Marketing Communications Management for a new brand of perfume
Marketing Communications Management for Paradise Perfume
The modern day global trend seems to be that of creating a free international market place, in which the commodities are sold without regulation and intervention from the government and in which the economic rules are the dominant ones. Despite tremendous efforts, such a marketplace has yet to materialize. But globalization has nevertheless allowed economic agents to transcend boundaries and benefit from the comparative advantages of other countries. The real growth opportunities of economic agents are supported by the ability to transcend boundaries and introduce the product onto a wider consumer market.
The perfume industry is one in which the forces of globalization are extremely sensitive as they have allowed the economic agents to spread their presence Earth wide. This has led to the growth and development of the industry. Aside globalization however, the development of the industry is also pegged to a series of managerial efforts, including the understanding of the environment, the creation of a product to serve the needs of a specific target market, or the sustained marketing efforts.
The scope of this research proposal then is that of correlating the marketing efforts with the launch of a new perfume. Paradise Perfume is the fragrance to be launched latter this year in the United States of America. During early 2011, the Paradise Perfume would also be launched within the United Kingdom. In order to ensure a successful launch, it is necessary to develop an adequate marketing communications program. This project proposes several elements considered pivotal in the required marketing program.
2. Situation analysis
The situation analysis — or situational analysis — is the first and one of the most important components of a marketing plan. Its importance is given by the fact that it assesses both the internal factors within the organization, as well as the external factors. The internal factors reveal the real and potential existence of organizational strengths and weaknesses, whereas the external factors reveal the existence of real or perceived threats and opportunities. The ability to address all these issues is the number one reason as to why the situational analysis is perceived as the “foundation of the strategic planning process of [the] marketing plan” (Milne, 2008).
The situation analysis for the Paradise Perfume is constituted from the gradual assessment of three major components — the external factors particular to the industry, the company and the market. Each of these proposed topics is discussed below:
2.1 External factors
The perfume industry is an extremely competitive one and the central element is that of secrecy. Even in its early times, the perfume creators would not reveal their ingredients. Today, the United States legislation does not allow for the patenting of perfumes. This virtually increases the risk of uniqueness loss. In response to this threat, most perfume creators are formed as private institutions, in which information is strictly controlled. The potential damage of industry espionage is rather increased as it could materialize in the final bankruptcy of the organization. As a result, companies select a limited number of people to know the recipe for the perfume.
The decision of most perfume manufacturers to become constructed as private institutions materializes in a series of disadvantages, one of them being a restricted access to financial resources. When the company strives to increase its borrowed capitals through the issuing of stock, it has to go public. Going public however implies a series of complexities. On the one hand, there is the loss of control in the meaning that stockowners have the ability to influence managerial decisions. On the other hand, there is the significantly increased effort pegged to the necessity of constructing more reports and presenting more company information to the public. Shannon L. Karppinen explains:
“Boards make decisons regarding top management. It is because of these relationships that public companies must produce certain documents. One of these documents, the 10-K form, requires the company to reveal aspects about itself in order to educate prospective stock puchasers. They must define their business looking at the markets they are in, the products they sell, new developments in these areas, the lines of distribution that they use, the purchases of material used to make their products, the competition that they face, and such. They must state which accounting policies they use in determining their financial figures. Public companies produce quarterly and annual financial reports in order to keep their stockholders abreast of their performance. In this sense, public companies have to provide a lot of information. It is time-consuming and it creates public scrutiny as the company itself becomes a product on the market” (Karppinen).
At the level of industry players, the ultimate success is given by the ability to effectively commercialize the products, as well operate in an overall efficient manner. Large size companies benefit from their creation of scale economies, whereas smaller size companies compete in lower size markets, in niche segments by selling specific products (Hoovers, 2010). The top two competitors Paradise Perfume is facing are DKNY Perfume and CK Perfume. Each of these competitors would be assessed throughout the following sections of the proposal.
2.2 Company analysis
Paradise Perfume is a startup organization, which means that it faces a series of barriers. The company is nevertheless committed to its purpose and reveals a series of internal strengths which would help it attain its final purpose. These specifically include the following:
Highly skilled and committed staff members
A strong secret recipe and a high quality product
A strong understanding of the environment and the ability to develop tailored strategies
Aside from these advantages, however, Paradise Perfume also reveals a series of disadvantages, as follows:
Lack of expertise in the perfume industry
Limited financial resources, and Low levels of operational efficiency
Perfume Paradise was opened two years ago and it has launched a series of products which retrieved successful outcomes in the local market. The organization has used an indirect distribution system through which the perfumes would be sold to local stores, from where they would reach the final consumer. It sells in a niche sector and it generally targets consumers in the average income economic sector.
2.3 Market analysis
A primary component of the market analysis is constituted by the demand for perfumes. This is pegged to demographic changes, as well as the economic climate. For instance, as the women became emancipated and as more men are becoming metrosexuals, the demand for perfumes and other cosmetics products increased. Additionally, with the growth of the economy, the purchasing powers of the populations increased and the demand for perfumes also grew.
In terms of the relationship between consumers and manufacturers, this has evolved in the negative direction as that desired by the economic agents. The perfume industry is estimated at $25 billion, but its results and importance are among the lowest in the overall cosmetics industry. The consumers lack consistency and loyalty towards the manufacturer and the sense of novelty primes that of loyalty. Specifically, as a new fragrance is launched into the stores, the individuals cannot wait to purchase and use it. However, by the time that bottle is over, they will purchase a new one, which has recently been launched. And this trend is not only obvious among the younger consumers, but also among the more mature and even senior consumer markets. The situation translates into a product’s average shelf life of three years. In order to increase the loyalty to a brand, economic agents have developed marketing campaigns in which celebrities such as Jennifer Lopez or Britney Spears promoted the respective perfumes. The popularity of the respective perfumes registered increases in the period immediate to the marketing campaigns, but this popularity was however short lived.
A noteworthy trend is the decision of perfume manufacturers to use the past fragrances to make new ones. Softer versions of past perfumes are as such launched, or the past fragrance is used to create other consumer products, such as scented candles or air fresheners. “Scented candles, perfumes for interiors and linens have become a huge home fashion market associated with lifestyle moods and fragrant environments with a feel good factor. It is driven by consumers who want to cocoon at home whilst experiencing relaxation and mood enhancement” (Weston Thomas).
3. Donna Karan New York
The analysis of the two main competitors is structures onto five distinct topics as follows: overview, segmentation, targeting, positioning and communications strategy. Each of the sections is important to help understand the setting of the competition, as well as the threat it poses for Paradise Perfume.
Donna Karan New York is mostly renowned for its clothing lines, perfumes not being the company’s primary product. The organization operates in the upscale industry and uses both intermediaries, as well as its own stores to sell to consumers. As of 2001, the company was purchased by Louis Vuitton Moet Hennessey (LVMH), but the artistic control which ensures brand strength is still in the hands of founder Donna Karan (Hoovers, 2010).
The DKNY perfumes are divided into two segments, based on the consumer types they target — perfumes for women and colognes for men. The main segment is represented by perfumes for women.
The main market targeted by Donna Karan New York is constituted by above the average income women.
The positioning strategy used by Donna Karan New York is a dual one. On the one hand, the DKNY perfumes are promoted as high quality, original perfumes. They have been created to enchant the senses of the buyers and they are sold at prices starting with $100 per bottle. On the other hand, Donna Karan has also strived to come close to the average American women and allow them to feel special by using a DKNY perfume. This has virtually translated into the creation of perfumes to be retailed at more affordable prices.
3.5 Communication strategies
Finally, in terms of communications strategies, the DKNY perfume campaign has been constructed on the combination of traditional and modern communications medias, including television advertisements, but also internet communications. The Donna Karan New York perfumes can for instance be purchased online at websites such as http://www.perfume.com/dkny or http://www.dknyfragrances.com, where individuals can also find out vast information on the products they seek to purchase.
4. Calvin Klein
Similar to Donna Karan, Calvin Klein is also mostly renowned for its clothing line, the perfumes being a complementary product line. The company was founded in 1968, and in 2003, it was purchased by Phillips Van Heusen. While the company is best recognized for its clothes, the main revenues are generated from “licensing its name for items such as shoes, jeans, underwear, hosiery, watches, bedding, tabletop products, and furniture. It owns or licenses namesake stores worldwide, as well” (Hoovers, 2010).
The segmentation strategy implemented by Calvin Klein is more complex than that implemented by Donna Karan in the meaning that CK creates products for both genders, as well as for various categories of age groups, including all children, adolescents and more mature consumers.
In terms of the CK perfumes, these target the consumers in a more balanced manner as they have been created for men, women as well as unisex.
Similar to Donna Karan, the CK products are positioned in the upper industry and target consumers which register above average incomes. Nevertheless, the company has also focused on creating specific products which were affordable for the general population.
4.5 Communication strategies
The communications strategy at Calvin Klein is complex and includes a combination of traditional and modern marketing communications tools. Aside from direct marketing through television advertisements or radio advertisements, the company also interacts with its customers in the virtual community. This also offers the possibility for customers to buy products from websites such as http://www.perfume.com/calvin-klein or http://www.calvinkleinfragrances.com/, which also offer vast information on the perfumes.
5. Paradise Perfume communication plan
5.1 Context analysis
In light of the research proposal currently developed, the context is revealed by the necessity to construct a marketing communications plan to sit at the basis of a successful launch of the Paradise Perfume. In order to accomplish this, it is necessary to reveal the objectives of the marketing plan, the communication objectives and strategies, the audiences and, finally, the very plan.
5.1.1 Marketing objective
The marketing objective is that of creating consumer awareness and demand for the new Paradise Perfume fragrance. The final scope is that of familiarizing the customers with the item to be launched, promoting the item in various media channels and drawing customers towards the product.
5.2 Communication objectives
Setting the communications objective constitutes the compulsory step in creating an adequate marketing program. Specifically, the company has to understand its goals and integrate them within the marketing efforts. In this order of ideas, the communication objective is that of providing customers with sufficient and adequate information which allows them to become aware of the existence of the Paradise Perfume, as well as desire to purchase it. Specifically, the marketing campaign strives to:
Create brand awareness
Define the need for the product, and Encourage action from the target market (Marketing Communications).
5.3 Communication strategies
In order to comply with the previously stated objectives, the communications strategy would revolve around the creation of campaign messages to be aired in various medias. The principles onto which the strategy would be constructed include the following:
Simplicity of formulation and easiness of understanding for the public
Ability to deliver messages consistent with the campaign, the product and the firm
Ability to inspire and energize the audience
Relevance and sufficiency of provided information (Clemmer, 2010).
5.3.1 Target Audience
Paradise Perfume targets two main categories of consumers, as revealed below.
188.8.131.52 Primary target
The primary target is formed from women registering average incomes between Â£250-Â£500, approximately 12,500-25,000 baht per month. They are either teenagers or recently employed; those who are employed, occupy white collar positions and possess at least a high school diploma. They are driven by adventure and professional goals of promotions and recognition. However, since they are starting out, they are sensitive to retail prices.
184.108.40.206 Secondary target
The second target market is constituted by business women between the ages of 35 and 45. They are generally professionally fulfilled, but are now married and have children. This virtually means that the higher incomes they register are divided between themselves and family interests and priorities. This feature once again reveals high levels of sensitivity to retail prices.
5.3.2 Pull, push and profile communication strategies
The suggestion at this stage is that of using a pull strategy through which the consumers are drawn towards the product, rather than implementing a push strategy, which could generate negative responses from the customers.
5.4 Integrated communication plan
5.4.1 Above the line – television – magazine – product placement
At the above the line level, the marketing campaign would integrate advertisements to be featured in television programs as well as in magazines. Also, the company would promote its perfume through store placements. The core of this process is that of identifying the magazines, television programs and stores preferred by the targeted consumers and addressing them.
5.4.2 Below the line
At the below the line level, the marketing communications campaign would materialize in two distinct efforts. On the one hand, the company executives would participate to industry conventions and would promote their product. On the other hand, the organization would participate to local exhibitions in which it would promote the perfume.
5.4.3 New media
Aside from the traditional above and below the line components, the marketing campaign would also be taken within the virtual community. Here, the Paradise Perfume would be promoted on the company’s website, as well as on the website of other organizations and on various blogs. It is estimated that the campaign would be launched in one month’s time and would cost approximately $10,000.
5.5 International Launches
As it has been initially stated, the Paradise Perfume would be launched within the United States by the end of this year. At the beginning of 2011, it would also be launched in the United Kingdom, specifically in London. The launch would be constructed on a similar marketing communications campaign. It must however be noted that cultural differences exist and they need to be integrated. In this order of ideas, the most relevant of the differences for the perfume industry refers to the proximity of UK to Paris — the capital of fashion and the originator of the world’s most popular perfumes. This specifically means that focusing on the product uniqueness and fashionability would not attain major points in the UK. On the contrary, it would be necessary for the Paradise Perfume to be promoted based on points of difference, specifically affordability.
The modern day economic agents are presented with the opportunity to transcend boundaries and both benefit from the comparative advantage of countries, as well as sell their own products and services to a wider audience. The perfume industry has benefited from the forces of globalization and has launched international operations. The current research proposal has focused on the creation of a marketing communications plan for the launch of Paradise Perfume’s new fragrance.
The commencement of the project has been constituted by the analysis of the external environment, which reveals a competitive, yet stagnant industry. The company is nevertheless confident it can overcome the external and internal challenges and succeed in both American as well as British markets. Paradise Perfume would face the biggest competition from Donna Karan New York and Calvin Klein, but it reveals the point of difference of targeting more price sensitive consumers. This point should also be emphasized upon throughout the expansion into the London stores. Aside from this, the marketing communications plan would be constructed on a combination of the traditional and modern tools, such as television advertisements and internet websites. The bottom line of the plan is that of an alignment between the theoretical marketing teachings and the specific requirements of launching Paradise Perfume onto the American and British markets, to serve the needs of the identified target market.
Clemmer, J., 2010, Communication strategies, systems and skills, Jim Clemmer, http://www.jimclemmer.com/communication-strategies-systems-and-skills.php last accessed on November 8, 2010
Gordon, B., 2010, Why the perfume industry stinks, Telegraph, http://fashion.telegraph.co.uk/news-features/TMG7945116/Why-the-perfume-industry-stinks.html last accessed on November 8, 2010
Karppinen, S.L., a view of the world of perfume, Zebrafish Information Server, http://zebra.sc.edu/smell/shannon/shannon.html#view last accessed on November 8, 2010
Katemopoulos, M., 2009, Perfume industry Information, eHow, http://www.ehow.com/about_5316083_perfume-industry-information.html last accessed on November 8, 2010
Milne, G., 2008, Writing the situational analysis for your marketing plan, Marketing Plan Success, http://www.marketing-plan-success.com/Articles/Situation / last accessed on November 8, 2010
Montague-Jones, G., 2008, Perfume industry goes beyond scent, Cosmetics Design, http://www.cosmeticsdesign.com/Products-Markets/Perfume-industry-goes-beyond-scent last accessed on November 8, 2010
Weston Thomas, P., Consumers and 21st century perfume trends, Fashion Era, http://www.fashion-era.com/perfumes/perfumes_fragrance_trends.htm last accessed on November 8, 2010
2009, Donna Karan New York, http://www.dknyfragrances.com last accessed on November 8, 2010
2010, DKNY Perfume and DKNY Cologne, Perfume, http://www.perfume.com/dkny last accessed on November 8, 2010
2010, Marketing communication objectives, Marketing Communication, http://www.marketingcommunicationsblog.com/marketing-communication-objectives last accessed on November 8, 2010
2010, Hoovers, http://www.hoovers.com last accessed on November 8, 2010
Calvin Klein Perfumes, http://www.calvinkleinfragrances.com / last accessed on November 8, 2010
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