Maybelline Company’s Competitive Market Analysis

Industry Analysis

Maybelline New York is owned by the parent company, L’Oréal Groupé, and is a major player of the colored cosmetic industry worldwide. Maybelline is from an industry that is categorized under monopolistic competition. The company competes directly with both internal competitors, that is, other L’Oréal Groupé brands, and external competitors in the industry. In 2018, the brand had positioned itself as a global leader in the industry by earning a market share of 7.4% (Euromonitor, 2019). L’Oréal Paris, an internal competitor, came second with a share of 5.0%. This was followed by Mac, an external competitor, with 4.0% and Lancôme, also an internal competitor, with a brand share of 2.0% (Euromonitor, 2019).

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Industry Analysis

L’Oréal Paris, Mac, and Maybelline are principal brands aimed at the mass market and are often lower priced. Moreover, they are commonly found in mass merchandisers, such as Walmart, and drug stores. However, Lancôme is a prestige brand offering premium-priced products that exclusively focus on the luxury market.

The cosmetics industry is faced with several critical issues that affect its market performance. First, is its dependence on consumer spending. Since most people often regard beauty products as luxuries, the sale of cosmetics, especially in the high-end segment, is susceptible to variations in consumer spending brought about by economic trends (Cosmetics, Beauty Supply & Perfume Stores, 2019). Therefore, during economic recessions, consumers may scale down their discretionary purchases and switch to less expensive substitutes. Second is the presence of a relatively high supplier concentration in the sector (Cosmetics, Beauty Supply & Perfume Stores, 2019).

Large multinational companies manufacturing a variety of products across different market segments dominate the cosmetics industry. As a result, they have a cost advantage in terms of volume discounts and the ability to produce new products. Consequently, this reduces the negotiating power of small brands owned by small retailers. Lastly, it is difficult to forecast demand trends (Cosmetics, Beauty Supply & Perfume Stores, 2019). It is hard to predict the life cycle of cosmetic products, therefore, firms struggle to manage inventory. For instance, celebrity endorsement can escalate the sales of a particular product within a short duration, however, as the celebrity fades from the limelight, the demand of related products can reduce.

Target Market

The profile for Maybelline New York’s target customers comprise of the following demographic, psychographic, geographic and behavioral factors:

Demographics

  • Women between 16 to 35 years. The company also offers products for women above 35 years, although minimal.
  • Women in the mid to high income social class.

Psychographics

  • People with emotional needs, for instance, confidence and seductive.
  • People with an inferiority complex
  • Individuals who wear makeup everyday
  • Individuals searching for quality brands to use on their skin
  • Individuals who are conscious of cosmetic trends

Geographic

  • Major urban markets

Behavioral

  • People who wear make-up frequently
  • People who are social media savvy
  • People who are busy and have no time to look for makeup in specific stores

Marketing Mix

Product

Maybelline New York is a manufacturer of skin care and cosmetic products. It has a wide product portfolio that can be placed into four different categories. According to Maybelline (2019a), these include the:

  • Eye makeup – It consists of the Maybelline eyeshadow, mascara, eyeliner and brow.
  • Lips makeup – It constitutes the Maybelline lipsticks, lip balms and lip gloss, and lip liner.
  • Face makeup – It comprises of the foundation, powders and concealer, primer, contour and highlight, and the blush and bronzer cream.
  • Makeup accessories – Makeup brushes, tools and removers.

Place

Maybelline New York does not use the direct distribution strategy and instead, it sells it products through mass market retailers, supermarkets and pharmacies, among other retailing channels (Maybelline, 2019b). However, the company allows customers to locate products in terms of shade on their website and buy from available online retailers or be redirected to a store near their area (Maybelline, 2019b).

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Price

Maybelline New York provides products primarily targeting urban females and working class women aged 16-35 years. It uses a low pricing strategy, thus, its products are reasonably priced. Prices range from $2.46 to $39.93 (Amazon, 2019).

Promotion

Maybelline New York’s global dominance in the industry is greatly attributed to its rigorous advertising and promotion strategy. Maybelline New York uses several methods for advertising and promotion. For instance, it provides discount coupons in local newspapers and special discounts on its website. Second, the company uses brand ambassadors, in which it commonly recruits renowned make-up artists, social influencers, and other celebrities. Third, it utilizes all possible media channels, such as fashion magazines, TV campaigns, fashion events, billboards, and the social media, to promote its entire portfolio.

Marketing Strategy

Maybelline New York is the world’s renowned colored cosmetics manufacturer. It has earned the first position in the industry due to a number of successful strategies that it has employed in its operations. First and foremost is its favorable price-quality ratio. The company is known for producing quality products comparable to that of prestigious brands, such as Lancôme, that are affordable.

The price-quality ratio also gives it a cost advantage among competitors, especially during economic recessions as consumers will switch to affordable products. Moreover, Maybelline New York’s products are found in mass merchandisers, thus, they are readily available and accessible to target customers. In addition to the favorable price-quality ratio, other desirable characteristics such as the presence of a diverse product portfolio, has enabled the company to succeed in staying relevant and contending with its competitors. Fourth, the company targets women in the 16-35 age group, and this comprises of the heaviest buyers of beauty products (Statista, 2018).

Fifth, with regards to advertising and promotional strategy, the company has primarily focused on using social media platforms, and recruiting brand ambassadors. These promotional strategies are considered as the best for the targeted age group (Statista, 2018).

For instance, the use of social influencers as brand ambassadors is a growing trend in the beauty industry (Forbes, 2016). This is because they are a popular and trusted source of how-to beauty tips among young women who often visit social platforms and cosmetic product recommendations. Furthermore, celebrity vloggers can trigger sales by drawing customers to in-store meet-and-greets. Lastly, Maybelline New York has a good research and development team that improve its innovative capabilities hence, enabling it create new products that determine or align with the current trends in the cosmetics industry, hence they are able to remain competitive.

Overall, Maybelline New York is doing a good job of reaching the target market. However, there are a few discrepancies that still emerge from their strategies, that is, some of their strategies are unsuccessful. For instance, the consumer market is shifting towards cosmetic products with natural ingredients. This is benefiting niche brands, such as Lancôme, at the expense of mass-market retailers (Maybelline New York).

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As a strong and innovative company in the beauty industry, Maybelline New York should consider diversifying its products at lower production costs to remain competitive. Secondly, this shift in consumer behavior has come as a blow for Maybelline, since some countries have enacted various government regulations demanding for cosmetic manufacturers dealing with synthetic ingredients to switch to natural and safer alternatives. Third, the company should try and explore other possible market segments that comprise men and seniors. When it comes to seniors, a large portion of the consumer market is ageing, and this is an untapped source of revenue for Maybelline.

Third, there are several industry opportunities that Maybelline has not yet explored, and these include the male and older consumer segment. Empirical research shows that the male baby boomers are becoming more conscious about their appearance (Cosmetics, Beauty Supply & Perfume Stores, 2019). Although the male prestige skin care is an emerging market, it shows the promise of considerably growing in future. Therefore, Maybelline’s research and development team should consider diversifying its products to cater to the needs of consumers of all genders. On the other hand, Maybelline has given little emphasis of cosmetic products that can be used by women above the age of 35 year.

It is essential to note that individuals in this age group as also self-conscious, therefore, Maybelline should give more attention to the manufacturing of anti-ageing cosmetic products and other cosmetics that are suitable for this niche. Lastly, the direct selling strategy will hinder Maybelline New York’s competitive advantage. Maybelline New York does not sell its products directly to consumers, but instead use other retail channels, such as supermarkets.

This is unlike its competitors, which all employ both the direct and indirect selling strategy. The direct strategy will limit Maybelline’s performance as it prevents the company from closely interacting with its customers. This will result in the company having a reduced influence on its clients and it will not be aware of how the customers feel towards its products. The issue of direct selling can be mitigated by the company selling its products through its website.

References

Amazon. (2019). Beauty and personal care. Web.

Cosmetics, Beauty Supply & Perfume Stores – Quarterly Update 3/25/2019. (2019). Web.

Euromonitor. (2019). Beauty and personal care. Web.

Kristen, F. (2019). Examining the beauty industry’s use of social influencers. Elon Journal of Undergraduate Research in Communications, 7(2), 78-87.

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Maybelline. (2019a). Maybelline New York. Web.

Maybelline. (2019b). FAQ. Web.

Statista. (2018). Cosmetics consumer behavior in the U.S. Web.

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