Presentation on Kiehl's prepared for the L'Oreal Brandstorm 2014 competition.

1. L’Oreal Brandstorm 2014
BrandStars Team
Ada Kuzniar, Annelise Sealy, Daisy Plowright
London College of Fashion (UAL)

2. Market Overview
• According
to
data
provided
by
L’Oreal,
the
global
beauty
market
is
worth
87.2
billion
Euros.
• The
men’s
global
beauty
market
is
worth
7.58
billion
Euros,
with
men’s
fragrance
accounting
for
7%
of
the
market
share
and
only
1%
accounting
for
men’s
skincare.
• From
2007-­‐2012,
the
global
men’s
grooming
market
grew
31.8%
(Euromonitor,
2014).

3. Kiehl’s Top Markets & Products

4. The UK Market
• In
2012
the
men’s
grooming
market
grew
5%
to
reach
sales
of
£1.1
billion
(Euromonitor,
July
2013).
• Men’s
hair
care
was
the
fastest
growing
category
in
2012,
posting
a
16%
value
gain,
followed
by
skin
care
with
8%.
• Procter
&
Gamble
remain
the
leading
player
with
a
31%
share
of
sales
(Euromonitor,
July
2013).
• According
to
a
survey
of
1,250
men
and
women
in
the
UK
aged
between
18
and
45
by
CloseShaveSociety.com,
men
are
now
spending
as
much
as
women
on
personal
care,
with
86%
of
them
regularly
using
moisturiser
(Euromonitor,
July
2013).

5. Kiehl’s Brand Identity Prism

6. Kiehl’s 4Ps
PromotionPlace
PriceProduct
Unisex
product
offer.
Men’s
speciZic
products
include
moisturisers,
cleansing
and
shaving
preparation,
eyes
and
lips,
shower
products,
antiperspirants
and
deodorant,
hair
products.
Unique
packaging,
made
from
recycled
materials.
Premium
prices
ranging
from
£16.50-­‐£38
in
their
moisturiser
category,
£8.50-­‐£25
in
hair
care,
and
peaking
at
£38.50
for
their
signature
scent.
(Prices
in
their
broader
ranges
exceed
this
e.g.
youth
regeneraCng
creams).
Generous
with
free
samples.
Presence
in
44
territories.
Selective
distribution.
Department
stores,
freestanding
stores
and
online.
Strong
in
travel
retail
presence,
having
stores
situated
in
airports
and
train
stations.
Online
use
of
promotional
codes,
e.g.
for
free
shipping.
Strong
associations
with
charities
and
community
groups
Use
of
social
media,
interacting
with
the
customer
and
creating
a
dialogue
on
Facebook.

7. Kiehl’s Communication Mix
Awareness
is
driven
primarily
through
“word
of
mouth”:
utilizing
sampling,
PR
and
digital
communication.
Traditional
advertising;
speciZically
television
or
print
advertising
is
not
a
part
of
Kiehl’s
business
model.
Kiehl’s
was
built
on
sampling
philosophy:
“Try
before
you
buy”.
Leadership
in
service:
For
over
160
years,
Kiehl’s
has
been
committed
to
providing
customers
with
exceptional
service,
personal
consultations,
and
generous
samples
of
their
efZicacious
formulas.
All
customers
receive
personalized
service
“We
are
here
to
serve
you”
Kiehl’s
is
targeting
ultimate
consumer;
Makes
use
of
a
variety
of
formats:
sampling,
promotional
codes,
online
contests
and
store
events.
Actions
attract
attention,
offer
strong
purchase
incentives,
and
are
supporting
building
long-­‐
term
brand-­‐customer
relationship.
Kiehl’s
PR
is
based
on
3
pillars:
Brand,
Heritage
Skincare
and
Philanthropy
Mainly
online
marketing.
Kiehl’s
actions
are
customized
and
interactive,
especially
when
it
comes
to
social
media,
yet
discreet,
as
they
want
to
over-­‐
expose
and
dilute
the
brands.
Advertising Personal Selling Sales Promotion
Public Relations Direct Marketing

8. Kiehl’s UK Competitors
Premium
Mass Market
Lower Price Higher Price

9. The Kiehl’s Customer
The
Trendy
Trier
Age:
26
Resides:
Dalston.
Occupation:
Marketing
manager
at
a
fashion
brand.
Earns:
£30-­‐50k
per
annum
The
Trendy
Trier
Age:
31
Resides:
Pimlico/Marylebone.
Occupation:
Lawyer,
based
in
West
London.
Earns:
£50-­‐70k
annum
The
Proactive
Professional
Age:
45
Resides:
Surrey.
Occupation:
Works
in
Zinance.
Earns:
£70k+

10. UK Consumer Trends
• Men
are
willing
to
take
more
care
of
their
appearance
and
are
increasingly
interested
in
having
the
tools
to
do
so
(Euromonitor,
June
2010).
• The
recent
trend
towards
facial
hair
has
resulted
in
a
decrease
in
the
proportion
of
men
using
shaving
preparations
(Mintel,
2013).
• Trends
for
the
older
demographic
include
anti-­‐ageing
and
Zirming
products
(Euromonitor,
June
2010).
• Nutricosmetics
is
also
thought
to
become
a
trend
(Euromonitor,
June
2010).

11. The Macro-Environment - PESTEL
• Political
unrest
in
the
lead
up
to
the
2015
general
election.
• Scottish
independence
could
lead
to
the
demise
of
‘the
economic
beneZits
of
being
a
bigger
country,
greater
international
clout,
connections
between
people
and
the
cultural
impact
of
the
UK’
(BBC,
2014).
• Cap
on
pension
charges
to
be
introduced
in
2015
(BBC,
2014).
• The
UK
economy
grew
by
1.9%
in
2013,
its
strongest
rate
since
2007
(Sellgren,
2014),
and
is
set
to
grow
by
2.%
in
2014
(BBC,
2014).
• The
unemployment
rate
has
fallen
from
7.7%
in
August
2013
to
7.1%
in
November
2013
(O’Connor,
2014).
Employment
growth
is
expected
to
continue,
together
with
starting
salaries
increasing
across
the
UK
(Groom,
2014).
• AGR
predicts
that
graduate
job
vacancies
will
rise
by
10.2%
in
2014
(Howse,
2014).
• Interest
rates
not
to
be
raised
until
UK
unemployment
falls
to
7%
(Peston,
2014).
Political
Economical
Social
Technological
Environmental/
Ethical
Legal
• Universities
face
a
funding
cut
of
£125m
next
year,
which
is
likely
to
affect
disadvantaged
students
the
most
(Warrell,
2014).
• 75%
of
people
use
their
phones
while
on
the
toilet
(Drewett,
2013).
• Threat
of
cyber
criminals
hacking
bank
accounts
through
online
shopping
–
banks
are
increasingly
concerned
with
cyber
security
(Arnold,
2014).
• 1.5
billion
smartphones
and
tablets
will
be
installed
globally
by
mid
2013
–
overtaking
laptops
and
PCs
(Millward
Brown,
2012).
• Consumers
are
becoming
more
ethically
and
environmentally
aware
(Euromonitor,
June
2010).
• The
government
is
promoting
new,
more
ethical
scientiZic
research
techniques
in
order
to
replace,
reZine,
and
reduce
the
use
of
animals
in
research
(Morgan,
2014).
• Several
UK
banks
have
been
subject
to
theft
of
conZidential
information
of
customers.
The
most
recent
is
Barclays
having
the
data
of
27,000
customers
stolen
(Arnold,
2014).

12. Five Forces

13. The Micro-Environment – Strengths & Weaknesses
Strengths
1. Unique)and)authentic)brand)history.)
2. Credible)and)approachable)brand)DNA)with)quirky)
personality.)
3. Brand)signature)carried)throughout)all)brand)
communications,)including)inBstore)and)packaging)
design.)
4. Extensive)background)of)using)herbal)and)
medicinal)knowledge)combined)with)natural)
ingredients)and)advanced)science.)
5. Reputation)for)innovation)–)in)the)1960s,)Kiehl’s)
was)a)top)producer)and)distributor)of)
pharmaceuticals)and)medicinal)salves.)
6. Quality)of)the)formula)vs.)expensive)packaging)or)
advertising.)
7. Global)retailer)with)distribution)in)44)different)
countries.)
8. Leadership)in)service,)including)the)Kiehl’s)“Circle)
of)Service”,)personalised)customisation)and)
generous)sampling.)
9. Philanthropic)commitments)to)communities)and)
charities.))
Weaknesses
1. Low)brand)awareness)due)to)lack)of)
advertising.)
2. Men)typically)shop)for)convenience,)and)may)
tend)to)stick)to)mass)products)sold)in)
supermarkets/convenience)stores.)
3. Hygiene)staples,)deodorants)and)shampoos)
appeal)to)the)highest)proportion)of)men,)with)
over)nine)in)ten)using)these)products)(Mintel,)
2013).)Kiehl’s)does)not)have)a)range)of)
“staples”,)or)deodorants.)
)

14. The Micro-Environment – Opportunities & Threats
Opportunities
1. Men’s(grooming(is(one(of(the(most(dynamic(
categories(within(cosmetics(and(toiletries.(The(
major(markets(are(in(Western(regions(
(Euromonitor,(November(2009).(
2. All(zones(for(Kiehl’s(are(in(doubleIdigit(growth(–(
MEA(+52%,(Latin(America(+(42%,(Europe(+41%,(
Travel(Retail(+34%,(and(Asia(+18%.(It(is(key(to(
retain(growth(and(increase(growth(in(the(lower(
performing(sectors.(
3. The(UK(men’s(grooming(market(is(forecast(to(see(
constant(value(CAGR(of(3%((Euromonitor,(June(
2010).(
4. Modern(marketing(and(PR(capabilities(will(enable(
product(and(brand(promotion(and(awareness.(
5. With(the(number(of(employed(men(set(to(increase,(
products(with(fastIacting(and(convenient(USPs(can(
appeal(to(men(on(the(go.(Men’s(toiletries(will(be(
buoyed(by(men(looking(to(maintain(a(professional(
image((Mintel,(2013).(
6. Hair(concerns(are(the(most(common(complaints(
among(men,(including(hair(loss,(greying(hair,(
dandruff,(and(dry/itchy(scalps((Mintel,(2013).(
7. Partnering(with(fashion(retailers(to(show(men(
which(grooming(products(complement(which(
clothing(styles(can(appeal(to(male(shoppers(
(Mintel,(2013).(
8. Multifunctional(products(most(appeal(to(16I24(
year(old(men(looking(to(save(money(and/or(time(
(Mintel,(2013).(
Threats
1. Following(a(strong(year(in(2012,(2013(has(seen(
a(slowdown(in(sales(growth(for(the(men’s(
toiletries(market,(with(estimated(annual(
growth(of(just(0.2%(resulting(in(a(market(value(
of(£590(million((Mintel,(2013).(
2. The(Western(European(region(shows(signs(of(
stagnating(and(maturing(in(regards(to(the(
men’s(grooming(market((Euromonitor,(
November(2009).(This(is(also(reflected(in(UK(
data(with(minimal(growth(in(the(men’s(
toiletries(market(in(2013((Mintel,(2013).(
3. The(Western(European(men’s(hair(care(and(
skin(care(markets(experienced(sales(dips(in(
2009,(2010,(and(2012((Euromonitor,(2013).(
4. Shaving(sales(in(Western(Europe(started(to(
decrease(in(2009(and(have(not(recovered(to(
the(same(level(as(in(2008((Euromonitor,(2013).(
5. Companies(such(as(Lynx,(Gillette,(Unilever,(and(
Beiersdorf((Nivea)(dominate(the(UK(market(
(Euromonitor,(June(2010).(
6. The(UK(grooming(market(is(predicted(to(
decrease(in(2013.(
7. The(big(challenge(for(brands(is(encouraging(
men(over(the(age(of(40,(who(show(a(level(of(
disengagement(in(the(category,(to(experiment(
and(try(new(products((Mintel,(2013).(Brands(
need(to(capture(younger(males.(
(

15. Summary
As
a
result
of
a
thorough
macro-­‐
and
micro-­‐environmental
analysis,
a
clear
opportunity
is
presented
for
the
25-­‐35
male
AB1
consumer
group.
Once
Kiehl’s
is
introduced
to
them
at
an
earlier
stage
in
life,
they
will
be
able
to
grow
with,
and
remain
loyal
to,
the
brand.
Due
to
Kiehls’
prominent
use
of
digital
marketing,
and
no
advertising,
the
current
promotional
strategy
sits
well
with
targeting
a
younger
consumer.
Within
the
UK,
Kiehl’s
could
take
inspiration
from
a
sense
of
Britishness,
producing
a
product
range
suited
to
young
urban
professional
in
combination
with
the
variable
climate.
This
strategy
would
also
be
successful
in
countries
with
a
close
cultural
and/or
geographical
distance,
as
well
as
cultures
that
admire
the
British
aesthetic
such
as
Japan
(one
of
the
top
Asian
markets
in
men’s
grooming).