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Kiehl's Male Skincare

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by

Det Jon

on 3 January 2014

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Transcript of Kiehl's Male Skincare

Kiehl's Mens Facial Skincare
Market Analysis and Segmentation
Current customer segmentation:
Geographical bases
: Global, urban
Demographic bases
: Male & Female, young
Psychographic bases
: Ethical, quirky, looking for quality (premium) and delivering on promises, natural products
Behaviour bases
: Loyal as heard about brand through WOM, promoted by senior figures such as Mayor Bloomberg (Founder of Bloomberg company), customers engaged with service quality, brand ethics, authenticity of brand.

Market Analysis- Facial skincare:
Prestige Facial skincare products accouts for 40% of facial skincare market (Mintel oxygen, 2013a)
Growing market experiencing, 3% sales growth in 2012, reaching sales of £1.12bn
Parent company, L'oreal experiencing 8% growth through advertising and social media integration



Consumer Behaviour and Trends
Content:

1. Situation analysis
Market Analysis and Segmentation
Consumer behaviour and trends
Brand analysis and positioning
SWOT analysis
Competitor analysis

2. Domestic growth strategy

3. Going international

4. Ethical considerations

PESTEL Analysis
Political
No significant Political changes, however economic environment can affect consumer confidence (Cosmetics, 2006).
Economic
Increasing employment levels are also expected in the next three years, which may heighten demand
Increasing competition within young professionals- increasing importance on appearance

Social
UK population expected to grow by 4% over the next 5 years leading to larger consumer base.
Emergence of the "metrosexual" man through TV, Mass media and fashion.
'Feminisation' of the market

Technological
New developments and research into qualities of skincare products.
Development of new products incorporating new ingredients and better understanding of qualities of products i.e. developments of 'poisons' for anti-aging qualities (Mintel oxygen, 2013).

Ethical
Customers

more ethically conscious
Competition based around providing sustainable products produced and extracted ethically.
Considerations of impact on environment and local communities
Global citizenship

Legal
In March 2013, the sale of cosmetics developed through animal testing was prohibited in the EU
ABC1 consumer:

Attitudes
Look young is important
Likely to buy premium products
Look for natural ingredients
Environmentally friendly
Higher levels of skincare usage

Travel
68% of ABs, 61% of C1s travelled by plane.
High percentage of male business flyer
Visit friends and relatives

Sports influence

High Penetration of ABC1 consumer visits to leisure centres, gyms and health clubs.
Sports Trends
Travel Trends
SWOT
Competitor Analysis
Strengths:
Kiehl’s rich heritage, dating back to 1861, reinforces the credibility of the brand
Their association with L’Oreal, again reinforces credibility, and allows leverage of resources
Large product range, all of which are unisex
Large male cliental base, unlike the competition
Global presence
Extensive charity work gives them a positive public image
High customer service in-store which encourages customer loyalty

Weaknesses:
Kiehl’s ‘zero advertising’ approach could lead to low brand awareness
Association with L’Oreal could lead to poor customer perception of Kiehl’s
Relatively large investment in R &D in comparison to other expenditure
USP of natural ingredients is easy for competitors to copy
Natural ingredients can be more expensive leading to higher unit and labour costs

Opportunities:
Could enhance the current straight-forward packaging to attract visual shoppers
Leverage L’Oreal for international expansion opportunities
Expand distribution channels
Enhance charity work, for example, in the local communities
Increased demand to ‘look good’ leads to additional growth opportunities and larger consumer base

Threats:
Large market with a lot of direct competition
Large availability of substitutes
Growing competition in emerging markets; particularly internationally
Top-end competition are all popular ‘designer’ brands

Brand analysis and Segmentation
2. Domestic growth strategy
Expand presence in UK airports to target ABC1 consumers
Large customer base – in 2012, there was an average of 95,100 passengers departing per day from Heathrow
Broad range of international passengers available to target, (Heathrow = 65.3m in 2012)
49.3m leisure travellers in 2012 from Heathrow
ABC1 consumers (25-34 year olds) – most likely to take holidays as they have the most disposable income, (Keynote, 2013)
Looking for better quality facial products, perhaps more educated/prone to care about appearance to remain competitive - especially young professionals
In the 12 months ending April 2013, 68% of Abs and 61% of C1s, travelled by plane, (Mintel, 2013)
Customers travelling to various key destinations around the world within these key airports.
Additionally this complements the idea of considering the non-host country and reaching a wider global audience.
Encouraging organic growth as per current brand identity.
Still focusing on selling men's most popular products focusing on hydration and sun protection elements i.e. Moisturiser/ cream
Male oriented themes (harley bikes etc) that mirror the "quirky" store layouts.
3. Going International
Targeting major airports in UK allows to target international customers directly
Significant and Diverse customer base -65.3m departing from Heathrow in 2012)
Can provide international awareness of the brand
Can gain knowledge of different customers from around the world based on their shopping patterns
A testing ground prior to further international growth
4. Ethical Considerations
Maintaining further control and transparency of the supply chain i.e. ensuring the ingredient are sourced ethically and sustainably.
Further focus on promoting charities.
Focus on supporting local charities and initiatives within the UK.
Large market with many competitors split into prestige and mass market brands
Kiehl's sells in both department stores and their own outlets meaning, again, competition is high
Does this appeal to men though who like convenient shopping? (Jackson et al., 2010)
Many of the competitors advertise via social media, identifying a channel Kiehl's could exploit further to attract males who notice online ads more than females, (Mintel, 2009)
Porter's 5 Forces

Bargaining power of the supplier
Supplier has high power as Kiehl’s place importance on the quality of their ingredients

Bargaining power of the buyer
Buyer has high power when the number of options available is considered
Low when you consider how small their purchases are

Rivalry amongst competitors
Lot of competition is owned by larger companies leading to low rivalry

Threat of substitutes
Substitutes represent high risk alternatives so threat is low

Threat of new entrants
Lucrative market which is growing – looks appealing to potential new entrants
Significant barriers to entry including capital requirements and economies of scale make it difficult to compete

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