Marketing Plan PDF

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BSB 126 MARKETING PLAN

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1.0 SITUATION ANALYSIS Founded in 1970, Sephora is an innovative retail chain of cosmetic stores that offers upmarket perfumes, makeup and skincare products including its own private label; Sephora Collection[ CITATION Sep16 \l 3081 ]. It has earnt its reputation as a pioneering industry leader, with a reported revenue worldwide of €3.6 billion in 2016 [ CITATION LVM17 \l 3081 ]. Australia comprises $4 billion (USD) of the global $382 billion (USD) cosmetics and perfume industry [ CITATION Low15 \l 3081 ]. It has demonstrated strong growth over the past 5 years, mainly due to the uptake of online shopping, with an industry revenue expected to grow at an annualised 14.1% over the next five years [ CITATION Ibi17 \l 3081 ], showing opportunities for growth in a sizeable global market. When analysing the CDSTEP Figure for macro-environmental forces of Sephora (appendix 1), demography and technology are the most important. The predominant demographic for Sephora is the millennial generation, more specifically, women with disposable incomes aged 16-24. Analysis of the female customers who shopped at Sephora in 2016 revealed that 74 percent were millennials [ CITATION sta16 \l 3081 ]. The term millennial is referred to as the generation born between the early 1980’s to 1990’s, and sometimes can include early 2000’s. with estimation that it is one of the largest generations to date [ CITATION Dou17 \l 3081 ]. Due to its size and purchase power, the millennial generation is the primary focus of popular media and marketers [ CITATION Mar12 \l 3081 ].

With over 10 million members of Sephora’s beauty insider program [ CITATION Kri17 \l 3081 ], one

of their strengths, as analysed in the SWOT Analysis (appendix 2 ), is a strong on-line and offline presence world-wide [ CITATION Wal13 \l 3081 ] . Through these factors, there is opportunity for success for Sephora in product development.

2.0 MARKETING GOAL Although Sephora is still relatively new to the Australian cosmetics market, opening its first store in 2014 [ CITATION Mar17 \l 3081 ], it claims to have a 10 percent stake in Australia’s $4 billion cosmetics industry [ CITATION Sue14 \l 3081 ]. With the potential for product development as analysed from the Ansoff matrix (appendix 3) and the continued success of both on-line and off-line sales, the goal is to increase market share to 12% by January 01,2019. This rivals Sephora Australia’s biggest competitor, Mecca Cosmetics who claim to have the same percentage of market share [ CITATION Low15 \l 3081 ].

3. MARKETING STRATEGY 3.1 Target Customers Two potential target customers for Sephora could include millennial men and women aged 25-34. With the men’s grooming industry increasing more than $6 billion (USD) since 2012 worldwide [ CITATION tab18 \l 3081 ], there is an opportunity to expand the market for Sephora’s products by targeting these potential customers. Women aged 25-34 are the second most prominent customers at Sephora, who are predicted to make up 31% of Sephora sales [ CITATION sta16 \l 3081 ]. However, Table 1 below is the relevant factors of the target market.

Figure 1: Relevant factors for market segmentation Segmentation Method

Segment

Description/Explanation

Geographic

Urban Living in Australia

Currently, all 13 Sephora stores in Australia are based in urban living, or city environments due to high amounts of foot traffic [ CITATION Sep \l 3081 ].

Demographic

Millennial women ages 1624

Behavioural (Loyalty)

Target customers following Sephora social media accounts and have joined Sephora loyalty program

The primary demographic for Sephora is millennial women; aged 16-24. They are the predominant customer age group to shop at Sephora. It is reported almost half of millennial women claim they wear makeup every day [ CITATION Rac15 \l 3081 ], and spend an average of $15,000 (USD) on beauty products in their lifetime [ CITATION Col17 \l 3081 ]. Loyal Sephora customers who have signed up to Sephora’s beauty insider program and follow the social media accounts are more likely to purchase new products when advertised on the social platforms, with Sephora being listed as one of the top loyalty programs globally [ CITATION Kri17 \l 3081 ].

Sephora’s own private label “Sephora Collection” launched in 1996, offering less expensive make-up and skincare with established high-quality products that customers trust [ CITATION Lei16 \l 3081 ]. The success of the Australian stores to date provides a solid foundation to increase market share with a new product that focuses on the two macro-environmental issues; Demographic and Technology.

As well as a high interest in makeup in the millennial generation, an increase in anti-ageing preventative measures have been identified [ CITATION Mol17 \l 3081 ]. Statistics from the American Society of Plastic Surgeons identified an increase of 28% in the millennial generation purchasing antiaging procedures; including Botox [ CITATION Rod17 \l 3081 ].

Research has shown that UV rays; that are predominantly from the sun can account to 80% of skin aging, which includes wrinkles [ CITATION Rod13 \l 3081 ]. With only 22% of women aged in our target consumers state they wear sunscreen regularly, this is a perfect opportunity for product development of a sunscreen in the private label; Sephora Collection. Including the sunscreen competent, this product will also be a primer for make-up, which will compliment with our current customers; women who shop at Sephora for make-up. By combining the two products, this will set us aside from current competitor’s sunscreen products.

3.2 Positioning Statement By combining the two products; make-up primer and sunscreen, this will set it aside from current competitor’s sunscreen products.

3.3 Positioning Map The positioning map below in Figure 2 below shows Sephora’s position in the Australian market for two key aspects that are relevant to the targeted demographic; the price of the product, and the popularity of the company’s social media brands. The popularity of the social media brands was determined be the total followers on the company’s social media accounts on; YouTube, Facebook, Instagram and Twitter, with the most popular being Sephora at a total of 20.6M, and the lowest being Cosmetics Plus being 30k. The price scale was determined by the average price of the products sold at that

company. With Sephora currently holding more followers than the main competitor Mecca, there is a wider audience to promote products.

Figure 2: Positioning Map for Sephora

4.0 MARKETING TACTICS 4.1 Product Branding of Sephora

References = [ CITATION Sep1 \l 3081 ] [ CITATION Sou16 \l 3081 ]

Brand Name

Sephora; name derives from the Greek spelling of Zipporah, the most beautiful wife

URL’s

of Mosses http://www.sephora.fr, https://www.sephora.com.au, https://www.sephora.com

Logos and Symbols

+ 22 other URL’s specific to each country/region The Sephora logo is a black “S” – shaped flame with a white background (appendices

Characters

3). The colour scheme of Sephora is black and white. There are no distinctive characters representing Sephora, however Sephora does partner with celebrities promoting their products through social media; such as

Slogans

Jingles/Sounds

YouTube and Instagram The most well-known slogan for Sephora is “the beauty authority”, however the slogan “where beauty beats” has become popular after Parisian PR agency BETC developed an ad campaign No distinctive jingles/sounds – but when advertisements are produced, they use loud, energetic, popular music with vibrant colours, and their distinctive black and white theme for their logo One particular advertisement: https://www.youtube.com/watch?v=meoFW_73wRo

4.2 Price 5 C’s of Pricing Decisions Company Objectives

Profit orientated. Maintain consistency with other Sephora Collection products. Still high quality, but a more affordable

Customers

option for customers to Sephora than other brands. Elastic demand. Sephora shoppers, especially customers signed to Sephora loyalty program are loyal, and shop at Sephora due to the brand known for quality, however if price is unnecessary higher than main competitors; especially a product being new to the market, they can shop elsewhere. Variable costs, such as labour and materials will increase or

Costs

decrease based on the amount of product needed to product. Competition

Fixed costs; such as rent, and utilities will remain the same. One major competitor for Sephora; Mecca Cosmetics currently has a well-established and well-rated sunscreen on their

Channel Members

website, with the average price of $39-$40 (appendix 4). As it will be Sephora’s private label product, there will be less channel members, as they can directly manufacture the product, then sell it to retailers; being their own stores.

Therefore, having analysed the 5 C’s of pricing, it is best to use competitor-based pricing for the product development for Sephora. Although the Sephora Collection sunscreen offers a little more than Mecca’s, having the primer included, if the price is too high-end, customers can purchase a major competitor’s sunscreen and primer that could be less expensive than Sephora’s one product. The average price of 50ml sunscreen on Sephora’s website is $48, and the Sephora Collection primer is $18 (for 15mls) (appendix 5). Through competitive parity pricing, we can introduce the product on the market at a total retail price of $40 for 50mls.

4.3 Place

With the online shopping, customers are able to purchase a product and be delivered in places the retail shops aren’t; with currently only 13 in major cities [ CITATION Sep16 \l 3081 ] . To expand on the use of the online shopping experience, the needs to be an added convenience of it for the customer. One example of adding distribution to help increase online sales is to use a QR code that customers are able to easily scan to receive information and a discount on the online website immediately. With promotional objectives (below in 4.4), there will be a simple, clear QR code (appendix 6) that customers are able to scan in a few seconds on their smart phones.

4.4 Promotion Communication Goal: through social media, samples of product distribution and advertisements of new product, a goal of 10,000 people per month to subscribe to Sephora’s loyalty program

Chief Marketing Officer of Sephora, Julie Bornstein claims Sephora was one of the mobile websites in 2010, with online sales growing 100% every year for the last 3 years [ CITATION Jul142 \l 3081 ]. Through analysis of previous success of online sales and the target of Sephora; millennials, promotional focus will be increasing sales online even more. By engaging directly with the customer, it has been found that customers spend an average of 20-40 percent more on brands that engage on social media [ CITATION Dan17 \l 3081 ]. Using social media outlets from the Communication Prism (appendix 7), such as YouTube to use public figures to promote the new product, with incentives of discounts if the viewer was to use the link and sign up to the loyalty program. When customers sign up to the loyalty program, there is an opportunity for direct marketing; sending the customers information on new products released and when sales want to be increased, discounts on certain products.

Objective

Media Cost

Using social media stars on Instagram and YouTube to

$25,000

promote Sephora Collection product

Distributing samples of product at events such as festivals

$10,000

and at the beach – scan QR code and sign up loyalty program to receive a discount on new product when purchasing (as seen in distribution) advertising of new product on bus stops, taxis and shopping center billboards – scan QR code and sign up to loyalty program to receive a discount on new product when purchasing Figure 3: Promotion of product development

V. REFERENCES

Bibliography

$15,000

Campbell, L. (2016, 09 12). Huffington Post. Retrieved 01 15, 2018, from The Business Of Beauty: Aussies Love Skincare And Makeup: http://www.huffingtonpost.com.au/2016/09/11/thebusiness-of-beauty-aussies-love-skincare-and-makeup_a_21469915/ Chitrakorn, K. (2016, 01 03). Is the Global Cosmetics Market Moving Towards a Cruelty-Free Future? Retrieved from Business Of Fashion: https://www.businessoffashion.com/articles/intelligence/is-the-global-cosmetics-marketmoving-towards-a-cruelty-free-future Cormack, A. F. (2014, 12 19). Sephora in damage control over broken Australian price promise. Retrieved 01 13, 2018, from The Sydney Morning Herald: http://www.smh.com.au/business/retail/sephora-in-damage-control-over-broken-australianprice-promise-20141219-12amob.html Dobson, R. (2013, October). Blame the sun for your visible wrinkles: UV rays account for 80 per cent of skin ageing Read more: http://www.dailymail.co.uk/health/article-2467385/Suns-UV-raysaccount-80-cent-skin-wrinkles-ageing.html#ixzz54f0kl3vl Follow us: @MailOnline on Twitter |. Retrieved from Daily Mail Australia: http://www.dailymail.co.uk/health/article2467385/Suns-UV-rays-account-80-cent-skin-wrinkles-ageing.html Epaminondas, G. (2016, April 02). Mecca Cosmetica's Jo Horgan and the feminine mystique Read more: http://www.afr.com/brand/mecca-cosmeticas-jo-horgan-fun-and-the-femininemystique-20160330-gnu5ez#ixzz54GElNJ4V Follow us: @FinancialReview on Twitter | financialreview on Facebook. Retrieved 01 15, 2018, from Financial Review: http://www.afr.com/brand/mecca-cosmeticas-jo-horgan-fun-and-the-feminine-mystique20160330-gnu5ez Grewal, D. (2017). Marketing. Sydney, NSW, Australia: McGraw Hill Publishing. Honingman, B. (2015, Nov 10). How Sephora Integrates Retail & Online Marketing. Retrieved Jan 13, 2018, from Sailthru: https://www.sailthru.com/marketing-blog/how-sephora-integratesretail-online-marketing/ Ibisworld. (2017). Online Perfume and Cosmetic Sales in Australia: Market Research Report. Ibis World. Julie Bornstein, D. M. (2014, 06 26). How Sephora Reorganized to Become a More Digital Brand. Retrieved 01 16, 2018, from Harvard Business Review : https://hbr.org/2014/06/howsephora-reorganized-to-become-a-more-digital-brand Julie Bornstein, D. M. (2014, July 26). How Sephora Reorganized to Become a More Digital Brand. Retrieved 01 16, 2018, from Harvard Business Review : https://hbr.org/2014/06/howsephora-reorganized-to-become-a-more-digital-brand Kratofil, C. (2017, March 30). Can You Guess How Much a Woman Spends on Makeup in Her Liftetime? (We Were Way Off!). Retrieved 01 16, 2018, from People style: http://people.com/style/how-much-does-a-woman-spend-on-makeup/

Krause, R. (2015, 12). This is the one beauty brand people love the most . Retrieved from Style caster: http://stylecaster.com/beauty/millennial-women-beauty-study/ Loeb, W. (2013, April 18). Sephora: Department stores cannot stop its golbal growth. Retrieved 01 14, 2018, from Forbes: https://www.forbes.com/sites/walterloeb/2013/04/18/sephoradepartment-stores-cannot-stop-its-global-growth/#21af1092e814 Lowe, C. (2015, 12 31). Mecca Cosmetica accelerates expansion. Sydney Morning Herald, 3. Lowery, K. (2017, Aug 24). How Sephora, Refinery29 and Warby Parker are Going Higher Up the Sales Funnel to Increase Conversion. Retrieved 01 15, 2018, from Sailthru: https://www.sailthru.com/marketing-blog/sephora-refinery29-warby-parker-conversion/ LVMH. (2017, 01 26). 2016 record reports. Retrieved 01 16, 2018, from LVMH: https://www.lvmh.com/news-documents/press-releases/2016-record-results/ Main, D. (2017, September 8). Who Are the Millennials? Retrieved from Live Science: https://www.livescience.com/38061-millennials-generation-y.html MarketLine. (2017). Sephora SA. Marketline Advantage. Retrieved from Marketline Advantage. Mitchell, S. (2014, June 10). How Beauty Retailer Sephora Plans to disrupt the Australian Cosmetics Market. Retrieved from Financial Review: http://www.afr.com/business/how-beauty-retailersephora-plans-to-disrupt-the-australian-cosmetics-market-20140610-jyvql Moore, M. (2012). Interactive media usage among millennial consumers. North Carolina: emereld insight. Parisi, D. (2017). Sephora, Amazon top list of retailers with social media marketing acumen. Retrieved from Mobile Marketer: https://www.mobilemarketer.com/ex/mobilemarketer/cms/news/research/23946.html Peta. (2017, 12). Beauty without bunnies. Retrieved 01 2018, from Peta: http://features.peta.org/cruelty-free-companysearch/cruelty_free_companies_company.aspx?Com_Id=938 Physicians Committee for Responsible Medicine. (2011, 11). More Than a Makeup Trend: New Survey Shows 72 percent of Americans Oppose Testing Cosmetics Products on Animals. Retrieved from Physicians Commitee for responsible medicine : https://www.pcrm.org/research/animaltestalt/cosmetics/americans-oppose-testingcosmetics-on-animals Rohrich, R. (2017, November 17). Why are millennials getting Botox and fillers in their twenties? Retrieved from American Society of Plastic Surgeons . Roy Morgan. (2015, Dec 01). Young Aussie women making up the make-up rules. Retrieved 01 15, 2018, from Roy Morgan: http://www.roymorgan.com/findings/6586-young-aussie-womenmaking-up-make-up-rules-201512010005

Sephora. (2016). About Us. Retrieved 01 16, 2018, from Sephora: https://www.sephora.com/aboutus Sephora. (2018, Jan 11). SEPHORA STANDS Expands Social Impact Programs After Successful First Year. Retrieved from CISION PR newswire: https://www.prnewswire.com/newsreleases/sephora-stands-expands-social-impact-programs-after-successful-first-year300389307.html Sephora announces exclusive products. (2014, Oct 08). Retrieved 01 14, 2018, from Elle Australia: https://www.elle.com.au/beauty/sephora-announces-final-beauty-brand-list-for-australia3018 Sephora. (n.d.). International websites. Retrieved from Sephora: https://www.sephora.com/international-websites Sephora. (n.d.). Locations Australia. Retrieved from Sephora : https://www.sephora.com.au/store_locations Sherman, L. (2013, September 14). Inside Sephora's beauty stratergy. Retrieved from Business of Fashion: https://www.businessoffashion.com/articles/intelligence/marc-jacobs-sephoralvmh-branded-beauty-strategy Sound Identity. (2016, 01 20). WHEN WORDS, IMAGES AND SOUNDS BEAT TOGETHER: SEPHORA ‘WHERE BEAUTY BEATS’. Retrieved from Sound Identity. statista . (2016). Distribution of female consumers who shop at Sephora in the United States in 2016, by age group. statista . tableau. (2018). statista. Retrieved 01 15, 2018, from Size of the global male grooming market from 2012 to 2024 (in billion U.S. dollars): https://www.statista.com/statistics/287643/globalmale-grooming-market-size/ Walls, L. (2015). How to reach the millenial customer. New York: Expert Insight . Young, M. (2017, August 16). Millennials Are Obsessed With Health, Which May Have a Downside. Retrieved from Allure: https://www.allure.com/story/millenials-obsessed-with-health-andwellness

VI. APPENDICES

Appendix 1: CDSTEP Figure Culture Demographic

Social Trends

A survey by RM identified that 70% of young Australian women asked have purchased make-up in the last 6 months[ CITATION Roy15 \l 3081 ]. There is a popularity in the target market for cosmetics in Australia. The targeted demographic, more specifically is women aged 16-24. With approximately 78 million members, the millennial generation is the primary focus of popular media and marketers [ CITATION Mar12 \l 3081 ] Majority of brands have incorporated social media as part of their marketing efforts[ CITATION Dhr17 \l 3081 ] . In additio...