ESTEE LAUDER's Marketing Strategy Essay Is Insightful And Informative.

Brief Discussion of ESTEE LAUDER

Discuss about the Marketing Strategy of ESTEE LAUDER.

Proper management of the business is crucial for any business organization as it enables the business organization to fulfill their business objectives and goal. This study deals with the marketing strategy, analysis of the competitive advantages, PESTLE analysis, and position of competitors and effectiveness of the strategic management in the context of ESTEE LAUDER. However, ESTEE LAUDER is the well known manufacturer and marketers of the beauty product established in New York City and they have expanded their business into Canada in the recent years ("ESTEE LAUDER", 2017).

ESTEE LAUDER is a well-known manufacturer and distributor of the cosmetic products. This organization has established first in the US. Hence, they have penetrated in the Canada market. They offer makeup ingredients. Hair care product, fragrance and skincare products. Such organization has a diverse brand that is internationally distributed by using the digital commerce and various retail channel. ESTEE LAUDER has strong financial resources and their cash flow from the business operation provides support to their business growth. Therefore, their acquisition strategy develops greater shareholder value. Cost saving program, improvements in the productivity and well financial discipline lead them towards success. Apart from this human resource of ESTEE LAUDER includes collaborative work between their partners, learning and development and the employee advisory that ensures their growth (Derdak, 2000).

ESTEE LAUDER possesses the capability to maintain a balance and diversified strategic business management. They have sustainable growth and they are able to provide prestige beauty products in the global market. ESTEE LAUDER focuses on the high price and their main target is the premium market. L'Oreal, Avon, Coty are the main competitors of such organization. ESTEE LAUDER offers natural skin care products, which is a useful approach to such organization to get competitive advantages in the global market in comparison to other cosmetic organizations those use synthetic materials in their products (Rosen & Sellers, 2000).

PESTLE analysis

ESTEE LAUDER has its branch in Canada also thus; market research of Canada based on the PESTLE analysis addresses different external factors of such organization.

Political factors

Canada is the strong democratic country with the stable political environment. Free trade negotiation is a vital initiative of Canada government to make business with many other countries in a protective manner (Strom, 1992). Less taxation and protective environment of foreign investment provide golden opportunity to ESTEE LAUDER to enhance their market share in Canadian supermarket segments.

External environmental analysis in context of ESTEE LAUDER

Economical factor

Canada has well developed and good performing economies among the developed countries, which brings positive opportunity for the foreign investors in such country (Thomas, 2000). In the year of 2012 GDP of such country was 2.6% that is higher than the previous year. In the year of 2015, Canada had 70.2% of the total GDP. Hence, the high economic condition of such country will be beneficial for ESTEE LAUDER to invest in this country against a good return.

Social factor

People of Canada have less income in comparison to the US. Therefore, the number of working women is lesser in comparison to men (Umemura & Slater, 2017). However, for this reason, it is quite difficult for the cosmetic industries as well as for ESTEE LAUDER to enhance their revenue generation as beauty products are targeted mostly the women. However, in the recent years, Canada has been trying to bring improvement in their social inequalities that can be a good aspect for business industries.

Technological factors

Rapid use of the internet and mobile phone is very common among the Canadian people (Peteraf, Gamble & Thompson, 2014). Hence, application of such advanced technology is the vital area of the Canadian citizens. Hence, advertisement through the internet and social media marketing will be easy for ESTEE LAUDER in this country.

Legal Factor

Canadian law is UK law oriented hence, British Common Law and Civil Law are required to maintain by the investors in this country (Ramli, 2015). In the context of ESTEE LAUDER they need to comply with the legal requirements of such organization otherwise they may face legal issues in their business operation.

Department of Environment Act of Canada has strict regulation for the manufacturer to use renewable sources (Pervin, Ranchhod & Wilman, 2014). However, ESTEE LAUDER and other organizations have to maintain the environmental norms during their business. They should use the natural sources in their products to maintain the sustainability of the environment.

Competitive rivalry, the threat of substitution, the threat of new entry, supplier power, and buyer power are the basic five elements of Porter five force models that are used to analyze the competitive advantages of an organization (Kobayashi, Hara & Usui, 2017). In the context of ESTEE LAUDER industry rivalry and the threat of substitution are major areas to understand their competitive factors. The emergence of competitive rivalry is a big challenge for ESTEE LAUDER (EL) as it may increase the power of the competitors of such organization as for example, L'Oreal, Avon are the strongest competitors of  EL.

ESTEE LAUDER offers the quality product at high price hence; people have a tendency to buy the quality product at low price. Hence, premium price of EU leads them to face product substitution threat as their competitors may offer similar products at low price, which easily affects the market share of ESTEE LAUDER.

Competitive factor analysis: Porter Five force model

Marketing strategy should be product, price, and promotion oriented in the context of any organization (Peteraf, Gamble & Thompson, 2014). ESTEE LAUDER uses natural ingredients in their products, which influences the customers towards their products. However, this strategic approach of EL will enable them to get competitive advantages in the market as this may reduce the threat of substitution for ESTEE LAUDER. On the other hand, ESTEE LAUDER has the premium price, which often allows the customers to choose the alternative product at low price. Hence, adoption of three pricing strategy of ESTEE LAUDER as for example, the conventional pricing strategy include cost based, competition based and demand based pricing will be an effective approach to such organization. This strategy is helpful to reduce the threat of new rivalry in the market in the context of EL. A promotional mix of ESTEE LAUDER consists of trade sale and consumer sale strategies that influence consumers by providing discounts on the product.

ESTEE LAUDER uses the digital marketing strategy that includes social media marketing and e-commerce marketing. However, in the recent years, online shopping is a common trend in the consumer domain as it is a time and cost effective process (Rosen & Sellers, 2000). Hence, such digital marketing strategy will be an effective initiative for ESTEE LAUDER in the context of Canada market as Canadian people have an intensity of using internet and mobile phone in a rapid manner. Situation analysis is another strategy that enables such organization to understand current market demand.

Conclusion

The above piece of work highlights on the external environmental analysis in the context of ESTEE LAUDER. Therefore, strategic approaches of EL such as their natural product and conventional pricing strategy will be beneficial for them to minimize the threat of competitive rivalry and product substitution by their competitors. On the other hand, their digital marketing strategy will enhance their sales promotion and revenue generation in the Canadian market as Canadian people are involved in the rapid use of the internet. Such aspect will maximize their advertisement process and product promotion in the consumer domain easily. Moreover, situation analysis strategy of ESTEE LAUDER is a crucial approach for them to understand their current market position and this allows them to forecast their future growth based on the market demand.

References

Derdak, T. (2000). International Directory of Company Histories. The Estee Lauder Companies Inc. History. St. James Press. Vol.30, 78-100.

https://www.esteelauder.com/

Umemura, M., & Slater, S. (2017). Reaching for global in the Japanese cosmetics industry, 1951 to 2015: the case of Shiseido. Business History, 1-27.

Peteraf, M., Gamble, J., & Thompson Jr, A. (2014). Essentials of strategic management: The quest for competitive advantage. London: McGraw-Hill Education.

Ramli, N. S. (2015). Immigrant entrepreneurs on the world's successful global brands in the cosmetic industry. Procedia-Social and Behavioral Sciences, 195, 113-122.

Pervin, S., Ranchhod, A., & Wilman, M. (2014). Trends in cosmetics purchase: Ethical perceptions of consumers in different cultures. A cross country comparative study between South Asian and Western consumers. Journal of Customer Behaviour, 13(1), 57-72.

Kobayashi, H., Hara, Y., & Usui, T. (2017). Trust building process for new market entrants: A case study of a Japanese cosmetics company’s business expansion in China. Journal of Business & Industrial Marketing, 32(6), 67-567.

Strom, S. (June 28, 1992). The Lipstick Wars. The New York Times. Available at: https://www.nytimes.com/1992/06/28/style/the-lipstick-wars.html

Rosen, C. & Sellers, C. (March 14, 2000). Business and the environment. Harvard Business School. Available at:https://hbswk.hbs.edu/archive/1352.html

Thomas, B. (April 14, 2000). Estee Lauder casts its Net wider. Company’s purchase of Gloss.com could shake up online beauty industry.

Los Angeles Times. Available at: https://articles.latimes.com/2000/apr/14/news/cl-19318

ESTEE LAUDER. (2017). Esteelauder.com. Retrieved 25 July 2017, from https://www.esteelauder.com/