Globalisation vs. Localisation of Marketing 30 years after Theodore Levitt. Analysis, Survey and Comparison of the German and Turkish skincare markets

Nivea, Clinique, Vichy, Diadermine and Skinceuticals as examples

Master's Thesis , 2018 , 88 Pages , Grade: 1,3

Business economics - Offline Marketing and Online Marketing

“The Earth is round but, for most purposes, it’s sensible to treat it as flat.”

The quote above is a part of Theodore Levitt’s iconic article “The Globalisation of Markets”, published in May 1983. Since it was published, it has been the focus of many discussions, with both protagonists and antagonists. In this thesis, the validity of Levitt’s arguments in “The Globalisation of Markets”, 35 years after it is published, is researched using the example Germany and Turkey’s skin care industry.

This research was conducted with the combination of existing literature and research, as well as an empirical survey. The current situation of the skin care market in Germany and Turkey was reviewed through various channels. After the literature review, the findings were supported with the cultural identification model “Dimensions of Behaviour”, developed by Richard Lewis, and compared to the results achieved by two surveys conducted in Germany and Turkey.

Table of contents

I. List of illustrations

II. List of tables

III. List of abbreviations

Introduction

1. Worldwide skin care market
1.1. Global Skin Care Market
1.1.1. Market size, growth, historic values and key players
1.1.2. Market trends
1.2. German skin care market
1.2.1. Market size, growth and historic values
1.2.2. Market trends
1.2.3. Distribution channels
1.2.4. Key players
1.3. Turkish skin care market
1.3.1. Market size, growth and historic values
1.3.2. Market trends
1.3.3. Distribution channels
1.3.4. Key Players

2. Brands & products compared
2.1. Estée Lauder - Clinique - 3 Step Skin Care System
2.2. L’oreal - Vichy - Liftactiv Supreme
2.3. Beiersdorf - Nivea - Nivea Creme
2.4. Henkel - Diadermine - Lift+ SPF
2.5. L’oreal - SkinCeuticals - Pigment Corrector

3. 7Ps on a global basis
3.1 Product
3.1.1. Clinique
3.1.2. Vichy
3.1.3. Nivea
3.1.4. Diadermine
3.1.5. SkinCeuticals
3.2 Price
3.2.1. Clinique
3.2.2. Vichy
3.2.3. Nivea
3.2.4. Diadermine
3.2.5. SkinCeuticals
3.3 Place
3.3.1. Clinique
3.3.2. Vichy
3.3.3. Nivea
3.3.4. Diadermine
3.3.5. SkinCeuticals
3.4 Promotion
3.4.1. Clinique
3.4.2. Vichy
3.4.3. Nivea
3.4.4. Diadermine
3.4.5. SkinCeuticals
3.5 Packaging
3.5.1. Clinique
3.5.2. Vichy
3.5.3. Nivea
3.5.4. Diadermine
3.5.5. SkinCeuticals
3.6 People
II
3.6.1. Clinique
3.6.2. Vichy
3.6.3. Nivea
3.6.4. Diadermine
3.6.5. SkinCeuticals
3.7 Physical Evidence
3.7.1. Clinique
3.7.2. Vichy
3.7.3. Nivea
3.7.4. Diadermine
3.7.5. SkinCeuticals

4. Summary of “The Globalisation of Markets” by Theodore Levitt

5. Cultural Differences Between Germany and Turkey
5.1. Germany
5.2. Turkey

6. 7Ps comparison between Turkey and Germany
6.1 Product
6.2 Price
6.3 Place
6.4 Promotion
6.5 Packaging
6.6 People
6.7 Physical Evidence

7. Comparison of German and Turkish skin care consumers’ preferences
7.1. Research results
7.1.1. Environmental Factors
7.1.2. Climate Conditions
7.1.3. Lifestyle
7.1.4. Demographic factors
7.2. Survey methodology
7.3. Survey outcome
7.3.1. Environmental Factors
7.3.2. Climate Conditions
7.3.3. Lifestyle
7.3.4. Demographic factors
7.3.5. Other findings

8. Recommendations
8.1. Clinique
8.2. Vichy
8.3. Nivea
8.4. Diadermine
8.5. SkinCeuticals

9. Review of validity of Levitt’s theory after 30 years

IV. Bibliography

V. List of appendices

I. List of illustrations

Figure 1: Cultural differences according to the Lewis model

Figure 2: Marks used on cosmetics products in Germany and Turkey

Figure 3: Demographic data of Turkish respondents

Figure 4: Demographic data of German respondents

Figure 5: Survey results self reliance

II. List of tables

Table 1: Pricing strategy comparison of researched brands

Table 2: Examples of marketing campaigns of Clinique

Table 3: Examples of marketing campaigns of Vichy

Table 4: Examples of marketing campaigns of Nivea

Table 5: Examples of marketing campaigns of Diadermine

Table 6: Examples of marketing campaigns of SkinCeuticals

Table 7: Comparison of income categories in Germany and Turkey

Table 8: Survey results environmental factories

Table 9: Survey results sun protection

Table 10: Survey results multifunctionality

Table 11: Survey results pigmentation, antiaging and locality

III. List of abbreviations

Abbildung in dieser Leseprobe nicht enthalten

Introduction

“The Earth is round but, for most purposes, it’s sensible to treat it as flat.”

Theodore Levitt, Professor of marketing at Harvard Business School

The quote above is a part of Theodore Levitt’s iconic article “The Globalisation of Markets”, published in May 1983. Since it was published, it has been the focus of many discussions, with both protagonists and antagonists. In this thesis, the validity of Levitt’s arguments in “The Globalisation of Markets” , 35 years after it is published, is researched using the example Germany and Turkey’s skin care industry.

This research was conducted with the combination of existing literature and research, as well as an empirical survey. The current situation of the skin care market in Germany and Turkey was reviewed through various channels. After the literature review, the findings were supported with the cultural identification model “Dimensions of Behaviour”, developed by Richard Lewis, and compared to the results achieved by two surveys conducted in Germany and Turkey.

1. Worldwide skin care market

Over the last decade, the global cosmetics and personal care market has been expanding rapidly, covering people from all age groups and genders. The cosmetics and personal care market consists of the following categories: skin care, hair care, makeup, fragrances, and toiletries. The largest category in this market is skin care, which consists of facial care, overall skin care, hand care, sun care, hair removal solutions and makeup remover products. Both cosmetic and medical products are included in skin care. Cosmetic products help augment beauty and adjust it to existing beauty standards, while medical products help to tackle skin related problems and regenerate skin.

1.1. Global Skin Care Market

1.1.1. Market size, growth, historic values and key players

In 2016, total global value of the overall beauty and personal care market amounted to €363.50 billion (Abbas, 2017, p.5). Europe was valued at €77 billion at retail sales price in 2016 and composed the largest beauty and personal care market in the world. The largest markets within Europe are Germany, United Kingdom, France and Italy with market values of €13 billion, €11.5 billion, €11.4 billion and €9.9 billion, respectively. Europe is followed by the U.S.A., which is valued at €64 billion (Cosmetics Europe, n.d.).

The global skin care market accounts for 27.3% of the global beauty and personal care market, and valued at €99.31 billion (Cosmetics Business, 2017). By 2024, the global skin care market is estimated to be €147.37 billion (Statista, n.d.a). The biggest category within this segment is the facial care market, which accounts for 66.1% of the global skin care market. Asia-Pacific (APAC) is the largest revenue generating region in the global skin care market, commanding 39.5% of the overall market value (Cosmetics Business, 2017). This region’s high market share is due to dense population of countries such as India, China and Japan, and the rising demand for regionspecific products, such as skin whitening cream and hair removal solutions. By 2020, the APAC market share is projected to hold more than 42% of the overall market share. The APAC region is followed by Europe, at 25.7% and North America, at 23.3% (Technavio, 2016).

The global skin care market is highly competitive and occupied by regional and international companies that compete on the basis of product differentiation, price and quality. Globalisation gives wellestablished international companies the ability to reach the locations where the entry of nonlocal companies had previously been restricted. The leading companies in the global market are Avon, Beiersdorf, Estée Lauder, L’oreal, Procter & Gamble and Unilever. The global market is expected to reflect an increase in strategic partnerships and M&As in near future (Technavio, 2016).

1.1.2. Market trends

Two major factors that drive demand in the global skin care market are a growing importance of visual appearance, and an increasing worldwide purchasing power. Aggressive marketing strategies of international companies and significant investments to inundate the global market with innovative products have also led to a significant increase in sales in all regions in the world. While the trends in the skin care industry continuously change, the growth in the market volume is consistent. Climate conditions and busy lifestyle caused by increasing number of women in workforce are the main factors that blaze the current trends in the global skin care industry.

The biggest trend in the current global skin care industry is the desire for natural and organic products. An increasing number of health and environmentconscious consumers are seeking natural skin care products. This market segment is expected to be driven by rising demand of organic ingredients such as herbs, vegetables and fruits, and increase at a CAGR of 10% from 2016 to 2025 (Schmidt, 2017). Companies all around the world are responding to this insight by introducing new products that are environmentally friendly. Despite their high prices, these products have been in great demand due to the increasing awareness of consumers of the possible side effects of chemicalbased skin care products. A related topic is the ban on animal testing, which has effected the sales of small and midsized manufacturers’ sales, and generated more interest towards products large companies’ nonanimal tested products.

Antiaging products have been showing a strong growth, which is caused by the increasing number of women in workforce and growing importance of appearance. The social pressure men and women are exposed to through television, movies and magazines causes them to want to look good and young at all times. The overall skin care industry has been experiencing a shift in the main consumer group, from older consumers to younger consumers. More and more people are starting to get concerned about the visible signs of aging on their skin, so they start using antiaging products at an earlier age in order prevent these signs before they appear (Statista, n.d.b). There is a great emphasis on a youthful appearance and companies are taking full advantage of this trend. The facial antiaging skin care products are ranked second among all skin care categories. In 2013, the global antiaging cosmetics and skin care market had a market value of €100.13 billion. It is expected grow at a CAGR of 7.8% and reach €156.94 billion by 2019 (Statista, n.d.c).

At present, APAC, Africa and the Middle East is experiencing a great demand in skin lightening products (Technavio, 2016). These products are used to reduce skin pigmentation, hide scars and flaws, reduce tanning, and therefore lighten skin tone in general. They are also used in treatment of several medical conditions such as melasma, hyperpigmentation and vitiligo. The high demand for skin lightening products in these regions are due to the consideration of fair skin tone as beauty enhancement.

1.2. German skin care market

1.2.1. Market size, growth and historic values

The size of the cosmetics and personal care market in Germany was €13.1 billion in 2016, which makes it Europe’s largest market (Kirst, 2016). The increase in ecommerce sales in beauty and personal care products causes both the sales figures and consumer expectations to rise. As of 2015, the German beauty and personal care market is placed fifth in worldwide ranking. In 2017, an annual growth rate of 1.5% and total sales accounting for €13.8 billion are expected (Kirst, 2016).

The largest segments of the German cosmetics and personal care market are hair care, skin care, oral care products and make up. Skin care was valued at €2,995.90 million in 2017. The average spending per capita in the German skin care market amounts to €36.26 in 2017. The market is expected to have a CAGR of 0.4% between the years 2017-2021 (Statista, n.d.d). Product innovations and new product launches are among the main growth drivers in the German skin care market. Natural and organic products that offer consumers high added value are especially successful. In 2016, the German natural cosmetics and personal care products market was valued €1.1 billion and had a growth rate of 9.2% (Kirst, 2016).

1.2.2. Market trends

Natural and organic products are the biggest trends in Germany. German consumers associate natural and organic personal care products mostly with nonchemical, non-GMO ingredients and animal friendly products (Statista, n.d.e). There is a continuous demand for natural products in Germany. German consumers are well informed and aware of ethical consumerism, and therefore tend to choose truly natural products instead of the so called nearnatural or natureinspired products. This consumer trend also creates market opportunities for international brands that were previously unknown to German consumers.

While there is currently no mandatory certification for natural personal care products in Germany, there are several private organisations who offer such certificates and seals. The most common and widely recognised natural personal care certification is the seal “Certified Natural Cosmetics” provided by “Bundesverband der Industrieund Handelsunternehmen” the German Association of Industrial and Trading Enterprises. This association deals with healthcare products, food supplements and personal hygiene products. In order to qualify for the certificate, companies have to comply with strict guidelines, such as using only natural products and verifying that their products are environmental friendly.

The current lifestyle trends in Germany are connectivity, convenience and individualism (Canadean, 2014). German consumers are also very price conscious and seek skin care products that offer value for money. Manufacturers respond to the lifestyle trends and priceconscious consumers with multifunctional products which promise more than one benefit. These products vary from moisturisers with sun protection features to antiaging creams that balance the skin tone differences. These “2 in 1” and “3 in 1” products are associated with more value and satisfy the consumer demand for connectivity and convenience.

1.2.3. Distribution channels

Majority of the cosmetics and personal care products are bought in drugstores in Germany. It was estimated in 2016 that 46.4% of all purchases in this market were made in drugstores (Kirst, 2016). The three largest drugstore chains are DM, Rossmann and Müller. Customer visits increased as German drugstores started adding more foods (organic, vegan, vegetarian, etc.) to their product portfolios. Diversified product offerings, convenient locations and a wide selection of personal care products increasingly attract customers. Approximately 14% of the personal care market in Germany is private label. Private label products are increasingly gaining market share, especially among global food retail and drugstore chains. Mass market products can be found in discount markets and hypermarkets, in addition to the drugstores. These channels are important in Germany, due to price consciousness of German consumers.

Pharmacies in Germany offer premium, high quality products with a qualified customer service and assistance. Additionally, pharmacies are usually located in very convenient locations within consumer walking distance. Premium products are also offered in perfumeries and cosmetics sections of department stores. However, only a small selection of personal care products is offered in department stores in Germany, which assigns a less important role to this channel compared to others.

E-commerce is an important channel in Germany. Companies operating in the personal care market are opening up and engaging in new business opportunities as more consumers turn to the internet to research or purchase products. High internet availability and usage are also factors that contribute the development of online channels for German consumers (GTAI, 2011, p.9).

1.2.4. Key players

German skin care market is dominated by mass market brands. The top five largest sellers are L'oreal, Procter & Gamble, Beiersdorf, Henkel and Unilever (Euromonitor, 2017b).

1.3. Turkish skin care market

1.3.1. Market size, growth and historic values

The size of the Turkish cosmetics and personal care is estimated at €2.54 billion in 2016. With a population of almost 80 million, Turkey is a very attractive market for skin care companies. Between 2005 and 2010, the Turkish cosmetics and personal care market had a very high growth rate of approximately 15% annually, except for the global crisis in 2009, when there was a 5% contraction. After the crisis, between the years 2010 and 2014, the market had a compound annual growth rate of 15.5%. The market expansion started to slow down in 2014 as it became more saturated, dropping to 12% growth. The growth rate is expected to be in the range of 6%-10% annually, until 2020 (Akguner and Demirdoven, n.d.). A constant growth in the Turkish skin care market has been observed since the early 2000s. In 2016, skin care category accounted for one of the biggest categories in the cosmetics and personal care market, growing by 15% in current value (Euromonitor, 2017a).

In particular, as the Turkish population has a younger average age than most EU countries, and the rate of population growth slows down while the average life expectancy increases, the demand for skin care products is increasing for consumers of all ages (Euromonitor, 2017a).

In September 2017, a ban on credit card instalments for cosmetics and personal care products was introduced in Turkey (Resmi Gazete, 2017). The aim of the ban was to direct consumers to purchase from domestic companies instead of choosing expensive, premium products from foreign producers. Credit card instalments are very common in Turkey in all industries, therefore, this ban lead consumers into purchasing cheaper products that they can afford to pay in one instalment. This ban was expected to be canceled in 2017, however, it still exists. When the ban is canceled, the negative effect on the premium products is expected to reverse.

1.3.2. Market trends

Turkey is considered as a bridge between Europe and Middle East with characteristics of both cultures. A young population, increased quality of life caused by rising disposable incomes and increased urbanisation cause people to care more about how they look. Increased participation of women in business life is another factor that favours the antiaging trend and increases the demand for skin care products in general.

Naturally derived and organic products are favoured by Turkish consumers (Cosmetica Italia, 2012). Organic products are produced from plant extracts and have natural ingredients, with minimal to no chemicals in them. Generic rise in ethical consumerism and customer concern about chemicals in the products they are using on their bodies drive this trend.

Multipurpose skin care products, such as 3-in-1 variants, or moisturising creams that can be used for both body and face, are providing a boost to the Turkish skin care market. The reason behind this trend is presumed to be the time and price benefits (Euromonitor, 2017a).

In the premium segment, people tend to purchase products that are marketed with doctors’ and pharmacies’ recommendations. These recommendations increase consumers’ perception of the dermatological effect they can get from a product.

1.3.3. Distribution channels

Distribution channels of skin care products in Turkey can be grouped into two channels: retail and online. Retail channels are supermarkets, brand outlets, pharmacies, brand stores, perfumeries, department stores, hairdressers and beauty salons.

Mass market products are usually sold in supermarkets such as Migros, Makromarket and CarrefourSA. Some supermarkets also offer skin care products under their private label. Mass market products can also be found in brand outlets.

According to the law, pharmaceuticals can only be sold in pharmacies in Turkey. That’s why Turkey doesn’t have any drugstores. Premium skin care brands that sometimes have dermatological benefits are usually offered in pharmacies. Turkish people trust pharmacists’ advice on over the counter drugs and personal care products. There are over 24,000 pharmacies in Turkey and available personal care products vary according to the location and size of the pharmacy (TUIK, 2013).

Most big companies that offer premium products choose to open their own brand stores. In 2015, 26 national (Flormar, Golden Rose, Pastel, Biota, Atelier Rebul) and international brands (BodyShop, Clinique, Yves Rocher, L'Occitane, Kiehl's) had over 1,600 brand stores in Turkey. Italian brand Kiko and the American brand Origins are two of the new brands that entered the market through brand stores in 2016 (Akguner and Demirdoven, n.d.). Premium products can also be found at the cosmetic sections of department stores such as Boyner, Beymen and Harvey Nichols. These stores sometimes have exclusivity agreements with brands, which means this brand can only be offered in their stores.

Both local and international chains of perfumeries are very common in Turkey. There are many small shops, as well as large local boutiques such as Tekin Acar, Sevil Kozmetik, YKM. In addition to the local perfumeries, many international chains, such as Sephora, Douglas have many branches located all over Turkey. Perfumeries are usually located in malls or busy shopping streets. Product offerings vary according to the location and concept of the store. In addition to perfumeries, there are many cosmetics and personal care retail chains that offer household items. For example, packaged food, stationary products, and simple jewellery are offered together with cosmetics and personal care products. There are both local (e.g. Gratis) and international (e.g. Watsons, Rossman) chains present in this segment.

Some hairdressers and beauty salons in Turkey offer the skin and hair care products that they use inhouse for purchase. However, this is not a significant distribution channel for skin care products.

The main drive for online distribution of skin care products in Turkey is the young, dynamic population. These young people are becoming increasingly more aware of global brands. This is why internet and social media tools are important sources to gather general information about the brands and what benefit to expect from them. In addition to gathering information, online retail is an important distribution channel in Turkey. As the perfumeries, retail chains and brand stores are mostly located in big cities and in urban areas, ecommerce is a crucial channel for consumers living in smaller cities. Internet retailing had a value growth of 28% in 2016 in Turkey, as more consumers are feeling more comfortable to purchase products online. As a result, online marketing campaigns and social media promotions become more important (Euromonitor, 2017a).

Since early 90s, direct marketing has proved to be a successful channel in Turkey. The start of Oriflame’s direct marketing efforts in 1992 was followed by Avon in 1993 and Amway in 1994. Currently, Avon is the cosmetics market leader in Turkey. However, direct marketing is proven to be more successful for cosmetics and make up products than for skin care.

1.3.4. Key Players

The Turkish skin care market is dominated by foreign companies. According to the Turkish Ministry of Health, there are a total of 3,350 registered cosmetics companies operating in the cosmetics and personal care market, however, only 1,500 of these companies are local manufacturers. Multinational companies Unilever, Beiersdorf, L’oreal, Procter & Gamble, Johnson & Johnson, Avon and Colgate Palmolive command 70% of the cosmetics and personal care market of Turkey (Akguner and Demirdoven, n.d.). In 2016, L’Oréal led sales in skin care with a value share of 21% (Euromonitor, 2017a).

These multinational companies benefit from large budget allocations for marketing campaigns, while local companies have a great competitive advantage on price. As of January 11, 2017, Turkey has started to apply customs duties ranging between 17-25% to all cosmetics and personal care products imported into the country. Products manufactured in the EU, EFTA countries, and countries with which Turkey has a free trade agreement, such as South Korea and Israel, are exempt from Turkey’s additional tax.

2. Brands & products compared

2.1. Estée Lauder - Clinique - 3 Step Skin Care System

Estée Lauder is an American manufacturer of prestigious skin care, makeup, cosmetics, toiletries, fragrances and haircare products. The company has a diverse portfolio of brands that are distributed worldwide. Clinique is a subsidiary of Estée Lauder and it offers dermatologist created, allergy tested, fragrancefree beauty products. Clinique’s mission is to be the most trusted prestige beauty brand in the world. In order to achieve this mission, they offer a wide variety of skin diagnosis services and invest in lasting relationship with consumers from all age groups and ethnicities. Their products are usually sold in high end department stores and consumers are assisted by “Clinique Consultants” who wear white lab coats which emphasise the dermatological and medical side of the company.

The now worldfamous threestep skin care system was first introduced in 1968. This three product kit aims to cleanse, exfoliate and moisturise the skin. An advantage of using the set is that Clinique lets consumers take a test on their website in order to learn their skin type, and suggests products that fit their needs. This test includes questions about life style, skin problems,etc. Clinique defines four skin types: “very dry to dry”, “dry combination”, “combination oily” and “oily”. Different products developed by dermatologists are offered for each skin type.

The first step, cleansing, consists of a liquid facial soap, which has a nondrying formula that leaves the skin clean, fresh and comfortable. For this step, there is only one product that works for all skin types. The cleansing step is followed by exfoliation. The exfoliation step is where Clinique makes the difference. There are four types of clarifying lotions designed for each skin type. This lotion sweeps away pollution and excess oil, and opens the pores on skin. The last step is moisturising. For this step, a moisturising lotion that is suitable for all skin types is offered.

2.2. L’oreal - Vichy - Liftactiv Supreme

L’oreal is a French cosmetics company and it is currently the world's largest. Their portfolio includes all field of cosmetics products such as skin care, hair care, makeup, fragrances, sun protection, hair colour. Vichy is a brand that is listed under the active cosmetics division of L’oreal. This division is the world leader in dermocosmetics. The principle ingredient of Vichy products is “Vichy Mineralising Water”, which is claimed to come from French volcanoes and represents purity. This ingredient contains fifteen rare minerals that help soothe and strengthen skin against external aggressors. Vichy claims to make skin stronger by rebalancing, reinforcement and regeneration. The brand prioritises the treatment of sensitive skin in order to guarantee tolerance for all other products.

One of Vichy’s start products, Liftactiv Supreme, counteracts aging and aims for a younger looking skin by minimising wrinkles, fine lines, sagging features, uneven complexion, loss of firmness, tonicity, volume and signs of fatigue and dehydration. It is a cream that is applied to the face once daily. On Vichy’s website, consumers can look for the results of a clinical research that was conducted with regular use of Liftactiv Supreme and have a concrete idea on the product’s effectiveness.

2.3. Beiersdorf - Nivea - Nivea Creme

Beiersdorf is a German manufacturer of multiple personal care products and selfadhesive product solutions. The company was founded in 1882 and has since been offering affordable and innovative skin care products. Their aim is to make people feel good in their skin, and they have been trying to achieve this goal by offering their skin care products globally for all sorts of needs and in different types of markets: mass market, dermocosmetics, and premium. They are the owner of the global brands Nivea, Eucerin, and La Prairie.

Nivea is the most popular brand of Beiersdorf on an international basis and they claim to have revolutionised the skin care market since Nivea Creme’s launch in 1911, as it was the first stable oil and water based cream in the world. Today, Nivea has grown considerably as a brand, and the Nivea Creme has become extremely popular. The Nivea creme is a budget friendly solution to a lot of skin problems. It can be used on face, hands, lips, feet and nails in order to protect, hydrate and moisturise the skin and reduce redness. It can also be used for babies.

2.4. Henkel - Diadermine - Lift+ SPF 30

Henkel is a German chemical and consumer goods producer. It operates globally in three business areas: laundry & home care, beauty care and adhesive technologies. In the beauty care unit, the company holds leading positions in several categories and market around the world. Henkel is the owner of the world famous brands Schwarzkopf, Fa, Gliss, Theramed, Syoss, Diadermine and many others. The beauty care unit of the company is mostly focused on shampoos, hair care and hair colours.

Diadermine is a brand of Henkel that is committed to offering dermatologically developed affordable antiaging products. The brand positions itself as an expert in skin care that uses natural ingredients, is tolerant for sensitive skin and has affordable prices. Its brand values are expertise, quality, proximity and innovation. Diadermine identifies its main target group as women that are older than thirty years old. According to their website, this group has the highest demands on antiaging products and search for expertise solutions.

Diadermine’s popular product Lift+ SPF 30 is a multifunctional product which offers sun protection and treatment to the visible signs of skin aging. While treating the aging skin, Lift+ SPF 30 protects the skin from the harmful ultraviolet radiation which causes cell damage that results in several severe skin problems.

2.5. L’oreal - SkinCeuticals - Pigment Corrector

SkinCeuticals belongs to the active cosmetics division of L’oreal as well. Its mission is to “provide advanced skin care backed by science to prevent visible signs of aging, protect healthy skin, and correct the appearance of aging. Used by leading dermatologists and plastic surgeons worldwide.” The brand’s skin care regimen in concentrated on three pillars:

- Prevent visible signs of aging by minimising the damage from harmful affects of atmospheric aggressors.
- Protect healthy skin against from the harmful effects of sun with high protection sunscreens.
- Correct and treat the visible signs of existing damage.

The brand’s products are called cosmeceuticals, which are on the cuttingedge between cosmetics and pharmaceuticals. The brand puts up the argument that the key to optimal skin health is a professional skin care regimen and offered professional products that are developed by dermatologists. Tools that provide interested people a better understanding of skin types and problems are provided on the website of the brand. Prospective customers can go online to explore what is causing their problems and which products would suit them better in order to treat the visible effects of them. SkinCeuticals also offers a variety of professional treatments such as chemical peeling and facial treatment. These treatments are only offered through an authorised SkinCeuticals skin care professional and recommended to be used simultaneously with SkinCeuticals home care products to yield optimal results.

3. 7Ps on a global basis

3.1 Product

3.1.1. Clinique

Clinique offers various products to both men and women of all ages and ethnicities. Its makeup product portfolio includes products that are suitable to different skin types and colours. The key products are skin care, makeup and fragrances. All their products are allergy tested and fragrance free. They also have products that address all common skin problems such as acne, hyperpigmentation, fine lines, redness, large pores, and lack of hydration.

Differently from the products that include pigments, such as foundations, concealers and powders, the threestep skin care system, does not differ on a global basis. In every country Clinique is sold, the threestep skin care system includes the same facial soap, four different types of clarifying lotions for four different skin types, and the same moisturising lotion.

3.1.2. Vichy

Vichy is a premium brand that produces skin care, makeup and antiaging products. Differently from Clinique, Vichy products are not all allergy tested, however the brand addresses all skin types and problems. Antiaging solutions are the most preferred products of Vichy. They produce customised antiaging products that are specially adapted to the skin type, age and lifestyle that combat the visible signs of aging skin and ensure youthful looking skin. The company tries to be innovative in the area of antiaging when they launch a new product. They currently have three antiaging product lines called Idelia, Liftactiv and Normaderm.

The Liftactiv product line is claimed to be Vichy’s best treatment for a lifting effect and biological action. The products in this line reduce wrinkles and have a long lasting lifting effect. Liftactiv Supreme Serum has a highly concentrated formula that was developed during ten years of research and includes six patents. The serum is applied twice daily, in the morning and evening, and is claimed to reduce visible signs of aging in ten days of regular use.

3.1.3. Nivea

Nivea’s product lines consist of skin care, face care and personal care products. Under the skin care line, it has Nivea Creme, Nivea Body, Nivea Hand and Nivea Baby. Nivea claims to produce exceptionally good creams. They currently have four different creams (Nivea creme, Nivea soft creme, Nivea care creme and Nivea men creme) that have a similar colour and smell, but different textures and application areas. Men’s products have a more fresh, masculine fragrance. Other than products that target men, most products have the same distinctive neutral smell and white colour. The white colour and distinctive smell represent simplicity in beauty. This perception is mostly associated with the most popular creme Nivea produces, the “Nivea Creme”, which is also the most famous product of the brand. Nivea Creme was invented over one hundred years ago, and currently is used by millions with different types of skin all over the world.

The researchers of Nivea work towards offering different products that suit all types of skin and requirements brought about by culture, gender and age. There is a laboratory in the Hamburg headquarters that works on developing products for Asia and Latin America. Nivea has been working on creating tailor made products for different needs of people in different countries since 1930s. These differences arise from climate conditions or the beauty norms of each country. For example, products that have whitening feature, e.g. the Nivea whitening paste, have generated great success in Asia (Nivea, 2011).

3.1.4. Diadermine

Diadermine produces affordable antiaging products. Because they provide a very focused group of products, Diadermine is one of the most preferred antiaging producers in the world. The slogan of the brand is “Because you only have one skin.” This slogan implies that, by using Diadermine products, consumers can achieve the best treatment their skin deserves. All Diadermine products are suitable for sensitive skin, are allergy friendly and certified by ECARF (European Centre for Allergy Research Foundation). The high quality and affordability of products are appreciated by the consumers.

As mentioned, Diadermine produces antiaging products that are based on the latest trends and scientific research. The product lines of the brand are Lift+, Wrinkle Expert 3D, Age Excellium, Dr. Caspari. Being an innovative brand, Diadermine followed the trend and introduced an organic antiaging product line, called Diadermine Bio Expertise.

Diadermine gives importance to multifunctional products. Instead of offering products that only work as antiaging solutions, its products usually also have sun protection, moisturising or other effects. Lift+ SPF 30 is one of the products that offers antiaging and sun protection features together. It is applied once daily. It is designed for women aged 30+ and aims to protect the skin from the harmful effects of sun and prevents premature aging of the skin while treating existing signs of aging.

3.1.5. SkinCeuticals

SkinCeuticals produces the products that are the closest to medicaments out of the five brands that are researched in this thesis. The brand’s products are called cosmeceuticals, and the active ingredients in them are claimed to enhance skin care efficacy. All products are scientifically proven to improve skin conditions when used regularly. The brand uses only pharmaceutical grade ingredients and medical grade formulations in production. All products go under extensive clinical testing before they are offered to consumers.

SkinCeuticals produces skin care products, antioxidants, sunscreens, corrective serums and antiaging products. The skin care products are designed to prevent future damage, protect healthy skin, and correct the appearance of previous damage. The corrective serums consist of concentrated formulations that are claimed to improve the look of discolouration, wrinkles, acne, excess oil and more.

The pigment corrector falls under the skin care products category. It is classified as a skin discolouration solution. It is a lightweight lotion that reduces the appearance of skin discolouration and improves overall skin tone. It is applied once or twice daily to the areas of discolouration. It is suitable for sensitive skin and is paraben, fragrance, and dye free.

3.2 Price

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Table 1: Pricing strategy comparison of researched brands

3.2.1. Clinique

Clinique’s products have high quality and high prices. While the products have premium prices compared to the overall skin care market, they have a premium pricing strategy, which is to be priced slightly lower than their highend counterparts. This strategy helps the brand communicate the quality and value of its products to the consumer. This way the brand’s products are perceived as affordable by the mass market, while the price still has the ability to represent the products’ quality, uniqueness and dermatological features.

3.2.2. Vichy

Vichy sells high quality products that have premium prices. The prices of Vichy products are slightly higher than the companies who offer similar products. In the more niche segment of high quality antiaging products, prices are set much higher than competitors. Vichy justifies the premium prices by communicating the high quality ingredients, product information and efficacy to consumers.

3.2.3. Nivea

Since the start of the company, making its products accessible and affordable was Nivea’s main concern. In the early years of Nivea, distributors were not allowed to offer discounts on the products, as the brand’s products were to be offered “anywhere, for the same price, and at the same level of quantity”. When the current prices of Nivea products are compared on a global basis, it can be seen that the prices are very similar. Thus, the brand still presents a consistent image on an international level. However, an exception to this pricing strategy was applied in Asia. As the Nivea products are perceived to be in the medium and upper price range in the Asian market, a new basic face care product line was introduced in region in order to make Nivea affordable to the mass market. This product line reached all Asians, both in the cities and in the countryside (Nivea, 2010, p.15). The affordable pricing and highquality products all around the world indicate that Nivea uses a penetration pricing strategy. Through this strategy, the brand has been able to achieve long term brand awareness and brand loyalty in massive markets

3.2.4. Diadermine

Diadermine offers antiaging products that have lower prices than the competition. Quality of Diadermine products are not marketed as much as similar products offered by competitors. Economy pricing strategy is used by the brand. The low prices are achieved through low promotion efforts, low production costs and basic packaging. As a result, Diadermine is able to attract the price sensitive consumers and many are able to afford the products. That’s why Diadermine is currently one of the most preferred antiaging producers in the world.

3.2.5. SkinCeuticals

SkinCeuticals has the most premium prices among the brands compared in this thesis. All products and their formulas are developed by scientists and the company puts great effort into communicating the scientific aspect to prospective customers. The high prices are justified by the high quality and proven efficacy. SkinCeuticals does not target price sensitive consumers and focuses on selling products to people who perceive their products as a medical service and therefore are ready to pay the premium prices.

3.3 Place

3.3.1. Clinique

On Clinique’s global website it can be seen that its products can be purchased through the official website in some countries, while in other countries the products can only be viewed. There are local websites for one hundred thirty countries, however only in 27 countries (United States, Australia, Austria, Brazil, Belgium, Canada, China, Denmark, Germany, Spain, France, Netherlands, Malaysia, Israel, Italia, Japan, Korea, Mexico, Russia, Poland, South Africa, Sweden, Switzerland, Taiwan, Thailand, Turkey, United Kingdom) consumers can make online purchases. In other countries, products can be purchased through drugstores, department stores and official stores of Clinique. Clinique uses a selective distribution approach on a global basis, which means that it has selected a few retail outlets in specific areas to sell its products. This assures that customers have the same quality of service everywhere they can shop for Clinique products.

3.3.2. Vichy

Vichy products are sold in healthcare outlets in over sixty countries (L’oreal, 2014a). Sales are made in pharmacies, selected drugstores, beauty specialty stores and medical spas. Vichy cares greatly about the requirements of local markets. For example, the market research done in the Chinese market indicated that Chinese consumers associate pharmacies with getting sick, therefore, do not prefer to buy beauty or skin care products from these places. Contrary to the European approach of selling products in selected pharmacies and specialty stores, Vichy products are sold everywhere in China: in department stores, supermarkets, shopping malls, and anywhere else that sells cosmetic products (Yue, 2013).

All products of Vichy are produced in the factory in France. The Vichy factory was built in 1969 as close as possible to the Vichy thermal sources (Vichy, n.d.). The products are then exported worldwide to Western Europe, Asia, Latin American and the Middle East. 90% of Vichy products are exported worldwide (L’oreal, n.d.).

Vichy products can be purchased online through the website in some countries such as the USA and France, however, in other countries the website directs customers to the websites of closeby pharmacies that sell Vichy products online.

3.3.3. Nivea

Nivea uses various channels to make their products available to consumers. Their main aim is to make Nivea products available at all places where consumers expect to find skin care products, such as drugstores, perfumeries, pharmacies and large supermarkets that have a beauty section. Nivea products are also available for online purchase in some countries. In others, the local website directs customers to the websites of local retailers and distributors which have the online selling function on their websites. Hence, Nivea appears as a brand that is available to the global mass market in terms of availability.

There are regional research of development laboratories of Beiersdorf in Brazil, China, India, Japan, Mexico and in the USA. The locations of these laboratories are wide spread in order to measure, analyse and evaluate the effectiveness of products and see if they fit local needs.

3.3.4. Diadermine

Diadermine products can be purchased in drug stores and selected supermarkets. They can also be purchased through the websites of drug stores and online shopping websites such as Amazon. The products are available in many European countries such as Belgium, Germany, France, Greece, the Netherlands, Austria, Portugal, Switzerland, Spain and Turkey. Outside of Europe, they can be bought in Kazakhstan, Russia, Ukraine and Tunisia.

3.3.5. SkinCeuticals

SkinCeuticals was founded in Founded in 1994 in Dallas, Texas and was acquired by L’oreal in 2005. After the acquisition, the products are still produced in the USA and transported worldwide. The products are also sold through a distribution network of dermatologists, physicians, cosmetic surgeons, and spas. Online purchase of products is not available in every country. In the countries it is not available, consumers are directed to the websites of pharmacies and beauty institutes that sell the products.

3.4 Promotion

3.4.1. Clinique

Clinique offers many deals, discounts and gifts to its customers. With its newsletter, different discount codes are distributed every day via email. These discount codes vary from a discount percentage to a trial size of a product. During the holidays such as Christmas, they offer gift sets or products that fit the holiday theme. In every online or instore purchase, customers are offered trial size products of their choice for free, in addition to the gifts and deals that are offered that day. These trial size products, gifts and nice packaging of the purchased products make customers feel like they are buying a present for themselves, while letting them try out other products of the brand.

Clinique promotes its products mainly through print ads. These ads are very simply designed and usually have a singular focus. They feature a white background and an appealing picture of the product. They are placed in magazines and newspapers.

Furthermore, Clinique is highly present on social media and digital channels in order to create a loyal customer database. It has official accounts on Facebook, Twitter, Instagram and YouTube. The brand uses social media tools effectively in order to reach a younger audience through colourful ads and strategic partnerships with influencers and celebrities. Examples of the digital marketing campaigns used by Clinique can be seen in the table below.

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3.4.2. Vichy

Since 2013, Vichy is positioned as a premium health and beauty brand, around a new mission: to help women attain their ideal skin (L’oreal, 2014b, p.4). It is seen as a way to improve the brand’s communication and relationship with consumers. Outside of its market of origin of Western Europe, Vichy is following a successful strategy by adapting to specific local characteristics Localisation of the products and strategies brought Vichy great success as sales nearly tripled in 2013 (L’oreal, 2014b, p.5).

Vichy continuously introduces innovative ways to provide better ways for consumers to take better care of their skin. For example, the tool “SkinConsult” is provided to pharmacists in order to help them diagnose people’s skin and recommend products. With the help of this tool, pharmacists are able to diagnose four aspects of skin, scalp and hair in four minutes. Another innovation is the Vichy Institute, which was created in 2008 at the Vichy des Célestins Spa. A skin analysis performed by a DermoAnalyser is provided in the institute. The use of very precise measurement tools allows the institute to recommend appropriate treatments to consumers.

Campaigns of Vichy promote natural looks and selfappreciation. Consumers are usually encouraged to participate in the campaigns by either voting or posting content. The brand is not very active on social media platforms as the target audience is older. Selected examples of Vichy’s digital campaigns can be seen in the table below.

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Table 3: Examples of marketing campaigns of Vichy

3.4.3. Nivea

The core values of Nivea of care, simplicity, courage and trust act as the daily benchmark of the brand and are communicated in every campaign. All marketing campaigns of Nivea use these values as the base of the communication strategy, yet, they are adapted to local cultures, traditions, climate conditions and mentalities. For example, in cold countries the products’ ability to protect from the cold and snow is emphasised, while in warm countries products with sun protection features are promoted much more heavily (Nivea, 2011). Aside from local advertisement campaigns, Nivea also created several international marketing campaigns that all communicate the same message. A selection of international campaigns can be seen in the table below.

[...]

• College: University of Applied Sciences Nuremberg
• Grade: 1,3
• Author: Deniz Ünal (Author)
• Publication Year: 2018
• Pages: 88
• Catalog Number: V423507
• ISBN (eBook): 9783668696198
• ISBN (Book): 9783668696204
• Language: English
• Tags: beiersdorf 4ps, german skincare market, german skin care market, turkish skincare market, turkish skin care market