Estee Lauder

Running head: Marketing Introduction Paper

Marketing Introduction Paper: Estee Lauder

Anne Caufield

University of Phoenix

Introduction

According to Lonnie Beaucheman, Director for the Central Division of Estee Lauder, Estee Lauder's brand Origins marketing plan plays a very important role in keeping Estee Lauder's many brands competitive (Beaucheman, 2006).

Challenges

Three challenges that Estee Lauder faces is keeping current customers, reaching new customers, the teen market, and growing globally. Estee Lauder dominates the prestige product market. Other Estee Lauder brands include Clinique, Prescriptives, Origins, M.A.C., Bobbie Brown, Aveda, American Beauty, and Flirt. With all these brands Estee Lauder has to make sure it is being innovative with its products and marketing strategies to keep its brands from cannibalizing each other (Odell, 2004).

Growth strategies include: keeping new products coming with advanced ingredients, reach more consumers with new concepts, grow their fragrance line, and expand globally. First, keeping new products coming is very important in keeping Estee Lauder at the top of the prestige market. New innovations in science and technology impacts Estee Lauder's ability to bring new skincare and makeup products with new technology to the forefront. Also, as generations change and the world changes, Estee Lauder strives to "keep up with the times" and keep a "one-up" on the competition (Odell, 2004).

Second, Estee Lauder strives to reach more customers with new concepts. For example, Estee Lauder pioneered the "store-within-a-store concept for Origins Cosmetics, whose unique lifestyle appeal is showcased dramatically in this environment (Findarticles, 2003).

Origins wasn't always successful in their marketing attempts. They tried several avenues that didn't work before settling on its current strategy. Catalog sales work best when there are at least three new products showcased in each issue. The problem was that Origins rolls out new products on a slower schedule. They focus more on brand loyalty (Findarticles, 2003).

Another failed attempt was marketing through tech-based kiosks within department stores and malls. Origins customers were adverse to the high tech features of the kiosks. They were looking for a relaxing experience with the natural products they offer. The kiosks represented a distant experience and not the hands-on-experience they were hoping for (Findarticles, 2003).

Third, Estee Lauder has focused on expanding globally, primarily through their fragrance lines. They already hold 40% of the global prestige business and 27% of their product mix. Their goal is to have the ability to match fragrance and brand with sophisticated positioning. Internet sales for Estee Lauder account for 43% of total revenue, (Western Europe and Japan.) As economies expand so do opportunities in Asia, Eastern Europe, and Latin America (Odell, 2004).

A Learning Experience

As mentioned before, Origins had made several failed attempts to market successfully to its customers. They eventually realized that they needed to do more market research and more research to understand its target market. Each Estee Lauder brand appeals to different customers. Understanding how these customers are unique and what they want out of a product is integral to the brand's success (Findarticles, 2003).

For example, Estee Lauder tends to appeal to mature women, M.A.C to the more edgy consumer, Clinique to teens and young adults, and Origins to those who prefer natural products and simplicity. They are health and environmentally conscious and looking for a relaxing and uplifting experience (Findarticles, 2003). The lesson learned is that customers want an experience. They want to see, touch and feel the products and they want an expert to help them decide which products are best for them. Thus, Estee Lauder has found that experiencing the product is one of the best ways to sell a product. No wonder Origins Kiosks failed,