Innisfree Marketing Strategy & Innisfree Marketing Plan

Introduction: Innisfree Mission and Vision

Innisfree is a South Korean (SK) natural cosmetics brand with more than 900 in SK. The brand’s name reflects the core concept of its mission and vision: it is derived from the words “innis” (island) and “free.” Through its cosmetics, Innisfree wants its customers to enjoy the natural energies: the fresh air, warm sunlight, and healthy soil of the pristine island. It appears that Innisfree’s strategy has so far been outstandingly successful. Since its foundation in 2000, the brand has been growing more than 30% per year in Asia. The brand has been receiving critical appraisal and enthusiastic response from countries outside SK. Currently, Innisfree is tapping into the Singaporean market characterized by high competitiveness and increased consumer expectations. The present marketing plan describes the steps that the brand should take in the upcoming years (2020-2022) to both stay true to its core values and strike a chord with Singaporean customers.

Innisfree Marketing Strategy: Situational Analysis

Alongside a few other cosmetic brands, Innisfree belongs to the Amorepacific group that ranked seventh among the world’s best beauty companies in 2017. The company ranks second within the group, only losing to Sulwhosoo in the number of sales. The success of Innisfree and especially its rapid growth since 2010 can be explained from the resource-based view (RBV). The natural cosmetics brand possesses and employs both tangible and intangible resources.

Being a part of the Amorepacific group, Innisfree has access to factories, manufacturing equipment, and resources for opening physical stores. Besides, the Amorepacific group governs its own technological institute that conducts a broad range of studies in beauty, health, dermatology, and bioscience. This implies that Innisfree is able to adopt evidence-based practices when developing its products and back up their solutions with actual scientific findings. On its official website, the brand states that it develops natural formulas for its product at the so-called Green Lab situated in the heart of Jeju island. Innisfree explains that the native plants of the island have beauty properties different from those found on the land. Their specialties allow the company to offer consumers unique ethnic beauty therapy.

As for intangible resources, it is safe to say that the main forte of Innisfree is its capitalization on natural beauty. As Retail in Asia (2017) writes, Innisfree breaks the stereotype that natural cosmetics cannot be as affordable as mass market products. The brand seeks to reach out to broader demographics who might be interested in a healthy lifestyle. Aside from that, Innisfree works relentlessly on improving customers’ in-store experience by appealing to all five senses. The SK brand is interested in making the process of purchasing a pleasant event to be remembered and its stores welcoming and engaging places (Retail in Asia 2017).

Another intangible resource that has been key to the company’s performance is its reputation. So far, Innisfree has been congruent in its actions: not only does it promotes natural beauty, it also shows its commitment to green initiatives. In particular, the SK brand reports donating W1.53 billion to ecological campaigns. Innisfree encourages its consumers to buy long-term use products such as handkerchiefs and introduce eco-friendly strategies in their daily lives through their mobile application.

From the situational analysis, it becomes clear that Innisfree enjoys certain heterogeneity of resources. It stands out on the saturated South Korean cosmetics market due to its unique approach and rare resources provided by the Amorepacific group. Probably, the Amorepacific technological institute and Green Lab are the resources that fall under the category of VRIO:

1. V – valuable. Innisfree’s resources create additional value as they allow the brand to innovate their products;
2. R – rare. The SK company capitalizes on the uniqueness of Jeju island, which alongside with scarce technological opportunities, makes the resource rare;
3. I – costly to imitate. Laboratories and institutes are generally costly to maintain, which makes this resource not exactly replicable;
4. O – organized to capture value. Innisfree’s use of scientific advances reflects its core values: health, safety, and natural beauty.

Another approach to evaluating the current situation at Innisfree is conducting the SWOT analysis. The breakdown of the principal components is presented below:

1. S – strengths encompass all the internal competitive advantages that the company enjoys. As it has been mentioned earlier, Innisfree possess valuable tangible (laboratories, technologies) and intangible (mission, reputation) resources;
2. W – weaknesses include all the shortcomings that the company shows at present. One disadvantage is its strong affiliation with the Amorepacific group that has a final say in its decisions. Another apparent shortcoming is the branding of products as “cheap” and “affordable,” which might repel consumers looking for more high-end options (Retail in Asia, 2017);
3. O – opportunities. Singapore is a global business hub with low taxes, excellent funding options, and government grants (Economy profile Singapore, doing business 2020, 2020). The beauty industry is resilient to economic cycles and continues to thrive even in times of economic uncertainty (GMI: Singapore Cosmetics, 2016). The Singaporean customer base is diverse in terms of income and expectations: a new and upcoming brand can reach both consumers preferring cheaper options as well as those with a taste for upscale products;
4. T – threats. Based on the recent “GMI: Singapore Cosmetics” report, it becomes clear that there are two imminent threats to Innifree’s success. Firstly, the beauty industry in Singapore is characterized by short product life cycles. Innisfree dedicates great amounts of time to product development before its introduction, which might become a competitive disadvantage. Another threat is US, French, and Japanese companies dominating the market as the top cosmetics suppliers.

Innisfree Marketing Strategy: Marketing Objectives & Strategy Formulation

Given the highlights of the situational analysis, the following marketing objectives can be formulated:

1. financial: ensure the steady growth of Innisfree in 2020-2022 in Singapore with an annual increase of at least 10%. By the end of the cycle, Innisfree shall become one of the three top suppliers, outdoing the US, France, or Japan;
2. non-financial: expand the customer base and increase customer satisfaction; stay true to the company’s core values while adjusting to the expectations of the Singaporean market.

In alignment with the outlined marketing objectives, the strategy shall focus on opening more stores in Singapore and attract more customers. This should be possible through thoughtful reputation management, advertising, and enhancing customer experience. As for the non-financial objectives, it might make sense for Innisfree to “glocalize” its strategy. As Grigorescu and Zaif (2017) write, glocalization offers an alternative to standardization; it allows companies to localize their products without losing its identity. Singapore is likely to offer its own set of challenges, and the customer base might be different from those in other Asian markets where Innisfree is already represented (China, Taiwan, Japan, and others). Innisfree needs to find a balance between appeasing the new customer and preserving its vision.

Innisfree Marketing Strategy Formulation: Branding and Internal Branding

Branding

In Singapore, Innisfree is planning to build a strong presence online and offline. Online, the SK cosmetic brand will focus on social media – the tool that is widely used by its contenders from US, France, and Japan. One of the ways to boost social media following and interaction rate is to collaborate with other brands and influencers, which Innisfree is already doing. In 2020, the company announced its collaboration with Disney on Instagram, giving some of its best-selling products a new, Disney-inspired design (Innisfree and Disney team up for a beautiful start to 2020 2020). As for the physical presence, Innisfree will focus on building spaces that appeal to consumers’ five senses. The stores will become a place where a person can not only make a purchase but also spend quality time and receive positive emotions.

Internal Branding

In regards to internal branding, Innisfree intends to hold on its five promises outlined on its official websites. The promises below constitute the brand’s core identity and define its unique voice amid the crowded and oversaturated cosmetics market:

1. Innisfree pursues healthy beauty and makes sure that all products contain reliable ingredients. This promise is in line with Singaporean consumers’ expectations: they enjoy a high standard of living and are not ready to settle for anything less. Singaporeans are open to experimenting with foreign products but brand-conscious: their loyalty is based on their confidence in the product (Ng & Lee 2015);
2. Innisfree promotes smart consumption by offering various high-quality products at affordable prices;
3. Innisfree intends to expand ist eco-friendly green design that allows consumers to enjoy the rich benefits of nature;
4. Innisfree implements the eco-friendly green life initiative to make sure that it keeps its environmental footprint to the minimum. This promise has good chances to resonate with the Singaporean consumer. Singapore is a small country with a high population density; as reported by the National Environmental Agency (2019), it suffers from limited natural resources and industrial pollution;
5. Innisfree provides customer experience that speaks to all five senses.

Innisfree Marketing Strategy: Marketing Mix

Product Management

Innisfree’s product management in Singapore will rely on the following three pillars:

1. releases. There is no right answer to how often a business should release new products. In the case of Innisfree, there should be a balance between planning a healthy product cycle life and adjusting to peak consumer activities. Forbes Agency Council (2017) argues that during the holidays, consumers switch from online to offline, are driven by emotions, and have a limited time to buy gifts. Innisfree might consider planning new releases around big holidays in Singapore;
2. design. Innisfree needs to find a design solution that will both a) be true to the company’s values (green, eco-friendly) design; b) be in line with trends (example: Disney collaboration);
3. technical specifications / product properties. Innisfree expresses its commitment to the development of evidence-based solutions and enhancing product properties.

Pricing Management

Innisfree’s pricing management in Singapore will include the following tactics:

1. competitive pricing. Given that the beauty market in Singapore is already saturated with foreign brands, taking into consideration their pricing strategies is non-optional;
2. pricing for promotion. Promotion prices are an old but effective tactic: Innisfree will focus on developing attractive offers, especially around holidays;
3. diversification. Innisfree may want to reach out to diverse customer demographics by offering both affordable makeup lines and more upscale options. This strategy will work well for the company’s image since it will avoid being labeled either “cheap” or “too expensive.”

Distribution Management

Innisfree plans to focus on the diversification of its distribution channels. This will be enabled through the following two tactics:

1. improving the online shopping experience. Facilitating online purchases is integral to the company’s success in Singapore. Kemp and Moey (2019) reports, 85% of Singaporeans (five million) have Internet access. 89% of them have browsed the Internet for online stores at least once in their lives; 74% have made at least one purchase. Therefore, it is imperative that Innisfree product be represented online to meet consumers’ expectations;
2. enhancing customer experience at physical stores. Innisfree will continue its direct-to-customer strategy and retain control over store design and zonation. According to Andajani (2015), customers pay attention to their physical surroundings: visuals, sounds, smells, and even air temperature. To make customers spend more time at the physical stores, Innisfree will provide ameliorated conditions. Those will include furniture, relaxation zones, coffee shops inside the stores, and others (Taylor 2019).

Communication and Promotion Management

In terms of communication and promotion management, Innisfree will employ all four key kinds:

1. advertising. Innisfree will capitalize on building a strong online presence and focusing on storytelling rather than aggressive advertising. On the market that is overwhelmed with selling offers, Innisfree seeks to find its unique voice and connect with customers at a more personal level;
2. publicity. Innisfree will guard its reputation by governing its public relations and making sure to respond to criticism on time. It is not possible to avert negative feedback altogether, therefore, the brand will focus on reaching out to unsatisfied customers and asking for their honest opinion;
3. sales promotion. Sales promotion will take place around major holidays when as Forbes Agency Council (2017) noticed, customers have to buy a lot of gifts while being pressed for time;
4. personal selling. Innisfree will make sure that all shop assistants are trained to be polite and helpful. They need to respect the customer and promote diversity and equality.

Budget Management

1. Income:

• Sales;
• Collaboration with other brands.

2. Expenses:

• Wages
• Store construction, renovation, and maintenance:

1. 1. construction;
   2. design;
   3. furnishing;
   4. decorations for promotions and holidays;
   5. renovation and maintenance.

• Product development

1. 1. laboratory equipment maintenance;
   2. design;
   3. staff salaries.

• Manufacturing
• Transportation and logistics
• Advertisement

Rough estimation of the operating for years 2020-2022: $150 billion X 3 = $450 billion.

Innisfree Marketing Plan: Implementation and Control

The table below (Table 1) comprehensively describes the implementation of the aforementioned tactics:

Table 1. Implementation and control of each tactic important for Innisfree’s marketing in Singapore.

Innisfree Marketing Strategy: Conclusion

Innisfree is a South Korean cosmetics company that is currently penetrating the Singaporean beauty market. The company claims to be in the pursuit of the most natural formulas for its products and promoting an eco-friendly green life. The bran plans to preserve its identity while localizing its products to appease the customer. In order to outdo its competitors on the already crowded cosmetics market, Innisfree will capitalize on eco-friendly solutions and strong online and offline presence. The brand shall use its access to scientific developments as its main strength and overcome such weaknesses and threats as close affiliation with the Amorepacific group and serious contenders.

Reference List

About us n.d.

Andajani, E 2015, ‘Understanding customer experience management in retailing’, Procedia-Social and Behavioral Sciences, vol. 211, pp. 629-633.

Economy profile Singapore, doing business 2020 2020.

Forbes Agency Council 2017, 11 consumer behaviors every business should know heading into the holidays.

Global Market Insight: Singapore cosmetics, skincare, and toiletries overview, Web.

Grigorescu, A. and Zaif, A., 2017. The concept of glocalization and its incorporation in global brands’ marketing strategies. International Journal of Business and Management Invention, 6(1), pp.70-74.

Innisfree and Disney team up for a beautiful start to 2020 2020.

Kemp, S & Moey, S 2019, Digital 2019 spotlight: ecommerce in Singapore, Web.

National Environmental Agency 2019, Annual reports.

Ng, S & Lee, A.Y. eds., 2015, Handbook of culture and consumer behavior, OUP Us.

Retail in Asia 2017, South Korean brand Innisfree hit 1 trillion won sales.

Taylor, G 2019, Storytelling, not marketing: how The Innisfree NYC store immerses shoppers into the brand.