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Research Report
Estée Lauder Inc
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Estée Lauder Inc
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3
SWOT analysis
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
Weaknesses
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
Threats
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5

Rivalry among Existing Competitors
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
The treat of substitutes
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7

Bargaining power of buyers
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8
Identifying key priorities in 1 and 5 years period
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
Price
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
Promotion
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Bibolograghy
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To achieve the objectives in this research, synthesise marketing theories with appropriate tools
must critically be analysed
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will be precisely
reviewed
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Finally, Conclusions
will be presented
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Background
Estée Lauder Companies Inc
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The Company’s products are sold in over 140
countries and territories
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Founded in 1946 in New York, USA, this technologically advanced, innovative
company has gained a worldwide reputation for elegance, luxury and superior quality
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Through huge research and
rigorous product evaluation, Products are both gentle and highly effective
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and an up-market brand hence, particularly target affluent

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35
2
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elcompanies
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www
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co
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Accordingly, Estée Lauder is competing with similarly positioned and luxury brands
and a prospect that a customer may switch to another brand because of pricing considerations is
low nevertheless brand loyalty is significant
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For Estée Lauder in
the UK this framework could be implemented as following:

 Strengths
The main key strength of Estée Lauder is its brand identity
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It obtains skills and capability, experience
on corporate marketing, intellect of the marketing function in a variety of corporate
environments and financial investment
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As Estée Lauder has a broad range of products, it appeals to various consumers group
at different prices within the premium segment
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 Weaknesses
The main weakness of Estée Lauder is limited retail coverage as Estée Lauder traditionally has
had low coverage in alternative retail channels
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However this channel has fewer shoppers compare to
retailers
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 Opportunities
Most opportunities arise from emerging markets and expanding in the China as China has
potential growth for skincare products and premium categorised
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Estée Lauder as a wide recognised brand must take advantage of this opportunity to attract and
target new potential customers by implementing appropriate marketing strategy
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As department stores experiencing a lower traffic, they would cause treat for company’s sales
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Office of National Statistics (www
...
gov
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Porter, The Five Forces that Shape Strategy, (2008) pp
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Considering in
the Estée Lauder UK and its competitors as market players and buyers as end-customers, this
framework would be implemented as following:

 Rivalry among Existing Competitors
The UK skincare market is extremely competitive; Estée Lauder with (%5
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The most immediate competitors of Estée Lauder according to Global Market
Information Database for SkinCare Company Shares (2005-2009) are Beiersdorf with (%7
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3), L`oreal (%5
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7), Clinique (%3
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8)
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The skincare market is tremendously
diversified and products are available in every quality and price range since today`s consumers
are more conscious and sophisticated, they demand different types of skincare products
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Most rival brands have successfully focused on a specific segment of the market and
have positioned themselves clearly
...
Therefore customers observe little variation
across skincare products of brands and perceive that essential quality and external added-value of
product is similar
...
Hence, Rivalry among existing competitors is extremely
high
...

Significant new entrants are likely to be a well established foreign brand, traditional luxury
bands which switch to a new line of skincare products and a company which offer unique
skincare products combined with new technology innovation and development
...
Brand names and the
learning curves are not as significant barriers to entry as they were in the past decades
...


 The treat of substitutes
Skincare products have few substitutes like surgeries and laser treatment which is expensive and
inconvenience for some people
...

Today, more people start using skincare products because they think prevention is better than
treatment and surgery
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This company develops its essential ingredients in its own R&D
department and only outsources basic and non-value-adding chemicals and packaging
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Therefore, suppliers have little bargaining power in this market
...
Since affluent buyers are highincome and so are less price-sensitive, they have accordingly less bargaining power compared to
low-income buyers, who are more price-sensitive and more likely to switch to a similar product
with a cheaper price
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Thus buyers have little
bargaining power in this market
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 Generic strategy options
Porter

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clearly describes the strategies that every company have to apply to maintain its

competitive advantage in the market and states” In coping with the competitive forces, there are
three potentially successful generic strategic approaches outperforming other firms in the
industry: overall cost leadership, Differentiation and Focus”
...
since Estée Lauder is a luxurious
brand, controls the up-end of the market and targets less price-sensitive, affluent young and
middle-aged females with relatively secure power of purchase consequently its generic strategy
and competitive advantage would be more heavily focused on differentiation, superior quality of
skincare products and technological innovative advancement and in addition benefits from
added-value obtaining from brand reputation, recognition and personalized brand images
...


6
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35

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Identifying key priorities in 1 and 5 years period
To identify key priorities in 1 and 5 years period, marketing strategy regarding Marketing Mix
(4P’s) should be developed
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Basically, Estée
Lauder has to adjust to business environment of every country whilst operating to sustain its
competitive advantage
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For instance, The Estée Lauder is committed to consumer health and safety, and
bringing to market products that comply with applicable regulations in the country 7
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The company`s Environmental Health & Safety policy is very crucial
subject which affect its relationship with governmental regulatory
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Estee Lauder promote responsible environmental and safety practices and encourage
and apply pollution prevention, resource conservation, waste minimization, reuse, and recycling
practices to minimize waste disposal costs and promote application of safe and innovative
technologies for waste disposal
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www
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com, Product safety& testing , (2010)
8
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elcompanies
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The Company
works extensively with the industry, universities and the global scientific community for
research
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Marketing strategy regarding Marketing Mix (4P’s) could be developed as following:

 Product
Estée Lauder deliver Superior skincare product with advanced quality and service
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Marketing plan for product in 1, and 5 years period, would be influence by target consumer
segment
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Estée Lauder must frequently assess its product in comparison to
competitors and evaluate brand position and be updated regarding latest innovative technology
not to fall at the rear of its competitors
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Estée Lauder must focus to these services in comparison to its competitors intend to
enhance brand image
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These must be considered when planning product-marketing strategy
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Estée Lauder must use
this opportunity to market its products to appropriate target consumers
...


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 Price
Estée Lauder has to assess its list price on a regular basis in comparison to its competitors to
match prices as well as providing discounts and incentives to compete with rivals
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For instance, affluent
consumers who are less price- conscious should not be targeted for such price strategies
...


 Place (distribution)
Estée Lauder distribution in the UK relies mostly on liable channel of distribution specifically
department stores to maintain high quality image of the brand
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When conduct marketing plan for 5 years and
considering target consumer segments, Estée Lauder must consider that young generation are
more shifting to purchase products online, as opposed to old people
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Estée
Lauder must pay special attention to aspect of distribution in short and long term and choose the
appropriate channel to effectively target customers
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for instance, The free gift and the gift-with-purchase techniques which were

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pioneered by the company founder, Mr
...
When Estée Lauder conducts marketing strategy, to
promote its products through sufficient promotion strategies such as Advertising, Public
Relations, Sponsorship, Point of purchase, Sales promotions, Exhibitions as well as Internet, it
must take into account specific characteristic of consumers in each segment to target effectively
particular groups of people
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For instance, Estée Lauder hosts Makeup Artist Events in selected department stores
which provide an opportunity for women to receive a personal consultation from a top makeup
artist
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This is also a great way to attract new customers and establish
relationship with customers
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Estée Lauder must choose the models
which present romance, elegance and natural beauty to the public to convey the vision of the
company which is “Bringing the best to everyone we touch” and to promote its products
...
For
Estée Lauder promotion through Media is crucial for advertisement and public relation of the
company
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For publicity and Building up a positive image of brand, Estée Lauder is
heavily involved in campaigns with other organisations and sponsorships of event which must
continue in future
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Cure
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www
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org, (2010)
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The goal is to reach millions of
people each year with lifesaving message of the importance of breast health and early detection,
and to raise funds for The Breast Cancer Research Foundation to find a cure
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It is crucial to make a clear picture of company`s marketing strategy
in highly competitive skincare sector
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To adapt With today`s
sophisticated consumers and more segmented skincare market, Estée Lauder must emphasise on
its core competencies which is product superior quality, differentiation and technological
innovative advancement and exploit brands name and reputation to compete with its rivals
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These could be considering as key priorities which must reflect in marketing mix planning in 1
and 5 years period
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Estée Lauder companies, The Estée Lauder Companies’ Breast Cancer Awareness Campaign Early
Detection
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Prevention, (2010)

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Bibolograghy


De Pelsmacker, P
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( 2007) “ Marketing Communications”, 3rd edn,
FT Prentice Hall M
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elcompanies
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php> (Accessed 24
...

2010)



Estée Lauder companies, (2010) Environmental Health & Safety Policy [Online] available at:
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com/citizenship/environmental_health_safety/EnvandSafetyPolicy
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12
...
elcompanies
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html>
(Accessed 26
...
2010)



Estée Lauder companies (2010) Product safety& testing [Online] available at:
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com/citizenship/product_safety_testing
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12
...
elcompanies
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html > (Accessed 26
...

2010)



Estée Lauder companies (2010) The Estée Lauder Companies’ Breast Cancer Awareness
Campaign Early Detection
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Prevention [Online] available at:
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com/citizenship/corporate_responsibility/breast_cancer_awareness/bre
ast_cancer_awareness
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12
...
elcompanies
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html> (Accessed 26
...
2010)

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Estée Lauder companies (2010) Corporate Information [Online] available at:
...
co
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tmpl > (Accessed 27
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2010)

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

Global Market Information Database (2010), Skin Care - United Kingdom [online] Jun Available
at: ...
com
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aspx > (Accessed 26
...
2010)



Hollensen, S
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Essex: Pearson
Education Limited
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, Piercy, N
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, and Nicoulaud, B
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, Harlow: FT Prentice-Hall



kotler et al
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, Armstrong, G
...
J
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and Keller, K
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(2006) Marketing Management, 12th ed
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(1998) “Marketing Communications”: Principles & Practice, ITP



Lasserre, P
...
2nd ed
...
Y
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(2003) Corporate strategy
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Essex: Pearson Education Limited
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(1990) Brand strategy
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

Malhotra N
...
F (2007), “Marketing Research, an applied approach”, 3th ed
...




Mellahi, K
...
J
...
(2005) Global Strategic Management
...
7% in Q3 2010 [online]
Available at : ...
gov
...
asp?id=192> (Accessed 26
...
2010)

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

Porter, M
...
, 1980
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New York: Free Press



Porter, M
...
(2008) “The Five Forces that Shape Strategy”, Harvard Business Review, Vol
...
1, January, pp
...
, & Broderick, A
...
(2001)
...
[online] Available at:
...
org/Models/p5f
...
> (Accessed 26
...
2010)



Tai, H
...
, Ya, X
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, (2005) Reviving Estée Lauder, the Beauty Queen
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Available at:< http://www
...
cc/Classes/BEM106/Papers/2005/EsteeLauder
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12
...
bcrfcure
...
12
...
pbs
...
html> (Accessed 26
...
2010)



Time Zone Anti-Line/Wrinkle Eye Cream, picture, (2010) [Online] available at:
...
co
...
tmpl?CATEGORY_ID=CAT21212&PRO
DUCT_ID=PROD97981> (Accessed 26
...
2010)



UK economy 'weakest in 30 years' (2009 ) [online] April Available at:
...
co
...
stm > (Accessed 26
...
2010)



Yahoo! Finance (2010) British Pound to Euro Exchange
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yahoo
...
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Title: Research Report Estée Lauder Inc. in the UK
Description: A strategy marketing audit of competitive position in the skincare sector for Estée Lauder in the UK to identify their key priorities in 1, and 5 years period

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