Cosmetics Industry

International Marketing

The Cosmetics Industry

Estee Lauder vs. Shiseido Cosmetics

E. Wang

July 8, 2005

BSAD 491

Introduction

The cosmetics business is a billion dollar industry. Every year, women are responsible for consuming millions of cosmetic products. The cosmetics industry is so large because of several factors. The media is a huge contributor to the intense pressure to look a certain way. The idea that "sex sells" is evident in gossip magazines, movies, advertisements, music, and more subtly- in the business world. People first notice what race someone is, how beautiful or ugly they are and what clothes they are wearing. Beauty is skin deep; however, first impressions are usually what others use to base their personal judgments. In the business world, people are expected to dress appropriately and carry themselves appropriately. Studies reveal that better looking people on average earn more than their peers. Obese applicants are discriminated against because of their larger appearance. Sadly, how one dresses and appears is often the determinant of the amount of respect one receives.

Cosmetics can pessimistically be seen as a group of products which feeds on either people's insecurities or egos. Optimistically, cosmetics can be a product which helps us bring our best face forward. The desire to look beautiful, young, and sexy does not only apply to women, but men as well. Cosmetic companies are highly competitive with one another. To remain competitive, companies feel the pressure to come out with innovative products. In the past few years, cosmetic companies are expanding their product lines to include products for men.

In addition to music, beauty is also the universal language. The popularity of cosmetics in China is growing with the economy. The government's change towards a more market-based economy has opened flood gates of opportunities for its people and foreign companies. Cosmetic companies in the industry have seen an overall growth.

Personal Experience

My travels in China resulted in an increased awareness of the similarities and differences that I have from mainland Chinese women. In my observations, I can confidently say that most women in China do not wear makeup on a daily basis compared to women from America. I believe this has to do with cultural differences and economic differences. In America, having sex appeal is emphasized more than having intellectual appeal. Whereas in China, there is more pressure for their young to study hard and work hard than to look pretty. I met students in China who had never gone to the bars before, especially with American students, and there were many students who still chose not to make an exception because they are responsible. Don't get me wrong, I believe that the Chinese do care about looking pretty, but they will not put precedence of looking attractive if it means it will prevent them from getting things done.

I also visited a shopping mall in Shanghai. A particular department store offered a variety of cosmetic brands, most of which I recognized and am familiar with. I was surprised to see that Maybeline, a cosmetic brand sold in discount stores such as Target, had a large kiosk complete with sales representatives. Although there were a variety of American and European cosmetic brands being offered at this department store, about half were advertised with European models. I expected to see predominantly Chinese or Asian models. In Nebraska, we seldom ever see any Asian models featured in cosmetic advertisements because there isn't a large demographic of Asians here, but the difference is that China does not have a highly contrasting, diverse, racial population. So, it would have seemed logical to expect Chinese faces in all cosmetic/retail advertisements, but it wasn't so.

The Products

Cosmetics are almost a universal product for women around the world. According to market research, four out of five women wear makeup (marketresearch.com 2005) and use skin treatment products. Many women enjoy buying and wearing makeup because of the makeup, in general, makes them feel good about themselves. The main purpose of cosmetics is unmistakable- to make you prettier. Women wear varying amounts of makeup depending on the occasion, the time of day, or just personal preferences. Makeup can be broken down into categories. Skin makeup consists of foundation, concealer, powder, and blusher. Eye makeup includes: mascara, shadow, liner, and brow definer. Lip makeup is comprised of products such as lipstick, lip gloss, and lip liner.

The generation of Baby-Boomers are growing older and living longer. The struggle to stay young has created a demand for a cosmetic product that slows down the hands of time. Many cosmetic companies have developed products that promise to erase wrinkles, lift and firm skin on our faces, and smooth out blotchiness created by age spots. Estee Lauder's Idealists Skin Refinishing line promises to do all that. The products range from US$46 to US$85 (EsteeLauder.com 2005). These miracle serums and lotions have a price tag many consumers in China still may not be able to afford.

Skin treatment products are often sold next to the cosmetics, but in reality are not cosmetics themselves. Skin treatment products are created with the purpose to improve the natural condition of the skin rather than purely the aesthetic. Cleansers, astringents, toners, acne medications, sunscreen, and lotion all help the skin stay healthy and free from blemishes. In the past, it used to be that consumers with sensitive skin had a harder time finding cosmetics and skin products that don't irritate their skin. Now, with advanced technology, an awareness of the demand for research and development, companies have made products for consumers with sensitive skin. Shiseido is such a company with products that care of delicate skin. .

Shiseido offers a wide selection of skin treatment products as described above. They produce many different skin care product lines which are targeted towards different age groups and specific beauty concerns. Shiseido's "Benefiance" skin care line addresses the aging woman's struggle to stay looking young and free of wrinkles. The products in this line have prices ranging from US$35 to $75. The "Optimal Balance" skin care plan calls for a daytime/nighttime moisturizing protectant against the sun's harmful rays, which cause skin cancer and premature wrinkles. It can