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Kiehl's Case Study - Company & Industry Analysis vis-a-vis Men's Grooming

Analyzed the status of Kiehl’s:

- SWOT analysis of the Kiehl’s brand when it comes to male beauty products
- Business performance
- Products (packaging, visuals, ranges, geography, claims, USP <unique>)
- Market share and ranking
- Positioning and image
- Pricing
- Consumers
- PR & Digital strategy
- Retail strategy
- Merchandising
- In-store & online activities

[Entry for Loreal Brandstorm 2014]

Kiehl's Case Study - Company & Industry Analysis vis-a-vis Men's Grooming

  1. 1. ARE MEN GETTING MANSOMER? Nikhil Saraf | Paarmi Modi
  2. 2. Market Scenario Market Size : $433,336.3 (US Million) CAGR: 3.0% $68735.5 $27520 $122059 $22766 Men’s grooming 7th largest sector $33595.1 [2012] $40,369.8 [2017] CAGR: 3.7% Per Capita Consumption $4.8 Market Size – $6088.5 (US Million) CAGR – 6% Per Capita – $1.5 2012-17- 33.6% Market Size – $707.7 (US Million) CAGR – 14.8% Per Capita – $0.6 “The men’s grooming market has boomed in recent years as increasing amounts of men wanting to look their best look to products specifically targeted towards them to do the best job possible. To keep up with demand, the market is becoming more segmented and expanding into new categories and claims. For instance, typical feminine formats such as serum and eye cream have moved into the male category.” Emmanuelle Moeglin, Global fragrance and personal care analyst at Mintel Source: Euromonitor Data
  3. 3. Men’s Grooming Products “Men’s grooming has gone mainstream. Male skin care is one of the beauty industry’s fastest-growing sectors, with more men adopting a grooming regimen, alongside exercise and eating right, as a component of healthy living. It is observed that now men buy as much as half of male-grooming and other types of consumer products. This is due to [a much greater] awareness and the need to be presentable according to current trend.” Sanjali Giri, Senior Manager, Product Merchandising, The Body Shop India 8% Global share Dominant Category 40% grooming revenue in India Market Size: $2737.4 Million 50% Global share 60% from Asia Pacific Upcoming categories: Anti- ageing, Blemish removing, skin brightening India: Fragrances fastest growing at 33% 2.4% share of premium market Market Size: 8219.1 India: 20% Growth in professional haircare segment Japan biggest market [$1.8 Billion] Skincare Shaving Deodrants Haircare Western Europe biggest market [18.5%] 11% increase globally Bath & Shower Source: Euromonitor Data; GCI Magazine
  4. 4. What does the market say? “Metrosexual man, the single young man with a high disposable income, living or working in the city (because that’s where all the best shops are), is perhaps the most promising consumer market of the decade. In the Nineties, he’s everywhere and he’s going shopping..” Mark Simpson, Man who coined the word ‘Mertrosexual’ Dermatologically Tested Ethical/Environment Friendly Aromatherapeutic 21% 11% 6% 14% 4% 3% Marketed as 29% Botanical & Herbal 23% Moisturizing & Hydrating 1985 25% 1998 2011 52% 69% Evolutionofthemetrosexualman Men buying their own grooming productsPopular television shows such as “Queer Eye for the Straight Guy” , “Suits”, “Mad Men” and many more are and have presented a shift in how men are perceived. In these shows, men were flattered, wooed and enjoyed much attention. In addition, with the growing number of magazines on men’s grooming and lifestyle, as well as the increasing popularity of websites selling men’s health and fitness content, today’s metrosexuals are becoming more hungry for grooming knowledge. Asian men prefer skincare products Brazilian men spend more on deodorants Russian men are more conservative with regards to skincare products Insights Source: GCI Magazine, Spire Research
  5. 5. Stats, Trends and the Future “The aspirations and requirements of today’s young Indian men are rapidly evolving. With a surge in disposable income, men are becoming more discerning and indulgent. In an evolving trend in India, men are beginning to look at innovative grooming and personal care products created specifically for them. The segment shows immense promise and is growing faster than the overall personal care market in India...” Nilanjan Mukherjee, Head of Marketing, Personal Care products, ITC Limited Over 9 in 10 men use some sort of grooming products today Men’s grooming industry generated $964 million in U.S. department store sales in 2011, an increase of 11%, Facial skincare product users are more likely to be used by ethnic men aged 18-34 Facial cleansers ,facial lotions/moisturizers, and lip products are the most commonly used Men’s facial skincare grew 12% in dollars in 2011 85% prefer to buy their own grooming products rather than women in household Future of Man-Kind - Skin care for men will continue to grow - “Non-basic” skin care products such as face masks and anti-agers will see strong growth in the short term - For simple colour cosmetics products such as BB cream and CC Cream, this will likely continue to gain acceptance in some parts of Asia pacific like India, East Asia. -“Complicated” colour cosmetics products such as “menscara” and “guyliner”, this will remain niche even within Asia - As men are usually not used to numerous steps in skin care regime, combination products will do well as it helps to cut down on the number of steps.All in one products. -Grooming spas, salons, parlours for men will see an increase Source: Emerging Market Information Service NPD Group Inc. / Consumer Tracking Service
  6. 6. Distribution Mechanisms Different retail formats targeted at men include Men’s grooming stores that carry different brands, brands’ standalone stores targeted at men only, dedicated “Men’s Zone” at drugstore/department store. To reach men, eliminate “girly” factors including store format, window display, product packaging Rakshit Hargave MD, Nivea India Key beauty Channels in Asia Pacific 91.5% includes store based retail globally 18.8% Health and Beauty Specialist stores in India 5.8% of internet selling Salons, Ateliers, Spas Source: Euromonitor Data Global Beauty and Personal Care what does the future hold? - In cosmetics Asia
  7. 7. His Grooming Regime “Rising beauty consciousness due to changing demographics and lifestyles, deeper consumer pockets, rising media exposure, greater product choice, growth in retail segment and wider availability are the reasons for sharp rising demand of cosmetics among India men, especially the youth..” D S Rawat, ASSOCHAM, Secretary General "IN THE MORNING, IF MY FACE IS A LITTLE PUFFY I'LL PUT ON AN ICE PACK WHILE DOING STOMACH CRUNCHES. "AFTER I REMOVE THE ICE PACK I USE A DEEP PORE CLEANSER LOTION. IN THE SHOWER I USE A WATER ACTIVATED GEL CLEANSER…." "…THEN A HONEY ALMOND BODY SCRUB, AND ON THE FACE AN EXFOLIATING GEL SCRUB." "THEN I APPLY AN HERB-MINT FACIAL MASK WHICH I LEAVE ON FOR 10 MINUTES WHILE I PREPARE THE REST OF MY ROUTINE." "I ALWAYS USE AN AFTER SHAVE LOTION WITH LITTLE OR NO ALCOHOL, BECAUSE ALCOHOL DRIES YOUR FACE OUT AND MAKES YOU LOOK OLDER." "THEN MOISTURIZER, THEN AN ANTI- AGING EYE BALM FOLLOWED BY A FINAL MOISTURIZING PROTECTIVE LOTION." Source: http://www.shortlist.com/grooming/how-to-replicate-patrick-batemans-grooming-regimen JWT – State of the men report
  8. 8. What do they have to say “Men in smaller towns are displaying greater desire for grooming increasingly, especially in the whitening and fairness segmentRakshit Hargave, MD, Nivea India Grooming well gives you more confidence. You put on that costume and you start believing you are more invincible. Mr. Mehta , 32, India It’s therapeutic. Shaving with a new razor after a hot shower at the end of the day is a great feeling. Colin, 26, UK My teacher in grade school used to say, ‘dress well, test well’. That’s kinda stuck with me, I think if you dress sharp, you perform better Arien, 28, SA I spend time on my appearance because it helps me attract others. As simple as that. Troy, 22, US “With women, it’s almost a form of politeness to put on some make- up and look pretty when they are meeting friends. I feel there should be the same form of respect when it comes to men.” Wu Qiang42, Owner of Spa in Beijing The world has come to a different place now when it comes to men taking care of themselves. I think more men spend more time looking in the mirror than women do. MAC makeup artist JOHN S., Men’sappearanceanxieties Source: JWT – State of the men report
  9. 9. Your customer “Skin care is a fast developing subsector of the men’s cosmetics market, mainly attributed to a rising concern over aging. Men above 45 are realizing that they need to work [until] quite late in life and maintaining a professional appearance will be an advantage. Thirty percent of our existing customers are men.” Rahul Kale, Founder of Iraya, Ayuvedic Personal Care & Beauty THE IMAGE CONSCIOUS MAN THE ACHIEVERS METROSEXUAL THE RETROSEXUAL MARLBORO MAN ZEN MAN GORDON GECKO JOE BOXER ROAD WARRIOR MULTI DIMENSIONAL MAN THE PLAYER
  10. 10. Brand Analysis “Hair Color - The need to look younger is driving many to this.”Najeeb Ur Rahman, National technical expert, Schwarzkopf Professional PHYSIQUE -Natural Skincare and hair care brand -Quality product from long research RELATIONSHIP -Trust -Listening -Customized Advice REFLECTION -People who take care of their skin -Feel concerned about environment PERSONALITY -Expert innovator -Natural product -Concerned about environment CULTURE -American -Family -Values -Expertise of a pharmacist SELF IMAGE -I feel good about myself ESSENCE Well being PERSONALITY Honest, Transparent, Warm, Family Focus VALUES OF USERS Environmental Concerns, Quality, A healthy body & spirit EMOTIONAL REWARD Well-being, Look rested, feeling adequacy, proud of its engagement FUNCTIONAL BENEFITS Quality, performance, pharmaceutical products, not harmful for skin and body ATTRIBUTES 100% natural, environment friendly, Premium cosmetic products BRAND IDENTITY PRISM BRAND BUILDING BLOCKS
  11. 11. SWOT & Porters “The constant exposure to heat, UV rays of sun and extreme weather conditions takes a serious toll on our skin. But nonetheless, it’s very important for us to appear well groomed at all times.” Rahul Dravid, Former Indian Cricket player STRENGTHS - Overseas market. - The organization system is complete. - They fully practice their business principles and core values. - They have a great plan for realizing goal. - They have a mature research and Development department. WEAKNESSES - It doesn’t have appealing packages. - They are not very well-known in Asia. . OPPORTUNITIES - They improve their products consulting customers requests. - International expansion. - They don't test on animals, that appeals to people who protect animals. - Growing organic market. THREATS .- Advertisements are not well- exposed. - Unit-price is higher. - Strength of competition. - Fluctuation of foreign exchange rates; Economies- SWOTANALYSIS Supplier power -Able to substitute -Similar products -Suppliers large -Able to change Threat of substitution -Cross product substitution -Relative price/performance value Threat of new entrants -Low cost entry with e-commerce -More luxury brands coming into the Indian market Bargaining power of customer -Price Sensitive customer -Relative low average purchase Industry Rivalry -Industry Growth -Balance of competitors -Many competitors -High cost of leaving market PORTER’SFIVEFORCES
  12. 12. Brand Overview “They have the products, time, and money to be infatuated with their appearance and lifestyle. As developed countries move toward economic prosperity, people within the country often become more narcissistic and less altruistic. In other words, the citizens move from an involvement role to a more individualistic one; it becomes a society more focused on the “I” rather than the “we”.” Tannen, 1986 Business performance Products Market Share & ranking Positioning and Image Consumers PR and Digital Strategy Retail Strategy Merchandising Sales > $200 Million Unique formulations with finest Natural ingredients with true benefits to hair and skin care US Rank 3 15% Heritage brand-160 year founded as old-world apothecary Men+ women, special tab for men(30-40% clientale) website, facebook, twitter, pinterest, instagram Simple, efficient, recyclable packaging Simple, efficient, recyclable packaging Double Digit growth in all zones present Simple, efficient, recyclable packaging Canada Rank 3 14% Mascot - Mr Bones upper middle class, care for body and cosmetic products email marketing+newsletter to learn about products Customized product offerings based on differnet skin types of customer gifts for him, her, baby, pets and corporate gifting services Distribution in over 44 countries More focus on cost and quality of product Australia Rank 5 18% Natural range of grooming products - attribute oriented and functional oriented - Quality experts, well informed, specific requirements, social commitments top 10 Customer favorite promotions including men Customer favorite promotions +33% growth over last year Special ingredients like lavender, caffeine, vitamin c, Blue Algae, Rose artica - France Rank 10 10% Customer is key offers while online shopping - 5 free samples on every order Charitable activations - Keep a child alive with Alicia Keys, Peace Loving Kiehls, amFar, Recycle-reuse campaigns(eco system) Scientifically formulated - safe and customized to skin China Rank 6 3% works towards improving lives of communities of Kiehl's customer(global+local) 3 causes- HIV/AIDs, environment protection, children's well being live chat for healthy skin consultation Appealing window display, brick wall, bike, airplane, chemistry instruments, customer pictures on wall Innovations (products+retail) Hong Kong Rank 2 8% Kiehls rewards and benefits to loyal customer Quirky, attractive, eye catching visuals
  13. 13. Competitor Portfolio “Three main reasons for enhancing the male appearance: vanity, saving marriages, and job security.” . Jim Emerson, Author of ‘Grooming for Success’’ “ Lab Series for Men powered by technology, backed by scientific research and reinforced by years of success in addressing men's skincare and grooming needs Biotherm provides biological approaches to luxury skincare that are priced lower than the average prestige face care Forest Essentials has pure, Nutritious Ayurvedic Products for the conscientious men based on the philosophy of Tree of Life Nivea's of men is synonymous with quality skin care on a global level. Strong heritage that soothes, nurtures and protects mass skincare market Clinique is the most Attractive Cosmetic International brand that creates great skin. Customers include men between 16-55 years. Distinctive packaging over the years L’occitance en Provence Natural and Local ingredients from a farm in France. Trustworthy and critically tested grooming products
  14. 14. Off-Line and In-store Activations“ Free Sampling and Grooming Experiences at men’s sporting events Editorials in high fashion men’s magazines Kiehl’s Grooming Guide Mobile App Kiehl’s Rejuvenating Grooming Ateliers and Spa Treatments Kiehl’s Travel Kits for the man on the move
  15. 15. Online Activations Grooming tips campaign #GroomYourself Suggest a look for a job campaign (in store/online) #IGotThePower MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY SUNDAY What’s your look for the day? #OwnTheDay
  16. 16. Thank You