Analyzing Sephora's Business Challenges and Market Strategies
School
Lambton College**We aren't endorsed by this school
Course
MARKETING 3203
Subject
Marketing
Date
Dec 11, 2024
Pages
5
Uploaded by BailiffMetal16043
Assignment 2 - PlaceSubmitted to:Ehsan AbdollahzadehGroup 2Adnan Patel-C0904579Utkarsh Singh- C0914038Rokesh Athikesavan- C0908624Parampreet Singh-C0901908Sahil-C0914290Bhanav Sharma- C0914459Mohit Datta- C0914294Date- 30th October 2024Lambton college
A. Current State and Business Issue/Opportunity (Sec 25/Sec 100)Current Situation:Sephora has become one of the leaders of the global beauty retail industry with the number of stores more than 2 700 in 35 countries, which has nearly 36 000 employees. This brand has over 250 beauty brands and products of which include Marc Jacobs Beauty exclusive products only found here. This unique shopping concept enables customers to browse and use products without prejudice, and creates unity and loyalty among beauty consumers.Business Challenges:1. Intense Competition:The beauty industry has dominant and new players and indie brands, which increases rivalry to attract customer interest and control the position in the market.Online selling is gaining traction and popularity with the online selling outlets, the services that offer subscription services, which influenced Sephora to change its ways.2. Brand Dependency and Tension:It has been the case that many luxurious beauty firms depend on Sephora to channel their products; as such Sephora has its own line of products that even can be generalize to compete with the established brands.Sephora is owned by LVMH which implies that the company has to cut deals with brands it also owns making it difficult in matters of brand alliances and shelf positioning.3. Changing Consumer Preferences:The customer expectations of the beauty industry today have shifted by more diverse representation, suppliers’ sustainability, and product ingredients.This is obligatory to face the purchasing trends due to the fact that sustainable has come as a new concept in purchasing habits into Sephora.B. PESTEL/STP Analysis: (25/100)PESTEL Analysis:1. Political:This paper reveals that different countries have different laws concerning product safety and labeling hence Such an aspect poses a challenge to the Product Marketing, sale, and promotion of Sephora in different countries.Today’s trade agreements and tariffs could also affect the pricing of beauty products imported into the country.2. Economic:- Recession is one of the social factors that cause negative impact since it results in reduced spending on non-sensitive products such as luxury products.On the other hand during economic growth one is likely to consume the prestige products.3. Social:
Sephora’s move towards changing customer perceptions of diversity and embracing products for allshades of skin and types of beauty means that Sephora has to seek out such brands.The rising trend for ‘beauty from within’ and health conscious has led to more and more consumer demanding skincare products in addition to fancy make up.4. Technological:Today Sephora and many other stores experience continuous increase in the level of digital shopping, thus Sephora needs to develop a technological plan, the essence of which is the company’s presence in e-commerce platforms and digital media.P3 Personal cellphones and other technologies such as augmented reality (AR) can be used to provide virtual trials.5. Environmental:Thus, environmental sustainability becomes more valuable, which is why Sephora has to think about utilizing environmentally friendly packaging and purchasing materials.It may also be that consumers are getting more conscious to environmental impacts resulting in a brand that is considered sustainable holding an edge over another brand.6. Legal:It is important to adhere to different configurations in different countries mainly concerning the legal statements and advertisement policies.Problematic aspects of trademarks or an issue of intellectual property may occur when many brands are united in one complex.STP Analysis:1. Segmentation:Sephora divides its market mainly by geographic aspects such as age, gender, income, shared values, and lifestyle and also by behavioral characteristics.Possible target customers are trendy people especially in young adult group, the affluent classes, and customers who are environmentally conscious.2. Targeting:The primary target involves targets as far as cosmetics; beauty enthusiasts/ consultants and /or beauty supply merchants who may be interested in a variety of brands which they may be willing to buy at a slightly higher price because they have confidence in the quality.Knowing the secondary targets are casual users in search of affordable and guaranteed beauty products.3. Positioning:Sephora appears to market itself as ‘the place to go’ for beauty product where the value proposition is based on the range of product offered, the shopping experience and the friendly advisers.
Mobile extensions of the branding strategy involve using in-store experiences and digital contents for the brand as a community platform for Beauty enthusiasts.C. Specific places in that marketing strategy and how decisions of place related to other 3 P’s (25/100)Place Decisions:Sephora has well positioned its stores and mainly targets those areas of high customer traffic, such asoutlets, shopping centers, cities, and now, alliance with department stores like Kohl’s). This decision is expected to increase market reach and convenience for customers excluding those who visit Sephora single-shopper destinations.Relation to Other 3 P’s:1. Product:The product assortment developed based on cross-promotion of diverse brands within an array of companies. This way continuing the traditions of putting exclusive and popular brands Synygy improves customer exploration for Sephora.The presence of private label products that are bought together with other popular brands turns out to be a winning approach both for cost-conscious consumers and for those who appreciate premium quality.2. Price:The pricing strategy of Sephora corresponds with the brand positioning of Sephora, this means Sephora it’s okay to charge rather high prices for its products since it stocks only those unique products that can support such prices.In addition, Sephora locates its stores in prestigious settings of a shopping center and, therefore, strengthens its premium cosmetic store positioning.3. Promotion:They also take into consideration exclusive promotions and events which include product launches and beauty classes that help in the creation of traffic within a Sephora outlet.The store environment makes it easy for the customers to engage with the products with calls for the ‘Touch and Feel’ factor; this makes promotional work even easier with the use of concept selling approach.D. Measures Adopted and Further Courses of Action Recommended (25/100)Solutions Implemented:1. Expanded Partnerships:Sephora’s affairs with Kohl’s company to open the outlets of Sephora in Kohl’s stores have been advantageous in brand recognition and opening of a new market.Not only does this help encourage people to come and shop at Kohl’s but it also shows Sephora to anew audience.2. Inclusivity Initiatives:
The company has stuck promotional campaigns to showcase more brands than before through diversity owned by people of colour due to the requests of the consumers.The return of Color IQ technology makes a customer’s experience even better as the people get a sense of which products suit their skin tone well.Next Steps Recommendations:1. Enhance Online Experience:Use more technology like Augmented reality (AR) fitted apparels to fit online customers properly toreach e-shoppers and to enable better shopping experiences.- Personalized web selling experiences derived from data obtained from the Beauty Insider programthat customize products according to previous purchases.2. Sustainability Initiatives:Set up and market comfort product types, investigating environmentally friendly ways of how raw materials are acquired and how products are packaged.Extend returnable packs that allow the consumers to return the used beauty products in exchange for gifts.3. Data-Driven Personalization:- Leverage the online circulation of customer information to ascertain more of their needs and buying behaviours and therefore are more strategic in their marketing strategies.- Develop campaigns personalized according to customers’ habits and activities noted within the Beauty Insider program.4. Community Engagement:Improving the community involvement by holding local events; cooperating with influencers of different backgrounds, and conducting engaging activities attractive for the community.The use of hashtags and other engagement markers should be recommended for use in social media to make customers feel like a community.Thus, with the help of these strategies, Sephora can overcome current problems, enhance its positonon the markets, and further advance in the competitive beauty industry.