Marketing Strategies to Turnaround Yue Sai Brand in the Chinese Market

MarketingStrategiesto Turnaround YueSaiBrandin theChinese Market

MarketingStrategiesto Turnaround YueSaiBrandin theChinese Market

YueSaiis a cosmeticproductproducedby L’Oréal. TheproductwasmainlydevelopedfortheChinese marketsegment,specificallytheageing population.However,thesalesrevenuegeneratedfrom theproducthas beendeclining,which callsforcriticaldecisionsin orderto restorethepopularityof YueSai.Thispaperwill discussseveralstrategiesthat can helpL’Oréal in restoringtheperformanceof YueSaiin themarket,with a focuson its short-term andlong-term success.

Referralstrategy

Referralis an effectivestrategythat helpsorganizationsin expandingtheir marketshareby ensuringthatthecurrentcustomersrefertheir friendsto theserviceortheproduct(Zipursky, 2014). L’Oréal can achievereferrals forits brand,YueSaiby offeringpromotionsto customerswhoreferothers to YueSai.Forexample,promotionscan compriseof cashorsachetsof YueSai.

Strategyto increasetransactionprices

L’Oréalcan usetwo majorapproachesto increasethetransactionprices.First,increasingthepriceper unitof YueSaican helpL’Oréal increaseits revenueper unit.Thisis an effectivestrategybecausehighpricesattractsophisticatedcustomerswhohavea perceptionthathighpricesreflectthehighquality(Adelaide, 2014). Secondly,L’Oréal can bundle theproduct(YueSai)with othercosmeticin its portfolio.Thecostof a bundleis higherthan thatof individualproducts,butlessthan thecostof sellingtheproductsseparately.Thiswill helpL’Oréal earnmorefrom YueSai.

Retentionstrategy

Customerretentionis difficult,butthere are severalapproachesthat can helpL’Oréal in retainingYueSaiconsumers.Conductingaconsumerfeedback surveyis an effectiveapproachthat can helpthecompanyin capturingtheconcernsof YueSaiconsumers.Feedback surveydetermineswhethertheproductmeetstheexpectations of thetargetconsumers(Beard, 2014). In addition,L’Oréal can achievecustomerretentionby adoptingtheanticipatory strategy.Thisimpliesthatthecompanyshould be proactive insteadof waitinguntil problemsoccur.Forexample,L’Oréal should taketheinitiativeto determinetrendsin preferenceof theageing consumersin orderto advanceYueSaibefore itis toolate.

Choosingtheprice

PricingYueSaiwithin otherL’Oréal’s brandsis one of thecurrentchallengesthatthecompanyneedsto address.In thecaseof L’Oréal, thevalue-based approachis themostappropriatewayof pricingits rangeof products.Thevalue-based approachrequiresthefirm to understandits marketandassigneachproducta pricethatwill not resultin adetrimentaleffectonsales(Magloff, 2014). Thisimpliesthateachof theproductsin theportfolioshould besoldat themaximumpricethat consumersofYue Sai arewillingto payaslongas thatpriceis above thecostof bringingtheproductto themarket.

Promotion

Theobjectiveof promotingYueSaishould be to restoreits popularityandincreaseits marketshareamong theChinese confidentandyoungwomen.Thepromotionmessageshould alsobe changedto ensurethatpromotionseeksto informconsumersabout thehealtheffects(suchas skincare)of YueSai).Thismeansthat80 % of thecommunicationshould be on skincareand20 % onbudget.Thisis becauseconsumersof cosmeticproductsare moresensitiveto healthbenefitsof theproductstheyusethan before (Dayan &amp Kromidas, 2011). Promotionmix should compriseof conventionalmedia(includingTV andnewspaper),butfocusmoreon themodernchannels,includingthesocialmedia.DeJohn (2012) identifiedthatsocialmediasites(suchas Facebook) are effectiveplatformsthrough which cosmeticsellerscan communicate,connect,andsharetheir productswith thecurrentas wellas potentialconsumers.Thereforeanydevelopment(suchas changesin formulation andskincarecapabilities)on YueSaishould be posted andsharedwith customersin thesocialmedia.

Productformulation andpackaging

Theformulationandpackaging are criticalaspectsthat can determinethesuccessof products,especiallyin thecosmeticindustry.Trendsshowthatconsumersofcosmeticproductshavebecomemoresensitiveto theimpactof differentcosmetics on their health.Thishas ledtoa drasticincreaseinsalesof cosmeticwhoseingredientscompriseof functionalbotanicalandnaturalcompounds(Dayan &amp Kromidas, 2011). To thisend,L’Oréal should focuson theincreasethesecompetencies in theformulation of YueSai.In addition,thepackageshould addressmisconceptionsabout botanicalandnaturalproductsby provingusefulinformationpertainingto efficacy,safety,formulation, processing sources,andstability.Thistypeof formulation andpackaging will ensurethatYueSaimeetsthetastesandthepreferencesof themodernconsumers.

Distributionchannelsforshort-term as wellas thelong-term successof YueSai

L’Oréalshould adopta multi-channel approachin distributingYueSaiandtherestof its cosmeticproducts.Forexample,YueSaican be distributedthrough supermarkets, departmentstores,pharmacy,beautysalons,directselling,specialtystores,andinternet retailingamong otherchannels.Accordingto DeJohn (2012) alldistributionchannelsare distinctandcustomersexpresstheir responseto distinctstimulifrom differentchannelsin varyingtimes.Thiswill helpL’Oréal in reducingtheriskof substitutionsince thelackof theavailability of cosmeticproductsat convenientpointsof distributionresultsin consumers’intentionto tryotherproductsthat are perceivedto be moreconvenient.Themulti-channel approachwill ensurethatYueSairemainspopularandwithin thereachof consumersin theshort-term andinthelong-term.

Conclusion

Thecosmeticindustryis highlycompetitiveandineffectivepositioning can resultin thesubstitutionof products.YueSaishould be pricedusingthevalue-based approachto ensurethatcustomersare willingandableto paythesetprice.Themanagementshould focusits attentiononsocialmediamarketingin orderto shareabout YueSaiwith modernandconfidentconsumers.However,theformulation andpackaging should reflectthehealthbenefitsof YueSaiforitto succeedin thecontemporarybusinessenvironment.

References

Adelaide,S. (2014). Increasethe average transaction and your customer value.Sydney: Quality Training and Hospitality College.

Beard,R. (2014, May 5). Nine customer retention strategies for companies.ClientHeartbeat.Retrieved February 22, 2015, fromhttp://blog.clientheartbeat.com/customer-retention-strategies/

Dayan,N. &amp Kromidas, L. (2011). Formulation,packaging, and marketing of natural cosmetic products.Hoboken, NJ: Wiley.

DeJohn,A. (2012). Integrating multi-channel distribution leads to successfor beauty brands. WilliamBusiness Media.Retrieved February 22, 2015, fromhttp://www.cosmeticsdesign.com/Market-Trends/Integrating-multi-channel-distribution-leads-to-success-for-beauty-brands

Magloff,L. (2014). Value-basedpricing strategy.Santa Monica: Demand Media.

Zipursky,M. (2014). Ten referral strategies to grow your consulting business.ConsultingSuccess.Retrieved February 22, 2015, fromhttp://www.consultingsuccess.com/10-referral-strategies-to-grow-your-consulting-business

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