The U.S. Beauty Industry: Brand Report Card - Research Paper Example

? HERE YOUR HERE HERE HERE The U.S. Beauty Industry: Brand Report Card INTRODUCTION The U.S. beauty industry is a highly competitive and dynamic industry. Multiple beauty product competitors such as Estee Lauder, Cover Girl, Maybelline, Avon and Clinique (to name only a few) produce very similar products in terms of chemical composition, color, benefit and texture, thus differentiation is a key brand performance measure to attain higher market share and gain consumer loyalty. Excluding Clinique, the majority of high-grossing beauty industry leaders utilize promotional prowess in brand strategy to create a unique brand image to appeal to diverse target consumers. Using the brand template identified by the article “The Brand Report Card”, this paper compares best practice in the industry with highly successful beauty brands to develop a scoring system to measure brand attributes that lead to competitive success in the U.S. market. SUCCESSFUL BRAND ATTRIBUTES The first success attribute for attaining brand dominance in the market is relevance, best defined as a blend of brand personality, effective usage of user and product imagery, and the relationship dimensions between consumer and brand (Keller 4). Relevance is the degree to which a product brand remains significant as related to stable or changing consumer lifestyle and attitude characteristics. Criteria for presenting effective relevance include sincerity, commitment, staying focused on current trends in consumer lifestyle, and effective usage imagery. In order to remain relevant, a beauty industry marketer must understand the dimensions of consumer lifestyle in order to create these important perceptions and emotional connections required to gain consumer interest. The VALS 2 model of marketing illustrates three different consumer profiles relevant to the beauty industry. These include those who are principle-oriented, action-oriented and status-oriented (Mishra 1). The VALS 2 model describes principle-oriented individuals as those with high regard for ethical and moral business behavior. Action-oriented individuals are consumers that seek excitement and generally lean toward products that fill an active lifestyle need. Status-oriented individuals are concerned with their outward image and reputation, usually willing to pay premium prices to attain a better social status. How is this associated with scoring relevance? Best practice in this industry is to identify these characteristics in its desired target markets, thus developing a brand personality that is most relevant to one of these key psychographic constructs. For instance, Clinique is highly successful is reaching both principle-oriented and status-oriented individuals through premium product positioning and also through credibility and brand reputation establishment associated with beauty research. Clinique devotes a considerable financial investment to dermatological testing, utilizing a “Power of One Philosophy” where when a single individual in a skin testing experiment shows a reaction to developing Clinique products, researchers return to the research drawing board (Pittilla 137). This makes the brand relevant to principle-oriented consumers through promotion of its ethical research and development processes that further justify premium pricing as compared to other beauty brands. Clinique recognizes that many consumers are growing concerned about the potential health risks of cosmetics products, using this focus to remain relevant to this segment of consumer markets. Media coverage of various studies indicating potential health concerns in beauty products increased 165 percent from 2000 to 2005 (Swan et al. 1056), thus giving consumers much more publicity by which to become further concerned. Clinique capitalizes on these growing concerns, creating brand relevance through commitment, sincerity and staying focused on current lifestyle trends in its target market. Where Clinique maintains low scores on the relevance attribute is usage imagery, something that many of its lower-cost competitors manage to achieve more effectively, such as Cover Girl. Figure 1: Clinique Brand Relevancy Figure 2: Lancome Usage Imagery Advertolog. Web. 23 September 2012 As illustrated by Figure 2, Lancome is more effective on establishing relevancy, illustrating status-oriented user profiles with tangible product dimensions in a lifestyle-relevant advertising focus. Lancome maintains similar premium, research-based focus on product development to meet principle-oriented consumer attitudes. However, its cosmopolitan-style advertising lacks dimensions of sincerity as actors utilized in promotional materials represent niche market characteristics and not necessarily its user attributes. Figure 3: Lancome Relevance Successes A secondary success attribute in the beauty industry is consistency. Consistency is best defined as the level to which a brand does not utilize mixed messages, but rather stays dedicated to a singular brand concept related to its competitive positioning. Consistency criteria include a stable value proposition, dependability and coherency in integrated communications. Cover Girl is an example of a beauty brand that maintains a great deal of consistency, appealing to the action-oriented and status-oriented buyer with lower to moderate resources. The value proposition consistently utilized by the company, “Easy, Breezy, Beautiful – Cover Girl” illustrates the brand’s benefits and expected outcomes in a reliable and recurring message format. Cover Girl remains consistent with usage of celebrity spokespersons with attributes for action-oriented lifestyle, in a promotional format that does not deviate from its long-standing, dependable link to the “Easy, Breezy” value proposition. Figure 4: Consistency in Cover Girl Promotion Models.com. Web. 21 September 2012 FanPop.com. Web. 21 September 2012 It is best practice in the beauty industry to avoid inundating consumers with mixed promotional messages, especially since the majority of market share attainment requires effective positioning. Cover Girl, over many other beauty brands, excels in all criteria associated with consistency, including dependability, coherency and its stable value proposition. Using a ranked scoring scale, this brand achieves a perfect 10 in all dimensions of consistent branding focus. A third attribute for success in the beauty industry is the attainment of customer satisfaction and loyalty. Customer satisfaction is best defined as the volume of customers who report positive brand experiences in a degree that exceeds corporate expectations (Farris et al.128). The criteria used to measure satisfaction, which leads to potential brand loyalty, are self-esteem development in consumers, trust establishment, the ability to improve word-of-mouth referrals, and customer relationship management. It is widely known in the marketing research community that when a product is able to provide for self-esteem development and self-expansion, their attachment to the brand grows more intensive (Zhang and Chan 1067; Greenwald et al. 7). Avon is a leader in this industry in customer satisfaction and loyalty, not only through decades of effective brand positioning, but through the relationships established between brand and the consumer. Avon representatives make up approximately 60 percent of all brand sales in the U.S., with these being a network of peer salespersons providing products in a lifestyle-relevant environment. Avon allows sales representatives to reinforce how the product builds self-esteem, through a variety of demonstrations of samples they carry. Trust is established through the competency of Avon peer sales networks, which dramatically improves satisfaction and word-of-mouth. Thus, the direct selling focus is Avon’s customer relationship management system, which is all an integrated marketing premise that builds considerable loyalty to this cosmetics and diverse beauty brand. Avon outperforms all other competition in this industry for customer satisfaction and loyalty development by meeting all of the brand best practice for this purpose. The interaction between brand and the consumer, along with ease of handling returns or complaints by accessible sales networks, adds perceptions of brand quality to Avon that provides many return purchases and favorability over competing retail store brands. A beauty brand that sought benchmarks for customer satisfaction and loyalty could develop a direct selling strategy in-line with this company, now iconic in American social culture. Loyal customers are also known to spend much more on products (Chaudhuri and Holbrook 84) which is built on emotional trust (Riegelsberger et al. 388). The criteria of trust are credibility, predictability, and reliability of the brand (Riegelsberger et al 389). Unfortunately, elements of trust development are difficult to quantify since the criteria used by different beauty industry consumers measure these factors differently. However, best practice in this industry is using credible and reliable celebrity spokespersons to build more interest in the brand. When it comes to celebrity endorsement usage, trust is measured by physical attractiveness and known expertise (Pornpitakpan 181). Having known and trusted celebrities endorse a product provides reliability to the brand, at least from a perceptual view, thus giving it more trust for purchase intention. Predictability, as an attribute of loyalty, can involve the tangible usage benefits of the product learned through experience or the consistency of advertising presentation and messaging. Cover Girl is another leader in building trust, using a wide variety of relevant personalities, such as Drew Barrymore, Taylor Swift and Queen Latifah. Cover Girl also has significant competitive advantage in reliability as it relates to non-premium pricing which is affordable to its target demographics. Predictability is measured by the format of promotional concept, such as those illustrated in Figure 4, which illustrates an unswerving commitment to its value proposition and intention: To easily transform the consumer into a Cover Girl. As one example, Cover Girl outperforms Estee Lauder in trust development, with Estee Lauder relying on free gifts (incentives marketing) to gain repeat purchases. Cover Girl attains higher market share and consumer trust (leading to loyalty) by maintaining moderate pricing structures, celebrity endorsement, and predictable promotional content that is harmonious with the brands’ personality and sincerity related to improving consumer lifestyle and attitude. A fifth brand attribute required for branding success is differentiation, the process of establishing perceived or tangible differences in a brand compared to industry competition. The success criteria for differentiation are positioning, pricing strategy aligned with consumer perceptions of brand value, and points of parity. A brand must find its niche among competition, establishing a singular concept of value, premium quality, or identifying angle that illustrates how the brand is unique from competition. The pricing strategy must be aligned with tangible benefits expected of consumers or the dimensions of ingredients and additives used in the chemical composition of the brand in order to gain market attention. Differentiation is best practice in this highly competitive market as many products are relatively easy to replicate, thus brand attitude and personality is often the deciding factor for purchasers about what makes one brand different from another. Points of parity are actually similarities to existing products, however used as differentiation tactics. Olay is a significant points of parity example in the industry. In on-air advertising, Olay often compares itself to high dollar facial creams, using research science iteration to illustrate how it is similar to more expensive products. This links a pricing value to more expensive products, such as Lancome or other exclusive, luxury products, giving the business differentiation through points of parity. Figure 5: Olay Promotional Content Sulit.com. Web. 22 September 2012 This ties in with value, maintaining success criteria as pricing aligned with consumer resources and needs, quality establishment, and tangible product benefits. Olay successfully achieves differentiation by linking price with comparability (or exceeding luxury standards) to illustrate a unique brand concept and perception with consumers. Using illustrative graphics to supplement, Olay is a benchmark of differentiation best practice success. Olay successfully outperforms Cover Girl, as one example, by finding its specific market position using a variety of differentiation criteria. Scoring value criteria involves having an appropriate pricing structure, gaining consumer beliefs that the product is of high quality (or expected quality related to pricing), and the tangible chemical compounds and formulas used to produce the beauty brand. There are no clear winners in value, as this is perceived differently by different consumer segments and each beauty brand has their own desired target market with different socio-economic characteristics. However, Olay manages to succeed in value, as well as Cover Girl, by staying true to their expected tangible benefits and staying true to their value propositions. It is also best practice in this industry to play on consumer emotional characteristics, especially those universal in target markets. Psycho-social theory illustrates the need for love and self-esteem development, such as has been identified on Maslow’s Hierarchy of Needs (Boone and Kurtz 228). Nearly all of these beauty industries illustrate women in a variety of promotions and lifestyle advertising touching their faces, an attempt to appeal to foundational emotional needs. Figure 6: Best Practice in Emotional Appeals Antimonide. Web. 21 September 2012 < http://www.antimonide.com/tag/lancome/> This face touching concept in best practice serves as a point of parity, illustrating the poignant or arousing characteristics of products, which expresses how a product can be uniquely relevant in different lifestyle scenarios. Differentiation occurs in how these expressive images illustrate actors with comparable consumer characteristics experiencing emotive sensations. Lancome, on a ranked scale from 1-10 in differentiation through points of parity, achieves a perfect 10 using emotional appeals in promotional content to differentiate product psychographically. Finally, brand equity is a successful brand attribute to achieve sales and market share successes. Equity is the long-term probability of a brand being able to extend its product line or sell supplementary branded products. Equity is the strategic value of a brand that stems from loyalty, satisfaction, trust, and many other consumer perceptions of value. Criteria to score equity include reported experiences of satisfaction, success with previous brand extensions, and level of brand recognition associated with logo presentation. It is best practice in this industry to use qualitative and quantitative market research studies to determine brand awareness and loyalty, as well as identify consumer sentiment about their brand experiences. Olay is another winner in achieving brand equity, expanding its original face creams into a variety of microdermal products, wrinkle repair serums, and foaming moisturizers. A brand can be successfully scored for its equity potential through compilation of market research to determine customer sentiment about their real-life attitudes about existing products. In addition, Olay consistently illuminates its product logo through the majority of its print and on-air advertisements, thus contributing to brand equity opportunities through ease-of-recall by many purchaser demographics. Lancome and other high cost products have not been as successful in building brand equity, largely because this market consists of high resource consumers that already have pre-established luxury brand loyalty in specific perfumes, dermatological products and procedures, and other exclusive products. Due to sociological conditions in American culture, it is not likely that Cover Girl would be successful with brand extensions, such as branded clothing, as Cover Girl often maintains somewhat of a social stigma about non-exclusiveness that is desirable in a variety of apparel, accessories, and other supplementary products usually associated with higher pricing structures. Scoring success in brand equity should be modeled with success of Olay in the three criteria to determine whether a product can achieve additional revenues with its brand attached to new product lines. CONCLUSION As identified, there are many complex dynamics for achieving a quality brand score. The brand must first identify aspects of the market, including resources, attitudes, perceptions of the beauty industry, and lifestyle in order to create an effective brand that meets with relevance needs of desired target consumers. Scoring is dependent on looking at best practice benchmarks and also using research data about actual consumer attitude and brand sentiment to determine what type of promotion or brand strategy would be most viable to improving sales and market share. This report highlighted the criteria associated with seven key attributes of effective branding, showing how to outperform or fail in achieving a high brand report card score for effective brand management in the U.S. beauty industry. Works Cited Boone, Louis and David Kurtz. Contemporary Marketing. 13th ed. Thompson SouthWestern, 2007. Print. Chaudhuri, Arjun. and Morris B. Holbrook. “The Chain of Effects from Brand Trust and Brand Affect to Brand Performance: The role of brand loyalty.” Journal of Marketing, 65.2 (2001). Farris, Paul W., Neil T. Bendle, Phillip E. Pfeifer, and David J. Reibstein. Marketing Metrics: The Definitive Guide to Measuring Marketing Performance. Upper Saddle River: Pearson Education, Inc, 2010. Print. 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Chan. “Self-Esteem as a Source of Evaluative Conditioning”, European Journal of Social Psychology 39 (2009), accessed September 20, 2012 at Proquest Database . Appendix A: Additional Attribute Scoring of Identified Beauty Brands Additional Attribute Scoring of Identified Beauty Brands Read More