This report identifies and analyses Kiehl’s position and market in the male cosmetics industry through the use of marketing aspects such as identifying its market growth rate, market share, size, segmentation, targeting and positioning. It also highlights its strong influence over the market for male consumers as well as its brand among competitors.
With all these factors, it thus evaluates, along with the characteristics of male consumers whether or not the product will be successful in future. 1. 0 Introduction 2. 1 Purpose The purpose of this report is to review the appropriateness of Kiehl’s facial fuel transformer (moisturising gel) for male consumers between the age group of 26 to 35. 2. 2 Background Found in 1851 by John Kiehl, Kiehl’s was initially established as a pharmacy in New York (East Village) and has grown as an American cosmetics retailer that specializes in skin, hair and body products.
Kiehl’s was acquired by the L’Oreal Group in 2000 and has more than 200 stores worldwide (Kiehl’s since 1851, n. d. ) 2. 0 Industry Analysis 3. 3 Market Information Khiel’s take pride in using natural ingredients that are beneficial to the skin, while using gentle formulas to create its products and maintaining a mindset to meet the needs of sensitive skin. Kiehl’s is positioned as a brand that is able to meet a variety of needs. Regardless of one’s skin type, consumers can find themselves having a large variety of basic skincare products to choose from as well.
In order to offer its products, Kiehl’s has adopted a “try before you buy” sampling philosophy, by giving out more than 12 million samples a year, which represents 80 percent of their total marketing budget (Upshaw, 2007, pp 48), highlighting their commitment to offer and sell products that are most appropriate for their needs. 2. 1. 1 Trend Consumers are willing to spend more on skin care as they need to keep up with appearance and maintaining their skin, therefore they seek more customized/dermatological skin care, body care and hair care products.
As men increasingly demand products that are specifically targeted at them, Khiel’s has dedicated products to the male sector since 1961 and has been a fast growing category as half of the company’s current clientele consists of men (Giarrantana, Fosfuri & Roca, 2010). 2. 1. 2 Size Kiehl’s has more than 200 shops in 34 different countries that expanded from the single store in New York and through the acquisition by L’Oreal, making it one of the world’s leaders in male beauty and health products (Giarrantana et al. , 2010). 2. 1. 3 Market Share
The three major players in the facial care market are L’Oreal, Unilever and Beiersdorf AG which account for 28. 9% of the total market share. The leading player in the market, with Kiehl’s under L’Oreal generates a 13. 6% of the total market value (San, Shin, Chua, Li, Tan, Tse, Chan & Oo, 2011) 3. 4 Micro Environmental Impact * Company: Kiehl’s has a relatively strong history and heritage that focuses on skin care and provides a strong market for the male sector. * Shop assistants: Kiehl’s take pride in its customer service through its shop assistants.
They undergo a three-week training course to learn how to “diagnose” their customers and wear white medical coats and “talk to each customer as an individual, working to recommend the products that are best fitted for their needs and preferences (Giarratana et al. , 2010) * Competitors’ strategy: As soon as Kiehl’s supplies its products to the market, its information becomes public knowledge, which rivals could use to obliterate its competitive advantage. This thus creates a risk for Kiehl’s in terms of competition (Giarrantana et al. , 2010) 2. 3 Macro Environmental Impact Nature: As mentioned that Kiehl’s uses natural ingredients to create its products, nature thus plays an important part, as it is their core supplier. Damage in crops would cause delay in production, which in turn affects consumers’ demands and expectations. – Culture: Part of Kiehl’s macro-environment aspects is that it relies on events and activities to create its culture to bond with its customers and consumers, such as raising money and organizing events that supports equality and human rights, health care issues and environmental awareness (Giarrantana et al. , 2010).
It is also part of their culture to be generous with free samples to attract potential consumers. 2. 4 Product Category The facial fuel transformer is a one of Kiehl’s latest skin care product for men. As it is a moisturizing gel, it thus falls under the moisturizer category (Kiehl’s since 1851, n. d. ). As the product is recommended to be used after shaving to smooth out the skin texture or cleansing, it can also be categorized as an after-shave product. These two categories play an important part in men’s grooming, as there is the need to refresh and rejuvenate the skin after daily grooming routines such as cleansing and shaving. . 5 Competitors Kiehl’s competitors for skin care in Australia include Kyoku, Nivea and Clarins (San et al. , 2011). As the competitors also segment their market to the male sector, they have thus created competition by segmenting the products offered such as shaving products, after-shave products, fragrances and hair care. This has been further developed and has been micro-segmented to meet male customer’s need such as skin/hair type (oily, dry or normal skin/hair), as well as targeting consumers based on age (e. g. skin care products to reduce wrinkles and hair products to promote hair growth).
Other than brand competitors, there is also an increase in the degree of competition from outside the industry including from the more traditional forms of external competition such as pharmacies, supermarkets and departmental stores (Richardson, 2012). 3. 0 Segmentation Analysis 3. 1 Bases of Segmentation Although Kiehl’s has a relatively large amount of male consumers, however it is possible to observe how they have targeted segmented consumers. As stated in Kotler, Brown, Burton, Deans and Armstrong (2010), there are four bases of segmentation, namely: geographic, demographic, psychographic and behavioural. . 2. 1 Geographic As Kiehl’s products are positioned as the high-end skin care products, it is necessary for Kiehl’s to reinforce it as the skincare brand in the luxury segment (San et al. , 2011). Being a luxury market, it can be observed that retailers of luxury brands tend to be in the more crowded and modernized areas such as the city. They (Kiehl’s) are usually located in central popular locations that resonate with the original East Village experience (Giarratana et al. , 2010). 3. 2. 2 Demographic
As much as Kiehl’s has been a male grooming retailer for a long time, it’s main focus of consumers on the demographic scale would be men between the age of 26 to 35 years old. Being in that age group, it is to say that they have been working for a considerable amount of time and have more spending power, which contributes to its revenue as seen in the graph: (Source: www. iheartkiehls. weebly. com) 3. 2. 3 Psychographic In the psychographic retrospect, male consumers whose lifestyle and personality are influenced by luxury male grooming products would definitely take Kiehl’s into consideration.
Engaging in a social life, they would find the need to keep up with appearance to meet up with people and hence require grooming categories such as facial care. 3. 2. 4 Behavioural Loyal customers of Kiehl’s would definitely be going back for more. In view of user status, Kiehl’s has adopted a way of attracting consumers through the use of generous sampling give-away to non-users, ex-users, potential users and first time users in hope of convincing them to think the company has beneficial values (they would go back more for the free samples). 3. 2 Targeting Strategy
The target market of Kiehl’s in this case would be male consumers need for grooming cosmetics such as facial and hair care and Kiehl’s has established this by offering a large range of products for men. Kiehl’s has therefore adopted the differentiated marketing strategy (Kotler et al. , 2010) to meet the needs of male consumers by providing products for different purposes and such as hair products for consumers who require hair care, facial products for facial care and shave products that vary between post and pre-shave. Kiehl’s also attract male customers by strategically featuring a motorcycle s well as chairs, couches, free magazines, coffee and relaxing music to make them feel more comfortable (Giarratana et al. , 2010). 3. 3 Positioning As shown on the perceptual map, Kiehl’s is in a leading position for skincare brands for using natural ingredients and offering premium products. In terms of product differentiation, consumers need not worry if the products are safe to use or not as Kiehl’s strongly focuses on safety, trustworthy and credibility, meaning to say its products must pass safety regulations and necessary procedures (San et al. 2011). In addition, Kiehl’s possess a long history and rich experience in the skincare industry that consumers can trust and appreciate. (Source: www. iheartkiehls. weebly. com) Being a dominant male grooming industry, Kiehl’s has a strong brand positioning as the demand and growth grate for male consumers are high. It has a high male consumer market, which relatively shows that customers are loyal and it is a well-known brand in the industry for male cosmetics. (Source: www. iheartkiehls. weebly. com) (Source: www. iheartkiehls. weebly. om) 4. 0 Target Market Selection 4. 1 Characteristics of Male Consumers With an increasing number of male consumers for facial care products, which in this case would be the moisturizer, the characteristics of these consumers need to be taken into account along with their demand for such products in the industry: * Men are influenced by popular culture and consumerism, and they are concerned with appearance as well as striving for glamour (Roedel, n. d. ) * Educated male consumers are aware of the advantage of grooming products nd are more conscientious about protecting their skin (Roedel, n. d. ) * Male consumers make use of cosmetics and grooming products to enhance the appearance as well as to protect face and body. (Roedel, n. d. ) * Marketers at the same time are taking advantage of this growing demographic to package their products in a more masculine way (Kiehl’s uses a simple and masculine colour: blue for their design). 4. 2 Satisfaction Analysis One of the methods of determining satisfaction is through customer retention (Valemtim, Saldanha & Ferasso, 2011).
This aspect is visible in the growth rate and demand of Kiehl’s in the future as they regard and acknowledge Kiehl’s products of superior quality. Giarratana et al. (2010) stated that they feel obliged to stay with the brand even if other firms offer competitive products. It can be concluded that consumers are highly satisfied Kiehl’s as a brand and its products. 5. 0 Recommendation In order for Kiehl’s to develop future marketing strategies, it needs to focus more on engaging the brand’s current product user and leverage on the brand’s current status (San et al. 2011) through the following methods: * Embrace its current followers and to welcome new members into its community wholeheartedly through its long heritage. * Stability and change (Dibb & Simkin, 2009): continue innovating and release new products regularly as well as improving on current products. * Establish relationships with consumers so they can have a sense of belonging and feel proud to be using Kiehl’s. 6. 0 Conclusion With the increase of male consumers in years to come, Kiehl’s has and will continue to benefit from its quality products to meet their needs and demands.
As Kiehl’s has a strong market and position in the male cosmetics industry, the sale of the facial fuel transformer (being a multi-functional product) will definitely attract attention and be success that will benefit its business. Word count: 1661 References Academic Journals: Roedel, A. (n. d). The evolution of masculinity: marketing and the appearance of men (Honours thesis, Saginaw Valley State University, Michigan, USA). Retrieved from http://andreabaumgartner. com/docs/honorsThesis. pdf Giarratana, M. , Fosfuri, A. & Roca, E. (2010).
Building a product differentiation advantage through community-based strategy. Business economics series, 10(1), 1-27. Retrieved from http://web. ebscohost. com. ezproxy. lib. monash. edu. au. Valemtim, C. S. R. , Saldanha, J. A. V. & Ferasso, M. (2011). Consumer behaviour and customer relationship management: understanding the mind of the consumer as priority in orienting organizational longevity. Asia pacific journal of research in business management, 2(6), 293-297. Retrieved from: http://web. ebscohost. com. ezproxy. lib. monash. edu. au. Dibb, S. & Simkin, L. 2009). Bridging the segmentation theory/practice divide. Journey of marketing management, 25(3-4), 219-225. Retrieved from: http://web. ebscohost. com. ezproxy. lib. monash. edu. au. Other sources: Kiehl’s since 1851. (n. d. ). Retrieved March 17, 2012, from http://www. kiehls. com. San, A. P. , Shin, A. , Chua, J. , Li, W. G. , Tan, J. , Tse, S. , Chan, S. , & Oo, J. (2011). Kiehl’s since 1851: our blog. Retrieved March 17, 2012, from http://iheartkiehls. weebly. com Hays, C. L. (2000, April 18). Kiehl’s Cosmetics Company Bought by France’s L’Oreal.
The New York Times Online. Retrieved from: http://www. nytimes. com/2000/04/18/business/kiehl-s-cosmetics-company-bought-by-france-s-l-oreal. html Upshaw, L. (2007). Truth: new rules for marketing in a skeptical world. New York, United States of America: AMACOM. Richardson, A. (2012). IBISWorld Industry Report G525b. Cosmetic and toiletry retailing in Australia. Retrieved March 18, 2012 from IBISWorld database. Maggard, J. P. , (1976). Positioning revisited. Journal of Marketing, 63-66. Retrieved from: http://web. ebscohost. com. ezproxy. ib. monash. edu. au. Bogomolova, S. (2011). Service quality perceptions of solely loyal customers. International journal of market research, 53(6), 793-810. Retrieved from: http://web. ebscohost. com. ezproxy. lib. monash. edu. au. Nitzan, I. & Libai, B. (2011). Social effects on customer retention. Journal of Marketing, 75, 24-38. Retrieved from: http://web. ebscohost. com. ezproxy. lib. monash. edu. au. Kotler, P. , Brown, L. , Burton, S. , Deans, K. & Armstrong, G. (2010). Marketing (8th ed). New South Wales, Australia: Pearson.
