Estee Lauder Strategies on Facing Their Major Problems Updated

Estee Lauder strategies on facing their major problems Major problems 1. The decrease of net sales for the fragrance product and need to struggle effort on this product/ (in 2011 it increased, so need to maintain and revise strategies… fadzli added) Strategies:  Estee lauder intended to take a bend concerning its strategic decision by creating objective for the market penetration of perfumes with a very promising potential especially in China. -China represents the third market (after the United States and Japan) of fragrances and cosmetics in the world. There are considered by the Chinese as staple commodities and no as goods luxuries  Estee Lauder prepares the launch of its new perfumes, which are in creation for soon 10 years. Among these perfumes, we can find the new perfume “Modern Muse” and the perfume “Uomo” of the Italian brand Emenegildo Zegna.

 The launch of several perfumes inspired by the special taste of certain countries such as the Middle East or Japan is planned for soon. Estee lauder is known to create local brand being inspired by needs for the various populations for example the brand “Nutritious” which was specially created to seduce the Chinese  Fragrance Partnership by Estee Lauder Companies and Tory Burch. Tony Burch is an American sportswear brand with an eclectic sensibility and an attainable price point which embodies the personal style and spirit of its CEO and designer Tory Burch. -Tory Burch is more than an innovative designer; she's a lifestyle brand. Tory empowers women with her clothes, creativity and experimentation of modern designs," says Veronique Gabai-Pinsky, Global Brand President,

Aramis and Designer Fragrances. "She has an inspiring and affordable sensibility that we know will transcend into the fragrance industry.  Fragrances collaborate by Estee Lauder Companies and Marni. Aramis and Designer Fragrances Division (ADF) will assume the exclusive worldwide license for the fragrance business of Marni, a Milan-based luxury fashion company found by Consuelo and Gianni Castiglioni in 1994. Marni has gained notoriety in the fashion industry with a recognizable and unique aesthetic. The brand reveals a playful charm built on experimentation and research, exclusive prints, combinations of textures and colors. 2. There have many competitors in the cosmetics businesses are diversified with brand and name that compete the Estee Lauder Company Strategies:  Target different market niches in each region. They follow the marketing strategy of “Bringing the Best to Everyone We Touch”. -The Skin care brands Clinique and origins marketed to appeal to customers that want natural, organic, and allergen-free products. -Makeup lines MAC and Bobbi Brown are targeted for the higher end fashion savvy customer. These brands appeal to both teens and middle aged market and offer professional-grade makeup and tools. -La Mer and Darphin are targeted at their high-end market and have substantial brand recognition as the prestigious skin care and makeup brands -Estee Lauder positions its AmericanBeauty and Flirt brands to the low-end Consumers Key initiative:  Creativity and innovation – they are focused on creating fewer, but more successful products. They are motivated to be “creativity-driven and consumer inspired.” Their muse is the consumer, who is used to create beauty products that they couldn’t have imagined needing.

 High-Touch – their High-Touch personal service allows the company to create an emotional connection with the consumer and inspire more brand loyalty. They implement a customized educational approach that comes from beauty advisors and makeup artists; they have also adapted it for online use, using direct response television and self-assisted formats as well.  Local Relevance – Estee Lauder strives to be locally relevant to consumers everywhere they live. They do this by creating certain products for specific markets and altering their marketing depending on the region, this allows them to speak to consumers in a more culturally relevant way.  Enhancing digital capabilities – they are immersed in the online world and continue to invest resources in everything digital. Many of their brands interact with consumers via Facebook, Twitter, and Youtube. They have also established global e-commerce sites that create powerful viral marketing campaigns

 Concentrating on high quality cosmetics, respecting consumer rights and environmental issues and participating in social responsibility actions. -Clinique has achieved competitive advantage through product differentiation. The main difference between Clinique and other cosmetic brands is that Clinique emphasizes on laboratory development, dermatologist-recommended products and mild and hypoallergenic ingredients. -This helped Clinique create a favorable image of a brand that concentrates not only on beauty, but more on healthy and radiant skin -This product is sold in upscale department stores in order to keep their image of a high quality brand. Clinique uses a segmented approach rather than a mass approach.

 Using customer reviews and word of mouth to let women “tell” their friends about its product online -Online word of mouth marketing is a particular sweet spot for Estee Lauder because the brand hits three key areas – women, luxury and fashion -Marketers also need to remember that word of mouth isn’t just a marketing tool, but also something you can turn into business intelligence and research to understand how to build and deliver new products. -Reviewers for Estee sites like Clinique and Aveda create profiles of themselves, to help give readers an indication of whether the person talking about the product shares their needs. -They can give their location, skin concerns/type, hair type, how long they’ve been using brand, and offer whether they’re a customer or a stylist using the product professionally. -Mobile is also a part of the way Estee Lauder’s brands are connecting social with consumers. -Clinique, for example, introduced an app this spring called “Clinique Forecast,” offering skin care tips (with product recommendations and store locator information based on real time information about weather and pollution in a user’s area).

3. The competitive pricing may be challenged to continue their patterns of innovative research Strategies:  Estee raised the price of its brands by an average of 8 to 10 percent, a move that follows price increases by its competitors -Price changes of particular brands are usually the result of various factors, such as the rising costs of ingredients and labor, and their market performance  Factors contributing to increase in prices a) The cost of the commodities used to make these products has increased, and many brands raising prices so that their margins do not erode too much b) Competitor brands have also raised prices over the last several months and it is important for them to adjust the prices of products sold by their subbrands so that brand image and positioning stay where they want - According to Cavender, Paris-based L'Oreal SA, Estee Lauder's main rival, already raised prices a few months ago. Estee Lauder's price increases come in part to keep its prices comparable to its competitors', Cavender said.