Write a summary for Global Marketing (9th Edition) page 241 case analysis 7-2 ti

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Write a summary for Global Marketing (9th Edition) page 241 case analysis 7-2 title: Cosmetics Giants Segment the Global Cosmetics Market. answer must be 300 words or more.

CHAPTER 7 SEGMENTATION, TARGETING, AND POSITIONING 241 n materials such as Akantara suede. According to l ?? F ndudepre otra, headof the Lincoln dison, focus groups in China Gor othe word "presidential" when desiribing Lincoln's nentage and image 7-9. Assess the prospects for success for the Lincoln Motor Company's entry in the China market. Sources Ba V "Chiese aes and American Herage trspire New C Discussion Questions 30,, 2015), ? R2; Laune and Alysa Atawu. for tingere" The Wall Sareet Joumal Febnary 4-15, 2015i p.84 Scott Cendrows, Chhnas uly 7, 2014) po 105-114nph & Whte and Mike Ramey and contrast the various segments of Chinese hxury consumers and customers profiled in the case or Licoln," The Wal Sareet Jounal ( I8 20141 p b6, Davd Grles. How have laxury goods brands responded to President X Why do so many Chinese parents want their children to study at foreign universitiests children ining ury, Fast, to China's s" The New York Tenes Septermber po 81, BE, Amy On, "Yet Another Way to Mock China's Rch October 15, 2010, Tim igns "Chinse Students Major in Lunuy s crackdown on corruption? December 23, 20131, po 23-25, Davwd Barbora, "For Bribing Officials Chnese Give the Best" The New ork Times (March 14, 20091 p d CASE 7-2 Cosmetics Giants Segment the Global Cosmetics Market world's best-known cosmetics companies are setting their sights on a lucrative new market segment: the emerging middle classes n countries such as Brazl, Russia, India, and China. For example, the Chinese spent $10 3 billion on cosmetics and toletries in 2005, that iqre has doubled in the last few years. Not surprisingly, marketers at Oreal, Procter & Gamble, Shiseido, and Estée Lauder Companies are moving quickly. Willam Lauder, president and CEO of Estée lLauder cals China a "$100 billion opportunity" (see Exhibit 7-14) Noting that there is no "one-size-fits-all" ideal of beauty, cosmet- s marketers pride themselves on sensitivity to local cultural prefer- As Jean-Paul Agon, chief executive of L'Oréal, explains, "We t customers. Each customer is free to have her own spirations Our intention is just to respond as well as possible to each customer aspiration. Some want to be gorgeous, some want to be natural, and we just have to offer them the best quality and the best Exhibit 7-14 L'Oréal is expanding dstribution in China. After successful ores, L'Oréal Paris, Maybeline, product to satisfy their wishes and their dreams." For example, Asian women use whitening creams to lighten and brighten their market tests at Walmart and Carefour st complexions; in China, white skin is associated with wealth. L'Oréal Gamier, and other brands are now available in retail responded by creating White Perfect, Shiseido offers Aupres White. supermarkets. In 2006, L'Oresl China launched a new advertising stores as well as Chinese for the Mininurse Professional UV cosmetics ine targeting women 18 years to 25 years of age. The sds communicate the brand's core benefits: UV protec- "You can't just import cosmetics here. Companies have to understand what beauty means to Chinese womenSon ant me skin whyterning action, and nighttime hydrating action and what they look for, and product offerings and communication have to be adjusted accordingly. It's a lot At its Shanghai Innovation Centre, t'Oréal is also studying how to incorporate traditional Chinese ncluding both harder than selling shampoo or skin care."in the morning and the evening is 2.2. Daisy Ching regional group account director for a medikine into new product lines Procter & Gamble, Grey Global Group m offers a wide range of products in China, i L'Oréal Market research is critical to understanding women's prefer- mass-market and premium brands. The ences in different parts of the world. According to Eric Bone, head tion product strategy, with more than 80 percent of of LOréal's Tokyo Research Center, "Japanese women prefer a compact foundation rather than a liquid. Humidity here is much is typically sold in exclusive igher and the emphasis is on long-lasting coverage. his knowledge, L'Oréal devotes more development time to compacts target a new demographic: Chinese men ather than liquids. The researchers have äpanese woman cleanses her face twice a day company pursues a localiza to use developed specifically for the region. L'Oréals Lancome luxury brand Armed with and luxury malls. l'Oréal has also capitalized on the opportunity to ako learned that the typical men's skin-care products is growing much faster than the market for h China, LOréal and its competitors have an opportunity educate women about cosmetics, which were banned prior to 1982. of Chinese men view tach year, L'Oréal observes and flms 6,000 Chinese women applying products playing an important role in women's skin care. Many of the purchases are made by women to ing shopping trips when couples go out together, Increasing numbers appearance as a key to success, with skin-care removing makeup. Alice Laurent, L'Oréal's skin-care development nnager in Shanghai, says,. "In China, the number ofrducts used the demand for luxury cosmetihibiting slow Although mass-market cosmetic lines are cosmetics is growing rapidly. Thisis

Explanation / Answer

Cosmetic industry has undergone an upheaval with all of the best known companies getting attracted to the new lucrative segment - the emerging middle class in the countries like Brazil, Russia, India and China. They have even substantiated their efforts by valuating the Chinese market with 100 billion $ worth. The expansion into the new market has made these companies sensitive to the local cultural preference, popularly known as the "No One size fits All" strategy. Through market analysis, the major companies are trying there level best to understand the need of their customers in these regions and then, create and market their product as per these needs. The market seems so lucrative to the cosmetic companies that there has been cases where the majority of the product line of a company is dominated by the products targeting women from these countries. They are even planning to collaborate with local players to make their product reach their target customers with ease.

Contrary to the belief of these customers, of being very price sensitive, research has yielded that they willing to invest in expensive products when it come to cosmetics. The cosmetic companies relate this characteristics to the growing number of working women population in these countries. In addition to this, the cosmetic companies have also realized that their low cost product offerings are bound to face tough competitions from the local producers and ultimately leading to their failure. Thus it would be advantageous for them to stick to the premium segment and skim that market segment first and then attempt to convert the customers from lower segment. Over and above these analysis & conclusions, cosmetic companies shall be investing substantial amount to know more about the market and then provide the last mile services. They even plan to provide end to end services through the means of parlors & cosmetic advisors in these regions.

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