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Garnier and Revlon in China

Autor:   •  June 27, 2018  •  4,001 Words (17 Pages)  •  494 Views

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2.2.2 Pricing Strategy in China

2.2.2.1 Garnier

Garnier targets the mass-middle Chinese consumers by setting a lower price on its products to stay competitive against other mass market brands. Garnier’s decision to position itself as an affordable brand also fosters brand loyalty among its consumers.

2.2.2.2 Revlon

Revlon’s cosmetics products are set at a relatively premium range to target the upper-middle class consumers. However, due to other cheaper substitutes of similar quality, the prices are not justifiable for the product’s respective price-quality value.

2.2.3 Promotion Strategy in China

2.2.3.1 Garnier

In tandem with the popularity of social media advertising, Garnier created an official account on Weibo for their advertisements. Garnier’s employment of Chinese celebrities like Leehom Wang, Liu Yifei, and Cyndi Wang contributes to the brand being more well-known and popular among the masses (Daxue Consulting, 2012). In line with its brand identity of young, healthy and natural beauty, its advertising campaigns maintains consistency in its positive, fresh, and clean advertisements to the public. For instance, Garnier typically portrays their spokespersons in natural-looking makeup and have healthy, radiant skin.

2.2.3.2 Revlon

Revlon failed to localize their products and instead relied heavily upon high-profile Western celebrities such as Olivia Wilde and Emma Stone in their global advertising campaigns (Jencress, 2013). These celebrities however, do not appeal to the Chinese’s ideal beauty standards. This marketing inefficiency can be reflected on Revlon’s official Weibo account which only gained 139 followers and 40402 fans as of today. The lack of a Chinese-centric brand image, resulted in the brand’s low visibility and recognition.

2.2.4 Placement Strategy in China

2.2.4.1 Garnier

Garnier’s products were only sold in supermarkets, notably lacking in penetration into the e-commerce industry. Despite having official website, online sales were not available to consumers. The lack of a variety of distribution channels inevitably resulted in its low sales. In addition, although having their products sold in supermarkets made Garnier more accessible to middle class consumers (Global Cosmetic Industry, 2014), the strong presence of cheaper alternatives from other local and Asian companies discouraged sales considerably, especially in comparison to a slightly more expensive foreign Western brand like Garnier. Hence, within supermarkets, Garnier’s image as an affordable quality brand failed to distinguish itself.

2.2.4.2 Revlon

Revlon’s point of sales are limited to both high-end beauty counters and mid-tier retailers which was an unwise decision as it resulted in a confused positioning of Revlon’s products, with higher-end consumers doubting its quality, while more cost-conscious consumers found it too expensive for their preference (Kotlet, Armstrong, Ang, 2017).

3. EXTERNAL ANALYSIS OF GARNIER & REVLON

Table 4 Opportunities and Threats Summary

Garnier

Revlon

Opportunities

- Market: Growing beauty market

- Market: Consumer preferences for various natural ingredients and skin care benefits in products

- Market: Increasing interest in more complicated skin care beauty regimes

- Technological: Rise of E-commerce as a potential distribution channel

- Technological: Rise of social media and online beauty gurus as a fresh advertising channel

- Market: Growing beauty market, especially colour cosmetics market

- Market: Rising market of China’s upper middle class

- Market: Consumer preferences for various natural ingredients and skin care benefits in products

- Technological: Rise of E-commerce as a potential distribution channel

- Technological: Rise of social media and online beauty gurus as a fresh advertising channel

Threats

- Competition: Lower brand recognition as compared to foreign brands with similar positioning.

- Competition: Increasing confidence in local brands with similar positioning

- Competition: Threats of products substitutes

- Competition: Lower brand recognition as compared to foreign brands with similar positioning.

- Competition: Increasing confidence in local brands with similar positioning

- Competition: Popularity of “fashionable” Korean cosmetics

- Competition: Threats of products substitutes

3.1 MARKET ANALYSIS

3.1.1 Size of the Beauty Market in China

In 2013, China was the world’s second largest beauty and personal care consumer market with an estimated retail value of 162.5 billion yuan and this market has been growing for the past 5 years, with expected annual growth rate of 20.8% by 2017 (PTL Group, 2016). However, while the cosmetics market experienced growth over the years, it is at a decreasing rate, with the yoy growth in 2013 at 13.3% as compared to 17% in 2012 (Liu, 2013).

Upon further segmentation of the beauty market, it was found that skin care products accounted for about half of the market share in 2013 while colour cosmetics accounted for less than 10% (Euromonitor International, 2013). Despite the low percentage share of colour cosmetics in 2013, this specific market is expected to grow in the next couple of years. especially amongst the younger generation.

Furthermore, according to 2012 statistics, the mass middle class market that Garnier targets takes up 54% of the private consumption in urban areas of China (Barton, Chen, Jin, 2013). Hence, due to the large size of the

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