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market analysis & product proposal

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Laura Cavaciuti

on 20 February 2015

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Transcript of market analysis & product proposal

market analysis & product proposal
NEW PRODUCT/RANGE EXTENSION
Si is "my tribute to modern femininity, an irresistible combination of grace, strength and independent spirit..."

Proposing a men's fragrance/version of Si...
Classic, sultry, intense and soft at the same time, Si embodies the modern woman, so let us embody the modern, classic man.

SI, MOI AUSSI


What are the key trends?

- £16 billion a year
- EU Cosmetics Market represents one-third of the global cosmetics market
- The UK Cosmetics Market was worth £1,186,926 million in 2013
- L'Oreal's Financial Annual 2014 results were released on February 12th, 2015 - showing accelrating sales in the final quarter; L'Oreal Luxe recorded growth of +7.1% like-for-like and +5.7% based on reported figures.

The Fragrance Industry
Market Review
Perfumes today have evolved into a mainstream business... perfumes have emerged as essentials, owing to the increasing trend of appearance and personal care becoming part of pride, self reliance, confidence and even self identity.
Growth and Decline in the Market?

GROWTH:
- See table below: sales are increasing (in value) but volume too (in tonnes)

DECLINE:
- Note that in 2013 adspends on fragrances decreased - potentially due to the increasing cost of entry
- Fragrance brands may also be challenged by planned ingredient regulations
- Online purchasing results in retailers suffering
How these opportunities fit into current UK-specific trends
Key Brands (Leaders & Competitors in terms of Brand Heritage and Positioning)

- Paco Rabane, Hugo Boss, Chanel
- Paco Rabane = men's fragrance industry leader (relative market share of Armani in comparison coming in at 45%)
- GA Fragrances come in 4th in 2013 at £24,511
- Market attractiveness! Men's market growth of 7.73% from 2011 to 2013
- Giorgio Armani = QUINTESSNTIALLY ITALIAN
All of the Giorgio Armani fragrances have been developed with the creative imagination of the world's most talented perfumers...
Future Opportunities

- Expanding
Si
would offer plenty of opportunities for more revenue on this quite newly launched fragrance. Stretching the brand into new types of secondary usage occasions/ancillaries (i.e. OBOs - olfactory body objects, might be a thing of the future) and this would provide some potential interesting opportunities

- Further establishing brand identity and brand DNA by launching a brand website for new fragrances, such as
Si
- increasing e-commerce profitability
Target

- Younger professional men looking for a scent to bring forth a strong, elegant identity but something smoother than the classic colognes such as 'Eau Pour Homme'
Launch Timings and Budget

- Aim for September release - time to build up hype for December where retail sales usually increase to 38% (potentially propose Christmas coffret)

Launch Plan & Strategy

- Enquired in store about launches/advertisement of Armani brands
- Focus groups
- Film strategy
- Celebrity endorsement
- Online digital strategy
Concept and Unique Selling Proposition

Empowering young professional men to embrace a more modern, fun yet elegant side.

"I can say yes to emotion, to mischief, to friendship, to the unexpected... Yes to a side of me you never thought you'd see... Si, moi aussi."

Advertising

- Launch Adspends = films, social media
-
Si
previous launch - budget of £1,8m gross (probably £1m in net cost) but did not reach average ROI of approx £2.7m
- Need to invest more in adspends for better ROI
- Women's: Chanel, Calvin Klein, Dior (but a 18.7% increase in sales for GA from 2011 - 2013)
Before getting into my proposal based on the opportunities & trends mentioned... let's take a look at the full year marketing plan you mentioned...
According to this, the only GA fragrance in the top 15 products of 2013 was Armani Emporio Armani Diamonds, and the GA men's fragrances in the top 15 were Armani Code and Armani EA Diamonds for Men. We have to push sales for these three aforementioned and strategically reassess all other Armani Fragrance products to see how we can support them and boost their sales.
Armani Women Fragrances

Si, Si Intense, Armani Code, Acqua di Gioia, Emporio Armani Diamonds Rose, Emporio Armani Diamonds She Eau de Parfum, Emporio Armani She, Armani Mania for Her
- As
Armani Emporio Armani Diamonds
for Women is 4th in the top 15 products in 2013, we should focus on pushing sales for its extension of
Emporio Armani Diamonds Rosé
- re-launching ads in springtime as the floral go-to fragrance... adspends should go up and creation of new advertisement would push sales
- Armani Code for men & women could combine ad - ying & yang perfumes of 'seduction'. It is a popular perfume for the men's fragrances so if we re-align them as complementing each other, we might have a better ROI
- Similar concept for Emporio Armani He & She - pushing for a kind of equal gender advertisement of the he & her products... the 'powerful', 'sexy' couple complementing each other. Careful not to step over into the overally 'unisex' line that is out of style (i.e. CK One Unisex)
- Hopefully my product extension will cover sales for the Si perfume by extending it into the men's fragrances. Will discuss later.
Men's Fragrances

Eau d'Aromes, Eau de Nuit, Eau Pour Homme, Armani Code Ultimate, Armani Code, Armani Code Ice, Armani Code Sport, Acqua di Gio, Acqua di Gio Essenza, Emporio Armani Diamonds Rocks, Emporio Armani Diamonds for Men, Emporio Armani Diamonds Black Carat (limited ed), Emporio Armani He, Armani Mania

So, with a growth in men's fragrance markets recently, there is a lot of opportunity here (which I will be expanding on in my product launch. Let us look at market opportunities to include in our potential full year marketing plan:
- Eau d'Aromes, Eau de Nuit, Eau Pour Homme fragrances can re-discover their brand DNA as a sophisticated cologne for older men. Focus groups for young working men and their understandings of these perfumes might confirm my hypothesis that younger men are not looking into buying fragrances such as these - they are looking for something younger. Let us focus on this and advertise these to the older target segment.
- As mentioned in the women's fragrances, the Emporio Armani He and the Armani Code fragrances could gain more commercial value as they have already been established as individual fragrances, by playing off this 'ying and yang' value of the he-she perfumes I keep mentioning. There is much potential to grow and expand the brands in this way, and also potentially saving a lot in investment cost.
- Armani Code Sport and Ice = more sports celebrities endorsements? They are fiercer than the classic, so we can play with this identity in focusing on a more specific segment of men
- Acqua di Gio and Acqua di Gio Essenza - new black and white ad. Huge success with first which boosted sales after release... or adspends in re-airing commercial more?


Armani Privé Collections

I think there is huge growth potential here. The exclusivity and luxury of these fragrances link them to a very specific consumer target, and sales have been growing.

I went to look at store facings in Harrod's and Harvey Nichols and asked beauty consultants about these products. They explained that the Privé collections are immensely popular with Middle Eastern customers. They explained that the Eau Rose Alexandrie was the most popular, and that in general 'La Collection', the Privé fragrances with the colored tops attract an older, even more refined customer base.
There is a huge opportunity to continue expanding these fragrances and building their brand DNA as the 'luxury fragrance'. Increase in adspends in Middle Eastern markets etc.
- This might be the perfect market to look into the opportunity of OBO's (olfactory body objects) as it is a customer basis with the finances to acquire something like this - i.e. wearable fragrant pearls (re-fillable?)
- Bob Shullman research suggests that television is the best marketing platform to reach high end 'luxury' consumers. So focus on TV advertising?
- Approaching Harrods or high-end retailer to affiliate with this opportunity and do an exclusive launch?
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