The U.S. cosmetics industry is a $7 billion dollar market. This lucrative business has attracted many competitors all fighting to gain a piece of the industry pie. As competition grows fierce, standing out amongst the crowd becomes more difficult. In order to succeed in this industry, CoverGirl must establish a sold brand image and differentiate itself from competitors.

For many years, CoverGirl’s primary target market has been Caucasian woman between the ages of 16 to 45. With its slogan, “Easy, Breezy, Beautiful…CoverGirl”, it was positioned as a trendy, low cost, good quality cosmetics provider. Distribution in mass retailers allowed easy access to target markets.

CoverGirl’s initial marketing strategy had been to saturate magazine covers with well-known supermodels such as Niki Taylor and Christie Brinkley. These campaigns successfully launched CoverGirl into households, and established strong brand equity, a trusting image, and many loyal consumers. However, as more competitors entered the market, CoverGirl’s mass appeal strategy began to falter. CoverGirl saw their leading market position fall to its current third behind L’Oreal and Revlon.

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Attempting to be everything to everyone, CoverGirl’s pre 2006 product lines included the Clean, Exact, Outlast, Tru, and LashBlast collections which targeted the mass market. Recognizing that cosmetics are a personal aspect of a woman’s life, marketers began striving to communicate and connect with consumers on a more personal level. In 2006, CoverGirl launched three new campaigns under the CoverGirl name: The Queen Collection, The Advanced Radiance Age Defying Line, and wild and bright additions to its nail colors. These campaigns represent a change in strategy for CoverGirl. Rather than targeting the mass market, these collections aimed to target niche markets.

Although CoverGirl’s pricing and distribution strategy remained the same, it found new ways of communication. The most creative being the reality model competition show, America’s Next Top Model. Incorporated in each episode are CoverGirl product placements and name mentions. Despite this seemingly innovative strategy, analysis reveals that these campaigns may not increase sales, but dilute and weaken CoverGirl’s brand image. Airing mid-week on prime time television, this show draws a wide range of CoverGirl’s target markets.

Featuring its Tru Collection on one episode while guest starring Queen Latifah on another weakens CoverGirl’s message. Furthermore, commercial breaks showcase an array of CoverGirl products ranging from its Outlast Collection, featuring young models, to its Advanced Radiance Anti-Aging Collection, featuring older models. With many target markets tuned in, CoverGirl runs a high risk of blurring its brand identity and alienating its many market segments.

Online communications are an essential promotional tool. CoverGirl’s has one website. Consequently, its many collections are all featured at once on its homepage (Exhibit 1). The many faces and messages of CoverGirl prevent it from making the deep, solid, and personal connections with its different target segments needed to drive loyalty, sales, and success.

To take advantage of a market with so many different segments, CoverGirl has two alternatives. The first is to drop the CoverGirl name and launch new product lines for each of its market segments. The company can leverage its financial resources, marketing expertise, experience in the market, and wealth of information to launch new products with new names. Under this strategy, the company will be able to focus on one market segment with one collection. Brand image will be clear, communication will be effective, and personal relationships will be established. However, this strategy completely disregards the strength of the CoverGirl name. Building a brand and a loyal customer base takes large investments in time and resources. Starting over and competing against established brands is extremely risky. Despites CoverGirl’s expertise, there is no guarantee of success in this already saturated business. Not leveraging the reputable CoverGirl name would be a waste of a great resource.

CoverGirl should execute their second alternative: balance its strong brand equity and distinguish its many collections. First, CoverGirl must differentiate its brand. Although CoverGirl has strong name recognition, with its many products and long history, consumers may not recall what separates CoverGirl from competing brands. CoverGirl must do pure branding commercials to reestablish its image as the trendy, clean, light, and natural cosmetics brand.

Next, CoverGirl’s name should be more subtle on its many collections. Instead of printing CoverGirl prominently on each collection, the company should consider promoting the collections with schemes and designs reminiscent of the CoverGirl brand, while allowing the individual collections to stand out. This allows the company to effectively leverage CoverGirl’s reputation while allowing each collection to better connect with the targeted segment. Additionally, CoverGirl must communicate to different market segments via different channels to avoid blurring brand image and alienation. For example, the Queen Collection will more effectively reach the targeted segment on distinctive networks such as Black Entertainment Television (BET). Furthermore, each product should have its own website with its own theme.

The make-up you wear is a personal express of who you are. Marketers must understand that developing personal relationships are essential to success in the cosmetics industry. Alternative two allows CoverGirl to leverage the strength of its brand to take advantage of the opportunities in different market segments. Additionally, pure branding will re-establish CoverGirl’s weaken image and allow the brand to differentiate from its threats. This strategy will lead CoverGirl to success. (Please see exhibit 2 for complete SWOT analysis.)

Exhibit 1: Conflicting themes on CoverGirl’s website

Exhibit 2: SWOT Analysis

Industry Background:

Products: Eye make-up, Face make-up, Lip make-up, Nail make-up

U.S. Make-Up Market: $6 Billion

Procter ; Gamble:

1837: Company started by selling soaps and candles

Founders: William Procter and James Gamble

Strategy: Focus on providing branded products that are of superior quality and value

1960: Launch of CoverGirl Cosmetics

Top Competitors:

L’Oreal:

* Leader in U.S make-up market

* Strategy: Innovation and diversification

* Revenue: $18,564 million in 2005

Est�e Lauder:

* Strategy: “Bringing the best to everyone we touch.”

* Revenue: $6,463.8 million in 2006

Revlon, Inc.:

* Strategy: Reputation as trendsetters in the world of cosmetics

* Revenue: $1,332.3 million in 2005

CoverGirl 2006 Product Launches:

1. Advanced Radiance Age Defying Collection

2. Queen Collection

3. New Nail Line

Questions:

1. Did recent campaigns:

i. Make great advances on the market?

ii. Weaken the CoverGirl brand image?

2. How can CoverGirl communicate with different market segments without running the risk of alienation?

i. Different channels?

ii. Different brand names?

3. Should CoverGirl expand into the international market?

 

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