Marketing Intelligence

UBI – Marketing Intelligence
Doru
Crinta
Fabio
D’Agostino
Walter
Perie
Cosmetic Sales Growth
by geographic zone (in million)
€ 4.000,0
€ 3.750,0
€ 3.500,0
€ 3.250,0
€ 3.000,0
€ 2.750,0
€ 2.500,0
€ 2.250,0
€ 2.000,0
€ 1.750,0
€ 1.500,0
€ 1.250,0
€ 1.000,0
€ 750,0
€ 500,0
€ 250,0
€ 0,0
First half 2004
First half 2003
Identity
Who, when and where
Estée Lauder
- Founded in 1946 by Estée
and Joseph Lauder, in NYC
L'Oréal
-
- 1960 first international office
in London for Europe
-
- 1961 in Honk Kong for
Asia/Pacific area
-
- Founded in 1907 by Eugène
Schueller, in Paris
-
- 1909 “Société Françasie de Teintures
Inoffensives pour Cheveux
-
- 1920 L’Oréal already sells in Europe,
Americas, Russia and Far East
-
Evolution
Origins division is created
1990
Estée Lauder
L’Oréal
+Tommy Hilfiger –full license (US)
1993
+Redken
+MAC(stake) (Canada)
1994
1907
founded - hair dye company
founded – pure cosmetics company
1946
+LaMer (France), +Bobbi Brown
1995
Aramis division is created
1964
1996
Clinique division is created
+Maybeline
1968
+Dona Karan – full license, +Aveda,
+Sassaby Inc (Jane brand)
1997
1970
+Biotherm
+MAC (complete)
1974
1998
Sold stake to Nestle
+SoftSheen
+Stila(US), +Jo Malone (UK)
1977
1999
+
MarieClaire
+Full
controlMagazine
LaRochePosay,
Prescriptives division is created
1979
-> Joint venture for CADAMUJER.COM
+Bumble and bumble (stake) (US)
1980
2000
++Kiehl’s,
Vichy, +Metabo-Juille
+Colorama (Revlon-razil),
+Cela Cosmeticos(Chile,Peru,Bolivia)
1982
+Response(Sweden),
+Dermablend
+Armani parfume license
1984
+Matrix
+CosmeticEssentials,
operations+Carson,
of Warner Communications
+PHAS
(RalphLaueren, 1/2 Jean Lanvin parfumes, part of
-> Participation in CPGMARKET.COM
Helena Rubinstein)
-> Gloss.com –joint venture with Chanel and
Clarin
2001
-Marie Claire, -Lanvin 2001
-> Elca Cosmetics – joint venture with
SARANTIS (GR) for distribution in EEMarket
1988
->
Established the Fragrance
division
- +Biomedic,Shuuemura
(stake),
Ylang SA
+Complete
acquisition
of
Helena
Rubinstein
(Argentina)
+Kate Spade Beauty – full license (US)
2002
1989
+ARTec (US) (stake)
+LaRochePosay
-> Inneov share
+Darpin (France), +Michael Kors
Fragrances(US), +Rodin & Fields (US)
2003
+Mininurse (China)
-> Sean John joint venture
2004
+Yue-Sai (China)
- Jane mass cosmetics brand
Comparative facts
“Bringing the best to everyone
we touch”
Estée Lauder
Mission
5
Turnover (billion$)
14
1.3
R&D as % of turnover
3.3
(17)
No of patents(2003)
515(2451)
400
No of research employees
2500
300
New products
3000*
9
No of factories
42
5
Turnover (billion$)
14
22200
Employees
50500
“'Where the future is always
present”
L'Oréal
* formulas (#new products - not available)
Estée Lauder Brands
1
0.6
Turnover (billions)
0.3
urban / consumer
premium / luxury
professional
L’Oréal Brands
4
Turnover (billions)
2
1
0.5
urban / consumer
premium
professional
Geography
Identity
Where are they?
Source Euromonitor
MAIN COSMETICS MARKETS IN
2003
In billions $
US 45.4
* 48
Russia
5.3
China 6.0
Japan
21.9
Brazil
7.3
* France, Germany, UK, Italy and Spain
Source Euromonitor
Cosmetic Sales 2003
in millions
Western Europe
North
America
€ 3,784
€ 7,221
+6%
+4.9%
€ 2,669
Rest of the
World
Total Cosmetic sales €13,704,096
Source L’Oreal
Cosmetic Sales 2003
Europe, the Middle East & Africa
Americas
$2,931.8
+7
%
in millions
$1,506.4
+14%
Asia/Pacific
$657.8
+9%
Total sales $5,096
Source Estée Lauder
The world’s largest C&T markets in 2003 ...
US$bn % vs 0 % vs 97
USA
45,4
0,7
24,3
Japan
21,9
3,2
8,1
France
12,1
5
33,6
German 11,6
1,4
22,8
UK
10,1
4,7
21,6
Italy
8,5
2,5
27,4
Brazil
7,3 12,2 113,7
China
6
7,8
63,2
Spain
5,7
5,6
56,7
Russia
5,3 14,3
1,3
Source Euromonitor
Geography
Identity
Finance
Market
In which market do the two groups operate and compete?
L'Oréal
●
Active in three main
fields
–
Cosmetics and
Toiletries
–
–
–
–
Consumers
Luxury
Professional
Active (Cosmeceuticals)
–
Dermatologicals
–
Pharmaceuticals
Estée Lauder
●
Essentially active in
one field
–
Cosmetics and
Toiletries
–
–
–
–
Consumers
Luxury
Professional
Active (Cosmeceuticals)
World market
for Cosmetics & Toiletries
●
$201.000 million
●
4,8% growth in 2003
Cosmetics & Toiletries Market
M ark e t
Baby care
Bath and shower
Deodorants
Hair care
Color cosmetics
Men’s grooming
Oral hygiene
Fragrances
Skin care
Depilatories
Sun care
2003in million
$3.476,10
$20.701,20
$9.242,80
$42.491,80
$28.055,00
$16.221,20
$20.335,90
$22.408,90
$38.481,40
$2.559,50
$4.302,50
02/03
5,4%
3,3%
6,6%
4,3%
4,6%
7,3%
3,5%
3,5%
6,8%
4,3%
7,8%
97/03
42,20%
24,80%
38,30%
34,80%
37,70%
47,80%
27,00%
27,30%
43,60%
68,00%
55,10%
Note: Sum of sectors is greater than the market size because men’s
toiletry products are included in men’s grooming and in the relevant
toiletry sector.
Baby care
Bath and shower
Deodorants
Hair care
Color cosmetics
Men’s grooming
Oral hygiene
Fragrances
Skin care
Depilatories
Sun care
Source: Euromonitor Interbational
L'Oréal
●
High growth in
●
Cosmetic and Toiletries
●
●
Steady Growth in all sectors
●
●
'Active comsetics' +16%
●
Cosmetic Sales Growth
€ 7.500,0
Asia
East Europe
Latin America
Decrease in North
American market
Cosmetic Sales Growth
by operational division (in million)
by geographic zone (in million)
€ 7.000,0
€ 5.000,0
€ 4.500,0
First half 2004*
First half 2003*
€ 4.000,0
€ 3.500,0
€ 3.000,0
€ 2.500,0
€ 2.000,0
€ 1.500,0
€ 1.000,0
O
th
er
€ 0,0
Professi
onal
product
Cosum
ser
product
Luxury
s
product
s
Active
cosmetic
€ 500,0
First half 2004
First half 2003
Rest of
the World
€ 5.500,0
North
America
€ 6.000,0
€ 4.000,0
€ 3.750,0
€ 3.500,0
€ 3.250,0
€ 3.000,0
€ 2.750,0
€ 2.500,0
€ 2.250,0
€ 2.000,0
€ 1.750,0
€ 1.500,0
€ 1.250,0
€ 1.000,0
€ 750,0
€ 500,0
€ 250,0
€ 0,0
Western
Europe
€ 6.500,0
L'Oréal
Dermatology
–
Galderma
●
–
Joint-venture with Nestlé
(1981)
Sales decreased
●
●
United States
Germany
* in million
** 50% share
Dermatological Sales Growth
€ 140,0
€ 130,0
€ 120,0
€ 110,0
€ 100,0
€ 90,0
€ 80,0
€ 70,0
€ 60,0
€ 50,0
€ 40,0
€ 30,0
€ 20,0
€ 10,0
€ 0,0
First half
2004
First half
2003
L'Oréal
Sanofi-Aventis
Capital structure at 31 August 2004
Pharmacology
Pharmaceuticals Profit Share
5,59%
6,19%
Sanofi-Aventis
€ 250,0
10,41%
€ 225,0
€ 200,0
€ 175,0
€ 150,0
First half 2004
First half 2003
63,46%
Public
Total
L'Oréal
Kuwait Petroleum
Corporation
Sanofi-Aventis
Employees
12,99%
€ 125,0
€ 100,0
€ 75,0
€ 50,0
€ 25,0
€ 0,0
... l’Oréal has given its full approval to the offer made by Sanofi-Synthélabo
for Aventis ... L’Oréal intends to keep its shares and will record its share of
the dividends paid by Sanofi-Aventis in its consolidated income statement
...
Estée Lauder
Cosmetics and Toiletries
Cosmetic Sales Growth
Cosmetics Sales Growth
by product
by geographic zone
$6.000,00
$6.000,00
$5.500,00
$5.500,00
$5.000,00
$5.000,00
$4.500,00
$4.500,00
First half 2004
First half 2003
First half 2002
$4.000,00
$3.500,00
First half 2004
First half 2003
First half 2002
$4.000,00
$3.500,00
$3.000,00
$3.000,00
$2.500,00
$2.500,00
$2.000,00
$2.000,00
$1.500,00
$1.500,00
$1.000,00
$1.000,00
$0,00
Asia Pacific
Europe –
Middle East
- Africa
North and
South
America
$0,00
Skin
care
Mak
e-up
Fragra
nce
Hair
care
Othe
r
$500,00
$500,00
Financial Health
Estée Lauder
FULL YEAR PROFIT/LOSS
Revenue
Operating Result
Pre-Tax Profit/Loss
Net Attributable
BALANCE SHEET
Cash
Current Assets
Fixed Assets
Total Assets
Current Liabilities
Long-Term Debt
Total Liabilities
Minority Interests
Shareholders Equity
30JUN2004C
30JUN2003C
31DEC2003C
31DEC2002C
5790m(USD)
5096m(USD)
14029m(EUR)
14288m(EUR)
644m
503.7m
1819m
1778m
616.9m
495.6m
1869m
1698m
375.4m
302.2m
1491m
1277m
611.6m
364.1m
554.1m
544.4m
2199m
1844m
6875m
6842m
1508m
1505m
8136m
8130m
3708m
3349m
15012m
14972m
1322m
1053m
3260m
3827m
652.6m
512.7m
759.1m
825m
1959m
1554m
6875m
7539m
15.5m
12.3m
11.9m
11.9m
1733m
1423m
8124m
7421m
Estée Lauder’s net profit: +19.5%
L’Oréal’s net profit: 14.3%
L'Oréal
What about stock value?
Estée Lauder
New York
Stock Exchange
Source: bigchart.com
What about stock value?
L’Oréal
Paris
Stock Exchange
Frankfurt
Stock Exchange
Source: bigchart.com
Geography
Identity
Finance
Demographic
Age Pyramids – USA, Europe15 and Japan
Source European Commission Employment & Social Affairs
CHINA
Male
Female
Source: United Nations (1999): World Population Prospects.
Changes in Population Pyramid-India (1971-2016)
Source: Technical Group on Population Projections, Registrar General of India (RGI) 1996
Worldwide, the population will age.
Geography
Identity
Finance
Demographic
Market
Trends
Estée Lauder Turnover Trends
L’Oréal Turnover Trends
Industry evolution
z
The rise of upper mass products
z
Emerging markets will outpace
z
z
z
z
Fast innovation and new retail concepts will
boost market penetration
Real term global sales expected to grow by
2.9% annually, for the next four years
Shift from ingredients towards
‘cosmo’molecules
Beauty Silk of Far East goes West again.
Market volume trends
Forecasted growth per cosmetic
categories
Geography
Identity
Finance
Demographic
Market
Trends
Values &
Ethics
L’Oréal and the society
z
SHE policy
–
–
–
z
Strict rules about Safety, Health and
Environment
Energy and water cosumption
Atmospheric discharge
L’Oréal-Unesco
–
Partnership “For women in science”
"Science is the root of all progress and the contribution of
women is essential to its future".
Lindsay Owen-Jones
Estée Lauder and the society
z
Packaging
–
z
Strict protocols to encure environmental
criteria fulfillment
Conform to ISO 14001
“The Estée Lauder Companies realizes that in order to ensure the
long-term success of our Corporation, our financial goals need to
be integrated with the human and ecological impacts of our
business.”
Edward M. Straw
L’Oréal and Estée Lauder
According to
“All For Animals” based in Santa Barbara,
California (http://www.allforanimals.com/)
both L’Oréal and Estée Lauder
DO NOT test their products on animals!
Geography
Identity
Finance
Demographic
Competitors
Market
Trends
Values &
Ethics
Existing competitors
Alberto-Culver
Elizabeth Arden
Avon
Beiersdorf
Chanel
Church & Dwight
Clarins
Colgate-Palmolive
Coty
Del Laboratories
Dial
Gillette
GlaxoSmithKline
Intimate Brands
Johnson & Johnson
S.C. Johnson
Kao
LVMH
NuSkin
Mary Kay Cosmetics
Oriflame
Pfizer
Playtex Products
Revlon
Schering-Plough
Shiseido
Unilever
Procter & Gamble
Wella
New competitors/products
•
•
•
•
•
•
Sensient technologies, Symrise,Fimenich, Givandan, Human Pheromon
Sciencies Co., Radiancy - ingredients
Elizabeth Taylor (Curious), Ted Barke, Vera Wang, Kenneth Cole,
Oxford Industries –fragrances
Cosmetochem, Imaginetix(Celadrin), Inerparfums, Helix Biomedics,
Universe Cosmetics, Healthspan, Disperse Technologies, DNAcare
Systems, Croda –haircare, Rohm and Haas –haircare, Dow Corning –
hair
Janson-Beckett Cosmeceuticals (OkuSil), NeoStrata –skincare, Inamed
(Hylaform anti-wrinkle treatment ), Arch Personal Care Products 'genetically-guided' skin care, Valeant –pharmaskincare, Omega
Pharma, Artdeco –skincare, DHC Corporation –skincare, Juvena –
skincare, Miss Sixty, N.V. Perricone(Clinical Creations) , Klein-Becker
(StrivectinSD), Philosophy, Laboratoires Sérobiologiques,
Tolsom/Quixtar, Classified Cosmetics
Shaklee Corporation - colour cosmetics , SkinMedica –cosmeceuticals,
Gel-Del Technologies (CosmetaLife –botox alternative),
HauteFaceCosmetics-ethnic, Laboratoire Pharmygiène's –sun products,
City Lips -lips cosmetics, OT Over Time – teen products
Natura Cosmeticos –Brazil, Kose Japan, Kalina-Russia, G&D
Cosmetic(China) -green fields
Geography
Identity
Finance
Demographic
Competitors
Market
Trends
Distribution
Values &
Ethics
Distribution Channels
z
z
z
z
Retailers
EL Travel retail division
Own Shops
Pharmacy
EL bought Paris-based company Laboratoires Darphin.
z
E-business
EL e-commerce business grew 36% in 2003
L’Oreal e-learning, business simulations and virtual
seminars.
Geography
Identity
Finance
Demographic
Market
Trends
Values &
Ethics
Customers
Competitors
Distribution
Consumer transformation
trends
z
z
z
z
z
Research will be ‘hastily’ applied due to
demanding customers
Elder people will demand increase share
of the pie
New attitudes will shift perception of age
Simplifying consumer choice
The ‘whealthchare’ pursuit will boost
large market areas like cosmetic
supplements or cosmetic surgery
Customers do change
z
z
z
z
z
At home salon experience
Teens – the new family budget dictators
The beauty goes beyond skin
The power of example
You can take it with you
Completed!
Geography
Identity
Finance
Demographic
Finance
Values &
Ethics
Customers
Competitors
Distribution
SWOT Estée Lauder
Strengths
•
Management expertise
•
Marketing ability
•
Large market share
•
R & D advantage
•
Established brands
Weaknesses
•
Complex structure
•
Lack of focus
•
Selling costs are 20% of net sales
•
Management structure under reorganization after the death of founder, Ms. Estée
Lauder
Opportunities
•
Growth opportunities in China, Russia,Eastern Europe, Brazil and India
•
Pick-up of travel
•
Availability for strategic alliances in the electronic commerce area
•
Plenty of candidates for acquisition
Threats
•
Exposed to crisis events (SARS, recession, terrorism etc) causing downturn in
travel
•
Downturn in department store sales
•
Other competitors
•
Americans stagnating spending on cosmetics
SWOT L’Oréal
Strengths
●
Size
●
Diversification
●
Global coverage
●
People
●
R & D advantage
●
Established brands
Weaknesses
•
Dominance of Gesparal, L’Oreal’s main shareholder
•
Room for margin improvements
●
Dependency on American market
●
Potential changes in shareholder structure (Mrs. Betancourt’s age)
Opportunities
●
Opening markets due to WTO expansion
●
Increased return on R&D investments
●
Positive trends for cosmetic products in its portfolio
Threats
●
Strong Euro.
●
Discounters cutting down profit from mass market products.
●
Strengthened competitors
●
Sluggishness of European market (especially France and Germany)
L’Oréal
Estée Lauder
Innovation radar
Evaluation
Factor
Geographical
Brands & Products
Trends
Finance
Values & Ethics
Distribution
Customers
L’Oréal
+++
++
++
+++
+
++
++
Estée Lauder
++
+++
+
++
+
+++
+
Estée Lauder hot topics
z
z
z
z
z
Watch out for predators
Resolve the weakness in male
and ethnic portfolios
Positioning forces it in a follower
position for emerging markets
Open up management structure
to new people
Invest the cash or loose
L’Oréal hot topics
z
z
z
z
z
Balance European market revenue
Win China and create the first
Chinese global brand
Prepare for shareholder shakeout
and EU scrutiny
Expand research by acquisition
and investment
Attack the African cosmetics
market for the ethnic products
Sources
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Industry reports from Merill Lync, Morgan Stanley, Deutsche Bank, JPMorgan
L’Oreal Study - Fabien Blanchot & Michel Kalika, 2003 - Université Paris-Dauphine
http://www.elcompanies.coom
http://www.loreal.com
http://www.cosmeticsdesign.com
http://www.colipa.com
http://www.manyworlds.com/
http://www.ctpa.org.uk/page.asp?section=2&page=3
http://news.surfwax.com/beauty/files/Estee_Lauder_Perfume.html
http://www.academic.marketresearch.com/product/display.asp?productid=143435&prid=1111111
http://www.cpcpkg.com
http://strategis.ic.gc.ca
http://www.findarticles.com/p/articles/mi_m0BEK/is_6_8/ai_62408616
http://www.in-cosmetics.com
http://www.cosmeticpackaginganddesign.com
http://www.ced-lyon.com/gb/dermocosmetologie/recherche.html
http://databases.cosmeticsbusiness.com/web/
http://www.allforanimals.com/