Coursework 1 - Ysl Beauty

LXRY642B – Marketing analysis of a luxury brand IUM Individual assignment Luxury brand analysis – analysis – Yves Yves Saint Laurent Beauty Module lecturer: COHEN Corinne

LXRY642B Marketing of luxury Goods and services Nelly Maccario Exchange student MSc LUX Retail & hospitality Academic year: 2013/2014

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Nelly MACCARIO – MACCARIO – MSc MSc 1 LUX R&H | Marketing analysis of a luxury brand

LXRY642B – Marketing analysis of a luxury brand IUM Table of content

Table of content .................................... .......................................................... ............................................. .............................................. ......................................... .................. 2 1.

2.

Overall presentation of the brand ............................... ..................................................... ............................................. .................................. ........... 4 1.1

Historical background ............................... ..................................................... ............................................. ............................................. ...................... 4

1.2

Main figures .................................................. ........................................................................ ............................................ ......................................... ................... 6

External evaluation .......................................... ................................................................. ............................................. ............................................ ...................... 7 2.1

Main contextual elements: PESTEL........................................... ................................................................. ................................. ........... 7

2.2 Competitive environment .................................. ........................................................ ............................................. ......................................... .................. 8 Perfume ............................................ .................................................................. ............................................ ............................................. ...................................... ............... 8 Cosmetics & skin care ............................. .................................................... .............................................. ............................................. ........................... ..... 12 2.3 Consumer trends ............................. ................................................... ............................................. ............................................. ................................... ............. 13 Perfume ............................................ .................................................................. ............................................ ............................................. .................................... ............. 13 Cosmetic products ............................................................. .................................................................................... ............................................. ........................ .. 14 Skin care ........................................... ................................................................. ............................................ ............................................. .................................... ............. 14 3.

Internal evaluation ...................................................... ............................................................................. ............................................. ............................... ......... 15 3.1

Target consumers ............................................. .................................................................... ............................................. ................................... ............. 15

Segment targeted ......................................... ............................................................... ............................................ ............................................. ......................... .. 15 Segmentation dimensions ........................................... .................................................................. ............................................. ............................... ......... 15 3.2

Positioning ............................................ .................................................................. ............................................ ............................................. ......................... .. 16

Perceptual map ............................................ .................................................................. ............................................ ............................................. ......................... .. 16 3.3

Brand identity i dentity & strategy ........................................... .................................................................. ............................................. ........................ .. 17

Kapferer prism ......................................... ............................................................... ............................................. .............................................. ............................ ..... 17 3.4

Product strategy ............................................ ................................................................... ............................................. ...................................... ................ 17

Product portfolio description ........................... ................................................. ............................................. ........................................... .................... 17 3.5

Pricing strategy ............................................. .................................................................... ............................................. ...................................... ................ 19

Makeup ............................................. ................................................................... ............................................ ............................................. .................................... ............. 19 Perfume ............................................ .................................................................. ............................................ ............................................. .................................... ............. 19


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LXRY642B – Marketing analysis of a luxury brand IUM Skin care lines ......................................... ............................................................... ............................................. .............................................. ............................ ..... 20

4.

3.6

Distribution strategy ............................................ ................................................................... ............................................. ............................... ......... 22

3.7

Advertising strategy & promotion ....................... .............................................. ............................................. ............................... ......... 22

3.8

International strategy ........................................... .................................................................. ............................................. ............................... ......... 24

Final conclusion and recommendations ............................................ .................................................................. ............................... ......... 24 4.1

SWOT analysis ............................................................... ...................................................................................... ........................................... .................... 24

4.2 Recommendations ............................................. .................................................................... ............................................. ...................................... ................ 25 5.

References (Harvard References) ........................... ................................................. ............................................. .................................... ............. 26

6.

Appendices ........................................... ................................................................. ............................................ ............................................. ................................ ......... 28 Appendice 1: French article from the financial r eport of L’Oréal in 2012 .......................... 2012 .......................... 28 Appendice 2: Infography from Le Figaro concerning the beauty market in 2011 ............... 28 Appendice 3: overall perfumes of competitors of YSL Beauty .............................. ........................................... ............. 29

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LXRY642B – Marketing analysis of a luxury brand IUM 1. Overall presentation of the brand

1.1 Historical background

Yves Saint Laurent is a very famous French fashion designer who died in 2008. After working for Christian Dior in the late of the 1950s, he decided to create, in association with Pierre Bergé, this own maison, who was named “ Yves ”. ”. Nowadays the Yves Sai Sai nt L aur ent SAS YSL SAS Company is part of Kering group, the 3 rd biggest conglomerate of luxury in the world. The fist collection was presented in January 1962, and according to the website of the Foundation Foundation Pierre Bergé, “that “that day, all fashion professionals are dazzled by what would become a historic moment ”1.Yves Saint Laurent invented the wardrobe of t he modern woman, including creating the cloak, the “Saharienne “Saharienne””, the trench coat, popularizing the Smoking for woman and the jumpsuit.

“The Saharienne”

“The Smoking”

“The Jumpsuit”

But Yves Saint Laurent Cosmetics is a different company than YSL SAS who is concentrated on haute couture, ready to wear and accessoiries. The core business of YSL Cosmetics is perfume for men and women and also cosmetics (make up and skin care essentially). In 2008 the company was takeover by the L’Oreal group and joined the “ L’Oreal “ L’Oreal Luxe” Luxe ” division. The division. The YSL Beauty Company also has licenses as Bucheron, Alexander McQueen and Stella McCartney (stopped in 2013).

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Official website of Pierre Bergé Foundation : http://www.fondation-pb-ysl.net/fr/Histoire-214.html


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LXRY642B – Marketing analysis of a luxury brand IUM The real History of the company started by the launching of the first perfume named “ Y” in 1964. In fact, after a journey of Yves Saint Laurent in Japan, Pierre Bergé focuses on the development of licenses. He meets Richard

Solomon,

president

of

Charles of the Ritz, which proposes the

creation

of

a

perfume

in

exchange for royalties on sales; it was the beginning of the adventure. Then, in 1971, in order to launch his first eau de toilette, YSL himself posed naked in the French edition of Vogue, causing a huge scandal in the press. Despite, this picture will become iconic. In July 1977, it is the Opium perfume that was launched. Less than a year after the death of Mao, it is the celebration of the splendor of Imperial China. According to the Pierre Bergé Foundation, “this “ this is also the beginning of a scandal in the United States, up to a lawsuit for false advertising because the scent does not contain opium”. opium”. Today, this perfume is the 7 th best sold in the world, so it is one of the symbolic product of the brand 2.

In 1983 it was the launching of the perfume “ Paris” Paris”, then in 1993, Pierre Bergé announces in a press conference, the launch of a new perfume “Champagne” Champagne”. The fragrance will be renamed simply Yves Saint Laurent, following a court case brought by the CIVC (Comité Interprofessionnel du Vin de Champagne). In December 1993, during the stop sale under its original name, “Champage” Champage” was (in less than three months) became the best-selling fragrance in Europe.

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2

Cf. official website of L’Oreal Luxe : Luxe : http://www.loreal.fr/marques/loreal-luxe/yves-saint-laurent-beaute.aspx


LXRY642B – Marketing analysis of a luxury brand IUM 1.2 Main figures

According to the French Magazine “Strategies “ Strategies”, ”, in 2007, the turnover of YSL Beauté (part of the L'Oreal group) group) was € 626 millions 3. According to Florentin Collomp, Collomp, journalist for the French Figaro magazine, “ L'Oreal “ L'Oreal bought YSL Beauté in early 2008 to € 1.15 1.15 billion in the family group Pinault PPR (now becoming Kering Group), which retains the split mode. Since then, the th e global leader in i n beauty has been busy, including 1,300 people in its own staff, reorganizing production and multiplying launches. Great beauty brand in the 1970s and 1980s, YSL had lost its luster. Most of its new fragrances in recent years have been flops: Nu, M7, Cinema and Elle, almost all removed from the market. […] L'Oreal aims aims to YSL Beauty to become one of the top five beauty brands in the world, alongside its flagship Lancôme and Dior or Chanel competitors ”4. According to the group’s financial report, in 2012, the L’Oreal group was the 1st mondial cosmetic group with € 22, 22, 5 milliard of turnover, present in 130 different countries, with a portfolio of 27 international brands and 611 deposed patents 5. L’Oreal Luxe included the following brands: Lancôme, Giorgio Armani, YSL Beauty, Bioderm, Bioderm, Kiehl’s, Ralph Laurent, Shu Uermura, Cacharel, Diesel, Victor & Kolf, Stella McCartney and Maison Martin Margiela.

Key data from L’Oreal in 2008 (year of the purchase of YSL Beauty)

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Turnover

Operating income

Net income per share

Dividend

€ 17 542 million 542 million

€ 2 725 2 725 million

€ 3,49

€ 1,44

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Cf. article in the website of Stratégies : http://www.strategies.fr/actualites/marques/r48771W/yves-saintlaurent-sans-yves-saint-laurent.html

4

Cf. article of Le Figaro : http://www.lefigaro.fr/societes/2010/09/22/04015-20100922ARTFIG00693-l-orealveut-doubler-la-taille-d-ysl-beaute-en-dix-ans.php

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Cf financial report of L’Oreal in 2012 : annuel/2012/LOREAL_Rapport-Activite-2012_FR.pdf

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http://www.loreal-finance.com/_docs/pdf/rapport-

Cf annual report of L’Oreal finance.mobi/_docs/rapport/2008/fr/chiffresCles_resume.htm

in

2008 : 2008 :

http://www.loreal-


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LXRY642B – Marketing analysis of a luxury brand IUM 2. External evaluation 2.1 Main contextual elements: PESTEL

Political

-

Private organisms who control the toxicity of the cosmetics/perfumes

-

European regulations on prohibited ingredients for cosmetics and skin care

-

Quotas in sales of duty free (one of the most important POS)

Economical

-

Economic crisis (customers can’t afford the wide range provided)

-

Slow growth of the industry

-

Substitution product product with non-luxury non-luxury products products (less expensive)

Social and cultural

-

Ecofriendly trend, bio products

-

Men consume more and more beauty products (skin care and perfume)

-

Reign of youth (bigger market of skincare)

-

Westernization (Chinese/Indian woman wants to look like western woman)

Technological

-

Innovations are in the core of the R&D departments

-

The new technologies for packaging (sustainable packaging)

-

The importance of being innovative is a competitive advantage for a cosmeti c company

Environmental

-

Sustainable development

-

Non-testing on animals products

-

Ecofriendly products trends (Body Shop and Lush for example)

Legal & legislative

-

Ban of animal testing for cosmetics

-

Regulations concerning the raw materials

-

Complexity to set up a patent

-

Laws on environmental protection and testing on animals for cosmetics Nelly MACCARIO – MACCARIO – MSc MSc 1 LUX R&H | Marketing analysis of a luxury brand

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LXRY642B – Marketing analysis of a luxury brand IUM 2.2 Competitive environment This market is very competitive and complex. Indeed, a lot of companies are present, and the luxury companies invest more and more in the R&D in order to depose patents and to create a new product to gain market share. Indeed, the market is very attractive: according to the magazine “ Les Echos” Echos”7, “in 2009, the perfume and cosmetic market weighed € 6.6 billion of turnover (against 6.9 billion in 2007)” 2007) ”. The market of YSL Beauty was to be divied by two: perfume & cosmetics, because it is not the same market.

Perfume A). Luxury brands

The most brands in competition with YSL Beauty are positioned in the same area: wellknown French maisons, who do Haute Couture, ready to wear and accessoiries in parallel. CHANEL : Perfumes how are the most in competition with YSL Beauty are the “best sellers

products” like “Chanel N°5” N°5”, “Coco Mademoiselle” Mademoiselle” and “Chance” Chance” for women. For men, it is more “ Bleu de Chanel ” and “ Allure” Allure”.

LANCOME : Lancôme is a cosmetics and luxury products maison created in February 1935

by Armand Petitjean, a Parisian perfumer. Even if this is part of the same group: L’Oreal Luxe, it a competitor for YSL beauty. “ La vie est belle” belle”, “Tresor ” and “ Hypnose” Hypnose” are the most well know product of the brand. They use a lot of celebrity endosment with actors like Julia Roberts and Penélope Cruz for example.

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7

Cf aricle from Les Echos de la Franchise : http://www.lesechosdelafranchise.com/dossier-cosmetiques parfumerie/franchise-le-secteur-de-la-cosmetique-parfumerie-se-refait-une-beaute-4672.php


LXRY642B – Marketing analysis of a luxury brand IUM GUERLAIN : Guerlain is the oldest French perfumer. The house was created in Paris in 1828

by Pierre-François-Pascal Guerlain. The “ Petite robe noire” noire” is the youngest perfume of Guerlain. But the well-know fragrance “Shalimar ” is the most famous of the brand. And in 2013, the perfume has his own legend, with a beautiful video 8 with the mannequin Natalia Vodianova as principal character.

Accodring to the official website of Guerlain 9

centuries in India, Emperor Shah Jahan falls : “There are four centuries

madly in love with the princess Mumtaz Mahal. He created it for the wonderful gardens of Shalimar, and he dedicated the Taj Mahal, one of the seven new wonders of the world. This incredible story ignited the imagination of Jacques Guerlain, who in 1925 created Shalimar, the first oriental fragrance of history”.

CHRISTIAN DIOR : The most popular perfumes for Dior are “ J’adore” J’adore”, “ Poison” Poison” and

“ Miss Dior ” for women and “ Dior Homme” Homme” and “ Eau sauvage” sauvage” for men. They use a lot of celebrity endorsment to sell their product, particularly with actors. For example a very famous add with Charlize Theron in the Palais of Versailles (to show the French aspect of the brand), Alain Delon and Natalie Portman for Miss Dior.

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See the video: http://www.youtube.com/watch?v=vL6XJw8Oe5M Official website of Guerlain : http://www.guerlain.com/fr/fr-fr/parfums/parfums-pour-femmes/shalimar.html


LXRY642B – Marketing analysis of a luxury brand IUM GIVENCHY : At the opening of his house in 1952, Hubert de Givenchy cultivated a mixture

of fantasy and elegance, like Audrey Hepburn, his muse. Today, the company offer ultimate chic fragrances as a line of bold and creative makeup. The most famous perfume of this maison is “Very “Very irresistible” irresistible” (with Liv Tailor as celebrity), “ Ange et démon” démon” (characterized by Uma Thurman) for woman and “Gentleman only” and “ Pi” Pi” or “π “π ” for men.

JEAN PAUL GAULTIER : : Jean Paul Gaultier, fashion designer and perfumer is considered

worldwide as a symbol of French culture. He is often nicknamed "terrible child of fashion" because of this provocative side (the famous corset of Madonna). The bestsellers bests ellers perfumes of this maison are: are: “Classique “Classique”” and “ Le mâle”, mâle”, who are complementary (woman/man). The universe of the brand is very interesting and it creates a very particular atmosphere. The company does not use celebrity endosment but the “sailor” of “le male” is very well known. And in 2013, the new campaign “on the dock” create the buzz with a very beautiful video

THIERRY MUGLER: the more famous perfumes for this French brand are

“ Angel ”, ”, “ Alien” Alien” and “Womanity “Womanity”. ”. The company creates a new way to buy perfume “ La source” source” that is in fact a perfume fountain where customers can fill their empty bottle of perfume. They are very innovative and they try to gain market share with this new way to consume (buy only that we need).


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LXRY642B – Marketing analysis of a luxury brand IUM B). Licenses

A license agreement is a contract by which a company owning a brand allows a third company to market different products under the licensed name. A lot of examples are available in the perfume industry: -

Coty Inc : who market Celine Dion, Calvin Klein, Marc Jacobs, Cerruti, Davidoff,

Jennifer Lopez fragrances

-

Estée Lauder Inc. : parfums Estée Lauder, Clinique, Donna Karan, Michael Kors,

Tom Ford and Tommy and Tommy Hilfiger.

-

Inter Parfums : fragrances from Burberry, Balmain, Boucheron, Lanvin, Montblanc,

Jimmy Choo, Van Cleef & Arpels.

-

L'Oréal : perfume from Giorgio Armani, Cacharel, Diesel, Lancôme, Ralph Lauren,

Victor & Rolf, Yves Saint Laurent and Lancome.

-

LVMH : perfume for Dior, Givenchy, Kenzo, Guerlain, Kenzo, Guerlain, Fendi, Fendi, Benefit Benefit Cosmetics and

Sephora.

-

Procter & Gamble : perfume Lacoste, Hugo Boss, Dolce & Gabbana, Gucci, Rochas

and Escada.

-

PUIG : perfume for Nina Ricci, Prada, Carolina Herrera, Paco Rabanne and

Valentino.

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LXRY642B – Marketing analysis of a luxury brand IUM Cosmetics & skin care

Luxury brands

Every luxury brand listed above has cosmetics and skin care lines. It is part of the dream they sell. Especially for skin care because they have the necessary resources to invest in R&D and to advance the progress. It is interesting to notice that the color code of these luxury brands is very pure: only black and white. For the cosmetic and perfume market they use a lot of gold too. And of course the red/black code for the makeup. Jean Paul Gaultier is a precursor because the t he maison mais on was the first firs t to create an entire enti re line li ne of make up for men. Lancôme launch in 2008 the first vibrating mascara named “Oscillation” Oscillation”. The new trend of these brands is to open their own specialized shop in big cities. For example Chanel opens a “beauty “beauty boutique” boutique”10 in the center of London in Coven Garden. It permit to give this own personality to the beauty brand and to have a better brand image. Middle range brands

The middle range brands are sold in supermarkets or in specialty stores (perfumeries like Sephora, Marionnaud or Nocibé in France. Indeed, the “Sephora” brand and “make up forever” (who is the professional brand of Sephora) are exclusively sold in Sephora stores (part of the LVMH conglomerate). Mac (upper range of makeup) has their own store in the biggest cities. Bourjois and L’Oréal L’Oréal are sold in supermarket (Monoprix and others). Yves Rocher is not a competitor because the brand only sold his own products. And the others lower range brands are not competitors neither because the quality offered is not the same and the product, the dream itself is not the same than YSL product. The bio products sold by a brand like “Lush” are not competitors of YSL beauty because it is for sure not the same product and expectations from the customers.

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Official website of Chanel beauty boutique : http://popupstore.chanel.com/coventgarden/flash/index.html


LXRY642B – Marketing analysis of a luxury brand IUM Pharmaceutics brands

These brands are specalized in pharmaceutics products. They use a lot of innovation and spend lot of money in R&D in order to find the “miracle product” especially in skin cares and anti-aging products. The rivalry is very important in this sector because the market is very wide and worldwide (even new consumer in China want to stay young and are influenced by the western countries especially for the makeup and skincare market).

2.3 Consumer trends

Perfume

In Europe, the market of perfume is in full expansion. Particularly in France where the market was born. According to the Sleever International website

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: “in this countries, perfume

market is particularly demanding and mature (7 out of 10 women use perfume in Europe) ”. Brands must be compete for talent and creativity to meet customers constantly looking for something new and conquer younger and male targets. But, in China this market is not interesting. In fact, the scents are not part of the habits instilled in Chinese history. They don’t have the same attachment to the perfume that we have in Europe. In fact, less than one percent of China's population now use perfumes in comparison with 60% in Western Europe or the United States. The lack of perfume history creates a big catching up to the fragrance market in China. This is why brands try to establish this culture to younger consumers. According to the researsh and market article of 2013 12 “ Fragrances are increasingly viewed by consumers as part of visual culture, and are therefore becoming an essential part of a daily beauty regime. Consumer preferences are becoming more sophisticated and complex, resulting in stronger demand for more intense and indulgent sensory experiences” experiences ”. Effectively, the perfume industry is very competitive and the different brands are to be innovative in order stand out from worldwide competitors: every maisons or brands launch his own perfume and consumers are more and more demanding. 11

Sleever International website : http://www.sleever.com/fr/trends/solution/parfums-un-marche-mythique-mais-mature Article from Researsh Market : http://www.reuters.com/article/2013/07/25/research-and-marketsidUSnBw255659a+100+BSW20130725

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LXRY642B – Marketing analysis of a luxury brand IUM Cosmetic products

According to a blog specialized on business in China 13, “ sales of beauty products are booming in China. Indeed, consumers, especially young people, are more and more attention to their health and therefore more interested in personal care products ”. Nowadays, the importance of the Corporate Social Responsibility of a cosmetic company is much more important than ever. The environnemental issues are very important for consumers. They want to buy products from companies who care about the environment. Obviously, the animal testing issue is a key element for the cosmetic industry. More and more customers are sensitive to the kind of test using for create products. For consumers, the use of natural ingredients is now essential; they don’t want aggressive cosmetics with too many chemical products.

Skin care

Emerging countries are very fond on this market: Chinese customers love takes care of their skin and Brazilian too. The westernization of these markets is very important for cosmetics companies. Indeed, they can expand worldwide and attract new consumers. Skin care products are selling to more younger woman, because of the “r eign eign of youth” youth” trend. But western men use increasingly skin care product. This market is very attractive, thanks to it democratization in terms of average age of the clientele, but also in terms of nationality. According to an article of Sleever International, “ protection (hydration and sunscreen) becomes more than ever a priority. The bearer of the anti-aging niche (heart of the market), trademarks replicate to cosmetic surgery products with more technical inspired by dermatologist’s techniques”. techniques”.

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Cf. Marketing in China blog : http://www.marketing-chine.com/analyse-marketing/le-marche-des-parfums-en plein-essor-en-chine


LXRY642B – Marketing analysis of a luxury brand IUM 3. Internal evaluation

3.1 Target consumers

Segment targeted targeted

Positioning is the act of designing the company’s offering and image to occupy to occupy a distinctive place in the mind of the target market. YSL beauty beaut y targeting a “high“high-quality position” brand position” brand of cosmetics, make up and skin care. The company also tries to attract younger customers. In this way, the firm has to do several strategic choices: -

produce high-quality product product by investing a lot in R&D,

-

charge a high price in order to justify the luxury,

-

distribute through high-class dealers (official website of the brand, or specialist shops as Sephora, Nocibé, Marionnaud, Galeries Lafayette and on duty free too)

-

And finally, advertise in high quality magazines, for example in France: Madame Figaro, Vogue, Glamour, Marie France…)

Segmentation dimensions

YSL Beauty has different segmentation dimensions: -

Geographic: especially for makeup. Indeed the western and eastern customers have not the same values. For example, in China, women use only red lipstick. That is why the company has to adapt itself to the country.

-

Demographic: YSL Beauty tries to attract younger customers by launching the “Babydoll” makeup range. The company target a certain social class who can afford luxury cosmetics goods.

-

Lifestyle: the target of the brand is young customer who can afford luxury makeup and skincare. But for perfumes it is different, because that perfumes is the easier way for low professional society to enter in the dream of luxury brands.


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LXRY642B – Marketing analysis of a luxury brand IUM 3.2 Positioning Perceptual map

In this perceptual map, all of the market is represented: perfume, cosmetics and skincare. In this way, we can realize how much the market is competitive . There is no space available in the map for new brands, the market is saturated, but because of the high demand and the size of the market, every company can have this place and gain market share. A lot of companies deal with the 3 business (cosmetics, perfume and skin care): Chanel, Dior, Jean Paul Gaultier, Guerlain, Estée Lauder, Givenchy and Lancôme. They are the main and closer competitors of YSL. Some of these brands are specialized in cosmetics: Sephora, Urban Decay, L’Oreal, MAC, Make-up forever and Bourjois. Their core business is cosmetics, so they have the expertise to provide good quality makeup, makeup , even if they are more positioned in the “ mass market” market” and no the luxury industry; they don’t sell the same dream than YSL. Others brands are only specialized in skincare: Clarins, Nuxe, Bioderma, Clinique and Shiseido. They have a good knowledge in this market and they spend a lot of money in R&D. The other brands of the map only do perfume: Lanvin, Hermes, Tom Ford, Prada, Giorgio Armani, Hugo Boss, Nina Ricci, Paco Rabanne, Thierry Mugler, Calvin Klein, Diesel, Lacoste, Lolita Lempica, Kenzo, Marc Jacobs and the other licenses like Lagy Gaga’s perfume. It is the most competitive market, especially because of the ease to create licenses.


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LXRY642B – Marketing analysis of a luxury brand IUM 3.3 Brand identity & strategy

Kapferer prism

3.4 Product strategy Product portfolio description

According to the UK official YSL Beauty website 14, the portfolio is very wide. -

Width: the company have 5 lines for makeup, only 2 for fragrances (men/women) and several range for skin care

-

Length: the offer is very ver y length and include more than 50 different kind of product ( for example, only for makeup, there is more than 10 different products: lipstick, gloss, liner, mascara, eye shadow, pencil, brushes, foundation, powder, nail lacquer)

-

Depth: The average variant for a product is 10. For example, there are 7 different mascaras and 12 lipsticks. The only exception is for fragrances, there are few variant: shower gel, body lotion, after shave care, deodorant and cologne.

-

Consistency: there is a real coherence between the various products offered by the brand. In fact, make-up are broken down for each use (lips, eyes, complexion, nails) but the range is still quite traditional for perfume (all perfumers offer cologne, showers gels and deodorants and declined the basic perfume), there is no differentiation offer for the fragrances.

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UK website of YSL Beauty : http://www.yslbeauty.co.uk/


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LXRY642B – Marketing analysis of a luxury brand IUM Make up

There are several lines of make up: complexion, lips, nails and eyes. According to this portfolio, we can see that it the complexion and the lips that are the most most expended lines.

Fragrance

We can see that YSL propose more fragrance to woman (more than 10 items) than to men (only 8 fragrances). Women bestsellers are: Opium, Manifesto and Paris. For men it is: La nuit de L’Homme, Opium pour homme and L’Homme.

Skincare We have to notice that YSL skincare targeting only woman. In their portfolio, they do not have product for men. The colors of the line are very pure: purple, white or gold (to accentuate the luxury side of the product).

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LXRY642B – Marketing analysis of a luxury brand IUM 3.5 Pricing strategy

Makeup Complexion Product

Lips

Average

Product

price

Nails

Average price

Foundation

45 € €

Lipstick

30 €

Highlighters

30 € €

Gloss

Powder

45 € €

Blush

35 € €

BB Cream

45 €

Eyes Average

Product

price

Nail lacquer

21 € €

Product

Average price

Mascara

28,75 €

25 € €

Shadow

50 €

Vernis

29 € €

Liner

30,50 €

Contour

21,25 € €

Eyebrow

20,30 €

Perfume Woman Produ ct

Pri ce

Content

Manifesto eau de parfum

100 €

90 ml

Opium eau de parfum

60,40 €

30 ml

Opium eau de toilette

51 €

30 ml

Opium collector

95 €

50 ml

Paris eau de parfum

114,05 €

125 ml

Paris eau de toilette

77 €

75 ml

Parisienne eau de parfum

98,60 €

90 ml

Parisienne eau de toilette

63,10 €

50 ml

Rive gauche eau de toilette

65,30 €

50 ml

Elle eau de parfum

78,50 €

50 ml

Elle eau de toilette

63,30 €

50 ml

Cinéma eau de parfum

58,25 €

35 ml

Babydoll eau de toilette

64 €

50 ml

Belle d’Opium eau d’Opium eau de parfum

75,85 €

50 ml

Saharienne eau de toilette

50,90 €

50 ml

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LXRY642B – Marketing analysis of a luxury brand IUM Men Produ ct

Pri ce

Content

La nuit de l’Homm l ’Hommee eau de toilette t oilette

48 €

40 ml

La nuit de l’Homme the perfume

67 €

60 ml

L’Homme libre eau de toilette

47 €

40 ml

L’Homme L’Homme libre prestige edition

112 €

200 ml

L’Homme eau de toilette

78 €

100 ml

Kouros eau de toilette

53,70 €

50 ml

Body Kouros eau de toilette

78 €

100 ml

Opium for men eau de parfum

66,95 €

50 ml

Opium for men eau de toilette t oilette

53,70 €

50 ml

Skin care lines

Skin care Produ ct

Pri ce

Content

Forever light creator cream

89 €

50 ml

Forever light creator serum

84,80 €

30 ml

Forever light creator lotion

56 €

200 ml

Forever youth liberator serum in cream

165 €

50 ml

Forever youth liberator mask

62 €

75 ml

Forever youth liberator night cream

91,50 €

50 ml

Forever youth liberator serum

80 €

30 ml

Forever youth liberator cream

57,80 €

30 ml

Forever youth liberator cleaner froth

45 €

150 ml

Top secret BB cream

45 €

Top secret beauty sleep

58,50 €

40 ml

Top secret cleansing

31,95 €

200 ml

Temps majeur supreme cream

234,30 €

50 ml

Temps majeur cream

234,30 €

50 ml

Temps majeur eyes

107,75 €

15 ml

Temps majeur cleansing balm

60 €

125 ml

Temps majeur nutri cream

234,30 €

50 ml

-

20


LXRY642B – Marketing analysis of a luxury brand IUM We can say that, the makeup lines stay affordable for mass consumption, because the average of a liner, mascara or lipstick is 30 €, who is only the double of the middle range makeup as L’Oreal Paris brand.

For the perfumes, we can see that women products are more expensive than men’s products. We can explain this because the fragrance is a typical women fascination. Indeed, fragrances are part of the feminine myth. Even if the men market starts to be interesting for luxury brands, it is not as attractive as that of women, what is why it is less expensive. For the skin care products, the range is very wide: day and night creams, lotions, serums, mask, cleaner, cleansing and eyes care. This market is in full expansion which may explain the different kind of offers from YSL Beauty Company. Some articles are very expensive like the Temps Majeur line, especially the 50 ml cream sold at 234,30 €. The innovation and the brand image can explain the very high prices of the skin care lines.

It is important to mention that the brand set up sales s ales strategy for Christmas when they the y sell a lot of gift boxes. For example, Opium Christmas boxe at 71, 50 €, includes: -

Eau de Toilette 50 ml Opium

-

Voile Hydrating for skin 50ml

-

Shower gel Onctueux 50 ml

21


LXRY642B – Marketing analysis of a luxury brand IUM 3.6 Distribution strategy

YSL Beauty does not set up a retalization channel, because of the type on industry; few luxury beauty companies have their own shop. Only Channel opens a “beaut y bar” in London. The cost of this private shop is very high for this kind of product. In fact, the company does not sell directly to consumers; there is not official YSL beauty store. The company sells products by the intermediate of professional dealers: perfumers or special stores in cosmetics as Sephora who offering full service (help, advices, testing of product, samples…). The products are also distributed in airport, especially in duty free shops that are specialized in selling luxury beauty product. But YSL beauty set up direct selling program by internet; consumer can buy online and receive the product directly at home. It permit democratization of the brand because consumers can by easily without go out of their house. Obviously YSL Beauty is not for sale on supermarket, indeed, a luxury brand cannot compromise its image by providing makeup, skin care and perfume in this kind of store.

3.7 Advertising 3.7 Advertising strategy & promotion

The adverstising strategy is any form of non personal presentation and promotion of ideas, goods, or services by an identified sponsor. YSL Beauty has

a

luxe

oriented

advertising

strategy. In every ad, there is the color code of luxury: white, black and gold, sometime they use red (for sensuality of makeup and fragrances products) or pink for the young targeting product. For example, Babydoll mascara mascar a is gold with the name of the product in pink. For the Opium fragrance, the universe of the ad is more dark red and black with a famous personality, the actress Emily Blunt. For the “Youth liberator” skin s kin care, the universe of the ad is more pure, with little maked-up woman with hair pulled back, in order to see the purity of her skin. The product is very pale pal e pink and the cap is white. We W e can say that the diriment universes of these pictures each fit to the target and the type of product sold; this is not the same universe because it is different products, even if it the same brand.


22

LXRY642B – Marketing analysis of a luxury brand IUM YSL beauty does advertisement in printed magazines (luxurious as Vogue, but general public too with Glamour for examples) and on billboards in cities. They use celebrities for perfumes (it is the norm in this industry): Kate Moss for “Parisienne”, the actress Jessica Castaing for “Manifesto”, Vincent Cassel and Garett Hedlund in 2013 for “La nuit de l’Homme”. For makeup and skincare the company use in priority billboard and magasins; there is few TV ads for other products than perfume. The company spread it image and universe by TV ads, for example the video of “La Nuit de l’Homme” with Vincent Cassel was very successful because of the unique universe: undaunted, elegant, shady, chic and esthete. esthete . Indeed, the video is in black and white and the classical song “suite espagnole” is playing; the elegant signature of the brand is shown. In the TV add for “Manifesto”, “Manifesto”, Jessica Chastain plays the “woman Manifesto” as Manifesto” as imagined by the YSL maison; bold, but with both seduction and emotion. Furthermore, the company strongly use internet as communication channel. In the official Youtube channel of the brand, consumers can find “making -off” and additional additional videos of the TV add. For example, in 2011, the company has posted the additional video of “La nuit de l’Homme” with Vincent Cassel. The public can more discover the universe of the brand than on TV (because TV adds only last 30 second in average). In this t his additional video, we discover that the director of this add is the famous Darren Aronofsky. And the brand explains the universe of the additional video 15: “in this two-minute video Vincent Cassel plays the seductive confirmed, alongside the actress Marine Vacth, the top models Alyssah Ali and Eniko Mihalik. From the cozy atmosphere of a classical music concert to more aggressive sounds a nightclub, "love feeds on coincidences, hazards, prohibitions" ... It hunts its prey at night Paris with his bipolar personality, as was already the characters in Darren Aronofsky's previous films Requiem for a Dream and Black Swan”. Swan”. This kind of additional videos can help the consumers to better understand the brand and appropriate YSL Beauty’s codes. For the launching of the new perfume Manifesto, YSL Beauty creates the event in France. The communication agency BETWIN set up a street marketing operation on September 2014 in Paris. Around the

“Fontaine du theatre

Français” (whose Français” (whose water was amethyst; time of the operation), several releases of purple balloons occurred (color theme of the campaign). This communication device has also been made in Lyon, Marseille, Toulouse and Bordeaux.

15

See the video : http://www.youtube.com/watch?v=g8qahlsHDx0


23

LXRY642B – Marketing analysis of a luxury brand IUM 3.8 International strategy

The international strategy of YSL Beauty is to locate in countries with strong potential for cosmetics. Penetrate emerging markets like BRICS and Eastern Europe (where French luxury brand are very successful, especially for makeup, fragrances and skincare) and maintain its market share in the countries where the cosmetics market is saturated like Western Europe, USA and Canada.

4. Final conclusion and recommendations

4.1 SWOT analysis

Strengths

Weaknesses

French luxury brand with Heritage

Not enough competitive in skin care (only 5% of

Part of the L’Oreal L’Oreal group (world N°1)

the sales)

Very innovative brand (thanks to R&D)

Too much link this the creator YSL and with the

Strong brand name

Haute couture brand

History is very important (the Opium legend,

Old fashion (but they try to give a younger image

YSL himself poses naked to promote his first eau

to the brand with the launch of Babydoll line)

de toilette) New image: younger image and impressive i mpressive adds with famous and powerful people (especially Kate Moss and Jessica Chastaing) Strong online presence (website, videos…)

Opportunities

Threats

New emerging emerging markets; markets; mondialization

Bio products & eco friendly trends

Standardization of beauty (they can sell their

Economical crisis (mass market suffer from the

product everywhere) everywhere)

crisis and it is a large amount of consumers of the

Westernization of the world (Chinese women do brand) surgery of the eyes and Indians women use

Very competitive markets

products to make make a whiter skin) skin) Men cares more and more about physical (use of perfume and and skin care)


24

LXRY642B – Marketing analysis of a luxury brand IUM 4.2 Recommendations

YSL Beauty had a very strong image worldwide because it is a French brand closely link to Haute couture. The company is very innovative (lunching of the “vernis à levres”) and use lot of international celebrities to promote perfumes. More, the cosmetic market is growing very positively due to emerging markets that are not saturated but in expand. But, because of the extreme rivalry of the market, the company should differentiate from competitors. In this wa y, the brand can become in new markets “THE French luxury cosmetic company”. Set up N°1 positioning include for this company : “best quality”; “best innovation”; “best styling” and “best value”. To do that, the company has to work along 5 different dimensions: -

Product: continue to invest in R&D to have the most innovative products, in order to maintain this competitive advantage

-

Services: set up services with the purchase (online advices or free samples)

-

Personnel: open their own store and train the personnel, have a good relationship with customers (effectiveness of the staff in terms of knowledge concerning the products and the luxury technical of sale)

-

Channel: have their own channel of distribution (own shop, online) but continue to sell in cosmetics department store and duty free

-

Image: continue to use the media to create the YSL legend, with their own atmosphere for each product.

YSL Beauty can open their own store and set up “corporate retailing”, as Chanel’s beauty bar in a very luxurious place in order to consolidate the good image of the brand and to differentiate from competitors who have the same distribution channel (perfumeries and online). Even if the price will be consequent (no economies of scale, and rent of the luxurious place), the company will gain wider brand recognition and enjoy a better image in term of luxury products.

25


LXRY642B – Marketing analysis of a luxury brand IUM 5. References (Harvard References)

Chanel

beauty

boutique

[online]

available

from

> >> [October 24, 2013]

Collomp F. (2010) « L'Oréal veut doubler la taille d'YSL Beauté en dix ans » Le Figaro [online]

available

from

<
20100922ARTFIG00693-l-oreal-veut-doubler-la-taille-d-ysl-beaute-en-dix-ans.php>> 20100922ARTFIG00693-l-oreal-veut-doubler-la-taille-d-ysl-beaute-en-dix-ans.php >> [November 12, 2013]

Guerlain (2013) [online] available from <> [October 24, 2013]

Guerlain, Shalimar advertisement (2013) The Legend of Shalimar film [online] film [online] available from <> >> [October 24, 2013]

L’Oreal Group (2009) (2009) Key data 2008 [online] available from <> finance.mobi/_docs/rapport/2008/fr/chiffresCles_resume.htm >> [November 12, 2013]

L’Oreal Group (2013) Activity Report 2012 [online] available from <> >> [November 12, 2013]

Maudieu M. (2013) « Yves Saint Laurent sans Yves Saint Laurent ». Stratégies Magazine n°1504

[online]

dated

06/05/2008

available

from :

laurent.html > [October 24, 2013]


26

LXRY642B – Marketing analysis of a luxury brand IUM Olivier, J. Marketing Chine. [02 September 2013] available from chine.com/analyse-marketing/le-marche-des-parfums-en-plein-essor-en-chine > [October 24, 2013]

Research and Markets (2013) Consumer and Innovation Trends in Fragrances. Thursday July 25,

2013

online

at

7:13am

available

from:

<<

http://www.reuters.com/article/2013/07/25/research-and-marketsidUSnBw255659a+100+BSW20130725>> idUSnBw255659a+100+BSW20130725 >> [October 24, 2013]

Sleever International (N.D) Perfume: a mythical but mature market [online] available from <> >> [November 17, 2013]

Sleever

International

(N.D)

Skin

care

[online]

available

from

> >> [November 17, 2013]

UK website of YSL Beauty [online] available from <> >> [October 24, 2013]

27


LXRY642B – Marketing analysis of a luxury brand IUM 6. Appendices Appendice 1: French article from the financial report of L’Oréal in 2012

Appendice 2: Infography from Le Figaro concerning the beauty market in 2011

28


LXRY642B – Marketing analysis of a luxury brand IUM Appendice 3: overall perfumes of competitors competitors of YSL Beauty

Guerlain Women

Men

Après l’ondée

Guerlain Homme

Aqua allegora

Habit rouge

Chamade

Heritage

Champs Elysées

L’instant de Guerlain pour Hommes

Chant d’aromes

Mouchoir de monsieur

Idylle

Vetiver

Insolence Jardins de bagatelle Jicky L’heure bleue L’instant de Guerlain L’instant magic La petite robe noire Mitsuko Nahema Samsara Shalimar Vol de nuit

Dior Women

Men

J’adore

Dior Homme

Les escalles de Dior

Eau sauvage

Poison

Fahrenheit

Miss Dior

Higher

Dior addict

Jules

Dune

Dune pour Homme

Dolce vita Les creations de monsieur Dior


29

Coursework 1 - Ysl Beauty

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