrogena
the signs of aging in just 4 weeks
Healthy Skin

PRICE

PLACE

$6.49-22.99

Drugstores (e.g. Shoppers


Drug Mart)
Grocery/superstores
Promotional & transactional
website

Lotions
Eye Creams
Scrubs
Cleansers

LOreal Derm
Expertis Age
Perfect

Eye creams
Serums
Night creams
Toners
Lotions
Day creams
Cleansing towlettes

$15-40

Drugstores (e.g. Shoppers


Drug Mart)
Grocery/superstores

Clinique

Moisturizers
Serums
Eye Creams
Makeup (Foundation)
Night Creams
Lip Treatments

$30-70

Sephora
Department stores (e.g. The
Bay, Sears)
Higher-end drugstores (e.g.
Beauty Boutique @ Shoppers
Drug Mart)
Promotional & Transactional
website

FASHION 119 INTRODUCTION TO MARKETING 1


0

PROMOTION
TV commercials Celebrity
endorsement
Internet
Magazine ads
Social media
Mobile marketing (i.e. mobile search)
Email marketing
TV commercials - Celebrity
endorsement
Internet
Magazine ads
Social media
Mobile marketing (i.e. emails, mobile
search)
Email marketing
Online skin consultations
Online video advertising (e.g.
YouTube)
TV commercials (few)
Internet
Magazine ads
Email marketing
Online skin consultations
Insiders Club

Neutrogena Healthy Skin


Neutrogena is a brand consisting of skincare, hair care, and cosmetics that markets
its products worldwide in over 70 countries. It has been around since 1930 and is
now a part of Johnson & Johnson since 1994. Neutrogena has product lines for acne,
anti-aging, sun protection, bath and body, and more recently a line targeting men
(Neutrogena.com).
Neutrogena Healthy Skin is a line of dermatologist-recommended daily
moisturizers that help to erase away the appearance of fine lines, blotches, and
discolourations for a lifetime of healthy, beautiful skin and are clinically proven to
reduce the signs of aging in just 4 weeks (Neutrogena.com). Neutrogena Healthy
Skin contains multi-vitamins, lightweight moisturizers, oil-free formulations, and
UVA/UVB sunscreen.
LOreal Derm Expertis Age Perfect
LOreal Paris is a brand consisting of skincare, colour cosmetics, hair colour, hair
care, and styling products that is sold internationally in over 130 countries. Founded
in 1909, the company has been around for over 100 years and has product lines for
anti-aging, anti-wrinkles and dark spots, sun protection, sunless tanners, as well as
products developed for men (Lorealparis.ca).
LOreal created their line Age Perfect specifically for women over the age of 50 as a
way to reinforce mature skins network by [repairing] signs of past damage and
[reducing] visible signs of aging (Lorealparis.ca). LOreals anti-aging skincare line
Age Perfect contains nutri-repair complex enriched with Bio Peptides and Ceramide
Fortifiers, Dermo-Peptides, and beta hydroxyl acid and has formulations for face,
neck and chest, and the eye area. The products work to brighten and smooth
mature skin while reducing the appearance of age spots, fine lines, and surface
wrinkles (Lorealparis.ca).
Clinique
Clinique is a manufacturer of skincare, cosmetics, fragrances, hair care, and sun
protection and operates under the Estee Lauder Corporation. The company has
been in business for over 40 years and is considered a premium-priced
hypoallergenic skincare company that is sold in a variety of retailers across 80
countries around the globe. Clinique carries product lines targeting anti-aging, acne,
redness, pores, as well as mens skincare products (Clinique.com).
Cliniques anti-aging skincare focuses on [protecting] skin from the visible effects of
emotional and environmental stresses as well as [helping] skin rebuild firming
natural collagen to appear smoother, more lifted and by reducing fine lines and
wrinkles (Clinique.com). Cliniques formulations focus on lips, eyes, and face as
problem areas in order to fight the signs of aging.

FASHION 119 INTRODUCTION TO MARKETING 1


1

STEP TWO: CONDUCT SECONDARY & PRIMARY RESEARCH


LATEST TRENDS/NEW PRODUCT DEVELOPMENT ANALYSIS SECTION
Past generations adopted a passive, less involved
way of aging while newer generations take an active,
complex, and deliberate approach to anti-aging. The
desire to look younger is not just restricted to the
older generations, men and women starting from as
young as 25 are spending time and money on
skincare treatments to preserve and minimize the
signs of aging. The trend in cosmetic surgery is also
changing. More and more people are turning
towards less invasive options, for example
microdermabrasion. A more holistic approach is
being taken, as people are aiming to prevent aging
by coinciding it with a healthy lifestyle.
Product trends and new developments in antiaging products include research into the
yarrow plant that is purported to increase
epidermal thickness and improve the
appearance of wrinkles & pores.
Perfluorocarbons have been looked into for
their botox-like effects as they firm the skin
and make wrinkles less visible. Olays products
contain niacinamide/glycerin formula, some of
the most innovative and active ingredients on
the market.
New products on the market focus on product
application. Skincare tools such as skin
cleansing rotating brush systems, such as
those made by Clarisonic and other drugstore
brands, exfoliate and prep the skin and allow it
to better absorb anti-aging or acne treatments.
Other tools, such as Tandas Luxe Skin
Rejuvenation Photofacial Device, harness LED
light to deliver a professional skin-enhancing
results. For the eye area, there has been the
introduction of eye roller balls, which employs
cooling-metal to massage away and de-puff
under eye bags and circles.
FASHION 119 INTRODUCTION TO MARKETING 1
2

The skincare and


beauty world has seen
another breakthrough
byway of BB creams
or beauty balms that
originated in Asia as
multi-use, all-in-one
skincare/cosmetics.
They are meant to
replace traditional
moisturizers,
foundation,
sunscreen, and
serums. Both highend and drugstore
brands are currently
selling these beauty wonder products that are quickly gaining traction in the
Western world.

FASHION 119 INTRODUCTION TO MARKETING 1


3

STEP TWO: CONDUCT SECONDARY & PRIMARY RESEARCH


PRIMARY RESEARCH SECTION
FOCUS GROUP
Conducted on: Wednesday, October 24th, 2012
Focus group members: Elizabeth (21), Laura (25), Janelle (20), Sarah (23), Monica
(19), Dominika (28), Catherine (20), Tia (22)
Moderators: Jacqueline posed questions, Stephanie recorded answers
Sampling method: non-probability because the sample population was chosen
from friends, co-workers, & classmates
1) Do you use anti-aging products?
E: no
L: yes
J: no
S: no
M: no
D: yes
C: no
T: no
2) At what point are you going to or did you start to worry about aging?
E: around 30
L: I started worrying about aging when I was 23
J: not sure
S: I agree with Elizabeth, when Im 30
M: maybe when Im 25
D: yeah Ive heard youre supposed to start using products when youre 25
C: not really concerned
T: maybe when Im older like in my 40s
3) How much would you be willing to spend on anti-aging products?
E: maybe $20
L: Id spend over $100 if it really worked
J: $30
S: $20-40
M: not very much
D: same as Sarah
C: $50
T: like $10

14

4) Do you believe that anti-aging products work?


E: sort of
L: yes
J: yes
S: yes
M: yes
D: yes
C: not really
T: no
5) What do you look for in an anti-aging product? What type of products do you
use?
E: I dont use any products yet but I would want something for sensitive skin
L: I use a line I buy at Sephora
J: something all natural
S: nothing specific
M: something cheap
D: I use Olay
C: whatever my mom uses
T: no
6) Would you plan on getting cosmetic surgery in the future? Would using antiaging products postpone that?
E: maybe when Im much older; no
L: definitely and no
J: definitely not
S: I would consider it; if they worked
M: no
D: maybe; also if they worked
C: probably not; yes
T: no; yes
7) Where would you prefer to purchase anti-aging products? (Drugstores vs.
Department stores)
E: drugstore
L: Sephora
J: department stores
S: drugstore
M: drugstore
D: Sephora or department stores
C: department stores
T: doesnt matter

FASHION 119 INTRODUCTION TO MARKETING 1


5

8) How do you feel about home remedies or organic/all-natural anti-aging


products?
E: not sure I believe they work
L: I wouldnt bother
J: Id give them a try
S: dont care
M: (no answer)
D: Im not sure theyd work
C: (no answer)
T: (no answer)

16

STEP TWO: CONDUCT SECONDARY & PRIMARY RESEARCH


PRIMARY RESEARCH SECTION
FOCUS GROUP
Summary of Findings
1) Do you use anti-aging products?
6 out of 8 respondents said no
2 out of 8 respondents said yes
2) At what point are you going to or did you start to worry about aging?
3 out of 8 respondents said approximately 23-25
2 out of 8 respondents said approximately 30
2 out of 8 respondents were unsure or not concerned
1 out of 8 respondents said approximately 40
3) How much would you be willing to spend on anti-aging products?
4 out of 8 respondents said $20-40
2 out of 8 respondents said $10 or less
1 out of 8 respondents said $50
1 out of 8 respondents said over $100
4) Do you believe that anti-aging products work?
5 out of 8 respondents said yes
2 out of 8 respondents said no
1 out of 8 respondents were undecided
5) What do you look for in an anti-aging product? What type of products do you
use?
overall factors for purchasing anti-aging products include:
I.
sensitive skin
II.
all natural
III.
inexpensive
IV.
mothers influence
V.
purchased at higher-end stores, such as Sephora
VI.
brand leader (Olay)
6) Would you plan on getting cosmetic surgery in the future? Would using antiaging products postpone that?
4 out of 8 respondents said they would not get cosmetic surgery
o 2 said anti-aging products would postpone this
o 2 did not provide an answer either way if anti-aging products would
postpone this
3 out of 8 respondents would consider getting cosmetic surgery
FASHION 119 INTRODUCTION TO MARKETING 1
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o 2 said if they worked it might postpone this


o 1 said anti-aging products would not postpone this
1 out of 8 respondents said they would get cosmetic surgery
o anti-aging products would not postpone this

7) Where would you prefer to purchase anti-aging products? (Drugstores vs.


Department stores)
3 out of 8 respondents said drugstores
2 out of 8 respondents said exclusively department stores
1 out of 8 respondents said exclusively Sephora
1 out of 8 respondents said either department stores or Sephora
1 out of 8 respondents said it doesnt matter
8) How do you feel about home remedies or organic/all-natural anti-aging
products?
3 out of 8 respondents have negative feelings (do not believe they work or
wouldnt bother trying them)
3 out of 8 respondents did not provide an answer or are indifferent
1 out of 8 respondents have positive feelings (would be willing to try them)

18

Summary of Findings
Results from the companys focus group provide insight into the target markets
perceptions regarding anti-aging. Most of the respondents questioned do not
currently use anti-aging products and most will only begin to get concerned about
their skins aging process around their mid-twenties. Most consumers would be
willing to spend approximately $20-40 on an anti-aging skincare product with the
majority of respondents believing that anti-aging products do show results. Factors
that influence the purchase of an anti-aging product include having sensitive skin,
ensuring that the product is all natural, the cost of the product, influences from their
mothers, where the product is purchased, and who the brand leader is for anti-aging
skincare. Half of the respondents said that they were not interested in having
cosmetic surgery performed on them in the future and another half of the
respondents said that high-performing anti-aging skincare products would make
them consider postponing preplanned cosmetic surgery procedures. There were no
major indications that the place of purchase has any impact on the success of an
anti-aging skincare product, as respondents weighted their choices approximately
equally amongst drugstores, departments stores, and specialty stores such as
Sephora. Lastly, the majority of respondents have either negative or indifferent
feelings regarding all-natural anti-aging skincare products as they felt they did not
work.

FASHION 119 INTRODUCTION TO MARKETING 1


9

STEP THREE: TARGET MARKET & POSITIONING


TARGET MARKET PROFILE SECTION
CATEGORIES
Geographics

Demographics

VARIABLES
Region
City or Census
Metropolitan
Area Size
Density
Climate
Age
Gender
Family Size
Stage in
Family Life
Cycle
Income
Occupation

Education
Ethnic
Background
Home
Ownership
Psychographics Personality
Lifestyle

Behaviouristics Benefits
Sought

Usage Rate
User Status

BREAKDOWN
Canada, USA, Europe
250,000-1,000,000+
Urban, Rural
Any; Cold OR Warm
20-29
Female
1-3
Young single adult
Young married, w/ or w/o kids
$30,000+
Housewife
Student
Sales
Professional
Clerical
High school, College, or University graduate
All ethnic backgrounds
Owns or rents home
Beauty-conscious, compulsive, extroverted,
youthful, fun, competent, confident,
adventurous
Structured
Assured
Caring
Busy
Skincare
Antiaging
Youthfulness
Health
Beauty
Confidence
Medium to heavy user
First-time user, regular user, long-time user

20

STEP THREE: TARGET MARKET & POSITIONING


TARGET MARKET PROFILE SECTION
Target Customer
Our target customer is a 25-year-old woman
named Sarah. Sarah is a beautiful, outgoing,
fun-loving young woman who is also
intelligent and mature. She is a part-time
student, as well as works part-time and leads
a very busy life. Due to all the stress in her
life she is beginning to become concerned
about her skins aging process. Sarahs ideal
anti-aging product would be a one-step,
simple-to-use product that targets multiple
skincare concerns. This product will replace
many of the other skincare products in
Sarahs life including a daily sunscreen,
antioxidant and vitamin-enriched anti-aging
product, as well as a tinted moisturizer.
Since Sarah is still in her mid-twenties, mild
to moderate acne still continues to be an
issue so she is looking for something that is
lightweight and oil-free, so as not to exacerbate her somewhat blemish-prone skin.
Sarah is very fashion- and beauty-conscious and keeps up-to-date on all of the latest
cosmetic and skincare trends. She ranks feeling beautiful, youthful, and confident as
top priorities in her everyday life. She is therefore not as price sensitive as some
other women her age and is willing to spend a premium price on a product that will
help her feel and look her best. In addition, Sarah likes to feel like she is a pampered,
luxurious, and sophisticated woman who deserves the best so she tends to shop at
beauty boutiques such as Sephora. She is ultimately looking for a product that
makes her feel excited about anti-aging products and takes away the stigma
associated with aging, as well as all the complication. Sarah wants to feel fresh faced.

FASHION 119 INTRODUCTION TO MARKETING 2


1

STEP THREE: TARGET MARKET & POSITIONING


POSITIONING STATEMENTS & POSITIONING MAP SECTION
FRESHFACE
FreshFace Anti-aging Skincare aims to provide anti-aging at an early stage, primarily
for women in their twenties, who want to prevent the signs of aging before they
appear. Removing the clutter of products that target older women, FreshFace aims
to motivate young women to take care of their skin and get excited about anti-aging.

POSITIONING MAP
More Expensive
Dior
Nars
Lancome
Clarins

FreshFace

Murad
Vichy

Estee
Lauder

Clinique

Younger

Older
Body Shop
LOreal
Neutrogena

Less Expensive

22

STEP FOUR: PRODUCT/BRAND


PRODUCT DESCRIPTION SECTION
PRODUCT ANALYSIS
LAYER
Core
Product

Actual
Product

DESCRIPTION
(Clements et al. 148)
What the product does
for the customer the
benefits derived from
using the product

The physical good or


service, including the
branding, design, and
features that the
consumer receives

FRESHFACE ANTI-AGING
SKINCARE 4-IN-1
-

Augmented
Product

Additional features or
benefits that accompany
the product, such as a
warranty, a service
contract, delivery
options, installation, or a
website

Provides antioxidant and


vitamin-enriched anti-aging
skincare, SPF protection, and
colour coverage
Easy and transportable skincare
and makeup solution
Youthfulness
Confidence
Beauty
A lightweight Beauty Balm (BB
cream) that offers anti-aging,
lightweight moisture, SPF, and a
hint of colour coverage
Dispensed from a cylindrical
pump that is small and easy to
transport (30 mL)
Comes in formulas for
dry/sensitive, oily/combination,
and normal skin types
Colours ranging from light,
medium and dark skin tones
Skin type assessments done by
professionals
Full-money back guarantee if not
satisfied with the product
Can be ordered online at
Sephora.com or on our own
website at
Freshfaceantiagingskincare.com

FASHION 119 INTRODUCTION TO MARKETING 2


3

STEP FOUR: PRODUCT/BRAND


PRODUCT DESCRIPTION SECTION
STRENGTHS & WEAKNESSES
Strengths
FreshFace Anti-aging Skincare 4-in-1 is a convenient, easy-to-use, and simple antiaging skincare product that uses the highest quality and most innovative
ingredients. It also has different formulations depending on the consumers skin
type, making it a product that every woman can use. It provides antioxidant and
vitamin-enriched anti-aging; lightweight, oil-free moisture that is non-comedogenic;
SPF protection; and blendable colour coverage that is buildable. Its cylindrical size
and 30 mL volume make it an easy-to-carry product that any woman can transport
in her makeup bag or clutch for a night out. By being a multi-use product, FreshFace
Anti-aging Skincare 4-in-1 ultimately saves the consumer time and money because
they are only using one product as opposed to four separate products.
Weaknesses
Despite its obvious benefits, FreshFace Anti-aging Skincare 4-in-1 has a few
weaknesses and limitations. Its pricing is set at $35 which may be seen as too high
for some women who either do not feel that it is worth it to spend that money on an
anti-aging skincare product or who are simply unable to afford it. FreshFace is a
new brand in the skincare market, which may cause some discomfort and make
some women even more hesitant to spend $35 on a new product from a new brand.
Limitations involving the actual product include inadequate colour coverage for
women with more problematic skin exhibiting severe acne and/or uneven skin tone
and texture, as well a colour range that is too narrow to appropriately match all skin
tones.

24

STEP FOUR: PRODUCT/BRAND


PRODUCT DESCRIPTION SECTION
FUTURE RECOMMENDATIONS
Elements Maintained
Throughout the continuous development of FreshFace Anti-aging Skincare 4-in-1,
FreshFace will continue to use the highest quality and most innovative anti-aging
ingredients. FreshFace will also maintain its convenient, easy-to-use, and
transportable packaging that saves consumers time and money.
New Elements Recommended
Dependent on the success of FreshFace Anti-aging Skincare 4-in-1 in its
introductory form of three colours and three skin types, FreshFace will introduce a
larger range of colours to match more skin tones. As newer and more innovate
ingredients are discovered through research and development, they will be added to
FreshFace Anti-aging Skincare 4-in-1s formula.
As FreshFace gains brand-loyal consumers, it plans to expand the product mix to
include face washes, facial scrubs, facemasks, eye treatments, as well as anti-aging
colour cosmetics. A line of anti-aging body treatments will also be launched under
the name FreshBody that will also be available at day spas providing FreshFace and
FreshBody anti-aging skincare treatments.
Lastly, a line of vitamins and other dietary and nutritional supplements will become
available under the name FreshInside that will provide anti-aging and other
skincare benefits from a cellular level.

FASHION 119 INTRODUCTION TO MARKETING 2


5

STEP FOUR: PRODUCT/BRAND


BRAND NAME SELECTION SECTION

BRAND LOGO:

FRESH FACE

26

STEP FOUR: PRODUCT/BRAND


CONCEPT TESTING SECTION
IN DEPTH INTERVIEWS
Conducted on: Wednesday, October 31st, 2012
Questionnaire members: Elizabeth (21), Laura (25), Janelle (20), Sarah (23),
Monica (19), Dominika (28), Catherine (20), Tia (22), Nicky (26), Patricia (22)
Moderators: Olympia posed questions, Gemella recorded answers
Sampling method: non-probability because the sample population was chosen
from friends, co-workers, & classmates
1) What product formula most appeals to you?
a. serum
b. oil-free lotion
c. moisturizing cream
d. gel
e. foam
E: B) oil-free lotion
L: B) oil-free lotion
J: D) gel
S: B) oil-free lotion
M: C) moisturizing cream
D: B) oil-free lotion
C: C) moisturizing cream
T: B) oil-free lotion
N: B) oil-free lotion
P: B) oil-free lotion
2) What colour scheme would you associate with a high-end, luxury skincare
product?
a. silver
b. gold
c. black
d. white
e. red
E: A) silver
L: B) gold
J: E) red
S: C) black
M: D) white
D: C) black
FASHION 119 INTRODUCTION TO MARKETING 2
7

C: B) gold
T: A) silver
N: B) gold
P: B) gold
3) Would you be willing to pay $35 for an all-in-one anti-aging skincare product?
Why or why not.
E: yes
L: absolutely
J: yes
S: yes
M: yes
D: no; I wouldnt want to spend more than $20
C: yes
T: for sure
N: yes
P: yes
4) Do FreshFace Anti-aging Skincare products sound like something that appeals to
you and that you would use? Why or why not.
E: yes
L: yes
J: yes
S: yes
M: yes
D: not really; Im not concerned with aging yet
C: maybe; I would want to look into it more on my own
T: sure
N: yes
P: yes
5) Which product format most appeals to you?
a. jar
b. pump
c. individual-use capsules
d. roll-on
e. spray
E: A) jar
L: B) pump
J: B) pump
S: A) jar
M: B) pump
D: B) pump
C: B) pump
T: A) jar
N: E) spray
28

P: B) pump
6) Which of the following images most appeals to you?

A)

D)
E: B
L: D
J: A
S: B
M: B
D: D
C: F
T: C
N: F
P: B

B)

E)

C)

F)

7) What size would you prefer an anti-aging makeup product to come in?
a. small (25 mL)
b. medium (50 mL)
c. large (75 mL or more)
d. variety
e. other (please explain)
E: A) small
L: B) medium
J: B) medium
S: C) large
M: A) small
D: D) variety
C: A) small
T: B) medium
N: A) small
P: A) small
FASHION 119 INTRODUCTION TO MARKETING 2
9

8) Where do you most often purchase skincare and cosmetic products?


a. Shoppers Drug Mart (or other drugstore)
b. Sephora
c. Department store
d. Grocery/superstore
e. Other (please explain)
E: A) Shoppers Drug Mart
L: A) Shoppers Drug Mart
J: B) Sephora
S: C) Department store
M: A) Shoppers Drug Mart
D: B) Sephora
C: B) Sephora
T: B) Sephora
N: A) Shoppers Drug Mart
P: B) Sephora
9) Which advertising channel(s) are most likely to reach you? Please select all that
apply. If choosing more than one channel, please rank in order of most effective
to least effective.
a. TV commercials
i. Celebrity endorsements
ii. Infomercials
b. Magazine ads
c. In-store promotions
d. Social media sites
i. Facebook
ii. Twitter
e. Event marketing
f. Promotional websites
g. Other
E: Celebrity endorsements; Magazine ads; Facebook
L: Social media; TV commercials
J: TV commercials; Magazine ads
S: TV commercials
M: Magazine ads
D: Facebook; Magazine ads
C: Celebrity endorsements
T: Event marketing; Promotional websites
N: In-store promotions; TV commercials
P: TV commercials; Magazine ads; In-store promotions

30

10)Would you be willing to sign up for email updates regarding product


information, development, and upcoming events and promotions? Why or why
not.
E: yes
L: yes
J: no; dont check my email
S: no; I get too many emails as it is
M: sure
D: yes
C: no; I get too much junk mail and I just end up deleting them
T: yes
N: yes
P: yes
11)Would you be willing to participate in seminars on anti-aging from a dietary and
nutritional standpoint? Why or why not.
E: maybe
L: probably not
J: sure
S: yeah absolutely
M: yes
D: no; dont think it would make a difference
C: no; waste of time
T: yes
N: yes
P: maybe

FASHION 119 INTRODUCTION TO MARKETING 3


1

STEP FOUR: PRODUCT/BRAND


CONCEPT TESTING SECTION
SUMMARY OF FINDINGS
Summary of Findings
1) What product formula most appeals to you?
a. serum
b. oil-free lotion
c. moisturizing cream
d. gel
e. foam
7 out of 10 respondents said oil-free lotion
2 out of 10 respondents said moisturizing cream
1 out of 10 respondents said gel
2) What colour scheme would you associate with a high-end, luxury skincare
product?
a. silver
b. gold
c. black
d. white
e. red
4 out of 10 respondents said gold
2 out of 10 respondents said black
2 out of 10 respondents said silver
1 out of 10 respondents said white
1 out of 10 respondents said red
3) Would you be willing to pay $35 for an all-in-one anti-aging skincare product?
Why or why not.
9 out of 10 respondents said yes
1 out of 10 respondents said no
4) Do FreshFace Anti-aging Skincare products sound like something that appeals to
you and that you would use? Why or why not.
8 out of 10 respondents said yes
1 out of 10 respondents said maybe/unsure
1 out of 10 respondents said no

32

5) Which product format most appeals to you?


a. jar
b. pump
c. individual-use capsules
d. roll-on
e. spray
6 out of 10 respondents said pump
3 out of 10 respondents said jar
1 out of 10 respondents said spray
6) Which of the following images most appeals to you?

A)

D)

B)

C)

E)

F)

4 out of 10 respondents said B

2 out of 10 respondents said D

2 out of 10 respondents said F

1 out of 10 respondents said A

1 out of 10 respondents said C

FASHION 119 INTRODUCTION TO MARKETING 3


3

7) What size would you prefer an anti-aging makeup product to come in?
a. small (25 mL)
b. medium (50 mL)
c. large (75 mL or more)
d. variety
e. other (please explain)
5 out of 10 respondents said small
3 out of 10 respondents said medium
1 out of 10 respondents said large
1 out of 10 respondents said variety
8) Where do you most often purchase skincare and cosmetic products?
a. Shoppers Drug Mart (or other drugstore)
b. Sephora
c. Department store
d. Grocery/superstore
e. Other (please explain)
5 out of 10 respondents said Sephora
4 out of 10 respondents said Shoppers Drug Mart (or other drugstore)
1 out of 10 respondents said Department store
9) Which advertising channel(s) are most likely to reach you? Please select all that
apply. If choosing more than one channel, please rank in order of most effective
to least effective.
a. TV commercials
i. Celebrity endorsements
ii. Infomercials
b. Magazine ads
c. In-store promotions
d. Social media sites
i. Facebook
ii. Twitter
e. Event marketing
f. Promotional websites
g. Other
3 out of 10 respondents ranked TV commercials as most effective
2 out of 10 respondents ranked celebrity endorsements as most effective
2 out of 10 respondents ranked Social media (Facebook) as most effective
1 out of 10 respondents ranked Event marketing as most effective
1 out of 10 respondents ranked In-store promotions as most effective
1 out of 10 respondents ranked Magazine ads as most effective

4 out of 10 respondents ranked Magazine ads as 2nd most effective


2 out of 10 respondents ranked TV commercials as 2nd most effective
34

1 out of 10 respondents ranked Promotional websites as 2nd most effective


10)Would you be willing to sign up for email updates regarding product
information, development, and upcoming events and promotions? Why or why
not.
7 out of 10 respondents said yes
3 out of 10 respondents said no
11)Would you be willing to participate in seminars on anti-aging from a dietary and
nutritional standpoint? Why or why not.
5 out of 10 respondents said yes
3 out of 10 respondents said no
2 out of 10 respondents said maybe

FASHION 119 INTRODUCTION TO MARKETING 3


5

Summary of Findings
The results from the above questionnaire show overall support for FreshFace Antiaging Skincare 4-in1 and proof that is appeals to consumers in our target market.
The results provide indications for strategic direction and point towards an oil-free
lotion, packaged in gold, using a pump product format in a cylindrical shape that is
priced appropriately at $35 for a smaller size. Results show support for the intended
distribution by Sephora and the use of TV commercials and magazine ads with
celebrity endorsements. The majority of respondents would be willing to receive
email updates regarding product development and promotions and participate in
seminars on anti-aging from a dietary and nutritional perspective. Overall, results
point to the success of FreshFace Anti-aging Skincare 4-in-1.

36

STEP FIVE: PRICING, PROMOTIONS, & DISTRIBUTION


PRICING ANALYSIS SECTION
PRICING ANALYSIS
Pricing Strategy
FreshFace Anti-aging Skincare 4-in-1s pricing strategy is focused on the demandoriented approach and specifically uses target pricing. By estimating a price that
consumers in the target market would be willing to pay, FreshFace Anti-aging
Skincare 4-in-1 is priced appropriately to promote increased sales. With target
pricing, consumers will associate value with FreshFace Anti-aging Skincare as an
added benefit.
Competitive Analysis

COMPETITORS
Olay Regenerist
Neutrogena Healthy
Skin
LOreal Derm
Expertis Age Perfect
Clinique

PRICING STRATEGY
Odd-even pricing (prices end in $0.99); Bundle pricing
(offers product systems)
Odd-even pricing (prices end in $0.99); Bundle pricing
(offers product systems)
Odd-even pricing (prices end in $0.99)
Price lining (products range in prices depending on the
product line); Bundle pricing (offers product systems)

FASHION 119 INTRODUCTION TO MARKETING 3


7

STEP FIVE: PRICING, PROMOTIONS, & DISTRIBUTION


PRICING ANALYSIS SECTION
STRENGTHS & WEAKNESSES
Strengths
The advantages of using target pricing for FreshFace Anti-aging Skincare 4-in-1 is
that the company is thinking about what a consumer is willing to spend as opposed
to over- or underpricing it which could result in a loss of sales. Target pricing will
result in increased sales because $35 is an appropriate price for consumers in the
target market and is based on primary research. Compared to competing brands
sold at Sephora, FreshFace Anti-aging Skincare 4-in-1 is priced relatively low which
encourages trial and sales, especially for a new brand that consumers have little to
no experience with. Consumers will therefore be willing to pay this price to test
out the product and the brand.
Weaknesses
Unfortunately, target pricing does not take into full account the costs associated
with researching, developing, and manufacturing the product. As well, some women
in the target market may consider the price to be too high. This may result in
decreased sales as the product is not accessible to all of the target market and
higher priced items are typically not purchased as frequently.

38

STEP FIVE: PRICING, PROMOTIONS, & DISTRIBUTION


PRICING ANALYSIS SECTION
FUTURE RECOMMENDATIONS
Elements Maintained
FreshFace Anti-aging Skincare 4-in-1 will continue to maintain its target pricing
strategy so that the price reflects the target markets price sensitivity. As brand
loyalty is increased as a result of a successful launch and movement throughout the
product life cycle from introduction to growth, FreshFace Anti-aging Skincare may
move slightly towards prestige pricing so as to increase profits and its status in
consumers minds.
New Elements Recommended
In the future, FreshFace Anti-aging Skincare will focus on sales promotions and will
create strategic alliances with other skincare brands. The company will continue to
conduct market research into fair pricing perceptions that will affect the price that
FreshFace Anti-aging Skincare 4-in-1 is set at.

FASHION 119 INTRODUCTION TO MARKETING 3


9

STEP FIVE: PRICING, PROMOTIONS, & DISTRIBUTION


MARKETING COMMUNICATIONS (PROMOTION) ANALYSIS SECTION
MARKETING COMMUNICATIONS ANALYSIS
Advertising

FreshFace Anti-aging Skincare 4-in-1s


marketing communications will
predominantly focus on advertising as the
companys primary research revealed this
to be the most effective means of
communication with consumers in the
target market. FreshFace Anti-aging
Skincares advertising campaign will focus
on celebrity endorsement in TV
commercials and magazine advertisements
in such magazines as Vogue, Cosmopolitan,
Elle, People, Harpers Bazaar, Glamour, and
Flare. Magazine advertisements will mirror
the level of sophistication used by the
brand leader, Olay.
The ideal celebrity to endorse FreshFace
Anti-aging Skincare would be Blake Lively
as she is popular among women in the

target market and embraces all the


qualities of FreshFace Anti-aging
Skincares target customer, Sarah. As
well, the company will use product
placement in TV shows and movies,
particularly those that star Blake Lively
such as Gossip Girl.
Secondarily, FreshFace Anti-aging
Skincare will use Internet advertising
consisting of display advertising, online
video advertising, pay-per-click
advertising, and primarily social media.
Sephora and Blake Lively both have
Twitter accounts that will tweet about
the launch of FreshFace Anti-aging
Skincare 4-in-1. This will coincide with
the creation of a Facebook page where
users can like FreshFace Anti-aging
Skincare.

40

Public Relations
To attract media and press attention, FreshFace Anti-aging Skincare will host two
types of events. The first set of events will occur approximately two months prior to
product launch in major cities in Canada, the United States, and countries across
Europe where there are Sephora stores. In conjunction with Sephora, FreshFace
Anti-aging Skincare will host a set of cocktail parties in-store with magazine beauty
editors, well-known beauty bloggers, and prominent makeup artists and
dermatologists in order for them to gain awareness and have the opportunity to
test-run FreshFace Anti-aging Skincare 4-in-1. This will allow adequate time for
magazine editors and bloggers to write about the product and pass on product
awareness to consumers and women in the target market.
The second set of events will coincide with the launch of FreshFace Anti-aging
Skincare 4-in-1 and will occur in waves at most major Sephoras in most cities
across Canada, the United States, and countries in Europe. Also in conjunction with
Sephora, FreshFace Anti-aging Skincare will host product launch parties inviting
Beauty Insiders from Sephoras VIP loyalty program and will give consumers the
chance to gain experience with the product and brand.
Sales Promotion
Sales promotions will be implemented in select Sephora stores whereby skincare
professionals will perform skin type analysis that will award the customer with a
coupon entitling them to 15% off their first purchase of FreshFace Anti-aging
Skincare 4-in-1. This serves to entice consumers to try the product and foster brand
loyalty. Prior to full-scale commercialization, samples of FreshFace Anti-aging
Skincare 4-in-1 will be an option for Sephoras VIP Beauty Insiders when redeeming
their loyalty points. At its introduction, samples of FreshFace Anti-aging Skincare
4-in-1 will be distributed in major magazines that also run advertisements. After its
launch, point of sale materials in the form of displays and banners will be present in
all Sephora stores.
CRM Loyalty Programs
FreshFace Anti-aging Skincare 4-in-1 is exclusively sold at Sephora stores that
currently offer a VIP Beauty Insider loyalty program. Customers purchasing the
product will receive points for each purchase that can be used towards promotional
offers.
Direct Response
To attract consumers in todays technologically focused market, FreshFace Antiaging Skincare will use a variety of modern marketing approaches including mobile
apps, as Sephora currently has an IPhone app, e-marketing, and quick response bar
code scanning. Many young adults spend a dominant amount of time on their
phones and smartphone use is at an all time high. This provides an opportunity for
direct consumer contact by way of mobile marketing.
FASHION 119 INTRODUCTION TO MARKETING 4
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42

STEP FIVE: PRICING, PROMOTIONS, & DISTRIBUTION


MARKETING COMMUNICATIONS (PROMOTION) ANALYSIS SECTION
STRENGTHS & WEAKNESSES
Strengths
The overall advantages to the marketing communication tools used is that they are
relevant in todays modern marketplace and are therefore effective in reaching
consumers in the target market. Women in their twenties are among the most
technologically savvy and the above methods are proven to be effective through
primary research conducted by the company. As well, these various promotional
methods use integrated marketing communications (IMC) that provide coordination
of a consistent promotional message for a product at every point of contact between
the consumer and FreshFace Anti-aging Skincare.
Weaknesses
The disadvantages to the marketing communication tools used involve the fact that
they are focused on consumers that specifically shop at Sephora which does not
account for other consumers. Awareness will be limited to those consumers who do
not frequent a Sephora store.
Some limitations involve the Sephora Beauty Insider loyalty program, as consumers
may not use their points to redeem FreshFace Anti-aging Skincare products and
instead will allow them to test out other brands and their products. As well, some
consumers may not have any interest in redeeming points for sample size products,
which will therefore not encourage product purchase.
Ultimately the largest weakness to FreshFace Anti-aging Skincares marketing
communications is that they do not necessarily encourage more price-sensitive
consumers who are bargain hunters to purchase FreshFace Anti-aging Skincare
4-in-1.

FASHION 119 INTRODUCTION TO MARKETING 4


3

STEP FIVE: PRICING, PROMOTIONS, & DISTRIBUTION


MARKETING COMMUNICATIONS (PROMOTION) ANALYSIS SECTION
FUTURE RECOMMENDATIONS
Elements Maintained
FreshFace Anti-aging Skincare will continue its use of integrated marketing
communications and will primarily continue to send e-marketing to their
consumers. FreshFace Anti-aging Skincare will maintain its focus on its advertising
campaign, as well as their public relations campaign consisting of special
promotional events for new product innovations and development and for product
line expansion.
New Elements Recommended
Once FreshFace Anti-aging Skincare is a more established brand, the company plans
to introduce more outdoor and transit advertising on billboards, bus shelters, and
subways. As well, with gaining popularity and brand loyalty, the company will
implement fewer sales promotions, as they will become somewhat unnecessary due
to a well-established customer-base.
The major adjustment to FreshFace Anti-aging Skincares marketing
communications will focus on its celebrity endorsements. The companys
advertising campaign will continually reassess the popularity of its spokes model to
assure that they reflect the target market and hold their interest. Each spokes model
will have a contract lasting approximately six months, after which it can be renewed
or other celebrity spokes models may be added to the roster.

44

STEP FIVE: PRICING, PROMOTIONS, & DISTRIBUTION


DISTRIBUTION (PLACE) ANALYSIS SECTION
DISTRIBUTION ANALYSIS
COMPETITOR
Olay
Regenerist

Neutrogena
Healthy Skin

DISTRIBUTION

DISTRIBUTION
CHANNEL

Sold in over 44 countries


internationally
Distributed by Proctor &
Gamble (North America)

Sold in over 70 countries


internationally
Distributed by Johnson &
Johnson

Drugstores (e.g.
Shoppers Drug Mart)
Grocery/superstores
Online (promotional
website that provides
links to other
transactional
websites)
Drugstores (e.g.
Shoppers Drug Mart)
Grocery/superstores
Promotional &
transactional website

DISTRIBUTION
DIAGRAMS
Manufacture
r
Wholesalers
Retailers
Consumers

Manufacture
r
Wholesalers
Retailers
Consumers

LOreal Derm
Expertis Age
Perfect

Sold in over 130 countries


internationally
Distributed by the LOreal
Group internationally

Drugstores (e.g.
Shoppers Drug Mart)
Grocery/superstores

Manufacture
r
Wholesalers
Retailers
Consumers

Clinique

Sold in over 80 countries


internationally
Distributed by the Este
Lauder Corporation
internationally

Sephora
Department stores
(e.g. The Bay, Sears)
Higher-end drugstores
(e.g. Beauty Boutique
@ Shoppers Drug
Mart)
Promotional &
Transactional website

Manufacture
r
Wholesalers
Retailers
Consumers

FASHION 119 INTRODUCTION TO MARKETING 4


5

Fresh Face Anti-aging Skincares Indirect Channel Distribution: Diagram

Producer (Fresh Face


Anti-aging Skincare)

Retailers (Sephora &


Online)

Consumers

46

Factors Influencing Channel Selection


An indirect distribution channel was chosen for various reasons, which relate to
market factors, product factors and company factors.
Market Factors
An indirect distribution channel employing both online and in-store retailers was
chosen because FreshFace Anti-aging Skincares customer base is geographically
dispersed across North America (Canada and the United States) and Europe. As well,
there is the potential for a large customer base which makes using Sephora as a
retailer the most practical and logical. FreshFace Anti-aging Skincare is a consumer
product, which warrants a retailer, as well as the fact that order sizes are not large
enough for direct distribution.
Product Factors
FreshFace Anti-aging Skincares use of indirect distribution byway of a retailer
reflects the fact that it is not a highly sophisticated product, is not a perishable
product, and its unit value is low enough that it necessitates a retailer. As well,
beauty balms as many companies prefer to call their multiuse anti-aging products,
have moved from the introductory stage to the growth stage in the product life cycle
and thus are becoming more mainstream and are available in more channels and
retailers.
Company factors
FreshFace Anti-aging Skincare is a new brand and company that does not yet have
the financial means for direct distribution. It is therefore in the companys best
interest to sell its product through the use of a well-established retailer such as
Sephora. By using only a retailer as an intermediary in the indirect distribution
channel, FreshFace Anti-aging Skincare maintains a level of channel control. For this
reason, a wholesaler is not appropriate. The company does not wish for full control
so therefore does not require direct distribution. The use of a wholesaler as an
intermediary was excluded because FreshFace Anti-aging Skincare 4-in-1 is not a
product that is low-cost and of low-unit value that is purchased frequently.
The company plans on using offshore distribution in Europe and the United States
where technology and research and development are more advanced.

FASHION 119 INTRODUCTION TO MARKETING 4


7

STEP FIVE: PRICING, PROMOTIONS, & DISTRIBUTION


DISTRIBUTION (PLACE) ANALYSIS SECTION
STRENGTHS & WEAKNESSES
Strengths
FreshFace Anti-aging Skincares use of dual distribution benefits the company by
being able to reach different types of buyers by selling both in-store and online. This
will ultimately translate into increased sales for the company. As well, there are
lower costs, particularly start-up costs, associated with distributing through a
retailer as opposed to selling directly to consumers. Most importantly, by producing
offshore in Europe and the United States, FreshFace Anti-aging Skincare makes use
of the latest product research and innovation that would not be available if it
maintained onshore production.
Weaknesses
Limitations of FreshFace Anti-aging Skincares distribution channel involve its focus
on online shopping. Some consumers are not comfortable with making purchases
online and some consumers do not have Internet access. For those consumers that
choose to make purchases in-store, not all consumers live near a Sephora store,
particularly those consumers that live in remote rural areas.
By using indirect distribution and offshore production and distribution,
FreshFace Anti-aging Skincare has less channel control compared to the use of
onshore, direct distribution. This may translate into higher costs in terms of
shipping and other fixed expenses, as the cost of doing business may be higher in
Europe and the United States. Offshore production and distribution also means
longer lead-times associated with the difference in time zones and other
communication barriers.

48

STEP FIVE: PRICING, PROMOTIONS, & DISTRIBUTION


DISTRIBUTION (PLACE) ANALYSIS SECTION
FUTURE RECOMMENDATIONS
Elements Maintained
Primary research indicates that this is the most effective type of distribution in
reaching the target market. FreshFace Anti-aging Skincare will continue to sell its
products at Sephora stores and online at Sephora.com and on its own website
Freshfaceantiagingskincare.com.
New Elements Recommended
Dependent on its initial success, the company plans to expand its distribution for
sale in Shoppers Drug Mart Beauty Boutique as well as other major department
stores worldwide. With increased sales come increased profits that can be used to
invest in onshore production and distribution in North America in order to gain
more channel control.

FASHION 119 INTRODUCTION TO MARKETING 4


9

BIBLIGRAPHY
Amazon.com: Olay Regenerist Advanced Anti-Aging Eye Anti-Aging Roller, 0.2
Ounce: Beauty. Amazon.com: Online Shopping for Electronics, Apparel, Computers,
Books, DVDS & more. N.p., n.d. Web. 7 Nov. 2012. <http://www.amazon.com/OlayRegenerist-Advanced- Anti-Aging-Roller/dp/B0028K3J9O>.
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