Estée Lauder (1908–2004) was known for her belief that all women can be beautiful. Like the other grande dames of the cosmetics industry, Lauder gained entrance to the cosmetics business through skin care products. Her company’s global reputation was built on brands such as cosmetic line Clinique, and Aramis, her first specialty fragrance line for men. Lauder’s marketing philosophy is based on product loyalty in specialty niches that recognize the diversity of women’s demographics. Marketing a wide variety of cosmetics, fragrances, and clothing lines, Lauder remains one of the more diverse beauty corporations. The Lauder product lines project an image of high-class society, thus accessing the snob appeal inherent in purchasing.
Early Life And Marketing Philosophy
Born Josephine Esther Mentzer, of Hungarian and Czech parents, Lauder was raised in Queens, New York. Starting as a skin product salesgirl and selling her uncle John Schotz’s creations (legend says out of a restaurant’s kitchen), Lauder learned about selling methods and the power of the personal touch between women. She also understood that presentation, and especially limited color choices, can be used effectively to guide public purchasing power. She finished high school and in 1930 married a son of Austrian immigrants, Joseph Lauder. Her professional name became Estée, a take on her nickname, Esty, and her husband’s last name.
Lauder helped popularize the free gift or sampling marketing strategy to attract and retain customers; in today’s customer base, free samples are frequently used as trial or travel cosmetics by women. Gift with a purchase is another very successful marketing ploy, which expanded the range of products bought by customers in the Lauder product lines. Knowing that women share their experiences with friends and family, Lauder accessed word-of-mouth advertising of her products through these sharing and personal touch strategies. Like other beauty corporations, Lauder employed the services of face models, which helped the product lines to gain customer recognition; this was a precursor of the supermodel brand recognition strategy. Her use of signature colors, blue for the Lauder brand and light green for Clinique cosmetics, reflected her understanding of the totality of many women’s home environment decorating schemes: blue and green would coordinate with most bathrooms.
Lauder and her husband expanded the sales business to beauty salons and hotels, founding the Estée Lauder Company in 1946 with $50,000. The first Estée Lauder brand products were Super Rich All Purpose Crème, Crème Pack, Cleansing Oil, and Skin Lotion. In 1948, her talent for sales led to a counter at Saks Fifth Avenue, then to Nieman Marcus in 1950, and thereafter to contracts with other high-end department stores. The company’s first international store counter was at Harrods in London in 1960, followed rapidly by contracts in Central America, Australia, France, Belgium, Germany, and Japan. Over the next three decades, the Lauder Companies expanded further by establishing their own manufacturing plants and research and development facilities, and finally establishing business contracts in the USSR (1973) and China (1993).
Capitalizing on the idea of product niches, Clinique was introduced in 1967 with its neutral green packaging and asexual advertising presentation; it became a favored choice among professional women. It was dermatologist tested, hypoallergenic, and fragrance free, which also appealed to the health-conscious clientele. The Prescriptives brand, using color authority and individualized products, followed in 1979. Tapping the interest in natural products, Origins Natural Resources, launched in 1990, touts “age-old remedies from nature” in skin care, makeup, and bath/body products. Because of its ownership of widely diverse cosmetics lines and brands, the Lauder corporate holdings have marketed across a range of clientele; many of their products, sold under various names, vary mainly in packaging, marketing focus and price, rather than ingredients. The Estée Lauder brand’s main competitors seem to be product lines within the company’s own holdings.
Among the famous Lauder products are Youth Dew, a bath oil /skin perfume first introduced in 1953, and Aramis, a fragrance and grooming line for men, introduced in 1965. Besides Aramis, the Lauder company markets more than 70 fragrances, including White Linen (1978) and Beautiful (1985). Broad ranging acquisitions have followed in the last two decades as the company diversified its offerings in licensing ventures such as Thomas Hilfiger (1993) and online sales of its various brands and product lines beginning in 1996. Lauder continues to acquire high-end brands in specialty niches; M.A.C., the makeup artist brand in 1994–98 was followed by Bobbi Brown in 1997, Aveda (hair care) in 1997, Stila Cosmetics in 1999, and Jo Malone in 2000.
Today, the Estée Lauder brand is seen as a classic and continues to seek ways to lure the new under-40 clientele without alienating its loyal base. Besides acquiring high-end specialty niches, Lauder’s tradition of sampling may also be accessing young women, inviting them to join the beauty routine culture of their elders. The company’s skin care products continue to underpin the corporation’s economic well-being. Marketing strategy follows Lauder’s tradition of ground-breaking approaches and keeping up with the image of the times; it spends approximately $65 million per year on promotion.
The Estée Lauder Company surpassed $1 billion in sales in 1985, $2 billion in 1991, and $5 billion by 2003. In 2008, the company’s global sales exceeded $6.4 billion annually; it controlled 45 percent of prestige cosmetics in the United States and nearly 20 percent in Europe and Australia. The Estée Lauder Company stock has been public since the year of Lauder’s retirement in 1995; however, the Estée Lauder empire remains a family affair today, 77 percent run by direct descendants of Estée and Joseph Lauder. Lauder granddaughters Aerin and Jane are senior vice presidents of the Lauder and Clinique brands, respectively.
The Lauder empire continues to support many philanthropic organizations, including contributions to restoring the Palace of Versailles and building playgrounds in New York’s Central Park. The company today declares that it conducts no animal testing on its products, unless required by law. It also maintains statements on global citizenship, reduction of the impact of product manufacturing on the environment, and its philanthropic interests.
At the same time, controversy has surrounded the company despite its philanthropic efforts. For example, during the Campaign for Safe Cosmetics in California in 2005, the company lobbied against efforts to implement a regulatory framework for the use of chemicals in beauty products that would require companies to report all toxic ingredients used in their products.