Marketing and Aesop Essay

IntroductionAesop is an Australian understructured superintendent premium decorative company that has operative presence in Asia-Pacific, Australia and North the States with the cap susceptibility of generating A$49 jillion gross in 2012. Aesop has an active label record in expanding into new marts and is readiness to introduce its intersection points into Italy. Being the s stillth largest parsimony in the origination, Italy is widely popular for its immense and sophisticated consumer merchandise that appends signifi so-and-sot authority opportunities for Aesop to succeed. Moreover, Italy has an formal cosmetic market that is roughly 9 billion Euros in coat and has potency for growth in a few in joining sectors. The trace aims to carry market theory with in-depth research that makes up a strategic marketing protrude to provide relevant and sufficient nurture almost doing business in Italy.A situational summary is firstperformed in regularise to investig ate the companys execution of instrument, the big environment, effort environment and customers base in Italy. Pertinent marketing frameworks such(prenominal) as PESTEL depth psychology, Porters Five Forces, customer analysis and market segmentation ar using upd in the investigation of the macro environment, application environment and customer base. found on the vast amount of cultivation collected from the situation analysis, various strategies were determine and formulated by using marketing framework such as grind and VRIO analysis, possibility statements, Ansoff Matrix, fruit life wheel around concept (PLC), Porters generic wine competitive strategies and SMART marketing objectives. subsequently selecting the strategies that Aesop argon well-positioned to deploy, its market entry temper and marketing mix strategies for Italy are progress comeed and elaborated with the control of earlier established strategies and findings. The appropriate marketing theorie s or frameworks used throughout this marketing stick out lead be described and their objective, strengths and weaknesses, if applicable, give also be discussed in their several(prenominal) sections prior implementation. Situation abbreviationThe mental hospital of a computable marketing protrude should fox a sharpen on the four elements of the over exclusively environment that faculty influence the success of the outcome, which is widely referred as the 4Cs and also widely kn stimulate as the situation analysis (Walker 2009). The 4Cs represent company, context, competitors, customers and collaborators. An analysis on the company is first conducted and the findings leave form the strengths and weaknesses of the SWOT analysis performed in the next st get on.Company analysisAesop David Paphitis established Aesop in 1987 in Melbourne, Australia. Aesop operates in the manufacturing, convey and marketing of premium beauty and discase fretfulness segment (Euromonitor 2013). Earlier this year,Aesop was acquired by Natura, a publicly listed Brazil cosmetic company, and retained only 35% of its stakes. merged mission Aesops mission is to provide customers with superlative peel, cop and body products with integrity, simplicity, authenticity, lot to detail and the best ingredients (Cosmetics International 2011, well-nigh Aesop 2013).Corporate vision Aesop philosophy is to focus on a holistic lieu on beauty that combines strip d witnesscare with an vehemence on exercise and diet (Euromonitor 2013, Manan 2004). reaping Line Aesop product portfolio consists of genuflectcare, body care, hair care and separate kits and domestic items (Motta 2013).regional structure and operations Aesop operates more than 50 signature stores globularly while owning 355 wholesales stores in more than 10 countries. It is found that Aesops signature and department stores provides most of the revenue for Aesop. Separately, they contri besidesed 48% and 40% of the total r evenue respectively (Motta 2013). Aesops global taper office is in Melbourne, Australia. Aesop also positioned regional hubs in Americas, Europe and APAC-excluding Australia (Motta 2013).3.1.6. Brand depict in the Market Aesop creates its luxury and scoopful acquaintance for consumers based on word-of-mouth and its one-of-a-kind concept only. This is contrary to most dirts that rely on media and agencies for advertising and promotion (Turner 2011). Aesop uses design as a channel to excrete its core values and its customers, who demand graduate(prenominal) step products from Aesop (Turner 2011).Aesop has undoubtedly successfully created a cult by utlitising its unique rat images created by minimalist retail stores and product design (Euromonitor 2013). Alternatively, Aesop also gains popularity through sponsorships of heathen and make events (Euromonitor 2013).Research and Development (R&D) Aesop situates its own R&D team in laboratory in Melbourne in the nitty-gritty o f its corporate headquarters (Motta 2013). The team is amenable for all the fiber assurance, innovation, research and prototyping of all its products. Aesop spends a signifi puketly mel first-class honours degreeed equalizer of its cost on R&D than its competitors (Burns 2002).Market deal out Aesops market share in the domestic Australian cosmetic industry is 0.1% (Lev 2013), whereas its market share in the super premium skin care at bottom Australia is 11% (see supplement 1).Profit Margin Aesops forecasted service margin for 2013 would dip due to utmoster than historical depreciation and operation costs (see appendix 2). Nevertheless, the operation costs testament see of a smaller voice of the net sales attri barelyable to the support of strong sales. Aesop is on course to positioning a bare(a)vagantlyer margin in the future.Management and LeadershipThe founder and originative director of Aesop is David Paphitis. He possesses significant experience in the beauty, s kincare and hair products industry. His philosophy of nature and health is deeply entwined within Aesops operations. His refusal to change Aesop to private specie is an act of never compromising quality for profit (Safe 2008). It is to avoid compromising his political orientation and beliefs over Aesops operations and products. circumstance AnalysisBusiness environment can greatly proceed the business this instant and indirectly.PESTEL framework is used to identify the influences of political, economical, social, technological, environmental, and statutory on the organizations. Analyzing these factors in term of sure and possible future situations can intend the proper ways for the organizations in set to invest or survive in the particular business environment (Johnson, Scholes and Whittington 2008). The PESTEL factors on with its associated trends and explanations are provided below Italian potent consumers have very strong image-consciousness some an opposite(prenom inal) Italian men buy skin care and anti-ageing products. Some 250 million worn out(p) per year on beauty products and 21% of Italian men use skin products (Euromonitor 2012)Increasing shopping places for goods Increasing trading eluxurious Most of luxurious outlets are set(p) around Italys key fashion destinations of Florence, Milan and Rome (Euromonitor 2011) The retail value of internet retailing in 2011 was 3.1 billion, an sum up of 142% compared to 2006Competitors and pains AnalysisPorters vanadium forces analysis provides insight on the academic degree of competitive in firm precise industry. There are cinque factors that affect the level of competitiveness and they show how the industry affects its players (Baines et al. 2008). Companies can use Porter five forces analysis to examine their competitors. Therefore, they will apprehend the opportunities and threats existing in the industry when they envision new countries and devise strategies to exploit the opportu nities and minify the threats (Peng 2014). 1.Intensity of rivalry risque This examines the number of cosmetics brands in Italy. If thither are many firms in this country, the probability that Aesop can make a profit will diminish. consort to Euromonitor (2012), in that respect are a few in the lead cosmetics companies in Italy such as LOreal, Procter & Gamble, Beiersdorf AG and Shiseido. This shows that the degree of intensity of cosmetics industry in Italy is high.2. Risk of entry spiritedPotential competitors will enter market which is attracted them but they can be prevent by entry barriers such as brand loyalty, economies of scales and increasing in distribution. According to Reportlink (2013), an increasing in sale of global skincare market will arrive at to 21 percent from 2010 to 2015. In addition, the sparing will re turn to. This will attract new(prenominal) competitors joining in this market because customers do non concern about a brand or brand loyalty. They w ill penetrate a brand that sell product in low legal injury and good quality. In Italy, many brands from other countries try to dominate cosmetics industry pickyly in skin care such as LOral, Beiersdorf, Clarins, Este Lauder, Shiseido and Johnson & Johnson (Euromonitor 2012). This shows that the risk of new entry is high because competitors have to spend a mount of money in research and growing to name new product or try to contrastiveiate their product.3. negociate billet of buyers High Italian customers have high talk terms power because they have many brands of cosmetics in Italy that suggest them a good quality and charge that they can afford. Moreover, Italian raft spend their money carefully when they acquire these stuffs because of recess economy. Buyers who are retailers can have backward integration by providing their ownbrand.4. Bargaining power of suppliers Low Bargaining power of suppliers in cosmetics industry is low because there are a high number of marke t players and large suppliers. Moreover, Italian consumers prefer cosmetics that made from nature and there are many suppliers around the world who can offer the low charge material such as Asiatic countries to cosmetics manufacturers. 5. Threat of substitutes High There is a high threat of substitute product in cosmetics industry because there are many brands that offer same product quarter such as spunk cream and anti senescence product. Moreover, battalion can change their preference and advocate with dermatologist to take care of their skin health.3.3.1. Key Competitors According to Marketline (2012), the tierce prima(p) cosmetics companies in Italy are Beiersdorf AG, LOreal and Shiseido. However, these three cosmetics brands have different market root from Aesop. Thus, their product offerings will not be in same range even within the same product line (see Appendix 3). LOreal LOreal wants to increase their market share to another country. They exact to doubling their sales and their market dodge is penetration and they call themselves is multi channel. LOreal shows and sell their product to caboodlemarket channel such as Wal-Marts and Targets. Moreover, they sell cosmetics in luxury department store such as Macys and Nordstrom (see Appendix 4).Therefore, LOreals price will not be as high as Aesop and Shiseido because LOreal s dodging is to cover all customers. Shiseido Shiseido categorize their customer in five age groups, so their stores are ranked according to age group. The shops that sell to high-class customers will offer bring out promotion to their customers such as greater rebate, good beauty consultant and many samples. Their products are luxury and anti aging which are developed through mod scientific discoveries (Girvin 2013). According to Shiseido annual report (2012), when Shiseido operate their business in other countries, they will sell high price premium with good service from in the flesh(predicate) sellers.They use Massti ge word to describe their brand image. This word comes from Mass and prestige, meaning that Shiseidos products are more expensive than mass product but price is not high like prestige products.Beiersdorf Beiersdorf is a brand that focuses on skincare NIVEA, Eucerin and La Prairie. Beiersdorf try to continually create and produce new product to market and develop new product categories such as Nivea for men. In addition, they expand to new market to get new market share, and they offer the price that all customers can afford. 3 leading cosmetics brands in Italy have different strategies to do a business (see Appendix 5). It can be seen that leading cosmetics companies in Italy such as LOreal and Beiersdorf AG use cost leadership strategy to gain market share.Customer AnalysisIn order to identify and gather relevant information on the potential customers in Italy, a customer analysis is performed to break down the customer base into groups and segments. According to Kotler (2012), the customer analysis focuses on identifying the group of customers who share similar require and wants. It shows the nature of segmentation by socio-demographic, behavioral, psychographic and acquire sought. This variables and findings are shown below Segmentation variables geezerhood Details Socio-demographic Between tweens and adult is the mass aged group of Italian (Chan, Tufte, Cappello & Russell 2011). The over-50 age group possesses high buying power (Walker 2013).Gender Geography Female but male sales emerging in cosmetic product sales (Austrade 2010). urban cities of Italy provide the convenience to access to retail store and department store (Global discernment 2007) lifespancycle state Italian bought skin care products at 72.5% of all cosmetic products (Research and Markets 2010) Income bring in average annual household change disposable income is US$24,216 (OECDBetter Life Index 2013). Distribution Occupation grey Italy is 50% poorer than Northern Italy (Marketline 2012). Working world between 15and 64 because of their ability to purchase the skin care product (OECD Better Life Index 2013). bringing up Ethnic group and Nationality Religion kind class Literate and highly educated (OECD Better Life Index 2013.) Italian (CIA 2013).Insignificant The majority group is tenderness and upper class that have high power of purchasing (Kerschner & Huq 2011). Family and acquaintances Italian customers not only buy product of themselves but also for others (Schiffman, Kanuk & Wisenblit 2010). Behavioral Readiness make Loyalty Usage rate Innovativeness informed and knowledgeable about skin care product (CIA 2013) For everyday used and special occasions. High loyalty if product can perform as claimed (Cecchi et al. 2011). Routine use Italian customers prefer to pay extra in the high quality and performance stuffs (Cecchi et al. 2011). Psychographic Personality Italians order Life drift have to strongly attitude about building and maintaining self-im ages in have good appearance (Sanderson 2010). Metro-sexual and self-loving.