Team MET- Brandstorm 2014 Pre-case (TIZA BUAL)

A. The Market Market Definition Last year (2012), the Philippines experienced a GDP growth of 7%. As a result of the growing economy, certain trends were observed among Filipinos in relation to having a higher purchasing power. For example, Filipinos are travelling more frequently for leisure. Also, more and more Filipinos can actually afford to act on their health consciousness by buying organic or healthy products, enrolling in fitness classes, and also buying beauty products. In fact, such health consciousness has become so widespread that macho is already becoming redefined. Now, it does not only refer to men who likes to work out and does a lot of sports, it also includes such men who are conscious about grooming (we will refer to these men as the active metrosexuals). Such trends can be attributed to the gradual acceptance of male vanity hence the wider acceptance of male-specific beauty products. Such trends are very noticeable among Filipinos from higher socio-economic brackets (AB), and theyll usually get the high income from their high-paying middle-management jobs or their start-up businesses. This segment is also mostly responsible for the decreasing marriage rate. Filipinos prefer to marry at a later age, or at least have a child at a later age so that they could focus on their careers and themselves, since once they have children, their focus financially would be on their childrens education. In general, although Filipinos still prefer mass brands, the purchasing power of Filipinos are rising and theyre preferring lifestyles which would let them splurge more money on themselves than having their own families (see Appendix 1 for list of other significant market trends) Competition Definition One of the direct competitors of Kiehl's is L'Occitane. Its a direct competitor because of the similarities of the products that they offer, especially the top products which they are known for (Shea butter products). Even the minimalistic look and feel of their skin care products is very similar. Also, they're both luxury products, and is attracting similar markets in the Philippines (those who have high purchasing power and is very conscious about their skin). However, L'Occitane exudes a more feminine vibe than Kiehl's, which is known as a unisex brand. Other direct competitors we've identified are products which exude an apothecary or medical vibe such as Mario Badescu, although such brands are more known for their targeted treatments (i.e.,acne solutions). Lastly, we also identified brands which offer both makeup and skincare as direct competitors, especially those focusing on their skincare line such as Shiseido since they tend to be the ones holding more market share, making them a threat to Kiehl's. (See Appendix 2 for table of direct competitors, indirect competitors, and replacement products) Customer Definition Kiehls can take advantage on the growing subculture of the modern macho man, or the active metrosexuals, as wed refer to them from now on. Kiehls market would be the active metrosexual from the age of 25 to 35 (AB socioeconomic bracket). He is popular among his peers because they see him as someone who lives the complete life. He used to have a management role in a prestigious company, but he gave it up to start his own business in the travel industry. He did this because he knows that adventure and fitness is his passion. He loves the outdoors and his skin is always exposed to the harmful rays of the sun. Since hes still a professional, he feels that he still has to be presentable despite having an active lifestyle. Therefore, hes concerned about grooming, and even fashion, without going over the top. He takes care of his skin by buying the top-of-the-line and most effective skin care products. On his own, his primary choice for such products would be popular brands which he's aware of through traditional advertisements. However, his buying decision is easily influenced by the testimonials of his friends, and especially his girlfriend who recommends products to him and also gives him clothes and grooming products as small gifts. B. The Brand Positioning of Kiehl's (vs 2 competitors) Kiehl's is positioned as a modern American apothecary (focusing more on product development rather than advertising) who can provide highly effective skin care products for both men and women. The brand's focus on its products is easily seen when customers go to the stores, where they're welcomed by salespeople who are capable of giving customers skin consultations and recommend appropriate products for their skin's needs. Their confidence on their products is also demonstrated through their 100% money back guarantee. The brand's competitive advantages are superior quality and customer service. Aesthetically, Kiehl's stores exude a vintage and adventurous vibe, which makes it attractive to both men and women. L'Occitane, on the other hand, is positioned as a skin care brand which provides scented natural products which are commonly used by women from Provence. It's easily differentiated from Kiehl's because of its French and feminine branding. While Kiehl's doesn't really sell heavily-scented products, L'Occitane is quite known for its scents which is said to make women feel the environment of Provence. L'Occitane stores also has a more calming appeal compared to Kiehl's vintage look. Lastly, Shiseido is positioned as an Asian cosmetic brand (with a focus on skin care), which has the perfect blend of oriental and western appeal. Its positioning is quite far from Kiehl's since it also sells a lot of colour cosmetics. Its stores also has a very minimalistc red and white interior, making its look quite far from Kiehl's as well. Despite all the differences, it's still a critical competitor because of its market reach, which it acquired through traditional advertising techniques. SWOT Analysis One of Kiehls strengths is its attachment to its mother brand, LOreal because the latter is the market leader in the industry. With this, it is able to receive the prestige of the LOreal. Also, the rich heritage of Kiehls as a brand exudes

Team MET- Brandstorm 2014 Pre-case (TIZA BUAL)

a distinct personality among the players. Kiehls also owns a superior customer service compared to its competitors which retains their customers. Lastly, the advanced laboratories of the brand are well-known to create highly effective beauty products to many. On the other hand, limited advertising is one of the weaknesses that pesters Kiehls. This results to a lack of reach to their target market. Kiehls also is not a popular brand in the country; thus, does not earn a large share of the market. This is mainly due to the expensive price that comes with the product which seems to be too expensive to the majority of the Filipino market. The Unisex branding of Kiehls is considered an opportunity for the brand because it has greater potential in attracting the male market compared to its feminine competitor brands. The current major c ustomers of Kiehls which are women can also be an opportunity because they can be used to tap the men they know to patronize the brand. Kiehls may also leverage on its mother companys network. However, there a lot of other factors that could threaten Kiehls as well. The myriad of available substitutes especially low-cost skin care products could still hinder Kiehls to grab its potential market. Also, beauty brand which use traditional advertising are more known to most people. Lastly, the potential m arket may also resort to Kiehls indirect competitors and replacement products which provide similar benefits. C. Communication Strategies The main target of the communication strategies are the 25-35 year-old active metrosexual men from the AB socio-economic bracket. They are men who are adventurous because they actively participates in various outdoor activities yet are very concerned of how they look and presents themselves to others. Although theyre the main target of the communications campaign, were also expecting men from older age brackets (especially from the middle youth, 3044 years old) who have similar lifestyles to be attracted to the campaign. Our strategy would be to keep the current vintage and adventurous appeal of Kiehls. However, we thought that the brand would benefit from a more local/Filipino sense of adventure. In the Philippines, when we talk about adventure or the outdoors, we dont usually think of big bikes and the urban streets, rather, we think of the b each, the waves, the mountains, and such. With this, the main products that wed focus on would be the Activated Sun Protector Sunscreen for Body SPF 50, Ultimate Strength Hand Salve, Superbly Efficient Anti-Perspirant and Deodorant, and other necessities for the Filipino travelers backpack. Instore Materials In order to entice shoppers to get inside the shop, a poster of the Activated Sun Protector Sunscreen for Body SPF 50 will be posted on the store's glass window (See Appendix 3). The poster will feature a surfing theme to portray the active beach lifestyle of its user through the use of surfing elements with manly tones and use. This keeps the focus on the product while making it more relatable. An outdoor skin consultant booth will be put up right in front of the Kiehl's store for a month. This booth will provide free consultations to bypassers and will recommend Kiehl's products which will suit the person's skin. The booth will also sport the adventure theme. Brochures and samples will be provided as well. The interior of the Kiehl's store will show the marriage of the brand's vintage known theme and the adventurous personality of the consumers of the country it tries to reach. This concept will be followed all over the world. The adventure theme of the store however will adapt to the popular local outdoor activities in the country. On the other hand, the vintage theme is retained with the continued use of the brick wall of the store's interiors. Also, a poster of essential yet affordable products will be shown near the cashier. They might be considered as a last-minute buy for men, or even a woman for her special man. They will be even given an option if they want to specially wrap as a present. Lastly, in cooperation with partner brands such Billabong and The North Face Hiking Bags, Kiehl's will be providing discount coupons for every purchase of its partners' products. These coupons will invite the same market to check out for their hygiene needs in the outdoors. Discount coupons for Activated Sun Protector Sunscreen for Body SPF 50 will be given out. Online For its online channels, Kiehl's will revamp its website. Firstly, a new tab will be created especially for online consultation to create more emphasis (See Appendix 4) to further make customers experience. This will ensure satisfaction to their customers. Secondly, pop-advertisements and headers will be placed on the website at its home page featuring the same poster used as in-store publicity materials on the stores' glass windows. These posters will feature adventure activities mainly targeting the males. Videos will also be embedded on the homepage and shared on Kiehls facebook page. The video will have the same adventure theme for men. This video concept will be localized. Several videos will be produced all over the world. The adventure activities on videos must be those that are locally popular in the country it is shown. Lastly, for its Facebook page, Kiehls can launch a small promotional game wherein the prize will be Kiehls adventure necessities (Sunscreen, anti-perspirant deodorant, etc.). It will start by releasing a poster which features a travelers backpack and its usual contents (water, fitness shirts, towels, etc.), then, it will ask the question, What Kiehls products will you bring with you? Other instructions will be included in the poster and additional ones in the caption. Then , theyll be asked to share the poster on their walls with their answer and explanation why theyd bring su ch products with them. The winner will be chosen randomly.

Team MET- Brandstorm 2014 Pre-case (TIZA BUAL)

APPENDIX 1 (Demographic, Economic, Cultural, Social, Natural, and Technological trends) Demographic: The Filipino workforce is is becoming younger, although its still composed of young adults (18-29 yrs. old), middle youth (30-44 yrs old), and mid-lifers (45-59 yrs old) Filipinos are prioritizing self and career over having a family (marriage rate is 5.6 per thousand and decreasing) Economic: GDP growth of 7% in 2012 Higher purchasing power of Filipinos influenced 4% current value growth for skin care products More Filipinos can afford owning a housemore Filipinos are living alone as an effect of late marriage. Households with couples without children are also expected to increase by 7.41% by 2015. More Filipinos can afford to travel for leisure Cultural: Gradual acceptance of male vanity is seen in wider acceptance of male-specific beauty products (increased by 6% in current value terms, reaching Ps5.4 billion in 2012) Social More Filipinos are now connected online, but only 17% has made the shift to online shopping Fitness and wellness centers are becoming more popular (becoming a popular place for leisure and socialization) Natural Growing demand for safer cosmetics for men, which is usually associated with natural and organic products which does not cause skin to break out Technological Active ingredients are becoming more common Preference for products which show the most immediate effects APPENDIX 2 (Direct Competitors, Indirect Competitors, Replacement Products) DIRECT COMPETITORS POP L'Occitane 1. Offers face care, body care, hair care, and fragrances 2. Minimalistic packaging (still fancier than Kiehl's) 3. Luxury products 4. Popular for Shea Butter products Mario Badescu 1. Offers face care, body care, and hair care 2. Very minimalistic packaging 3. Luxury products 4. Has apothecary/medical appeal Shiseido 1. Offers face care, body care, hair care, and fragrances 2. Minimalistic packaging (still fancier than Kiehl's) 3. Luxury products 4. Has brick and mortar stores 5. Tests on animals when required or when it's the only reliable test for a product

5. Has brick and mortar stores 6. No celebrity endorsers

5. Has brick and mortar stores 6. No celebrity endorsers 7. Unisex appeal 8. American brand

POD 1. Offers home products 2. More feminine appeal 1. Does not offer fragrances 2. Popular for acne solutions 1. Offers colour cosmetics 2. Japanese brand 3. Does a lot of traditional advertising (including celebrity endorsers)

3. French (Kiehl's is American) 4. Emphasizes scent (even in their store ambiance) 5. Never tested on animals Revenue Beauty and personal care budget (same share of wallet)

3. Never tested on animals

Beauty and personal care budget (same share of wallet)

Beauty and personal care budget (same share of wallet)

Team MET- Brandstorm 2014 Pre-case (TIZA BUAL)

INDIRECT COMPETITORS POP Luxury Spas 1. Services offered can also be part of beauty regimens 2. Luxury 3. Some spas also sell beauty/wellness products 4. Improve's consumer's confidence 5. Unisex appeal POD 1. Offers wellness services primarily 2. Service is applied by another person while consumer is pampered 3. Effect in terms of how relaxed you'll feel is more immediate 4. Time of application tend to be longer since the service involves much more than just applying products Revenue Leisure budget (vs. Beauty and personal care budget) REPLACEMENT PRODUCTS POP Wellness/Beauty Pills 1. Can offer the same beauty benefits as some skin care products 2. Luxury (some) 3. Requires personal effort to achieve desired effect Cosmetic Surgery (NonInvasive) Cosmetic Surgery (Invasive) Fitness budget, may also be leisure budget (vs Beauty and personal care budget) Clothing budget (Beauty and personal care budget) 1. Offers fitness services primarily 2. Desired effect is harder to achieve because of personal effort required 3. Generally much less immediate results 1. Offers clothes 2. Effect is much more immediate Gyms 1. Services also availed for physical beauty benefits 2. Luxury 3. Requires personal effort to achieve the beauty that the service can offer 4. Improves consumer's confidence 5. Unisex appeal Luxury fashion brands 1. Adds to the physical beauty of the customer 2. Luxury 3. Improve's consumer's confidence 4. Unisex appeal

3. Fast "application" time

4. Has more long-term and critical health benefits

4. Products would generally last longer

1. Also offers beauty benefits 2. Luxury 3. Unisex appeal 4. Usually requires several sessions before effects can be noticeable 5. Usually no recovery time

1. Also offers beauty benefits 2. Luxury 3. Unisex appeal

4. Unisex appeal POD 1. Taken in and not just applied on the skin 2. No pampering experience at all since taking pills require a very small amount of time 3. Effect is usually faster (i.e., Glutathione pills vs lotion)

1. Time of application is usually longer 2. More pampering experience since it's generally done by another person 3. Although it requires several sessions as well, effects are still more immediately noticeable

1. Time of application is usually longer

2. Involves recovery time 3. Not pampering since it's usually painful (especially during recovery) 4. Effect is very immediate

Team MET- Brandstorm 2014 Pre-case (TIZA BUAL)

Revenue Beauty and personal care budget (same share of wallet) Beauty and personal care budget (same share of wallet) Beauty and personal care budget (same share of wallet)

APPENDIX 3 (Sample poster)

Team MET- Brandstorm 2014 Pre-case (TIZA BUAL)

APPENDIX 4 (Sample Website Layout)

SOURCE OTHER THAN BRANDSTORM RESOURCE PACK: Consumer Lifestyles in the Philippines ( September 2013), accessed through Euromonitor International