Estée Lauder Companies, Inc. — 2008
Sharynn Tomlin Angelo State University EL
Based in New York City, Estée Lauder is a manufacturer and marketer of four cosmetic product lines: 1) skin care, 2) makeup, 3) fragrances, and 4) hair care products. These products are sold in over 130 countries and territories under brand names that include Estée Lauder, Aramis, Clinique, Prescriptives, Lab Series, Origins, MAC, Bobbi B r own, La Mer, Aveda, Jo Malone, Bumble and Bumble, Darphin, Rodan + Fields, American Beauty, Flirt!, Good Skin and Grassroots. Estée Lauder also has global licenses for fragrances and cosmetics sold under brand names that include Tommy Hilfiger, Donna Karan, Michael Kors, Donald Trump, Sean John, Missoni, and Daisy Fuentes. Estée Lauder announced in June 2007 that it might acquire skin care company Murad Inc., based in El Segundo, California. Murad sells skin care products and dietary supplements on the Internet and via infomercials, and also in spas and stores such as Sephora and Bath and Body Works. Estée Lauder’s final 2007 sales increased 7 percent to $7.037 billion. E s tée Lauder sells its products mainly through upscale department stores, specialty retailers, upscale perfumeries and pharmacies, and prestige salons and spas. In addition, its products are sold in freestanding company-owned stores and spas as well as its own and other authorized retailers’ Web sites. You can also find Estée Lauder products for sale at stores on cruise ships, on television direct marketing channels, and at in-flight and duty-free shops. Estée Lauder’s range of skincare products for women and men include moisturizers, creams, lotions, cleansers, sunscreens, and self-tanning products, a number of which are developed for use on particular areas of the body, such as the face, the hands, or around the eyes. Skincare products account for about 37 percent of net sales as compared to makeup products that account for about 39 percent of sales. The company’s makeup products include lipsticks, lip glosses, mascaras, foundations, eye shadows, nail polishes, and powders, as well as related items such as compacts, brushes, and other makeup tools. Fragrances for women and men comprise about 19 percent of sales. Fragrances are sold in perfume sprays and colognes, as well as lotions, powders, creams, and soaps. Finally, Estée Lauder sells hair care products in salons and freestanding retail stores. These products include hair color and styling products, shampoos, conditioners, and finishing sprays. In fiscal 2006, hair care products accounted for about 5 percent of sales. Each of the company’s brands has a single global image that is promoted with consistent logos, packaging, and advertising designed to differentiate it from other brands.
Beauty, youth, and being forever young are common themes in the personal products industry. A young entrepreneur named Estée Lauder felt that she could provide a product that espoused those qualities. Estée Lauder Company was founded in 1946 by Estée Lauder and her husband Joseph Lauder. Estée was always interested in beauty and began her business selling the skin care products her chemist uncle, John Schotz, developed. Her first products were sold to beauty salons and hotels.
CASE 1 • ESTÉE LAUDER COMPANIES, INC. — 2008
In the early years, Estée was unable to convince Madison Avenue to carry her products. Facing this rejection, she began to market her products directly to customers. With that success, the Lauders began targeting high-class customers by selling products exclusively through boutiques and department stores. In 1948, Estée Lauder established their first department store account with Saks Fifth Avenue in New York. During the next 15 years, the products were selectively distributed in other stores in the United States. In 1960 the company globalized their operations with the introduction of Estée Lauder products at Harrods in London, with the...