Sunday, April 17, 2011

LANCOME Case Study

by Minji Kang



Lancome Paris is a French cosmetic company established in 1935 by French perfumer and cosmetician Armand Petitjean. Time International mentions Lancome’s old brand history, “born in the days when fashionable French women still wore gloves and didn't have the right to vote.” Petitjean started his business by launching five fragrances, Tendre Nuit, Bocages, Conquete, Kypre and Tropiques at the World Fair in Brussels. In 1936, Lancome created the skincare brand Nutrix, and it still exists in the market. In 1955, Lancome created a skincare line called the Océane with seaweed ingredients. Today Lancome offers skincare, make-up, and fragrance products and they are sold in over 140 countries, on three continents, including Europe, Asia, and America. Lancome has been owned by L'Oréal Corporate since 1964. To explain the relationship between these two brands, terms such as ‘parent’ company or ‘umbrella company’ are used, because one belongs to the other bigger group. The New York Times describes L’Oreal Corporate as the world’s largest cosmetics maker. Also an article from Marketing Week depicts L’Oreal Corporate as a ‘beauty products giant’. The article tells us about the brand Lancome; in the year 2003, L’Oreal invested more than four million British pounds on media to promote Lancome. Since L’Oreal is the biggest company, it embraces ethnic diversity in the company’s management and also in targeting the market. The article reports that L’Oreal has appointed its Italian luxury chief Claudio Collarile to oversee the marketing and sales duties for Lancome in the U.K. Another article from Marketing Week reports that L’Oreal launched the marketing campaign for hair care products for black women and the result was that black women in the U.K. spend six times more on hair products than white women.

To do design analysis of Lancome, we start with Armand Petitjean, the founder of Lancome who selected a rose to be the symbol representing Lancome. The design of the logo has had some changes since it was first created in 1964.

For the written logo, the word Lancome with the name of the city, Paris, helps customers to feel the sense of French chic. When the customers buy products from Lancome, the products are sold with nice packaging in pleasant spaces. Even products in small sizes such as eyeliner or lip-gloss, are always packed with an additional box outside, in a Lancome shopping bag, unlike L’Oreal. L’Oreal, targets the mass market, and buyers usually purchase the cosmetics without additional outside packaging for mascara, lip gloss, eye shadow, eye-liner, blushes in a plastic bag from Monoprix.

The Lancome stores are located in big malls, department stores, select cosmetic shop such as Sephora, and also in duty-free shops in airports. Since the products are sold worldwide, for the advertising, Lancome has hired models with diverse ethnic backgrounds and nationalities depending on the market to advertise the brand and to promote new goods. For the Asian market, Lancome employs local models and celebrities to appeal to customers.

As mentioned, in the same corporation there are imitators and competitors. For example, Lancome was the first one who created vibrating mascara. Then, Maybelline New York came up with a similar one right afterwards. After Lancome invented a mousse type foundation and blush, L’Oreal and Maybelline New York began to sell a cheaper version soon afterwards. It seems that the mass-market brands are desperately copying the real ones, but the problem is that they are actually all from one big company, and Paula Begoun argues that this is intentional.

Paula Begoun is the cosmetic reviewer and the author of Don’t Go to the Cosmetics Counter Without Me. She has tested more than 45,000 cosmetics from over 300 brands. She has argued that what matters in defining the luxury cosmetics is the market strategies—how they target the customers, and advertise the goods. Begoun compared the different umbrella brands from L’Oreal corporate. According to her reviews, the strengths and the weaknesses of the brands from L’Oreal are very similar, because they share the technologies that produce the cosmetics. Begoun pointed out that both Lancome and L’Oreal offer face cleansers, nice selections of self-tanning goods, and the best quality of mascara options.

In the review of the mascara from Lancome called L’Extreme Instant Extensions Lengthening Mascara, she recommends the mascaras from its sister companies saying “you don’t have to spend this much for such results, because other L’Oreal-owned lines have excellent options. Maybelline New York Lash Discovery Mascara and L’Oreal Voluminous Volume Building Mascara are equally adept at lengthening and expertly defining lashes”

Comparing the ingredients used for the products, actually many of them are identical. All three products contain aqua/water, paraffin, propylparaben, cera alba/beeswax, polyquaternium-10, carnauba/carnauba wax, and both Lancome and L’Oreal use stearic acid, panthenol, palmitic acid and hydroxyethylcellulose.

Comparing the “authentic” product from Lancome, and the “imitations” from L’Oreal and Maybelline, the most notable differences are the prices and where they are sold. L’Extreme Instant Extensions Lengthening Mascara is sold for $25 from Sephora online, and Maybelline New York Lash Discovery Mascara is sold for $6.48, and L’Oreal Voluminous Volume Building Mascara for $5.97 from Walmart.com. Not shopping online, customers can access Lancome for more luxurious spaces. In Paris, Lancome is available in the department stores, specifically, Galleries Lafayette, Le Bon Marche, and Sephora. “Imitations” from L’Oreal and Maybelline are targeting bigger market segments, hence they are available in more common places, such as supermarkets and drugstores such as MonoPrix. Lancome customers can purchase the item with better service because he or she is able to talk to the staff who are there for recommending, and explaining to the customers, and also for counseling on skincare.

When I went to the Lancome stores in BHV in Hotel de Ville, and the one in Le Bon Marche, Paris, the sales lady gave me her full attention to me. They were very kind and nice and explained differences with mascaras. I tested new lipstick for the spring season on my hand, and the lady from Le Bon Marche handed me the make up remover wipe even before I asked for it. In the store in BHV, the lady asked me to try perfume after I bought a mascara there.

Then what makes the real thing? Marketing strategies make Lancome the luxury brand and a better brand than L’Oreal rather than by making better quality product. Bernard Catry explains that there are four different types of strategies that create rarity; natural rarity, techno rarity, limited edition, and information-based rarity. From analyzing Lancome and L’Oreal, I found limited edition strategy. Begoun said “French flair, free gifts with purchase, constant magazine ads, and attractive packaging impel women to seek out the Lancome counter.” Customers can experience more pleasure from Lancome than L’Oreal. In addition to providing new innovative products in the market in advance of the other labels from L’Oreal Corporate, Lancome maintains its high end position with better services and packaging, and advertising in the media for recognition. Then, to compensate for the expense, Lancome prices their products higher than the other ones from L’Oreal corporate; therefore it creates limted access for customers. All these well considered sales strategies make the brand Lancome, the real thing, not by natural rarity but by artificial market schemes.

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