Ch. 14 - Marketing Channels and Retailing

Lancome represents selective distribution. It is available in only a few select locations such us departments stores, cosmetic stores, own-brand boutiques,  and on dedicated e-commerce websites. The purpose of selective distribution is to have the products available enough for customers to purchase and maintain the prestige of the brand as Lancome is high-end cosmetic. Lancome is distributed in over 2000 stores nationwide, and in more than 160 countries globally.
I recently visited the most busy Lancome counter in New York City which is located inside Macy's at Herald Square 34th Street.

This particular Lancome carries all the products available on the market including Bienfait multi-vital SPF 30 cream. They do a lot of "gift with purchase" promotions. Their recent one is another gift with purchase promotion available on Macy's website and in-store. The good thing about this promotion is the fact that customers can personalize the lovely 7-piece free gift with any $35 purchase, or they can get even more with any $70 purchase. Because Macy's at Herald Square is itself an extremely busy department store, I don't have to mention how busy the Lancome is. The manager told me that this is the best-selling Lancome location in New York City. The location is great and millions of tourists make the area very crowded which is a big attribute for business. The Penn Station stop is conveniently located just by the Macy's entrance. Pennsylvania station is the main transportation hub in New York City serving over 600,000 commuter rail and Amtrak passengers a day which makes it the busiest transportation facility in the United States. What more could a retailer want? As a luxury cosmetic brand, Lancome indicates its products quality by its traditional prices, however, customers can always take advantage of special offers on cosmetics. The brand offers a variety of promo codes to get the best deal possible, for example, 15% off $49 or more plus free standard shipping.

The overall physical appearance is very elegant and spacious looking. The decor is mainly white with some black accents. Merchandise is presented in a very orderly manner which helps the customers better notice or locate products. For example, there is a special counter for its best-selling fragrance La vie est belle with a crystal chandelier hanging above the items on display (see the picture on the right taken during my visit). Even though the store is very busy, the personnel make use of the suggestion selling technique to encourage customers to purchase products. Each potential customer buying a skin care product is offered a one-on-one consultation with a qualified member of the staff.

Ch. 6 - Consumer Decision Making

Walking through any department store, it is hard not to come across a Lancome counter. But what makes people stop by and purchase their very first or their favorite product from Lancome? Before purchasing a product from Lancome, the buyer goes through a consumer decision process which all of us go through in order to consider every important aspect of a potential product. The first and most important stage of the process is need recognition, that is, where the consumer recognizes what product is able to meet their needs. The customer has needs and wants which are influenced by internal or external stimulus. For example, an external stimulus such as a recommendation appealing to the good quality of a moisturizer can increase the likelihood that the moisturizer will be purchased.

An example of a strong external stimulus is Lancome's Elite Rewards loyalty program which seeks to increase customer acquisition and retention.

Naturally, when customers  recognize a need, they look for specific information about it. People have many opportunities in order to find valuable information regarding a cosmetic they are interested in. One way of searching is internal information search such as looking at previous experience with a product. Personally, I think this is a very reliable method if you don't want to make a mistake with the purchase decision. Lancome's clientele usually return to purchase more cosmetics. An example is Bienfait Multi-Vital Day Cream which  enjoys a very good reputation among customers who often return to purchase more of the product. A different way of searching for particular information about a product is external information source. Customers review opinions and reviews available from nonmarketing-controlled source, such as those which we can read on web forums, blogs or consumer opinion sites, to get a sense of how others view a product. Second form of external information search is marketing-controlled information source, such as mass media advertising. Lancome spends a great amount of money to advertise its products well and to provide reliable information about its product. In addition, Lancome's famous faces like Julia Roberts,Penelope Cruz or Kate Winslet, make Lancome a trusted brand and their products more desirable. 

Another stage of the consumer decision process is the evaluation of alternatives. This stage is where customers evaluate all the advantages and disadvantages of the product one more time before making a purchase. Usually, Lancome's clientele rely on the information made available by the mass media or base their decision on the quality of and information provided by customer service. It looks like Lancome greatly meets its clientele's expectations. According to Forbes magazine, the brand's sales were up 10% in 2012.

Ch. 5 - Developing a Global Vision

Lancome has been on the market since 1935. It began selling its products in about thirty countries in the first six months of the company's existence. The company has been a global brand since it became a subsidiary of L'Oreal Group in 1964. It entered the United States in 1950 and now sell its products in over 160 countries around the world. Its products  are sold at department stores, exclusive beauty stores, duty-free shops and boutiques. Lancome owes its global market growth to country-specific advertisement.

One of Lancome's advertisements that target the
Chinese market.

For example, Lancome developed  the Teint Miracle foundation in their Japanese laboratory with the Japanese consumer in mind. However, it became a global success because woman around the world wanted to have a beautiful skin like the Japanese. Lancome began selling its products in Japan in 1978 and it now has 112 shops, mainly in department stores. But Lancome's real conquest is the China market where it has spread into more than 40 Chinese cities and 18.000 retailers.

However, the company's tremendous success in China is mainly due to the web and by the adaptation to the local culture. Many Chinese customers for instance still do not feel comfortable making their payments online. In order to get around these concerns, Lancome's e-boutique allows clients  to pay for their products at the time of delivery. In addition, the goods are delivered by bike to improve the delivery time even though this method o delivery is incompatible with the Western idea of  luxury brand. Another strategy for enhancing e-market in China was creating the community website Rose Beauty. Rose Beauty not only raises awareness about products among clientele but also gathers information about the needs and desires of customers. The uses Chinese local social networks (Kaixin, Renren, Sina Weibo) to help brand build one of the biggest online community in cosmetics.

Lancome has grown to become one of the largest and recognizable cosmetic brand in the world with sales exceeding 350 million dollars in 2010.

Ch. 4 - The Marketing Environment

Bienfait multi-vital SPF 30 day cream from Lancome, a brand of the Luxe division of L'Oreal Group, is product highly recommended by many women. Only by reading reviews about it can I understand why it is purchased even by young women in their twenties. The formula of the cream was designed especially for women with visible effects of environmental damage and dehydrated skin. The actual target market of it is the early Y generation and below. Sunscreen, one of the ingredients of the cream, helps prevent sunburn and prevents premature aging of the skin caused by the sun. Although the main purpose of this cream is protection and moisturization, it contains a variety of other beneficial ingredients such as a complex of nourshing vitamins like E, B5 and CG. Women including me always love good moisturizers because it gives a comfortable feeling and makes the skin hydrated and healthy looking. Unlike many facial creams on the market that only moisturize and nourish the skin, Bienfait multi-vital SPF 30 also offers sun protection and so provides all a woman needs for her skin. This combination of ingredients makes it a unique and desirable cosmetic on the market.

There is a large variety of products on the market, but when it comes to picking one for yourself you want the best available product for a good price. For a luxury brand like Lancome, forty six dollars per good quality cream is relatively affordable in the eyes of regular customers wanting good cosmetics. The company provides generous complimentary samples with purchases so that people can get to know Lancome's products and get more for their money.

Like many companies today, Lancome uses social media to increase brand awarness. For Lancome, social media are important because through them, managers can listen to and engage their clients. Lancome relies on web sites such as Lancome.com where user-generated content coexists with product descriptions and where customers can invite their Facebook friends and freely discuss Lancome's products. By combining data from online customer purchases made through Lancome's website and data extracted from their customers' social media profiles (e.g., Facebook), the company gets to know its clients. This process helps them to predict likely future purchases and drive advertizing and rewards campaigns in order to offer clients the right incentives to make those purchases.