The Estee Lauder Group, a producer of prestige cosmetics, controls 46% of the U.S. market and 21% of the global market. The Group was launched in 1947 by Estee and Joseph Lauder and is still controlled by the family. With annual sales of over $8 billion in 130 countries, the Company hopes to double its business over the next decade.
Estee Lauder consists of a collection of up scaled brands targeted at a diverse selection of consumers. The Group's portfolio of brands includes the most recognized labels for mature customers (Estee Lauder, Clinique, Prescriptives, Aramis, and La Mer), eco-correct labels (Aveda and Origins), as well as hip labels (M.A.C., Bobbi Brown, Tommy Hilfiger, Donna Karan, Stila, Jo Malone, Bumble and Bumble, Kate Spade, jane, and Darphin). Its most elite brand is Crème La Mer, a "miracle" skin treatment created by a NASA scientist that sells at $400 a jar. At that level, it's main competitors are Yves Saint Laurent and La Prairie; which are exclusively sold in fine department stores such as Saks or Nordstrom. Estee Lauder not too long ago took over jane, a small makeup label sold in discount stores, drugstores and pharmacies.
Over 20% of Estee Lauder expenses is the selling costs. To be successful in the cosmetic industry, a company must be credible. Credibility cannot be fake, bought, or stolen. "That's what gives our prestige products a substantial edge" is what Estee Lauder says. The company manufactures and markets its brands and does some research and development all together. Estee Lauder knows that for each brand to be successful, whatever made it special the first time around must be kept that way forever.
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