Executive Summary …3
Company Details …4
Key Facts Of Estee Lauder …5
Portfolio Of Brands …15
Keep Shopping…Estee Lauder …39
Growth Strategy …40
SWOT Analysis …47
Marketing & Communication …63
Technology In Estee Lauder …73
HR Policies In Estee Lauder …81
Corporate Social Responsibility …85
Philanthropy: Global And Local …94
A Selection Of 2006-2007 Awards …98
USP Of Estee Lauder …102
Estee Lauder In India …103
The Estee Lauder Companies (Estee Lauder) is a globally recognized manufactures and markets skin care, makeup, fragrances and hair care products in over 140 countries spanning the Americas, Europe, the Middle East, Africa and Asia Pacific. It is headquartered in New York and employed about 32000 people.
Some of the best known brands of the company include Estee Lauder, Aramis, Clinique, Prescriptives, Lab Series, Origins, M.A.C, Bobbi Brown, La Mer, Aveda, Jo Malone, Bumble and bumble, Darphin, American Beauty, Flirt!, Good Skin and Grassroots.
They strongly believe that growth is possible globally by their ongoing strategy to build a diversified business base that is Multi-National, Multi-Channel and Multi-Brand.
In conclusion, Estée Lauder could introduce sub-brands customized for different markets, which provide the flexibility to enjoy multiple brand images without diluting each other. Since ESTEE LAUDER is a global name, so it must provide the same concentration on all its markets to bring in global stability in its business as a whole.
The guiding vision of The Estee Lauder Companies is:
“Bringing the best to everyone we touch.”
By “the best,” they mean the best products, the best people and the best ideas. These three pillars have been the hallmarks of the Company since it was founded by Mrs. Estée Lauder in 1946. They remain the foundation upon which they continue to build their success today.
One of the world’s leading manufacturers and marketers of quality skin care, makeup, fragrance and hair care products. The Company’s products are sold in over 140 countries and territories. For fiscal year 2008, net sales were $7.9 billion and net earnings from continuing operations were $474 million.
Key facts of Estee lauder:
The Company was founded in 1946 by Estée and Joseph Lauder.
Their products are sold in more than 140 countries and territories.
Headquarter in New York.
They have 29 brands.
They have 32,000 employees worldwide.
577 Single-Brand Freestanding Stores.
86 Multi brand Stores.
Net sales for Fiscal Year 2008 were near $8 billion.
60 percent of total sales came from outside the United States.
Research and Development Centers.
• Melville, New York
• Blaine, Minnesota
• Oevel, Belgium
• Tokyo, Japan
• Ontario, Canada
• Shanghai, China
• Colombes, France
• United States
• United Kingdom
The Estée Lauder Companies is a publicly traded company (NYSE: EL)
Currently, the Lauder family is represented by the second and third generations of family members.
Ownership: A majority of stock is owned by members of the Lauder family. The Company has been public since November 1995.
With the purchase of renewable electricity for all of its operations facilities at the end of 2007, The Estée Lauder Companies is the only beauty company to use green power for all of its manufacturing.
BOARD OF DIRECTORS
LEONARD A. LAUDER WILLIAM P. LAUDER
Chairman Chief Executive Officer
DANIEL J. BRESTLE FABRIZIO FREDA
Vice Chairman and President, ELC NA President and Chief Operating Officer
EVELYN H. LAUDER CEDRIC PROUVÉ
Senior Corporate Vice President Group President—International
RICHARD W. KUNES MALCOLM BOND
Executive Vice President Executive Vice President
Chief Financial Officer Global Operations*
GREGORY F. POLCER ALEXANDRA C. TROWER
Executive Vice President Executive Vice President
Global Supply Chain Global Communications
RONALD S. LAUDER SARA E. MOSS
Chairman Executive Vice President
Clinique Laboratories, LLC General Counsel
AMY DIGESO JOHN DEMSEY
Executive Vice President Group President
Global Human Resources
Executive Vice President
Development and Product Innovation
The Company was founded in 1946 by Estée and Joseph Lauder. The flagship brand, Estée Lauder, was launched with four products: Super Rich All Purpose Crème, Crème Pack, Cleansing Oil and Skin Lotion.
Five additional brands were developed internally:
Aramis, a line of prestige fragrance and grooming products for men, was launched in 1964.
Clinique, the first dermatologist-guided, allergy-tested, fragrance-free cosmetics brand, followed in 1968.
Prescriptive, a color authority with an advanced collection of highly individualized products, was founded in 1979.
Lab Series Skincare for Men, specializing in men’s treatment, debuted in 1987.
Origins, a plant-based line of skin care, makeup, bath/body and sensory therapy products, were introduced in 1990.
In 1993, the Company signed a global licensing agreement with designer Tommy Hilfiger.
In 1994, the Company acquired a majority interest in M•A•C. (The acquisition was completed in 1998.)
In 1995, the Company acquired a second makeup artist line, Bobbi Brown essentials.
It acquired the luxury skin care brand La Mer.
It signed a global licensing agreement with Kiton, an Italian fashion house for beauty products.
In 1997, the Company signed a licensing agreement with American fashion designer Donna Karan.
It acquired Aveda, a leader in the prestige hair care industry.
It acquired jane, a makeup brand. (jane was sold in 2004.)
In 1998, the Company began to sell certain products over the Internet.
In 1999, The Estée Lauder Companies created a new division, ELC Online, to manage online strategies and activities for all brands. The Company acquired Jo Malone, the London-based marketer of prestige skin care and fragrance products.
It signed a license agreement with handbag designer Kate Spade LLC to develop beauty products. (kate spade beauty was discontinued in June 2005.)
In 2000, the Company acquired a majority equity interest in Bumble and bumble LLC, an upscale hair salon and developer, marketer and distributor of quality hair care products. (The purchase was completed in 2006.)
It also acquired gloss.com, an e-commerce beauty website. Chanel and Clarins subsequently acquired minority interests. (Gloss.com was shut down in 2007.)
In 2003, the Company acquired Laboratories Darphin, a Paris-based prestige skin care company.
It acquired Rodan + Fields, a dermatologist-created skin care line. (Rodan + Fields were sold in 2007)
It signed a licensing agreement with Michael Kors, an American fashion designer, for beauty products.
In 2004, the Company’s BeautyBank division launched three brands: American Beauty, Flirt! and good skin, sold exclusively in Kohl’s department stores.
The Company signed an agreement with real estate mogul Donald J. Trump for Donald Trump, The Fragrance. (Donald Trump, The Fragrance was discontinued in 2007.)
In 2005, the Company signed a license with the Italian design house Missoni.
In 2006, BeautyBank introduced Daisy Fuentes.
In 2007, the Company acquired Ojon Corporation, a Canadian prestige hair care company that makes products derived from the Ojon tree in Central America.
In 2008, BeautyBank launched Eyes by Design, the first prestige cosmetics line to focus on eye products, sold exclusively on HSN and HSN.com.
Skin care: Moisturizers, creams, lotions, cleansers, sun screens and self-tanning products
Makeup: Lipsticks, lip glosses, mascaras, foundations, blushes, eye shadows, nail polishes and powders. Also compacts, brushes and other makeup tools
Fragrance: Eau de parfum sprays, colognes, lotions, powders, creams and soaps based on particular fragrances. Also bath and aromatherapy products
Hair care: Shampoos, conditioners, styling gels and crèmes, hair coloring products and hairsprays
PORTFOLIO OF BRANDS:
Launched in 1946 as the flagship brand of The Estée Lauder Companies Inc. Sold in more than 140 countries and territories. Technologically advanced and high-performance products with a reputation for innovation, sophistication and superior quality. Select products: Advanced Night Repair, Idealist Pore Minimizing Skin Refinisher, Perfectionist [CP+] Wrinkle Lifting Serum Corrector for Lines/Wrinkles/Age Spots, Hydra Bright Skin-Tone Perfecting Moisturizer, Re-Nutriv Ultimate Youth Creme, Re-Nutriv Ultimate Lifting Creme, Resilience Lift Extreme Ultra Firming Crème SPF 15, Cyber White EX Extra Concentrated Brightening Essence, Nutritious Vita-Mineral Energy Lotion, Double Wear Light Stay-in-Place Makeup SPF 10, Double Wear Zero-Smudge Lengthening Mascara, Private Collection Tuberose Gardenia, Estée Lauder pleasures, Pure White Linen, Beautiful, Bronze Goddess, Sensuous and Signature Hydra Lustre Lipstick.
Aramis was introduced in 1964 as the first prestige men’s fragrance and grooming products brand. Sold in more than 130 countries and territories. Select products: Aramis Classic fragrance, Aramis Soap on a Rope, Aramis 24 Hour Antiperspirant Spray, Aramis 24 Hour High Performance Deodorant Stick and Aramis Invigorating Body Shampoo.
Clinique was founded in 1968 as their first dermatologist-created, prestige cosmetic brand. Sold in more than 140 countries and territories. Today, Clinique’s mission remains what it was from the beginning: to provide the highest quality and most effective collection of products to enhance every skin type and tone. The brand’s customized approach and quality products—all meticulously tested and carefully formulated with the latest science—have made Clinique one of the leading skin care authorities in the world.
Clinique offers products for men and women of all ages and ethnicities. Select products: 3-Step Skin Care
System, Redness Solutions, Even Better Skin Tone Corrector, Acne Solutions Clear Skin System Moisture Surge Extended Thirst Relief, Lash Power Mascara Long-Wearing Formula, Long Last Gloss wear for Lips SPF 15, Almost Powder Makeup SPF 15, Clinique Happy and Skin Supplies for Men.
Prescriptives was established by The Estée Lauder Companies Inc. in 1979 featuring custom color for women. Sold in five countries. Prescriptives focuses on delivering flawless-looking skin—for all skin types, from lightest to darkest. Prescriptives also features a personalized skin care regime for all skin types. Select products: Flawless Skin Total Protection Makeup, Virtual Skin Super Natural Finish Makeup, Any Wear Multi-Purpose Makeup Stick SPF 15, Camouflage Cream, Super Line Preventor Xtreme, Intensive Rebuilding Moisturizer, _magic by Prescriptives Liquid Powder and False Eyelashes Plush Mascara.
Lab Series Skincare for Men was introduced by The Estée Lauder Companies Inc. in 1987. Sold in more than 55 countries and territories. A global leader and authority in men’s skin care, Lab Series Skincare For Men is solely dedicated to men and their skin’s unique needs. The elite team of doctors, scientists and skin care specialists of the Lab Series Research Center have
developed high-performance, technologically advanced skin care, hair and shaving essentials to keep men looking healthy, comfortable and well-groomed. Select products: Maximum Comfort Shave Cream, Triple Benefit Post-Shave Remedy, Root Power Treatment Shampoo, Oil Control Daily Hydrator and Age Rescue Face Lotion.
Origins was founded by The Estée Lauder Companies Inc. in 1990 as the first department store wellness brand. Sold in more than 30 countries and territories. The mission at Origins is to promote beauty and wellness through good-for-you products and feel-good experiences while celebrating the connection between Mother Nature and human nature. Origins is a brand that offers options for consumers. Origins is now a master brand with three distinct pillars all dedicated to offering healthy choices for every consumer. The pillars include: Core Origins, Dr. Andrew Weil for Origins™ and Origins Organics™. In October 2007, Origins was the first to market with a full line of prestige skin, body and hair care products certified under the United States Department of Agriculture (USDA) National Organic Program called Origins Organics™. Select products:
Peace of Mind® On-the-Spot Relief, Dr. Andrew Weil for Origins™ Plantidote Mega-Mushroom Treatment Lotion, Origins Organics™ Nourishing Face Lotion, Gloomaway™ Grapefruit Body-buffing Cleanser and Youthtopia™ Firming Eye Cream with Rhodiola.
The brand fully joined The Estée Lauder Companies Inc. family of brands in 1998 after majority interest was acquired in 1994. Sold in more than 65 countries and territories. A broad line of color cosmetics, makeup tools, skin care, foundations, fragrances and accessories targeting professional makeup artists and fashion forward consumers. M.A.C: All races, All sexes, All ages. Select products: Dazzlelash, Mineralize Skinfi nish/Natural, Fluidline, Prep+Prime Face Primer SPF 50, Slimshine Lipstick, Lipglass, Plushglass and Viva Glam.
Bobbi Brown joined The Estée Lauder Companies Inc. family of brands in 1995. Sold in select retailers in more than 42 countries and territories. An exclusive beauty line developed by celebrated makeup artist Bobbi Brown with a focus on service and teaching women to be their own makeup artists. Professional line includes color cosmetics, skin care, professional makeup brushes and tools, accessories and fragrance. Select products: Luminous Moisturizing foundation, Creamy Concealer
Kit, Shimmer Brick Compact, Long-Wear Gel Eyeliner, Long-Wear Cream Shadow, Lip Color, Hydrating Eye Cream, Extra line of skin care, Bobbi Brown beach fragrance and related products.
La Mer joined The Estée Lauder Companies Inc. in 1995. Sold in more than 40 countries and territories. La Mer represents supreme luxury and serious treatment.
Crème de la Mer was conceived by Dr. Max Huber, an aerospace physicist, after an explosion during an experiment resulted in severe chemical burns to his face. Twelve years and 6,000 experiments later, he perfected Crème de la Mer. Since then, it has evolved into what can only be described as a legend. La Mer has expanded from the original, bestselling Crème de la Mer into a complete range of facial skin care and body products. Select products: The Eye Concentrate, The Lifting Face Serum and The Radiant Infusion.
Jo Malone joined The Estée Lauder Companies Inc. in 1999 and is available in 14 countries and territories. The British lifestyle brand is known for its unique fragrance portfolio and luxury products for the home. Having rewritten the rules of perfumery by mixing unexpected combinations of ingredients and providing elegant yet playful concepts, The World of Jo Malone™ continues to inspire a loyal following. Jo Malone favorites include: Lime Basil & Mandarin Cologne and Home Candle, Orange Blossom Cologne, Pomegranate Noir Cologne, Grapefruit Home Candle and Vitamin E Gel.
Darphin joined The Estée Lauder Companies Inc. in 2003. Sold in more than 60 countries and territories. A well established, Paris-based brand offering prestige skin care based on a 3D program—body care, makeup and massage techniques inspired by its founder Pierre Darphin. All products are created from the fi nest plant extracts and botanical aromas. Sold in independent European pharmacies, beauty salons and spas worldwide. Select products: 8 Flower Nectar Aromatic Care, Arovita C Line Response Firming Serum, Stimulskin Plus Eye Contour Cream, Predermine Cream, Aromatic Purifying Balm, Denblan whitening toothpaste and Volume Shampoo.
Tom Ford joined The Estée Lauder Companies Inc. when the exclusive global license agreement was signed in 2005. Sold in 16 countries and territories and select travel retail locations. Select products: Tom Ford Black Orchid Eau de Parfum, Tom Ford Black Orchid Perfume, Private Blend Collection and Tom Ford Black Orchid
Ancillary Collection including Luminous Hair Perfume, Hydrating Emulsion, Cleansing Oil and Finishing Oil.
Tommy Hilfiger joined the Estée Lauder Companies Inc.
family of brands when the exclusive global license agreement was signed in 1993. Sold in more than 120 countries and territories. Tommy Hilfiger Toiletries produces fragrances and body products that reflect the classic, American cool themes of designer Tommy Hilfiger. Select products: Hilfiger, Dreaming Tommy Hilfiger, tommy, tommy girl, tommy summer and tommy girl summer.
Kiton, a prestigious Italian tailoring company that combines the traditions of fine Italian tailoring with a reverence for luxury and elegance, joined The Estée Lauder Companies Inc. family of brands when the exclusive global license agreement was signed in 1995. Since 1968, Kiton creations by Signore Ciro Paone have elevated hand tailoring from craft to art form within the sartorial splendor of Italy. Sold in more than ten countries and territories, Kiton is a fragrance that embodies the very essence of fashion, elegance and sophisticated masculinity. Introduced in March 2007, Kiton Black is a couture version of the original fragrance that reflects a man’s impeccable taste and the desire to have the very best. Select products: Kiton and Kiton Black fragrances.
Donna Karan joined The Estée Lauder Companies Inc. family of brands when the exclusive global license agreement was signed and business acquired in 1997. Sold in more than 120 countries and territories. Luxury fragrance, bath and body collections that reflect the quality, style and innovation identified with designer Donna Karan. Select products: Donna Karan Cashmere
Mist, Donna Karan Gold, Donna Karan Black Cashmere, Donna Karan Essences, Donna Karan Chaos, Donna Karan Fuel for Men, Donna Karan New York, DKNY Be Delicious Women and Men, DKNY Red Delicious Women and Men, DKNY Delicious Night, DKNY The Fragrance for Women and DKNY The Fragrance for Men.
Michael Kors joined The Estée Lauder Companies Inc. family of brands when the exclusive global license agreement was signed and buiness acquired in 2003. Sold in more than 20 countries and territories. The designer’s signature scent, Michael Kors, is a modern interpretation of the classic Tuberose. Select products include: original Eau de Parfum spray, a chic Eau de Toilette and innovative Leg Shine. Since the launch of Island Michael Kors in 2005, the designer has introduced limited-edition island destination fragrances including Island Michael Kors Fiji (2006), Island Michael Kors Hawaii (2006) and Michael Kors Island Capri (2007).
Sean John joined The Estée Lauder Companies Inc. family of brands when the exclusive global license agreement was signed in 2005. Sold in more than 35 countries and territories. Unforgivable catapulted to immediate success in the United States and around the world and was joined this year by Unforgivable Woman. Unforgivable and Unforgivable Woman are premium luxury fragrances and bath and body collections. They reflect the impeccable taste, sophistication, style and belief that “life without passion is Unforgivable,” epitomized by multi-media mogul Sean “Diddy” Combs. Select products: Unforgivable Eau de Toilette and ancillaries including Shower Gel, Deodorant Stick, After Shave and After Shave Balm, and Unforgivable Woman Scent Spray and ancillaries including Body Oil Spray, Bath and Shower Gel and Body Lotion.
Missoni joined The Estée Lauder Inc. Companies family of brands pursuant to an exclusive global licensing agreement with Missoni, which saw its first fragrance launch in 2006. Sold in more than 16 countries and territories, Missoni, the Milan-based fashion house, is
celebrated for its vibrant knitwear and engaging graphic designs. After more than 50 years in the fashion business, the Italian knitwear company launched Missoni, an Italian fragrance for women, in Spring 2006, followed by its second fragrance, Missoni acqua in Summer 2007. Select products: Missoni Eau de Parfum, Eau de Toilette, Parfum, Body Lotion, Body Crème and Shower Gel, and Missoni acqua Eau de Toilette, Parfum, Body Lotion and Shower Gel.
In 2006, Coach and The Estée Lauder Companies Inc. embarked on a collaboration to develop and market a line of fragrance and beauty products under the Coach brand name. Coach is the leading marketer of modern classic American accessories. Its first fragrance, which launched in Spring 2007, embodies the many personalities of the Coach woman—timeless, chic and sophisticated. The scent is classically inspired with a unique blend of florals. The signature fragrance launch was followed with ancillary and beauty products from Coach including the Coach Lip Gloss Collection, The Coach Lipstick Collection, solid perfume charms and body lotions. A second fragrance, Legacy, is planned to
launch in Fall, 2008. The collection is available exclusively in Coach U.S. and Japan retail stores and at coach.com.
Aveda joined The Estée Lauder Companies Inc. family of brands in 1997. Sold in more than 25 countries and
territories. Premium professional and consumer hair care, styling, professional hair color, skin, body, spa, aroma, makeup and life style products based on The Art and Science of Pure Flower and Plant Essences that fulfill the brand’s mission of environmental leadership and responsibility. Aveda products are sold in prestige salons and spas, cosmetology schools, specialty retailers and via freestanding Aveda Experience Centers and select Aveda Institutes. Select products: Be Curly Shampoo and Conditioner, Uruku makeup collection, Aveda Men Pure-Formance hair care, Green Science skin care, Chakra Balancing Mists, Botanical Hair & Scalp professional treatment, Shampure Shampoo and Conditioner, Hand Relief and Smooth Infusion Style-Prep Smoother.
Majority interest acquired in 2000, Bumble and bumble joined The Estée Lauder Companies Inc. family of brands when full purchase was completed in September 2006. Sold in more than 15 countries and territories. A New York based hair care and Education Company with two salons that creates high-quality hair care and styling products distributed through other top-tier
salons and select prestige retailers. Bb. University provides business and design education to the Bumble and bumble network of independent salons. Products are salon and stylist tested and found backstage at fashion shows, photo shoots, and TV and film sets. Select products include: Spray de Mode Hairspray, Gentle Shampoo, Super Rich Conditioner, Creme de Coco Shampoo, Conditioner and Masque, Thickening Spray, Brilliantine, Styling and Tonic Lotions, Sumo Tech, Grooming Creme, Surf Spray, Bb. Shine Spray and Hair Powder, which comes in five custom colors.
Ojon joined The Estée Lauder Companies Inc. family of brands in 2007. Sold in four countries and territories. Ojon creates wildcrafted beauty products using traditional indigenous ingredients found in the Central American rainforests. The rare naturally-derived elements are hand-harvested to ensure purity and potency. Sustainability and preserving the vital natural environments of indigenous communities around the world is at the heart of the brand’s mission. Select products: Restorative Hair Treatment, Ultra Hydrating Shampoo and Conditioner, Tawaka Ancient Tribal
ejuvenating Cream, Tunu Elastik Flexible Finishing Hairspray, Rub-Out Dry Cleanser, Swa Hair Juice Daily Leave-In Treatment and Tawaka “The Ball.”
Mustang joined The Estée Lauder Companies Inc. family of brands when the exclusive license agreement was signed in 2006. Sold in North America and Latin America. The Mustang fragrance exemplifies the allure
of the Mustang man: bold, daring and legendary. Mustang infuses a blend of warm ingredients including amber, cedar wood and patchouli, into a dynamic signature scent. Select products: Mustang cologne spray and Mustang Blue cologne spray.
American Beauty was launched in 2004 as one of the three original BeautyBank brands. American Beauty is a luxurious makeup, skin care and fragrance brand that
celebrates the beauty of American style. American Beauty is available exclusively in the United States at Kohl’s Department Stores and online at kohls.com. In 2008, American Beauty launched internationally in Target Australia. Select products: Beloved™ Perfume Spray, Perfect Mineral™ Powder Makeup, Beauty Boost™ Overnight Radiance Cream and Luxury for Lips™ Moisture Rich Lipcolor.
One of the three original BeautyBank brands, Flirt! was launched in 2004. Flirt! Is a makeup line with over 300 shades to flirt with the possibilities. Products are housed in innovative, color-matched packaging for easy shade selection. Flirt! is available exclusively in the United States at Kohl’s Department Stores and online at kohls.com. In 2008, Flirt! launched internationally in Korea on www.flirtcosmetics.co.kr and in Target Australia. Select products: Glamourazzi™ Extreme Lip Lacquers, Dreamy Eyes™ Eyeshadow, Far Out™
Lengthening Mascara, Squeeze Me™ Super Shiny Lip Gloss and Flirtatious™ Perfume Spray.
Good Skin™ was introduced in 2004 by BeautyBank as a dermatologist-formulated, fragrance-free skin care brand with simple, color-coded packages that allow for self-diagnosis by skin concern. In January 2006, Good Skin™ Labs was launched as a sub-brand of Good Skin. Good Skin Labs offers advanced performance products targeted to specific skin issues. Select products: Tri-Aktiline™ Instant Deep Wrinkle Filler, Eyliplex-2™ Eye Lift + Circle Reducer, Smooth-365™ Intensive Clarity + Smoothing Peptide Serum and All Firm™ Moisture Cream. Good Skin and Good Skin Labs are available exclusively in the United States at Kohl’s Department Stores, kohls.com and in select international markets.
In January 2007, Tri-Aktiline™ Instant Deep Wrinkle Filler was launched in the United States as the first product from Good Skin Labs. In September 2007, Tri-Aktiline launched in Sephora Europe, quickly becoming
a top-selling product. The highly successful European launch was followed by other international markets including the United Kingdom, Germany, Korea, Malaysia, Taiwan and Australia.
Grassroots, introduced in 2005, is a line of naturally-sourced products blended from pure essential oils. Grassroots has product categories for face, body and hair. Recognizing the power of both science and nature, grassroots Research Labs, a sub-brand of grassroots, was introduced in March 2008 and uses natural ingredients that are effective, potent and offer the latest in skin care technology. Grassroots and grassroots Research Labs are available exclusively in the United States at Kohl’s Department Stores and online at kohls.com. Select products: Pomegranate Super Anti-Oxidant Cream and Serum, Happily Ever After™ Moisture Cream SPF 15 and In Good Hands™ Comforting Hand Cream.
Daisy Fuentes Beauty was established in fiscal 2007 by BeautyBank. An entrepreneur and fashion designer, Daisy Fuentes is a proven business woman. Expanding on the success of her line of sportswear available at Kohl’s Department Stores, Daisy entered the fragrance, bath and body category with the launch of her first fragrance, Dianoche. In 2007, Daisy introduced her second fragrance, So Luxurious, followed in 2008 by her
third fragrance, Dianoche Ocean. All fragrances and ancillary products are available exclusively in the United States at Kohl’s Department Stores and online at kohls.com.
Eyes by Design was created by BeautyBank in 2008 as the first prestige cosmetics line designed specifically for direct response television and that focuses its expertise on the eyes. By narrowing the collection to only the essentials in treatment, color and tools, Eyes by Design takes the guesswork out of every step, from selection to application. Eyes by Design takes the application process a step further by offering detailed, yet professional guidance on how to apply individual looks, giving women confidence to experiment and try new looks on their own. Select products include: Transforming Eye Cream, Transforming Eye Palettes and Retouching Cream. Eyes by Design launched in the United States in July 2008 exclusively on HSN and HSN.com.
KEEP SHOPPING … ESTEE LAUDER
The Company sells its products principally through limited distribution channels to compliment the images associated with its brands. The channels consist primarily of:
Company’s Freestanding outlets
Spa & saloon
Perfumeries & Pharmacies
At The Estée Lauder Companies, the single focus is to remain the preeminent leader in global prestige cosmetics. To do that means nurturing three key assets—great brands, great people and great ideas.
Their three strategic imperatives:
• Strengthen and expand their geographic presence.
• Strengthen their product categories
• Diversify and strengthen their channels of distribution
Company’s growth in 2008 was powered to a large extent by their international business. Nearly 60 percent of their total sales came from outside the United States this year, with strongest gains coming from emerging markets such as China, Russia, Latin America, Eastern Europe and the Middle East. Both China and Russia, for example, exceeded $100 million in sales for
the first time. They also made progress in more established markets, as the European region topped the $3 billion sales mark.
Whatever the local language, their brands speak to the aspirations of millions of global consumers. In India, where they see immense potential, Estée Lauder and Clinique both opened stores in fiscal 2008, becoming company’s fifth and sixth brands in the country. They purchased a stake in Forest Essentials, a prestige Indian beauty brand based on ancient naturalistic Ayurvedic principles, to gain a greater understanding of Indian beauty traditions.
Estee Lauder is rolling out their brands in other promising international markets at a steady pace, as their insights into consumers’ desires translate into exciting new products and new markets. M.A.C has expanded to Korea and Indonesia, for example, while La Mer has opened in Russia and Dubai, and Bobbi Brown will soon be in Russia.
Every year, new brands are launched to lure shoppers and compete for their attention. The Estée Lauder
Companies is built on the success of its 29 unique brands.
The Estée Lauder Companies’ diverse portfolio of brands is an exceptional platform for growth. The vast majority of their sales still come from brands that they created internally, or that have expanded tremendously under their stewardship, a testament to their organic brand building strength.
Estée Lauder is the fastest-growing luxury brand in many Asian and European markets. M.A.C continues to be the leading prestige makeup line in North America and its global net sales rose by double-digits. Clinique had strong sales gains in Russia, China, Korea and the United Kingdom.
Many of their highly successful product launches are detailed throughout the following pages. Looking ahead at their established brands, Estée Lauder’s new sensuous fragrance went on sale with a fabulous ad campaign and Clinique Medical, the line of advanced, physician dispensed skin care products created with Allergan, Inc., will be launched soon. They are expanding the portfolio with new brands, creating BeautyBank’s Eyes by Design exclusively for the home shopping medium, HSN, and last year they added the
wildcrafted beauty of Ojon hair and skin care. These and many other examples reflect their talent for creating and identifying products that speak to the desires of consumers worldwide.
As consumers exercise their ability to shop when, where and how they want, new channels of distribution are becoming increasingly important. Company’s online sales grew 40 percent this past fiscal year, with particularly strong performances by La Mer, Estée Lauder, Aveda and Jo Malone. Many of their brands are expanding their e-commerce to global markets as consumers around the world use the Internet for shopping. Direct response TV is another exciting shopping venue where many of their brands have been smash hits—including Clinique, Origins, Bobbi Brown and Ojon.
Travel retail has proven to be a vital shopping venue. In spite of the potential challenges at the beginning of the year, travel for business and pleasure grew, as did the retail opportunity within airports and duty-free shops. The growth in their travel retail business also has been robust, with sales soaring approximately 20 percent this year as their brands expanded in airport locations
including Bangkok, Buenos Aires, London, Moscow, Paris, Seoul, Singapore and Tel Aviv.
Increasingly, their brands are sold in retail locations beyond traditional department stores. Company’s 577 single-brand, freestanding stores worldwide are showcases for brands such as M.A.C, Aveda, Origins, Jo Malone and Estée Lauder. Darphin has been a pioneer in spas in Europe and, recently, Asia. Origins’ Dr. Andrew Weil integrative wellness-based products have launched in European pharmacies.
They continue to nurture their traditional department store channel by creating innovative programs designed to bring consumers to their counters. Globally, department stores still account for more than 50 percent of their net sales.
BeautyBank, their entrepreneurial think tank dedicated to developing new brands and products for consumers shopping outside the traditional department store channel, is leading the way in leveraging the power of new distribution points. Following strong sales in the U.S.-based Kohl’s Department Stores, BeautyBank rolled out its top-selling Tri-Aktiline Instant Deep Wrinkle Filler internationally, with a groundbreaking, multi-channel, multi-national campaign in specialty cosmetics
stores, direct response TV, the Internet and travel retail. The launch began on the Champs Elysées in Paris and traveled to Taiwan, Korea, the United Kingdom, Germany, Hawaii, Turkey, and finally Australia, with a new, highly profitable sales model.
They have been benefited from their ongoing strategy to build a diversified business base that is Multi-National, Multi-Channel and Multi-Brand.
The skin care, makeup and fragrance businesses are characterized by vigorous competition throughout the world. Product recognition, quality, performance and price have a significant influence on consumers’ choices among competing products and brands. Advertising, promotion, merchandising, the pace and timing of new product introductions and line extensions and the quality of in-store sales staff also have a significant impact on consumer buying decisions. The Company competes against a number of manufacturers and marketers of skin care, makeup and fragrance products, some of which have substantially greater resources than the Company and many of which sell their products through broader distribution channels than the Company.
The Company’s principal competitors Include:
? Kao Corporation
? Revlon, Inc.
? Avon Products, Inc.
? Johnson & Johnson
? LVMH Moet Hennessy Louis Vuitton SA
? Shiseido Company, Limited
Estee Lauder is a strong brand and consists of broad portfolio including its own recognized brands and global licenses of brands. Moreover, the company’s M.A.C is number one in lip gloss, pressed powder and eye shadow markets in the US. Further, Estee Lauder Doublewear Long Lasting Foundation is the top-selling liquid foundation in many international markets. Strong brands differentiate the company’s product portfolio, and enable it to leverage the brand strength for expansion into new lines. However, as counterfeit trade
increases, the company stands to lose its brand equity and exclusivity. Besides, it may also result in customer dissatisfaction, which could be detrimental to the company’s image.
1. Strong brand name:
The brand “Estee Lauder” is associated with luxury, and quality. The company has a strong brand portfolio including Estee Lauder, Aramis, Clinique, Prescriptives, Lab Series, Origins, M.A.C, Bobbi Brown, La Mer, Aveda, Jo Malone, Bumble and bumble, Darphin, American Beauty, Flirt!, Good Skin and Grassroots. In addition, the company is also the global licensee of brands such as Tommy Hilfiger, Donna Karan, Michael Kors, Sean John, Missoni and Daisy Fuentes. Each of these brands is uniquely targeted in the beauty products markets. Moreover, four of the company’s fragrances for women rank among the top 12 fragrances in American department stores. In the US, lip gloss, powder and eye shadow markets, M.A.C is a leading brand. Further, Estee Lauder Doublewear Long Lasting Foundation is the top-selling liquid foundation in many international markets. Strong brands differentiate the company’s product portfolio, and enable it to leverage the brand strength for expansion into new lines.
2. Research and development focus
Estee Lauder is an industry leader in the development of new products. Its marketing, product development and packaging groups work with its research and development group to identify shifts in consumer preferences, develop new products, and redesign or reformulate existing products. Currently, the company conducts research and development (R&D) programs in New York, Belgium, the UK, Japan, China and France. Estee Lauder spent about 1.1% of its total revenues towards research and development expenditures in FY2007. The company’s research team consists of 450 experts, and it also conducts biological skin research with 25 research institutions around the world. An R&D research focus helps Estee Lauder to innovate and introduce new products in line with changing consumer preferences.
3. Strong distribution network
Estee lauder sells its products through a large retail network. The company Supplies it products through more than 20,000 points of sale in over 135 countries and territories. Estee lauder also markets through wholly-owned operations in over 35 countries and controlling interests in joint ventures operations in
four other countries. The company’s strong distribution network creates proximity to target customers and enhances market penetration opportunities.
4. Robust revenue and profit growth rates
The company has delivered superior financial results in the last few years. The revenues of the company have increased at a CAGR (2003-07) of 9% to reach $7,037.5 million in FY2007. Profits showed a similar trend due to the increasing revenues. Operating profit increased at a CAGR (2003-07) of 10% to reach $749.9 million in FY2007. Furthermore, the net profit increased at a CAGR (2003-07) of 11% to reach $449.2 million in FY2007. Robust financial performance indicates growth, and it also indicates strength in the management’s strategic perspective.
1. Weak liquidity position
The liquidity of the company has been declining over the past few years. Cash and cash equivalents declined at a CAGR (2005–07) of 32% to reach $253.7 million in FY2007. The net debt of the company
increased at a CAGR (2003–07) of 39% to reach $1,088.5 million in FY2007. Furthermore, the net debt more than doubled in 2007 over 2006. A weak liquidity position would affect the growth initiatives adversely; it is also likely to increase Estee Lauder’s exposure to the debt market.
2. Customer concentration
Estee Lauder’s revenues are concentrated with its single biggest client. For instance, no single customer accounted for more than 10% of the company’s sales in FY2005, whereas, in FY2007, 14% of Estee Lauder’s revenues are generated from Macy’s. This indicates the company’s overdependence on a single customer, which would lower its bargaining power.
3. Weak performance in some markets
The operating income of the company has decreased in certain product categories and certain geographical regions. The operating income in fragrances declined by 79% in FY2007 as compared to previous year, owing partially to lower sales. The operating income of Skin care products also decreased by 5%. The operating income from the Americas and Europe, the Middle East & Africa also
witnessed similar decline in operating income. Dropping operating profits in specific product categories and geographic regions indicates a poor cost structure.
1. Demographic trends in the US
Growing beauty consciousness especially among the aging baby boomers is an important trend for all cosmetics companies. According to the US Census Bureau, Americans aged 65 or more in the US comprise approximately 13% of the total US population in 2006. By the year 2030, the number of elderly is expected to climb to 71.5 million, or 20% of the total population. In the US, the elderly are seen to be increasingly using beauty enhancing/revitalizing lotions and cosmetics. Estee Lauder manufactures and markets a range of cosmetic products aimed to meet the needs of old people. For instance, Estee Lauder’s Perfectionist [CP+] Correcting Serum, which includes Perfectionist Pen and Perfectionist Power Patch, utilizes cutting-edge technology in the fight against fine lines and wrinkles. Strong presence in this segment would enable the company to tap the growing potential and thereby boost its revenues.
2. Cosmetics market in emerging nations
The importance of emerging markets such as China, India and Brazil, which have been spurred on by the increasing popularity of beauty contests and increasing disposable incomes, is on the rise for cosmetics companies. China is the second largest cosmetics market in Asia after Japan. The Chinese cosmetic market is expected to be worth JPY1.2 trillion by 2010. Also, the Brazilian beauty market, with an annual growth above 20%, is expected to become the world’s third largest beauty market in 2008. India is also witnessing a growing potential in cosmetics market. According to ASSOCHAM (a body of chamber of commerce in India), cosmetics market would reach $1.4 billion in next 2 to 3 years from the current size of $ 950 million. This growth is driven by increasing consciousness about style and looks among the modern and urban Indian women. Estee Lauder already operates in these markets and hence is well positioned to benefit from the expected demand for beauty products in these markets.
3. Growing plutonomies
Growing plutonomies also drive greater demand for luxury goods. Plutonomies are economies where
growth is powered by and largely consumed by the wealthy few. Examples of plutonomies are the US, the UK and Canada. In these economies the rich have been getting progressively richer over the last 30 years. Consumers in these plutonomies have been saving less and spending more and have exhibited a preference towards luxury goods. According to the Federal Reserve, in the US, the top 1% of households own more than half the nation’s stocks. They also control more than $16 trillion in wealth. Hence, Estee Lauder, with its premier range of perfumes and cosmetics, could cash in on this trend by catering to the needs of plutonomies.
1. Counterfeit products
The proliferation of counterfeit goods and accessories is adversely affecting the sales of branded goods. According to Global Congress on Combating Counterfeiting, 9% of all world trade comprises fake goods. In the UK alone, almost 100 million fakes are sold, estimated to cost £6 billion to the UK businesses. The top locations raided for counterfeit goods in 2006 were in India, the US, the Philippines, the UK and Malaysia. It is estimated in France, 10% of the
cosmetics sold are considered to be counterfeit and the value of counterfeit cosmetics market in the Gulf region is worth about $210 million. The European Commission reports that, in 2007, the increase in counterfeit goods usage in cosmetics and personal care product categories was 264% more as compared to 2006. The market for counterfeit products is forecast to reach the $2 trillion mark by 2026. As counterfeit trade increases, Estee Lauder stands to lose its brand equity and exclusivity. Besides, it may also result in customer dissatisfaction, which could be detrimental to the company’s image.
2. Intense competition
The global cosmetics business is intensely competitive, with a few big corporations and a large number of small companies vying for market share. The company competes against global companies such as Revlon, L’Oreal, and Procter & Gamble, in addition to a number of smaller companies. Also, the trend toward consolidation in the retail trade, particularly in developed markets such as the US and Western Europe, has resulted in cosmetic companies becoming increasingly dependent on key retailers, including large format retailers, who have increased their bargaining strength. Increased competition
could result in price reductions, reduced profit margins and loss of market share.
3. Increasing regulations
Several consumer protection groups are voicing concerns over the presence of harmful chemical ingredients in cosmetic products. A recent study showed that about one-third of cosmetic products contain known carcinogens. Due to increasing public pressure, the US Food and Drug Administration (FDA) impose stringent quality norms on cosmetic products. Increasing regulations may delay launch of new products and result in higher product development expenditure. This would adversely Estee Lauder’s cost structure.
Professional Makeup Artist Brush Modules:
Brush tips are accessible to the touch of the customer while the brushes themselves are fixed in order to prevent theft.
Includes flexible horizontal and vertical dividers, plus an underlay indicating product and shade names, making it easy to maintain the saleable product.
Eye shadow Modules:
Products are displayed in saleable size, without covers,
and flat to present the greatest amount of color to the customer
MARKETING & COMMUNICATION
Estee and Joseph Lauder had only $50,000 when they started their cosmetics business in 1946, too little to attract any advertising agency to take their account. So instead of advertising, they spent it all on samples that son Leonard carried by taxi to women charity shows at New York City’s Waldorf Astoria hotel. Thus was born Estee Lauder Companies’ “tell a woman marketing strategy.”
The Company’s marketing strategy is built around its ‘Vision’ statement:
‘Bringing the Best to Everyone We Touch.’ Estee Lauder formulated this marketing philosophy to provide high quality service and products as the foundation for a solid and loyal consumer base.
The Company focuses its marketing efforts on promoting the quality and benefits of its products. Each of the Company’s brands is distinctively positioned, has a single global image, and is promoted with consistent logos, packaging and advertising designed to enhance its image and differentiate it from other brands.
In recent years, the Company has increased its emphasis on media advertising while decreasing the
level of promotional spending as a percentage of sales. The Company regularly advertises its products on television and radio, in upscale magazines and prestigious newspapers and through direct mail and photo displays at international airports. Promotional activities and in-store displays are designed to introduce existing consumers to different products in the line and to attract new consumers.
The Company’s marketing efforts also benefit from cooperative advertising programs with retailers, some of which are supported by coordinated promotions, such as ‘Gift with Purchase’ and ‘Purchase with Purchase.’ At in-store counters, the Company offers personal demonstrations to market individual products as well as to provide education on basic skin care and makeup application. The Company conducts extensive sampling programs. The Company pioneered ‘Gift with Purchase’ as a sampling program and believes that the quality and perceived benefits of sample products have been effective inducements in selling products to existing and new consumers.
Global net expenses for advertising, merchandising, sampling and promotion were $2,034.6 million, $1,841.9 million and $1,721.1 million in fiscal 2008, 2007 and 2006, respectively, and are expensed as
incurred. These amounts include activities relating to purchase with purchase and gift with purchase promotions that are reflected in net sales and cost of sales. Excluding the impact of purchase with purchase and gift with purchase promotions, advertising, merchandising, sampling and promotion expenses included in operating expenses were $1,836.1 million, $1,640.9 million and $1,514.3 million in fiscal 2008, 2007 and 2006, respectively.
The Company’s results of operations are subject to seasonal fluctuations, with net sales in the first and second fiscal quarters typically being slightly higher than in the third and fourth fiscal quarters. The higher net sales in the first two fiscal quarters are attributable to the increased levels of purchasing by retailers for the Christmas selling season and for fall fashion makeup introductions. Greater variation exists in quarterly operating income and margin, which typically are lower in the second half of the fiscal year than in the first half. In addition to the effect of lower net sales on operating income in the third and fourth fiscal quarters as compared to the first and second fiscal quarters, operating income and operating margin in the third and fourth fiscal quarters are negatively affected by the relatively consistent dollar amount of advertising and promotional spending by the Company in each fiscal
quarter. In addition, fluctuations in net sales and operating income in any fiscal quarter may be attributable to the level and scope of new product introductions.
In the high-end cosmetics industry, brand loyalty and word of mouth, as opposed to price, play a major role in consumer purchases. Customers will generally trust the tried and true product, especially when it comes to skincare products. Those customers that have found a specific product or brand they like will also share their findings with friends. Thus, the marketing strategies are crucial in building brand loyalty among existing customers, attracting new customers and creating awareness of new products.
The Free Gift and Gift-With-Purchase
The free gift and the gift-with-purchase techniques were pioneered by the company founder, Estee Lauder. This technique works wonderfully by rewarding loyal customers for purchasing Estee Lauder products and by attracting new buyers who otherwise might not try Estée Lauder products.
Makeup Artist Events
To further promote its products, Estée Lauder hosts Makeup Artist Events in select retail stores. These events provide an opportunity for women to receive a personal consultation from a top makeup artist. When giving professional advice, the makeup artists have a really good opportunity to promote Estée Lauder products. This is also a great way to attract new customers.
The models used in Estée Lauder advertisements represent the beauty that is possible through Estée Lauder products. The models also add a touch of romance, elegance and fantasies to the beauty industry. In addition to being beautiful, the models chosen to represent a cosmetic brand show the public what populations the brand is targeted towards.
Printed Ads in Magazines
Printed advertisements in magazines are an effective way of reaching a large audience for any consumer industry. The Estée Lauder brand targets mature fashion magazines it expect its, consumer base to read; these include Bazaar, Cosmopolitan, Elle, Glamour, Marie Claire, In StyleSelf and Vogue. In these magazines, Estée Lauder will generally feature at least two two
page advertisements: one for its skincare line and one for its fragrance line. In a few of these magazines, the Estée Lauder makeup line is also advertised. The skincare advertisement will generally be within the first twenty pages of the magazine while the fragrance ad will be somewhere in the middle of the magazine. Estée Lauder advertisements are not found in magazines targeted towards the younger generation such as Cosmo Girl, Elle Girl, Jane and Seventeen.
The Estée Lauder Spa
The Estée Lauder Spa gives the Estée Lauder brand an opportunity to jump into the “well-being” market. This is a large market that has been ignored by most traditional beauty companies. However, whole treatment systems that cover beauty, exercise and diet which include spa visits is a growing market. The growing trend is to seek natural cures instead of chemicals and to place an emphasis on being fit instead of thin.
As marketing is crucial in the cosmetics industry, other high-end brands such as Lancôme and Clinique also follow the major marketing techniques used by the Estée Lauder brand. These brands recognize the importance of the free gift and gift-with-purchase technique as the techniques are employed not only in department store sales but also in online sales. High-
end brands have also chosen to advertise in the same magazines. For example, in Glamour and Vogue the following brands are advertised: L’Oreal Paris, CoverGirl, American Beauty, Chanel, Maybelline, Avon, Clinique, MAC, Elizabeth Arden, Christian Dior, and Lancôme.
PROGRAMS FOR LOYAL CUSTOMERS
Gone But Not Forgotten:
The Estée Lauder Companies Inc. understands that having a beloved product discontinued can be frustrating, and searching for a replacement can be daunting and time consuming. They offer their loyal consumers the opportunity to easily search for products that have been discontinued within 24 months. The Estée Lauder Companies’ Gone But Not Forgotten program is an industry first!
Their team will search high and low for a discontinued product and if they find it, a customer may purchase up to six pieces depending upon availability. Search can only be done for products in a participating brand’s regular product line; not seasonal or promotional or
limited-edition items. The Gone But Not Forgotten program is available to consumers within the contiguous United States.
Estee lauder comes with variety of special offers every now and then. Some of the latest special offers are follows:-
• Choose 3 samples with every purchase
Free Standard Shipping
• With every purchase of $50
Free Gift Time SMS Text alert service
• Allows customers to sign up to receive text messages to alert them that Gift Time (Estée Lauder’s Gift with Purchase offer) is starting at their chosen store. Available exclusively online, customers can register to receive a text alert via their mobile phone two days before Gift Time starts at their chosen store.
Free Gift Wrapping
• With any Extee Lauder.com purchase
• Each month the Grand Prize winner will receive a $350 shopping spree at esteelauder.com
5X American Express Membership Rewards Bonus Points
• Earn 5X Membership Rewards points by using your American Express® Card at esteelauder.com.
• Free 8-piece gift with any $27.50 Estee Lauder purchase
TECHNOLOGY IN ESTEE LAUDER
With the increase in globalization of retailers both in terms of their points-of-sale, as well as their points-of-supply, the Information Technology (IT) spend in the retail sector has increased considerably and plays an increasingly important role in managing the complexity of retail operations.
ESTEE LAUDER also used and practice many technology. Some of the important technology used during its operation are discussed below:
ELECTRONIC DATA INTERCHANGE
In Estee Lauder, EDI solution is a simple way for small and medium sized suppliers to process EDI transactions. Their EDI services are affordable and easily accessible.
Their web-based solution allows consumer to trade EDI documents / files with Estee Lauder, Inc including the ability to:
Receive 850 Purchase Orders
Receive 997 Functional Acknowledgement
Send 810 Invoices
Send 997 Functional Acknowledgement
Send 856 Advanced Ship Notice (ASN)
Send 855 Purchase Order Acknowledgement (PO)
Send / Receive any other EDI documents required by Estee Lauder, Inc
Advantages of Estee Lauder, Inc EDI Offering:
The EDI Pipeline system can serve as a stand-alone solution to meet the Estee Lauder, Inc requirements, or can be a single interface to trade EDI documents with all of their customers.
Import into Your Software Programs
The EDI Pipeline solution can optionally include a method to electronically import Estee Lauder, Inc Purchase Orders into your financial / inventory software (or any other software system), eliminating the need to manually key in the order data. The Purchase Order is received by the EDI Pipeline system, translated into the specific format your software needs, and sent to your office to import. The file can be sent via any method desired; the most popular being via email or FTP (to a specific server location).
“SYSTEMS ANALYSIS AND PRODUCT DEVELOPMENT”
Participate in business process design and incorporate requirements of Estee Lauder business/geographies into a *common SMI design* utilizing *standard SAP* process models.
Apply expert functional knowledge of SAP to provide solutions for complex business requirements.
Perform analysis of gaps and propose solutions through functional design, process change or system enhancement.
Provide production support to live SAP sites as a *level 2* business analyst. Evaluate production execution related issues escalated into the SAP Solution Management team. Propose and test configuration and data changes as necessary to resolve issues.
Help maintain consistency and integrity of the SAP configuration across Estee Lauder business/geographies.
Design and develop functional specifications for various development objects. Develop test plans, test scenarios, and test cases for system testing. Review, develop and contribute to training content. Train and support super users. Support the local implementations of the global template, including the identification of the localization elements as requested.
CONSUMER RELATION MANAGEMENT
Customer relationship management (CRM) is a term applied to processes implemented by a company to handle its contact with its customers. CRM software is used to support these processes, storing information on current and prospective customers. Information in the system can be accessed and entered by employees in different departments, such as sales, marketing, customer service, training, professional development, performance management, Human Resource
Development, and compensation. Details on any customer contacts can also be stored in the system. The rationale behind this approach is to improve services provided directly to customers and to use the information in the system for targeted marketing and sales purposes.
ESTEE LAUDER believes in making strong relation with their customers ( online n on store)
USE OF PERSONAL INFORMATION BY ESTÉE LAUDER ONLINE ARE:
MARKETING EMAILS COMMUNICATIONS TO SERVE YOU
EXPERIENCE ON THEIR SITE
They use various technologies to collect information about their consumers visit to their Site and to enhance and customize consumers experience on their Site. For example, they may collect the numerical Internet Protocol (IP) address identifying customer computer or device which may indicate customer geographic location. In some instances, they may use these technologies in combination with the personal information customer provide on the Site. These technologies may provide a variety of information such as whether customer have visited our Site before. They also may enable customer to save their preferences. Each technology is explained below.
WEB BEACONS AND TRACKING LINKS
Web beacons (also called clear gifs and pixel tags), tracking links and/or similar technology consist of a few lines of code and are embedded on the pages of our Site. They are often used in combination with cookies and are often not visible to the user of the Site. Web beacons may relay information to third parties such as company service providers and may be used in order to track customer response to certain advertising, to better target interactive advertising and to enhance customer support and usability.
Browser cookies are bits of text that are placed on customer computer’s hard drive when customers visit their Site. Flash cookies are similar to browser cookies except that they can store data more complex than simple text and are stored in our browser rather than on our hard drive.
They are continuously working to make our experience on ther Site better. To this end, they have retained a company, Core metrics, to assist
them in better understanding our use of their Site. Core metrics will place cookies on our computer to collect information on their behalf that will show them how we come to their Site and how we use and navigate their Site. Core metrics does not collect any personal information about us. Core metrics analyzes the information it collects on their behalf via a unique random number and returns it back to them through a secure web connection. The information and analysis will be used to help them better understand our interests and to better serve us through a customized web experience and personalized product offerings. Core metrics is contractually prohibited from using their data for any other purpose. Core metrics is required to maintain all information collected on their behalf in confidence. We may deactivate the ability of Core metrics to analyze our behavior on the Site
HR POLICIES IN ESTEE LAUDER..
“THE WEALTH OF COMPANY IS ITS PEOPLE, BY THAT STANDARD WE ARE A VERY WEALTHY COMPANY”
-WILLIAM P. LAUDER
Their workplace culture fosters a unique spirit of teamwork, innovation, passion and a shared vision to bring the best to everyone they touch. They clearly post the following principles in their offices throughout the world for their employees to live and work by.
• Strive for excellence – deliver their best.
• Put customer first. Know customers, understand their needs, and surpass their expectations.
• Be passionate about what they do! Enthusiasm and energy are contagious.
• Never stop caring. Show concern and respect for every individual, regardless of position or title.
• Understand your role in the big picture.
• Look for new and better ways to do things to continually raise our standards.
• Communicate! Voice your ideas, share your concerns, pass on what you know, and be honest.
• Be a team player. We’re stronger when we work together.
• Listen when others speak. Good ideas can come from anywhere.
• Be flexible. Success depends upon willingness to adapt when situations change.
• Pay attention to details – little things do make a difference.
• Solve the real problem, don’t treat the symptom.
• Spread the good news. Let others know when they’ve done a good job.
• Smile…. and have fun!
Some of the HR Policies
? Committed to building world-class brands by developing talented people.
? All employees are recognized and rewarded for their talents and performance.
? Take pride in providing a work environment where individuals of different races, genders, ethnicities, religions and backgrounds can excel.
? Encourages innovation and creativity, attract and retain the best talent and better serve consumers.
? The success of brands is the direct result of the talent, passion and vision of their creative and highly dedicated employees, who set a global standard for innovation, service and quality.
? Strives to keep the passion of employees alive and vibrant though many avenues of professional development.
? Training programs includes Professional development programmes are
? Tuition reimbursement programs
? Global executive development programs
? Executive education programs at Harvard Business School
? The General Management Program at Wharton
? The Estée Lauder Companies at Vassar College
Equal Opportunity Employment
It is the policy and practice of The Estée Lauder Companies Inc. and its officers to ensure equal employment opportunities without regard to race, color, religion, sex, age, sexual orientation, national origin, citizenship status, handicap, disabled veteran or Vietnam-era veteran status, and to affirmatively seek to advance the principles of equal employment
opportunity to ensure that there is equality of opportunity in all terms and conditions of employment.
Specifically, the Company is committed to:
• Recruit, hire, train and promote in accordance with the principles of equal employment opportunity;
• Ensure that promotion decisions comply with the principles of equal employment opportunity;
• Ensure that all personnel actions, including compensation, benefits, transfers, terminations, Company-sponsored training, tuition assistance, and social and recreational programs are administered in accordance with the principles of equal opportunity; and reaffirm its policy to provide equal employment opportunities to qualified handicapped persons, disabled veterans and Vietnam-era veterans.
CORPORATE SOCIAL RESPONSIBILITY
The commitment to the communities in which they work and the health and wellness of consumers and employees is engrained in their corporate culture. They are focused to ensure a healthy future for their consumers, our employees and the communities in which we live and work-and they are committed to doing our part.
Their Corporate Environmental Affairs & Safety Committee acts as the unifying force and focal point for programs, initiatives and communications related to environmental performance, workplace safety and associated issues. A sixth sub-committee called the Supplier Compliance Monitoring Committee has recently been created to ensure the integrity and environmental performance of our supply chain.
Animal testing It is the corporate goal of The Estée Lauder Companies to seek the complete elimination of animal testing on cosmetic products and ingredients worldwide. It is their policy not to test on animals nor to ask others to test on their behalf except where required by law. They were one of the first companies to mandate complete replacement of animal tests on finished products. They voluntarily stopped testing their products on animals nearly 20 years ago. They have been in the forefront of efforts to devise and use in-vitro and clinical tests that do no harm to living entities while ensuring safe, efficacious products for
their customers. They partner with associations and institutions worldwide to achieve their corporate goal.
Supplier conduct: They expect their suppliers of raw materials to meet the same stringent standards of occupational conduct that they set for themselves.
They are currently updating their Raw Materials Coding Package to help their suppliers work with them to provide them with the finest ingredients that meet their strict environmental and safety standards.
In addition, new vendors must agree to operate under a detailed supplier agreement that they will monitor for compliance. Key components address:
• Child labor
• Minimum wages and overtime compensation
• Safe working conditions
• Observance of local occupational regulations
• Environmental responsibility
The Estée Lauder Companies has implemented many programs to reduce water use in our cleaning processes. These include the use of spray-ball technologies in our cream and lotion manufacturing
facilities and water-free cleaning processes at our powder sites. Our Environmental Performance indicator tracking wastewater discharge per kilogram produced increased slightly in Fiscal Year 2006 because of a management decision to reduce batch size leading to more cleaning cycles. This is due, in part, to the unique nature of certain of our products, which require special manufacturing conditions.
GREENHOUSE GAS EMISSIONS
Greenhouse gas (GHG) emissions from direct and indirect energy usage at their Global Operations’ facilities and employee business travel were estimated to be 53,000 metric tons in Fiscal Year 2006. They plan to calculate the complete carbon footprint of the Company and develop goals for reduction by increasing the efficiency of Their operations and through the optimization of their incoming and outgoing materials shipments and use of renewable energy sources.
In Fiscal Year 2006, their total waste generated and disposal costs were reduced. Of their operations waste that could not be re-used and/or reclaimed, 54% was recycled and the remainder was processed at waste-to-energy facilities.
OCCUPATIONAL HEALTH AND SAFETY
They have reduced their accident frequency rate by 73% since 1995 at their Global Operations facilities, although in Fiscal Year 2006 they had a slight rise in their accident indicators. To further their commitment to workplace safety, they have implemented a corporate goal to reduce their TIR (Total Incident Rate) to 1.0 within the next five years by intensifying their safety training and maximizing communications between their facilities. They hope that these steps will lead them to their ultimate goal: an accident-free workplace.
They have increased the recycled content of their shipping cartons to 90% in the majority of their U.S. locations. In addition, they redesigned their shipper layout and drastically decreased the weight of shipping material per product. To date, these initiatives have saved the equivalent of approximately 700,000 trees.
They have recently implemented a number of smart transportation initiatives that will reduce the number of incoming shipments of raw materials and packaging into their buildings by working with their suppliers to
combine their shipments and decrease the number of outgoing materials that are shipped via air freight.
The Estée Lauder Companies designs its packaging under a “cradle-to-cradle” philosophy, with the goal of maximizing the use of renewable and recycled source materials, designing for recovery at the end of product life and manufacturing their packaging using renewable energy.
In Fiscal Year 2006, they increased the number of brands using renewable and recycled source materials:
• Aveda uses 80 to 100% post-consumer recycled (PCR) content in all hair care bottle and jars, and 35% PCR in tubes.
• All brands use a minimum of 80% PCR liner board in their holiday and promotional set boxes.
• Estée Lauder uses 100% PCR content in promotional bottles.
• All brands use 80% PCR in carriers.
• Origins uses cartons made from 50% PCR and 50% Forest Stewardship Council (FSC) certified pulp fibers.
• All brands use 80% recycled content in matte and satin anodized aluminum parts.
• Clinique uses 80% recycled content in its skin care jar caps.
• Donna Karan Gold developed a unique package, that allows the parts to be separated for recycling.
• Aveda launched “Pure Privilege” gift card using Genetically Modified Organism (GMO) free, wheat-based bio-resin.
• Four suppliers moved to production using renewable energy.
• Aveda uses FSC wood for its color cosmetic pencils.
• Origins has committed to manufacture its folding cartons from renewable energy
PARTNERSHIP WITH ENVIRONMENTAL PROTECTION AGENCY
They work extensively with environmental groups and government agencies such as the Environmental Protection Agency to improve their programs and performance.
• Energy Star- ELC joined the US EPA’s Energy Star Buildings Program in 1998. They have integrated this program across their Global Operations facilities to help implement energy conservation and efficiency projects.
• Department of Energy- The Company tracks and voluntarily reports greenhouse gas emission reductions as part of the Energy Information Administration’s 1605 B program.
• Sustainable Packaging Coalition- ELC is a founding member of the Sustainable Packaging Coalition and has taken a leadership position in driving its initiatives.
• Forest Ethics- Since 1998 they have partnered with Forest Ethics to ensure that they only purchase wood fiber products from managed sustained yield forests or recycled sources.
• Smartway Transport Partnership- Aveda partnered with Smartway to reduce the greenhouse gas emissions generated by the distribution of it products. The rest of the Company is integrating their warehouse management systems so that they will be able to quantify the data needed to join the program.
• Green Power Partnership- Aveda was named a United States Environmental Protection Agency Green Power Leader in 2007 for its work in offsetting its manufacturing and distribution electricity use.
• Last Resort Program- ELC developed the Last Resort Program to distribute excess materials to people in need. This includes providing personal care products to community assistance programs such as battered women’s shelters and donating collateral materials (i.e., unused displays, baskets) to emerging artists aligned with cultural enhancement organizations. In Fiscal Year 2006 they were able to redistribute 1,060 pallets, or 185.3 tons of materials in 42 trailer loads to these organizations.
PHILANTHROPY: GLOBAL AND LOCAL
Breast Cancer Awareness and Research This is one of their top priorities. There is no way to calculate the number of lives that have been saved since 1993 by the efforts of ELC to promote early detection of breast cancer and fund clinical and diagnostic research. The Breast Cancer Research Foundation is the beneficiary of all proceeds from their internal fund-raising programs, the sale of specialized products and corporate giving. Since 1994, the combined efforts of The Estée Lauder Companies brands’ Pink Ribbon products, employee fundraising activities, and the special Retail Partner initiatives, have contributed close to $27 million to The Breast Cancer Research Foundation.
People Helping People “Bringing the Best to Everyone We Touch” is The Estée Lauder Companies’ Vision Statement. Included in that vision is their role as responsible corporate citizens in the communities they serve. They are proud to support a multitude of institutions and programs that reflect the interests and concerns of their employees and customers, and that they feel best respond to the most pressing needs in their communities. In addition to corporate philanthropy in the form of funding, they provide product contributions and numerous other resources.
Aveda Earth Month Every April, Aveda aligns with organizations promoting clean air, clean water and other environmental priorities in a month-long global campaign to raise awareness and participation.
Materials for the Arts The Estée Lauder Companies supports this vibrant program that serves artists, educators and community organizations throughout New York City. By donating computers, office equipment and art supplies it no longer needs, ELC reduces waste and landfill while helping to nurture education and the arts.
Origins Natural Resources will support the Bashat (CBF) organization through the United Kingdom charity Fauna & Flora International. This initiative will help protect the snow leopard cubs in the Tien Shan (Heavenly) Mountains that are being driven from their natural habitat.
Origins Natural Resources also continues to increase its support of integrative health and wellness by building strong partnerships with not-for-profit organizations that share similar beliefs. Origins Natural Resources joined forces with Project Sunshine in 2005 to develop the Origins Oasis by Project Sunshine, a not-for-profit organization that provides free social, educational and recreational programs to children and families affected by medical challenges.
M•A•C Cosmetics has raised $100 million worldwide for the M•A•C AIDS Fund, a pioneer in HIV/AIDS funding that supports organizations working with underserved regions and communities worldwide. M•A•C Cosmetics generously donates 100% of the selling price of its Viva Glam lipsticks and lipglasses to the Fund.
A SELECTION OF 2006-2007 AWARDS
The Estée Lauder Companies and its brands are recognized around the world for excellence and innovation. Between 2006 and 2007, both the parent company and its brands have been privileged to be the recipients of numerous global awards.
Citizenship and excellence have long been a hallmark of The Estée Lauder Companies. Estée Lauder herself was post-humously awarded the Presidential Medal of Freedom, the United States’ highest civilian award. While it would be impossible to list all of our awards on a global basis, following is a short selection of awards we have won for our commitment to excellence, innovation and community support.
Fortune magazine’s Most Admired Companies
Criteria included: Innovation, People Management, Use of Corporate Assets, Social Responsibility, Quality of Management, Financial Soundness and Product Quality.
Marie Claire Prixe D’Excellence
Estée Lauder Advanced Night Repair Concentrate won the First Annual Marie Claire U.K. Prixe D’Excellence jury prize-one of the industry’s most coveted awards for product excellence and achievement.
Editors’ Choice Awards: Cosmetics/Personal Care Packaging magazine
Each year, the editors of CPC Packaging review hundreds of product launches from the previous year in order to choose packaging winners in color cosmetics, fragrance, personal care and sampling. In 2007, Donna Karan Gold, Aveda Scalp Remedy and Clinique Derma White C-10 Anti-Aging Clarity Formula received top awards in their respective areas.
Origins’ Dr. Weil for Origins Plantitude Collection won in sustainable packaging. This new category recognizes the efforts and progress being made by beauty companies to reduce the impact of packaging on the environment.
Human Rights Campaign’s Corporate Equality Index for GLBT Employees
They were named one of the Best Places to Work for gay, lesbian, bisexual and transgender employees for two consecutive years.
Ameristar Packaging Awards
Estée Lauder, Aveda, Clinique and Donna Karan won five of eight awards in the Health and Beauty Aids category at AmeriStar Awards. The honor, given by the Institute of Packaging Professionals, is based on innovation, protection, economics, performance, marketing and environmental impact.
The 3M Integrity Award
The Aveda Earth Month Limited Edition Candle 2006 also received the 3M Integrity Award for its environmentally friendly packaging design, based on having the highest scores in economics, environmental impact, product protection and marketing.
Minnesota Safety Council Governor’s Award for Safety
Our commitment to ensuring the safety and well-being of our employees led to their two Minnesota facilities receiving this award.
British Safety Council Award
Their United Kingdom manufacturing facility was recognized with the British Safety Council award for the 19th consecutive year in Fiscal Year 2006.
Lighthouse International Volunteer Recognition Awards
In April 2007, The Estée Lauder Companies was honored with The Corporate Partnership Award in recognition of their consistent commitment to volunteer service within their community, and in particular to the Lighthouse International.
amfAR Award of Courage
amfAR, The Foundation for AIDS Research, honored John Demsey, Chairman, M•A•C AIDS Fund, and Group President, The Estée Lauder Companies, for his role in leading the M•A•C AIDS Fund in its vital and
distinctive contribution to the global struggle against AIDS and HIV.
USP OF ESTEE LAUDER
“IT HAS MAXIMUM PREMIUM BRANDS”
ESTEE LAUDER IN INDIA
Estee Lauder’s initial foray was the launch of the first MAC store through a tie-up with Indian retailer Shopper’s Stop in January 2005 in the upmarket Mumbai suburb of Juhu. It has since grown over 50% in one year.
The Estée Lauder Companies had purchased a minority stake in a privately held Indian company that manufactures, markets and sells beauty products, under the Forest Essentials brand, which are based on Ayurvedic formulations on 21/07/08
Forest Essentials, which was founded in 2000 by Mira Kulkarni, uses pure essential oils and natural plant extracts in its range of skin, body and hair care products. Its portfolio of more than 100 SKUs is sold in the company’s seven freestanding stores and in high-end hotels and spas across India.
“Forest Essentials has given Estee Lauder a stronger presence in the rapidly expanding prestige beauty business in India,” William P. Lauder, Chief Executive Officer of The Estée Lauder Companies. This agreement will help Estee lauder to expand their growing expertise and competitiveness in the natural products arena,
while Forest Essentials will benefit from their long history of successful brand management and global expansion.
Forest Essentials products are rooted in age-old treatments from ancient Ayurvedic scriptures, updated with innovative textures and scents. Best-selling products include the Rose Crystal Salt Body Polisher, the Hand Pounded Organic Fruit Scrub and the Soundarya Facial Age Defying Serum.
The group currently sells six brands in India: MAC, Tommy Hilfiger, Donna Karan, Aramis, Clinique and most recently Estée Lauder.
The company has established the first of its four freestanding stores in Mumbai, Bangalore’s UB City Mall and Delhi, one in Promenade and one in courtyard malls. It will open 20 outlets over the next three years as it expands into Hyderabad, Kolkata and Pune.
The Estee Lauder Companies, Inc. engages in the manufacture, marketing, and sale of skin care, makeup, fragrance, and hair care products worldwide. It offers skin care products, including moisturizers, creams, lotions, cleansers, sun screens, and self-tanning products; and makeup products, which consist of lipsticks, lip glosses, mascaras, foundations, eye shadows, nail polishes, and powders, as well as related items, such as compacts, brushes, and other makeup tools.
At The Estée Lauder Companies, the single focus is to remain the preeminent leader in global prestige cosmetics. To do that means nurturing three key assets—great brands, great people and great ideas. Every year, new brands are launched to lure shoppers and compete for their attention. The Estée Lauder Companies is built on the success of its 29 unique brands. Estée Lauder is the fastest-growing luxury brand in many Asian and European markets.
Estee Lauder is an industry leader in the development of new products. Its marketing, product development and packaging groups work with its research and development group to identify shifts in consumer
preferences, develop new products, and redesign or reformulate existing products. Growing beauty consciousness especially among the aging baby boomers is an important trend for all cosmetics companies. The global cosmetics business is intensely competitive, with a few big corporations and a large number of small companies vying for market share. The Company focuses its marketing efforts on promoting the quality and benefits of its products.The Company has increased its emphasis on media advertising while decreasing the level of promotional spending as a percentage of sales.
Estée Lauder has carried the name of the Beauty Queen for 59 years. This golden name, with the credibility and reputation associated with it, has given Estée Lauder substantial advantages over many competitors. To adapt to the current market while still maintaining such advantage, Estée Lauder could introduce sub-brands customized for different markets, which provide the flexibility to enjoy multiple brand images without diluting each other.
Estée Lauder brand to develop a clear brand image and provide its customers with something that is unique. Possibility for Estée Lauder would be to create a new brand image through the release of a sub-brand.
The company should take measures to stop product counterfeiting as it will harm their business as well as their brand image. Besides it may result in customer dissatisfaction leading to low customer concentration, that finally would lead to business drooping.
Estée Lauder could introduce sub-brands customized for different markets, which provide the flexibility to enjoy multiple brand images without diluting each other.
Since ESTEE LAUDER is a global name, so it must provide the same concentration on all its markets to bring in global stability in its business as a whole.
No doubt that THE ESTEE LAUDER has a very vast and diversified product assortment but still it has to keep in mind about the increasing competition which can provide a strong hindrance to its smooth and calm operation of business.
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