Shiseido Corporation

(Brand Audit)Prepared by Sara Chen

Professor, Julie HaworthMarketing 3320

May 7, 2015

Company Information

Shiseido was founded as Japan’s first Western-style pharmacy in Tokyo’s Ginza district in 1872. Shiseido Group has expanded its business not only in the cosmetics but also in various domains such as salon-use, healthcare products, restaurants and R&D support and others. It has led the Japanese cosmetics and culture for over 142 years.With the creation of beauty and wellness as a mission, Shiseido Group is a multi-brand company which operates its businesses over the world including Europe, United States and Asia.

• Global BusinessConsists of the cosmetics business that manufactures and sells cosmetics,

cosmetic tools and toiletry products and the professional business that manufactures and sells products to hair and beauty salons in Japan and overseas. • Prestige The Global Brand SHISEIDO is the main brand for prestige area and is based on the three core values that only Shiseido can offer, namely richness, human science, and sprit of omotenashi(hospitality).• Regional-specific brands

We have developed an exclusive brand for China, based on our brand strategies to have different brands for each sales channel, and also a brand targeting middle-income consumers in Asian countries.• Other brands

These are brands with their own brand values that do not bear the Shiseido name, obtained mainly through acquisitions and licensing agreements.

Shiseido America Corporation

• Location: 900 3rd Ave. New York, NY in USA. However their headquarter is in Tokyo, Japan. • Major Activities: Cosmetic and skincare product in the USA.• Brand History: Shiseido is a 142 years old cosmetic company based in Ginza, Japan. In 1962,

Shiseido was establishes in Hawaii, the company’s first overseas investment. Soon after Shiseido establishes Cosmetic America Ltd in 1965.

• Main Subsidiaries in America: NARS cosmetic, Cle de Peau, Bare Escentuals, Jean Paul Gauiter, and Issey Miyake.

• Key Personnel: Masahiko Uotani, Shiseido CEO• Recent News: Shiseido Awarded World’s Most Ethical Companies Designation Four Years in a

Row. Ethisphese Institute has been researching approximate 1000 companies from over 100 countries. They had announced on March 8, 2015, Shiseido is the most ethical companies in the world. The research was based on 5 categories of (1) concept of corporate ethics and legal compliance, (2) activity content as a corporate citizen, (3) evaluation by society, top management leader ship, communication with stakeholders, (4) establishment of corporate ethics, and (5) corporate governance system, etc. http://www.shiseidogroup.com/releimg/2405-e.pdf

Masahiko Uotani

Category and Competition• Definition: In the United State Shiseido primary focused under cosmetic brands, from manufacturing and selling of various

brand of cosmetic. However, they also have healthcare products, salon-use product store and services, restaurants, and R&D supports around Asia countries.

• Size: has total of 33,000 employees as of March 31, 2015 around the world.• 98 group companies around the world • Major competition size : Lancôme, Estee Lauder, Clinique, and Clarins are the biggest competitor

• Distribution Channel: In the US, the channel distribution for Shiseido cosmetic are includes beauty consultant at retailers, mass merchandisers, direct selling, home shopping, e-commerce, department store, and others. However, the beauty consultant still plays a big part for the selling of Shiseido. They provided the services, knowledge and create the relationship with their each customers.

• Regional Factors: Shiseido are all over in the United State, and globally.

• Legal Considerations: Shiseido complies with applicable laws, national guidelines and other standards as wel as industry guideline in connection with personal information. They also establish, comply with and put into practice the “Personal Information protection Management Systems” that consist of this Policy and internal rules concerning protection of personal information.

Products • Prestige Cosmetic product from head to toe. They

also carry some drug store product in some of the retailer such as Asian grocery store in the United State.

• New Products: Shiseido has the most advanced technology and also partner with Harvard laboratory to discover their new product. • Fall season usually will be their most important

because the new product or line will come out usually at this time period.

• Spring season they are still launch new product such as wet forced sun screen and new eye shadow color for the year 2015.

• Shiseido introduce Ultimune Power Infusing Concentrate in Fall of 2014, which was their biggest innovation and launch.

• Ultimune had won several award around the world• WWD beauty Inc. for product of the year of 2014• Vogue Japan, beauty breakthrough gold.• Elle (45 editions globally), Best Innovation• Self (China), the most popular essence• Style (Singapore), Best Beauty Buy 2014• Grazia (Thailand), Best New Skincare Treatment

• News on Ultimune: • Shiseido builds Ultimune product awareness via consumer

research. 1. started from the social media platform at Facebook by phrasing

“skin care revolution”.2. launched a 70-second “Discover the secret to Ultimune” video

and a tutorial of how to use the product. Also, they includes the ingredient and consumer research reports of the product.

3. preformed social campaign by posting picture and hashtag #BeautyInYou# to personalize the consumer’s overall experience with Shiseido.

http://www.luxurydaily.com/shisedio-builds-product-awareness-via-consumer-research/

Domestic Shiseido Product

• Domestic Cosmetic Business Dividson• Counseling

• Exlxir• Benefique• Haku• Maquillage (#1 selling brand in Japan)

• Self-selection• Aqualabel• Anessa

• Toiletries• Tsubaki (#1 selling and advertise in Asia countries)• Senka• Sea Breeze

• Non-Shiseido• Ipsa

• Healthcare Business Division• The collagen

Global Shiseido Product

• Overseas Cosmetic Division• Shiseido• Cle de Peau BEAUTE• NARS• bareMinerals• Issey Miyake• Jean Paul Gaultier• Aupres (sold in China only)• Urara• Za

Key Products

Ibuki line focus on the millennial group

Benefiance line is the #1 selling product in the U.S. The entire whole line had won Allure Awards for the Best of Beauty Breakthrough in 2011.

White Lucent line 1st product in the US that focus on brightening. #1 selling in Asia countries.

The most Advanced Bio-technology that fight for sign of aging.

Comparison

• Shiseido Product:• Ultimune

• Competitor’s Products: • Estee Lauder: Advanced Night

Repair II• Lancome: Genefique• Christian Dior: One Essential

Brand Analysis

• Shiseido had the net sales for 777.7 billion yen for end of year 2014 as a whole global business company. • Net sales rose 2.1% of the total, domestic

sales declined 3.1%, and over seas sales grew 7.1%, due to the expansion in China.• Operating Income was 27.6 billion yen for

end of year 2014.

Shiseido Stock Symbol: SSDOYPrices per stock: $17.54 per stock. (However can only purchase at Japan market)Largest Shareholders: Financial institution 36.55% Stock as it today in YEN with 3

month trend. (May7,2015)

Related news-Investor Related• Shiseido is keep growing bigger and now has the largest share

market in Japan. However they want to double China sales as their part of a new business plan. Investing in operation and e-commerce in the world’s second-biggest economy. Shiseido will be investing more in local personnel with e-commerce or marketing expertise. They also want to develop more new products inside China to reduces old China inventory and builds up its ranks of beauty consultants in the country.

• Shiseido will also hire more beauty consultant for domestic market. Because they believe that Shiseido Beauty Consultants play important role in communicate the brand and create the brand value.

• Shiseido is also building a new R&D center “Global Innovation Center” in Yokohama that will cost up to 40 Billion yen. This expanding investment because last December, 2014, the CEO has announced their vision of 2020. This Cosmetic research facilities will be the largest in the world. Since Shiseido are focus consumer point of view, the first floor will be a communication area. In that way Shiseido can meet, learn, and experience of their consumer.

Consumer Profile• Demographic: All ethnicity, All ages, All man and woman• Frequency of purchase/usage:

• Skincare Product usually consumer purchase every other 3 months. • Make-up Product purchased every 3 months for the foundation. The color parts will be more personable and if any new collection comes

up.• Usage will be everyday

• Place of purchase:• USA: Macy’s, Dillard’s, Nordstrom, Sephora, Amazon, EBay, Asian grocery stores, private store and Shiseido website

• The consumers of Shiseido are classified by AIO (activities, interests and opinions) and were grouped into three categories, namely, fashion-conscious consumers, price-conscious consumers as well as product-feature oriented consumers.

• Decision Makers vs. Purchaser• Decision makers seek value and quality in the products they choose to buy while purchasers obtain merchandises with minor effect

without hesitation.

• Brand Loyalty: • Shiseido has very strong brand loyalty and all the customer will experience the spirit of, "Omotenashi (hospitality)" with their beauty

consultant. They create a home atmosphere environment when each customer walk in to the Shiseido counter. All Beauty Consultants participate in various training programs and seminar to acquire a range of skills, from consulting skills and technical skills. The very unique that Shiseido provide to their customer was the Facial Services at the counter. A very relaxation service for the customer and better way to connect with them. This is also why Shiseido has many repeat customer come back at the counter and replenish their products.

Market Share (China)

• Shiseido has the number 3 market share for personal care product in China, 2011• Shiseido is now focusing on China

business for the next couple years. Since China has the second largest population and economic are boosting. • They also launched their e-

commerce in China Shiseido website.

Advertising/Marketing Communications• Shiseido have very strong Advertising

in the Domestic business, Japan.• In the United States they focus their

advertising through Magazine Ads, Social Media Ads, Beauty Consultant, and word of mouth.• Lady Gaga is new face for Shiseido

since 2015. • Shiseido has also partner with

celebrity make-up artist, Dick Page as their director since March, 2007

History of Shiseido Advertising

• Shiseido has entrance the cosmetic since1897, Shiseido holds the lead in the development of modern Japanese beauty culture. • In 1917, Shiseido released products using seven face powder colors to match the complexion of each women. • In 1923, when Japanese traditional hair styles were the mainstream, Shiseido introduced a Western hair style called "Mimi Kakushi

(covering the ears)." It was extremely popular throughout Japan for the next 10 years, and the name has remained part of beauty culture history.

• During the era of rapid economic growth, Shiseido introduced a social and cultural message with its summer campaign presenting the "healthy beauty of suntanned skin," proposing unprecedented images of active women.

• In early 1990s, when it became common for women to work, Shiseido released highly functional, long-lasting lipsticks, and gained popularity among working women.

• In 1997, Shiseido presented a proposal integrating fashion with makeup, and enhanced the fashion sensitivity of women. • In 2006, with the catch phrase "Japanese Women are Beautiful," Shiseido released its TSUBAKI hair care line, which expressed the

beauty of Japanese women in a straightforward manner.

Shiseido’s symbolic camellia logo was designed in 1915 by the company’s first president Shinzo Fukuhara. It may have had a few minor adjustments since then, but it has stood the test of time and remains a firm part of Shiseido’s identity to this day. The Camellia Flower symbolizes the blossoms floating in a bowl of water. This also create timeless, eastern and international, delicate and bold. The logo is appear on every Shiseido item, from the packaging to the product. Shiseido has the most advanced technology and

quality product. They are also customer oriented and focus on consumer emotion. “The Beauty is in You. “

Media

• Shiseido uses media outlet such as YouTube and Vimeo to showcase their products, tutorial, commercial, and fashion shows they participate in.• Many blogger also like to post tutorial, and review on certain product to let

other consumer knows what they can expect on the product. This is another way to help Shiseido generate more business and brand awareness. • Competitors: Estee Lauder and Lancôme both uses YouTube to showcase

their products as well along with fashion shows they host.• When Shiseido launched the Ibuki line in September, 2012, they started let

customer try the sample package in the major department store that sell Shiseido Cosmetic. The new Ibuki collections targets consumers aged between 25-35 looking to maintain the health of their skin.

Promotions

• Skincare Bonus gift with purchase for twice a year in major retailer and Shiseido online• Fall • Spring

Promotion Continue

• Sun care promotion • On going free shipping promotion with certain amount purchase

online • Once a year Friends and Family Discount in the U.S.

Internet and New Media

• http://www.shiseido.com/• Purpose: to sell products to consumers, provide contact information, and feature catalogs.

• Shiseido has made a seamless transition onto mobile phones. The mobile commerce site can be accessed on a web-enabled phone’s Internet browser or through an application module for the iPhone and Android. Also very easy to shop on the mobile and thru computer as well. On the bottom of the mobile view you can easily connect with their social media page.

• Instagram, Facebook, Pinterest, Twitter, YouTube, Thumblr and Vimeo.• Shiseido has participate in many social media and they do run social campaign thru

Facebook and Instagram• #IBUKigirl, after they launch Ibuki line. If they win, they will get a yearly supply with it. Shiseido also

went to different college campus to promote the #Ibukigirl contest. Create more brand awareness to the younger generation

• #ShiseidoSunday, to win a new WetForce Sun Kit.

Instagram Facebook Pinterest

Some Pictures for the Social Media Campaign

#Ibukigirl Contest in 2014!!

#ShiseidoSunday contest that is running now!!

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Brand Value

• Shiseido has decrease their Brand value from 2014-15 by 154 million. • Brand Rating has increase from 2014-15 AA to AA+• Shiseido has follow their new business model to gained their brand value back

by • Technology: Shiseido known for their performance and quality with new concepts and

leading-edge beauty method. • Creation: Shiseido has create their style of selling and greet the customer. • Omotenashi: This is Shiseido founding spirit to serve customers and contribute to the

world through beauty. They had create a new apps that interact with customer w throughout the consultation process. Customer are able to use the apps to find the right solution for their skincare product or make-up product. Shiseido will continue training in Japan and overseas to improving sales counter activities that use information technology to achieve the highest level of beauty.

Brand Exploratory (Qualitative Survey)• Word Cloud by asking• Friends • Family• The beauty consultant that works

for Shiseido or other beauty associate

Brand Explortory (Quantitative Survey)• Consist of 8 questions.• Random Survey that posted on

Facebook page, and UTD Taiwanese Association page. • Total 12 people participant• First three questions are the Screening

questions

• All the participant know about Shiseido.

• 83% of people has bought Shiseido product!

• 75% people bought their Shiseido Product thru department store

Brand Exploratory (Quantitative Survey cont.)• Qualitative questions

• 83% of people thinks Shiseido have Quality product.

• 50% of consumer knows promotion is from friends and family. Shows Shiseido has strong word of mouth advertising by consumer.

Brand Exploratory (Quantitative Survey cont.)• Demographic Question• Purchase habit

• Age group are mostly fall into 25-34 years old with 58% of the participant • This clearly stated that 50% of consumer will replenish

their cosmetic product 3-6 month.

• 92% of people are female that participate this survey.

Brand Recommendation• Smart phone app

• People are using smart phones every day now, so it creates a huge market for different types of apps. This also creates an additional communication channel for companies to communicate with their customers.

• In view of this, Shiseido should design a smart phone app to arouse interest of the customers and do promotions. The app can be in form of a makeup simulation. Since they already have the apps for the beauty consultant to use at the counter during consultation. They should elaborate this technology to every consumer will be able to download on their apps

• They should also add some purchase feature for different region and can probably combine their social contest on there.• This smart phone app is especially targeting at the fashion conscious and product-feature customers.

• Crossover with fashion brands• In order to demonstrate the use of cosmetics with different outfits and create a cosmopolitan image.• Fashion shows can be held to increase the exposure of Shiseido to the fashion conscious customers

• Reward Program• This is a program that encourages customers to accumulate points from any Shiseido purchase. (Clarins has their VIP program that run very

successful

• Blogger’s promotion• As product-feature oriented customers will be attracted by celebrities and will look for users’ opinions and comments, Shiseido could invite

online bloggers to promote their products.• Three main advantages of inviting bloggers to promote Shiseido’s products.

1. Shiseido is inviting them to try the products and give objective comments, so the blogger will feel free to give both positive and negative comments. By providing both sides of the comments, the credibility of the judgments will increase and more persuasive to the product-feature oriented customers. Gained more Trust.

2. They will demonstrate the usage, it helps the viewers to increase the knowledge of products as well as the techniques of using it.3. This may influence of reference group and the effect of word of mouth on the decision making process. The positive comments may

speed up the decision making process and reinforce the positive consumption experience.

Works Cites

• Endo, T. (2014, March 19). Shiseido Focuses on Langerhans Cells to Strengthen Skin Immunity. Retrieved May 7, 2015, from http://www.businesswire.com/news/home/20140318006765/en/Shiseido-Focuses-Langerhans-Cells-Strengthen-Skin-Immunity#.VUk9NPlVhBc

• King, J. (2014, July 29). Shiseido builds product awareness via consumer research. Retrieved May 7, 2015, from http://www.luxurydaily.com/shisedio-builds-product-awareness-via-consumer-research/

• Kobayashi, M. (2015, February 24). IBM empowers Shiseido Beauty Consultants with mobile apps. Retrieved May 7, 2015, from http://www-03.ibm.com/press/us/en/pressrelease/46141.wss

• Lackie, D. (2015, March 8). Why Dave loves the Shiseido brand. Samantha Clow from PEI told us her favourite Shiseido product & won! Retrieved May 7, 2015, from http://davelackie.com/why-dave-loves-the-shiseido-brand-tell-us-your-favourite-shiseido-product-win/ Market Share Reporter. Ed. "Leading Makers of Personal Care Products in China, 2011." Robert S. Lazich. 2014 ed. Detroit: Gale, 2014.Business Insights: Essentials. Web. 7 May 2015.

• Shiseido Awarded World’s Most Ethical Companies Designation Four Years in a Row. (2015, March 11). Retrieved May 7, 2015, from http://www.shiseidogroup.com/releimg/2405-e.pdf

• Shiseido Will Establish the New Research Center "Global Innovation Center*" in the Yokohama Minato Mirai 21 District, Japan. (2015, March 27). Retrieved May 7, 2015, from http://www.businesswire.com/news/home/20150327005165/en/Shiseido-Establish-Research-Center-Global-Innovation-Center*#.VUuNpPlVhBc

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