Estée Lauder

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.

The Company

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).

Specialty Niches

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.

Company Legacies

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.

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