COSMETICS:
Reinvigorating a Flagship Brand

Client Situation

Our client, a large consumer packaged goods company was the producer of two popular cosmetics brands with products in multiple cosmetics categories, including foundation, nail, lipstick, and eye. The client's flagship brand had just lost its #1 position, after experiencing sluggish growth (1% CAGR) over the past few years, while its largest rival had been enjoying an 11% CAGR. In fact, the client's brand had become one of the slowest growing cosmetics brands in the mass channel. The client's initial hypothesis was that their brand was strong with the teen segment, but that women in their 20's were leaving the franchise to experiment with prestige brands, largely contributing to the brand's lagging growth. Our client, who did not have any prestige brands to offer these consumers, wanted to know how they could target these women and prevent them from leaving the franchise.

Results

As a result of working collaboratively with Market2Customer^® (M2C^®), our client was able to successfully rejuvenate its flagship brand; the brand regained both volume and share leadership, growing 25% (over $100 million) in three years. Our proprietary research and thoughtful analysis helped the client determine that the barriers to keeping young women in their 20's from leaving the franchise would be quite difficult to overcome, and that a strategy to win them back would be difficult and costly to create. Through our work, the client learned that its brand was quite popular among 10 and 11 year old girls, as well as young mothers, and that a strategy that focused on these two segments (mothers and daughters) and leveraged the relationship between them presented a much more attractive growth opportunity than one that focused on women on their 20's.

The Intervention

M2C GrowthPath^® approach was instrumental to our client's success. We began by using customized, primary research to understand how consumers buy cosmetics, mapping out the process in great detail. This level of granularity allowed us to provide our client with a point of view on where in the process they should direct their marketing efforts in order to get the biggest "bang for their buck." Our research revealed that our client's marketing efforts would best be leveraged at the point in time when the consumer is actually in the store, browsing across a number of brands before making their final decision, as opposed to focusing on television advertising, something our client had traditionally done in the past.

Having identified those specific consumer actions that would maximize growth, research was conducted using the Action Segmentation^® process to help our client identify and prioritize consumer segments. The segmentation allowed our client to select and sequence opportunities based upon segment size, affinity for client brand, and contribution to current revenues. The Action Segmentation process revealed to our client that the young teen/point-of-entry consumer should be prioritized as the critical target segment to focus on. This group exhibited brand choice behavior that our buying process revealed as being particularly relevant for our client, but they found our client's brand image and associations especially appealing. The client had initially believed that high school girls comprised this segment, when in fact the consumers were actually 10 and 11 years old. The segmentation also revealed that a great deal of young mothers were returning to the brand, due to time and money constraints, and that these women shared similar cosmetic brand needs and purchasing behaviors as their 10 and 11 year old daughters. While the client's hypothesis about women in their 20's had been correct, our segmentation revealed that a strategy focusing on young teens and their mothers would be much more successful, as women in their 20's, who were making their own money for the first time, were highly motivated to seek out these prestige brands, and would therefore be much more difficult (and expensive) to win with.

With these key insights in mind, Consumer Portrait^® frameworks were applied to gain an even deeper understanding into how and why the young teen/point-of-entry consumer buys cosmetics, and how their mothers factor in. An activation strategy was created using key learnings about these segments' motivations and desired experience. The client created marketing programs that leveraged the influence of the young mother segment and shifted the marketing mix from predominantly TV advertising to investing in an in-store presence that would enable young teens to experience the brand (capitalizing on our buying process learnings). Mother-daughter makeover events, "fashion-lead" product innovations, and redesigned wall units that provided testers/trial sizes for teens to experiment with are just a few of the strategies that our client developed based upon our Consumer Portrait framework.

Not only did this segment-focused positioning help our client's #1 cosmetics brand grow its teen segment share by 15 percentage points, but the brand was chosen as one of the "Top 5 Coolest Brands" by teens across all of the different brands that they experience. Now that's what we call results!

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