Parfums Christian Dior Is A Leading Personal Care Marketing Essay

Harmonizing to Vrontis and Thrassou ( 2007 ) the concern literature on international selling nowadayss contradictive and conflictive ideas between two mainstream schools of idea on international selling. One school of though supports the standardization attack and argues that transnational corporations ‘ behaviors in abroad markets should be standard and unvarying in order to understate entire costs and advance a planetary brand/corporate image ( ibid ) . The other school of idea supports and stresses the version attack so that a feasible tantrum can be made with the distinguishable and alone dimensions of each of the local markets overseas ( ibid ) .

Parfums Christian Dior was founded in Paris, France, in 1946 named after the famed interior decorator Christian Dior[ 1 ]. The company today is owned by Louis Vuitton Moet Hennessy ( LVMH ) , a luxury goods group which besides owns the aroma companies Parfums Givenchy, Guerlain and Kenzo. Currently, Parfums Christian Dior is one of the largest personal attention trade names in the universe ( Mintel, 2009 ) .

Separate from the Dior manner house, Parfums Christian Dior is active in the personal attention ( aromas and other beauty merchandises ) industry with sole aromas and coloring material cosmetics worldwide, and histories for around 30 % of LVMH ‘s aromas and beauty division ‘s gross revenues today ( LVMH, 2009 ) .

In add-on to adult females ‘s personal attention merchandises, Christian Dior moved into work forces ‘s aromas and other personal attention merchandises in the twelvemonth 1955. Since 1973, skin attention has represented a major country of the company ‘s activity both in the adult females ‘s and work forces ‘s class.

Parfums Christian Dior presently employs around 1,800 people and strikes a healthy balance of high turnover and gross coevals between in the personal attention – aromas and other beauty merchandises – ( Mintel, 2009 ) . Christian Dior ‘s worldwide web of straight operated shops grew from 184 dress shops in 2004 to 221 in 2007 ( ibid ) .

Parfums Christian Dior recorded 84 % of its turnover from international gross revenues in 2008. This is due to its web of well-positioned and wholly-owned distribution subordinates runing worldwide ( LVMH, 2009 ) .

The company ‘s public presentation was peculiarly strong in Europe, every bit good as in Japan and other Asiatic markets, a part of the universe where its growing was among the strongest for Western trade names ( Datamonitor, 2009 ) . In add-on, the trade name gained portion in France ( Mintel, 2009 ) .

Christian Dior is present in all parts of the universe, with a well-established presence in Europe, North America, and Asia ( ibid ) and with the purpose of farther widening its presence in the Asiatic part the company is be aftering to come in India shortly[ 2 ].

Personal Care Products

The company managed to stay first in aromas and beauty attention merchandises, with a little addition in value portion in 2008, following a fringy diminution in 2007 ( Datamonitor, 2009 ) . The company ‘s growing in aromas was led by Eau Sauvage and Dior Homme for work forces. In 2008, the company introduced Dior Homme Sport. Dior ‘s work forces ‘s aromas overall performed comparatively better than the adult females ‘s aromas in 2008.

The undermentioned aromas and beauty attention merchandises had a big gross revenues volume in 2008 ( LVMH, 2009, p33 ) :

Dior Homme Sport,

Escale a Portofino,

J’adore L’absolu,

The mascara Diorshow Iconic,

The lipstick Dior Addict High Shine, and

The skin care Capture Totale Haute Nutrition.

These aromas and beauty attention merchandises ‘ scope are in common with the adult females ‘s and work forces ‘s scopes sold in India by the taking companies: Unilever Group, Colgate-Palmolive Co, and L’Oreal Groupe ( see Table 1 in subdivision 3.1 ) .

Market Overview

Since the economic liberalization in the early 1990s, India ‘s economic system has come a long manner in national and economic development. Household incomes have about doubled on norm which has led to a favorable rise in consumers ‘ personal disposable incomes. Households with an one-year disposable income of over US $ 1,750 have jumped from 40 % in 1997 to a strong 75 % in 2007 ( Market Research, 2007 ) .

Further, unlike the Western states and other Asiatic states such as Japan and Singapore, which have progressively aging populations, India ‘s population has been turning younger with each go throughing twelvemonth ( MarketWatch, 2009 ) . An estimated 30 % of the state ‘s population is below the age of 29 ( ibid ) . These form an attractive potency market for personal attention merchandises.

The planetary economic crisis has affected India in late 2007 had an impact on consumer disbursement ( Market Research, 2007 ) . Consumers in India, as a consequence, believe really difficult before make up one’s minding to purchase expensive personal attention merchandises, such as aromas, coloring material cosmetics, and Sun attention ( ibid ) . However, this is less likely to be among the middle-income consumers. Similarly, flush upper-class consumers are expected to possess sufficient disposable income for them to go on their current criterion of life ( ibid ) . Hence, growing in the demand for premium personal attention trade names is expected to come about from this portion of the consumers in the Indian market ( MarketWatch, 2009 ) .

Coloring material cosmetics, aromas, and deodourants within the personal attention merchandise scope of aromas and beauty attention merchandises are forecast to turn by 134 % , 108 % and 69 % , severally, between 2009 and 2011 in changeless value footings, doing them the fastest turning sectors in India, peculiarly in the Western portion of India ( ibid ) . The prognosis besides suggests that germinating preparing wonts are likely to be strongly sustained among the urban young person in the part, and that consumers might non cut down the volume-usage of these merchandises, even during an economic recession ( ibid ) .

Competitive Landscape

Presently the market leader in personal attention merchandises in India is the Anglo-Dutch group company Uniliver Group within the top 5 companies in the ( see Table 1 below ) .

Table 1: Personal Care Products Company Shares by Retail Value 2004-2008

% retail value of several

Company 2004 2005 2006 2007

Unilever Group 37.1 37.8 36.7 36.1

Colgate-Palmolive Co 7.2 6.6 6.3 6.3

Godrej Group 4.0 4.2 4.4 4.5

L’Oreal Groupe 1.9 2.4 2.9 3.6

Dabur India Ltd 3.7 4.0 4.3 4.3

( Beginning: Modified and adapted from Euromonitor International estimations in Market Research, 2007 )

As for Parfums Christian Dior it has to pull off its merchandise offerings more strongly to vie with the above current top 5 personal attention merchandise providers in India.

Situational Analysis

Parfums Christian Dior is be aftering to come in the Indian market for personal attention merchandises in order to spread out every bit good as to increase its market-base, merely like any other MNC and in that chase the function of marketing mix becomes critical. And in order to measure the range for standardization of the selling mix for Parfums Christian Dior it is necessary to place the key relevant environmental factors that would act upon the standardization of marketing mix for the company.

Further, the economic environment, political environment, and cultural environment have major influences in the standardization procedure ( Kobrin, 1988 ; Jain, 1989 ; Hooley et Al, 1993 in Sustar & A ; Sustar, 2005 ) . Furthermore, the international selling mix determinations about: merchandise, monetary value, publicity, and distribution are in no manner much different from determinations associating to marketing mix made within domestic position though each domestic context is alone ( Perry, 1990 ) .

Consequently, the situational analysis composed of environmental analysis utilizing PEST and SWOT analysis for Parfums Christian Dior has been undertaken.

Environmental Analysis – Plague

Political

India is a democratic democracy which has liberalised its economic system since the early 90s has been holding a stable and strong assorted economic system that is promoting FDI – Foreign Direct Investment ( Market Research, 2007 ) . The regulative model associating to competition, patents & A ; hallmarks, Torahs associating to monetary value controls and merchandise fittingness are of import for Parfums Christian Dior.

Economic

Figure 1 ( on page 8 ) shows India ‘s GDP at the terminal of twelvemonth 2008. The increasing GDP shows clearly that India ‘s liberalised economic system has been turning reasonably quickly from twelvemonth 2000.

The rising prices rate in India in twelvemonth 2000 was at 5.4 % and in twelvemonth 2008 it stood at 5.9 % . These rising prices rates indicate that rising prices in India is good within control ( MarketWatch, 2009 ) .

Furthermore, the swelling strong foreign exchange modesty excess has been able to keep India ‘s balance of payments favorably and at the same clip has besides helped to keep stable foreign exchange rates.

Figure 1: India ‘s GDP ( in Rupees Billions ) Growth[ 3 ]

Social

India is going more and more cosmopolites, stylish, and trendy since 2003 ( ibid ) . This is chiefly due to the rapid growing in the urbanization [ an estimated 325 million occupants in the urban countries which are 31 % of the entire population in twelvemonth 2008 ( ibid ) ] and the consequent rise in personal income degrees throughout the urban countries ( ibid ) .

Added to these is the decrease in the spread between the rural and the urban population in India due to the successful incursion of satellite TVs every bit good as the migration of people from rural to urban countries, which in bend has been making a latent demand for lifestyle and personal attention merchandises ( Market Research, 2007 ) .

Technological

Information Technology is much cheaper in India due to the presence of a strong competitory Information technology market. Urban families have easy entree to the Internet. Further the Research and Development ( R & A ; D ) capablenesss of India in biotechnology, bio-chemical engineering, and IT that are most normally used in the personal attention merchandises industry would be able to complement Parfums Christian Dior ‘s ain R & A ; D work.

SWOT Analysis

Strengths

Christian Dior is the leader in aromas and beauty attention merchandises.

Dior has a really strong advertisement and trade name acknowledgment which is further accelerated by the company ‘s parent LVMH.

Parfums Christian Dior ( through LVMH ) is focuses on concern growing ( through wholly-owned subordinates ) by spread outing globally and wants to increase their presence in Asia.

Highly trained gross revenues and selling squad ( Mintel, 2009 ) .

Failings

Less competitory power when compared to companies like AVON and REVLON.

Not adequate gross revenues run in the personal attention merchandises like L’Oreal.

High monetary values.

Opportunities

Global enlargement.

Strong market demand for personal attention merchandises in India.

Consumer penchants for taking planetary trade name ( ‘Dior ‘ ) .

Expanding societal environment in India due to increasing urbanization.

Menaces

Laterality of Unilever Group and the new and successful entry of ITC, a big Indian company into personal attention merchandises like Fiama De Wills lines.

Strong possible competition from AVON and REVLON in the aromas and beauty merchandise lines.

Marketing Mix

The term ‘Marketing Mix ‘ refers to the 4 cardinal selling tools deployed by a seller. These are ( Goldsmith, 1999 ; Constantinides, 2006 ) :

Merchandise,

Monetary value,

Topographic point, and

Promotion.

Together these 4 elements of the ‘marketing mix ‘ are popularly known as the ‘4Ps ‘ or the ‘Marketing Toolkit ‘ ( Goldsmith, 1999 ) . All the 4Ps are related to a house ‘s clients ( ibid ) .

In the determination sing standardisation/adaptation, an MNC ‘s selling scheme becomes critical in order to gain its selling ends expressed through the selling mix of merchandise, monetary value, topographic point, and publicity elements ( Theodosiou & A ; Leondou, 2003 ) .

Further, the selling mix provides a construction to pull off the selling activities of: “ market analysis, selling planning, advertisement, gross revenues publicity, gross revenues, pricing, distribution and merchandise packaging ” ( Gronroos, 1994, p.7 ) .

Standardisation Vs Adaptation

With the promotions of information engineering, logistics, and transit the globalization motion has been rushing up excessively quickly and as a consequence accomplishing the organizational ends have become more hard and disputing for the MNCs ( Nasir & A ; Altinbasak, 2009 ) . As a consequence the determination associating to standardisation /adaptation of the selling mix scheme is a critical one for MNCs ( ibid ) .

Research over the past 40 old ages on standardization of marketing mix has focused chiefly on merchandises and advertisement ( Elinder, 1961 ; Sommers & A ; Kernan, 1967 ; Theodosiou & A ; Leondou, 2003 in Kustin, 2004 ) . Deploying a planetary selling scheme should comprehensively cover a standardized selling mix scheme holds a greater likeliness of big chances in the planetary market place ( Kustin, 2004 ) .

A good illustration in this instance is REVLON, which uses the same preparation for all its international merchandises sold worldwide in each abroad market apart from its home-base the US ( Nelson & A ; Paek, 2007 ) .

On the other manus, protagonists of version argue that the seller is capable to macro-environmental factors including different restraints such as linguistic communication, clime, instruction, businesss, race, gustatory sensation, topography, and to the conflicting ensuing from different Torahs, civilizations, and societies ( Czinkota & A ; Ronkainen, 1998 in Vrontis & A ; Thrassou, 2007 ) .

A instance in illustration is the celebrated EURODISNEY which used the same Disneyland criterion selling mix in France and failed ( Doole & A ; Lowe, 2004 ) . However, when Disney adapted its selling mix to accommodate the local client demands of France, like discounted tickets, free base on ballss etc. , EURODISNEY picked up successfully ( ibid ) .

Benefits of Standardization

Both the internal and external factors influence the determination to standardize the selling mix of merchandise, monetary value, distribution, and publicity ( Kreutzer, 1988 ) . Further, the graduated table of differences in the domestic physical, economic, societal, political and cultural environments, are progressively being invalidated by the rapid globalization of markets which has led to the minimization of the spread that was bing between domestic and international selling ( Perry, 1990 ) .

International selling standardization scheme besides provides a strong avenue to develop better quality merchandises from greater production efficiencies through big scale economic systems ( Levitt, 1983 ) . Besides standardization can bring forth potentially more net incomes through lowering of costs of production ( Kustin, 2004 ) .

For illustration: SONY ‘s legendary ‘Walkman ‘ trade name was ab initio priced high and later on monetary values became really low-cost in the US and Europe and remainder of the universe due to be efficiencies from big graduated table volume production lead by strong turning gross revenues demand worldwide ( Sanderson & A ; Uzumeri, 1995 ) .

Similarly, standardised merchandises and trade names and planetary advertisement are likely to bring forth big benefits to the MNCs ( Kustin, 2004 ) .

Buzzell ( 1968 ) recognised really early that the following benefits in international selling occur due to standardisation schemes of the selling mix:

Cost decreases from economic systems of big graduated table and improved resource use,

Uniform client attention,

Enhanced selling planning and distribution, and

Effective cross-border controls.

Further, the standardization scheme profit the MNCs in constructing international trade name image and corporate image, in obtaining better coordination and control of their international selling operations through reduced managerial complexness ( Nasir & A ; Altinbasak, 2009 ) .

Drawbacks of Standardization

Apart from the above benefits of standardization scheme there are besides some drawbacks to it.

Standardization scheme would be more appropriate merely when a planetary market section exists for the MNC ( Douglas & A ; Wind, 1987 ) . Standardization implies merchandise orientation alternatively of underscoring a customer-based and competitor-based orientation ( ibid ) .

As standardization in international selling is capable to both internal and external restraints a failure to react adequately to these restraints would take to the MNC ‘s failure in its abroad selling operations ( ibid ) .

Failure due to inadequate response to internal and/or external restraints may originate due to the mutual exclusiveness between the MNC ‘s current international operations with a standardized selling scheme ( Theodosiou & A ; Leondou, 2003 ) . As a consequence a planetary standardization is more likely to interrupt the MNC ‘s established international market operations with the attendant loss of cardinal assets and cardinal endowments ( Szymanski et al, 1993 ; ibid ) .

Standardization or Adaptation

Standardized selling mix in international selling is more suited to MNCs that operate within more or less homogenous planetary markets ( Kustin, 2004 ) .

If standardization scheme in international selling is pursued so the MNCs should near their standardized strategy-making in a multidimensional position as against a simple standardization scheme or version scheme in international selling scheme ( Zou et al, 1997 ) .

Scope of Standardisation – Discussion

Based on the above situational analysis ( PEST and SWOT ) which is relevant to the market entry by Parfums Christian Dior into India that affect marketing standardization the treatment on the range of standardization of the selling mix scheme for Christian Dior in footings of merchandise, monetary value, topographic point, and publicity is presented here.

Plague

Politically the Indian Government is pro-liberalisation and has been successfully pulling immense FDIs and Christian Dior would be no exclusion. States with turning GDP are contributing to execution of standardization of marketing mix ( Sustar & A ; Sustar, 2005 ) . Therefore, the strong GDP growing in India should ease the usage of a standardized selling mix by Christian Dior.

A stable economic system provides a steadfast base for implementing a standardized selling mix scheme in states that have homogeneous markets ( Perry, 1990 ) and Christian Dior presently operates in stable economic systems ( with the consequence of planetary economic crisis ablactating off now – December 2009 ) that have a about homogeneous markets. In so far as the Indian personal attention merchandises clients are concerned this should be no different as is validated by the rivals – AVON, REVLON, and L’OREAL in India.

Harmonizing to Jain ( 1989 ) cultural similarity between the place state of the MNC and the abroad market would assist the execution of domestic selling mix in abroad markets. Christian Dior prefers to come in markets that possess cultural similarity ( Mintel, 2009 ) . Socially and culturally India is going more widely distributed ( peculiarly the Indian mark client section composed of urban every bit good as a turning youth population ) . To this extent Christian Dior ‘s mark market displays cultural similarity.

Technologically both the place R & A ; D ( in France ) and the province of R & A ; D in India in so far as the personal attention merchandises are concerned are compatible with each other. Consequently, Christian Dior may non hold any trouble in utilizing a standardized selling mix.

Marketing Mix

Merchandise

Merchandise lines, merchandise quality and trade name properties of merchandises are more suited for standardizing selling mix schemes globally ( Tomas et al, 2000 ) . As discussed before Christian Dior ‘s personal attention merchandises do hold all these properties with strong trade name names of its prima merchandises every bit good as its ain name ‘Dior ‘ .

Monetary value

Competitively priced merchandises have higher market possible and therefore can be standardised in footings of international selling mix scheme ( Shaw, 1994 ) . But Christian Dior ‘s merchandises are sold under ‘Premium-price ‘ class. However, the company can standardize its selling as the current foreign operators in India like L’oreal, which besides sells personal attention merchandises under the ‘premium monetary value ‘ has adopted a standardized planetary selling scheme.

Topographic point

Standardised distribution tantrums direct exports ( Jain, 1989 ) . This holds true in the instance of Christian Dior as it handles its gross revenues ( through LVMH ) worldwide through its ain retail shops. It is more likely that the company will make the same in India every bit good.

Promotion

Both advertisement and personal merchandising suits best for advancing personal attention merchandises. Christian Dior already uses both planetary advertisement for all its trade names every bit good as personal merchandising through its wholly-owned subordinate retail mercantile establishments. Since consumer-based merchandises are suited for standardized publicity methods ( Jain, 1989 ) Christian Dior can take advantage of the same.

Drumhead

Based on the above analyses standardization of marketing mix scheme appears to be appropriate for Christian Dior ‘s entry into India in the personal attention merchandises market.

Decision

The basic aim of this study was to measure the range of standardizing the selling mix for the proposed entry of Christian Dior into India in the personal attention merchandises market. Consequently this study examined the same via a state of affairs analysis every bit good as through an rating of the benefits and drawbacks of standardization of marketing mix from literature and practical illustrations.