Skin Care

Case 7-1: Cosmetics Giants Segment the Global Cosmetics Market: The Assignment

Overview: The world’s best-known cosmetics companies are setting their sights on a lucrative new market segment: the emerging middle classes in countries such as Brazil, Russia, India, and China. Market research is critical to understanding women’s preferences in different parts of the world. In China, for example, L’Oreal and its competitors have an opportunity to educate women about cosmetics, which were banned prior to 1982.

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

In China for example, Chinese women apply products in the morning and the evening and Chinese consumers are price sensitive. In India, millions must live on $ 2 per day; but working women are increasing dramatically and millions of women in their 20s concerned about gray hair were not satisfied with existing do-it-yourself hair color. And in Japan, women prefer to use a compact foundation rather than a liquid.

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

Estee Lauder’s strategy is that their products are aspirational. Based on their market research and psychological research, they feel that Chinese consumers would be willing to invest in products that are relatively expensive versus their income because they are confident about the future.

3. What is the best positioning strategy for Shiseido as the company expands in Asia?

Shiseido has a corporate advantage because they understand the needs and requirements of the Asian skin – their positioning strategy is or should be one of “attribute or benefit” – they like when they see their customers happy! They should employ a “high touch” product and a utilize a global consumer culture positioning.