this case is about the market segmentation of great market leader for the cosmetic product; they are targeting emerging market of the world. This case study also analyse which marketing strategies they used and how they survive and win the market.

1. Prepared by:
Suman BHATTARAI
Monika MOCHEREK
Cosmetics Giants Segment
the Global Cosmetics
Market

2. Case Overview
1. How cosmetic giants are targeting new
market segments.
2. Consumer behavior in those target
countries.
a. China, India and Brazil (largest population
countries)
3. Different Brands and their marketing
strategies.
a. L’Oreal, Estée Lauder, and Shiseido.

3. Market Segmentation, Targeting & Positioning
- is the process of dividing a market of potential
customers into groups, or segments, based on
different characteristics.
-
- a process of evaluating the segments and focusing
marketing efforts on country, group or people that
has significant potential to respond.
-
- differentiate the product or brands in the minds of
target customers.
Market Segmentation
Targeting
Positiong

7. Target Countries
China
(1.379 Billion)
India
(1.324 Billion)
Brazil
(207.7 Million)

8. Cosmetic Preferences Around The World
- White skin is associated with wealth.
- They use whitening creams to lighten and brighten complexion.
- Average use of products in the morning and evening is 2.2.
- Compact foundation rather than a liquid.
- Cleaning face twice a day.
- Brazilian women spend more on beauty products.
- Third largest global cosmetic market.
- buying cosmetics from sales representatives (door-to-door).
- Makeup is the jewelry of the female.
- Whitening creams, sun protection creams, hair care are widely used.

9. China

10. L’Oréal in Chinese Cosmetic Market
Localization Product Strategy:
80% of its Asian products are developed
specifically for the region
Differentiated Global Marketing Strategy:
L’Oreal target more than one market
segment, and designs a separate offering for
each market segment.

11. Market Segmentation - L’Oreal
< Geographic Segmentation
Wide range of Products
Tier 1 Tier 2 & 3 Tier 4 & 5
Mass-market Premium Brand < Psychographic Segmentation
Female Male < Target Group

12. Estée Lauder in Chinese Cosmetic Market
“Most of Chinese are price sensitive but they are willing to pay relatively expensive for quality product.”
❖ Expensive prestige brands.
➢ Positioning: High Quality & Good Price
❖ Targeting new cities.
❖ Achieving growth.
❖ Concentrated Global Marketing Strategy.
➢ Niche market
➢ Single target group

13. Shiseido in Chinese Cosmetic Market
★ Company that understands skin issues
specific to Asian women.
★ Reputation for Advanced technologies and
R&D in key areas such as anti-aging products.
★ Used the same strategy that was successful in
Japan – highly trained beauty counselors
offer advice on color coordination, moisture
levels and related topics.

14. India

15. L’Oréal in Indian Cosmetic Market
● First followed Standardized Global Marketing Strategy.
○ low-price, mass-market strategy
● Shifted to premium-price, upscale strategy.
● Launching L’Oréal Excellence Creme.
● Running educational campaign.
● Promoting product door-to-door in local shops.
● Now, L’Oréal is known as profitable Company.

16. Brazil

17. L’Oréal in Brazilian Cosmetic Market
❏ Focus on hair-care product.
❏ Low percentage of sales on makeup
and skincare product. (15%)
❏ Creating makeup business in retail
from scratch.
❏ Hired personal beauty advisors to
offer shoppers in-store consultations.

18. Discussion Questions
1. How do women’s preferences for cosmetics and beauty care vary from
country to country?

19. Discussion Questions
2. Assess Estée Lauder’s strategy for China. Does it make sense to Focus
on premium brands, or should the company launch a mass-market
brand?

20. Discussion Questions
3. What is the best positioning strategy for Shiseido as the company
expands in Asia? High touch? High tech? Both?
High tech – providing products that are sophisticated, technologically
complex, and/or difficult to explain or understand.
High touch – appeal to the sense more than to the intellect, products linked
with the joy or pleasure found in “life’s little moments”. Consumers may feel
emotional with high-touch products, the performance of which is evaluated in
subjective, aesthetic terms rather than objective, technical terms.

21. Discussion Questions
4. Do you think L’Oréal will succeed in changing the buying habits of
Brazilian women?

22. 4. Do you think L’Oréal will succeed in changing the buying habits of
Brazilian women?
Spend more on Beauty
Products
****************************
Prefer to buy their
cosmetic from sales
representatives who go
door-to-door.
****************************
Focus mainly on
Hair-care Products
*****************************
Hired personal beauty
advisors to offer
shoppers in-store
consultations.
*****************************
The more market develops, the less important direct sales will be...