Premiumization is nothing new in the cosmetics world, but as more and more market leaders look to higher end products, it seems it’s becoming a must-do in order to stay ahead.
Indeed the behemoths are suggesting that premium is the way to go to drive growth. Unilever Personal Care President Alan Jope spoke in November, stating that the company is intent on building its prestige portfolio to take advantage of higher growth rates than those experienced by the mass market sector. He also stated that the company was looking to ‘premiumize’ its current portfolio of mass market brands, with masstige lines such as Pond’s Age Miracle and Dove Advanced Hair Care. Read more here.
Indeed, such is the desire to break into the market, companies are looking to new formulations and marketing strategies to bridge the gap. Step up Unilever again, this time Hindustan Unilever (HUL). At a time when more and more companies focus on herbal products to launch into a higher priced market, the Asian arm of the personal care giant announced the launch of a new selection of personal care products with the ayurveda tag. Whether pitched as herbal, natural or ayurvedic, the products are all marketed with a much higher price tag than their stablemates. For example, a 50-gm pack of Fair & Lovely Ayurvedic Care, a herbal fairness cream, is priced at Rs.120 while a similar pack of Fair & Lovely Advanced Multi-vitamin Cream costs Rs.89. This amounts to a price difference of 35 per cent. Read more here.
And it wasn’t just the Asian arm of the company that was focussed on the market. Back in July the Dutch manufacturer announced that it had signed an agreement to acquire leading clinical skin care brand Murad, pushing on with its desire to be a key player in the prestige market. The LA-based doctor line joined REN, Kate Somerville and Dermalogica – which the company purchased in late June – in the FMCG giant’s new prestige division. Read more on that story here.
It wasn’t all good news for higher priced products however. P&G India, for example, jumped on the bandwagon, as we reported in October this year. However, as its rivals continued to launch products at lower price points, its focus on premium products was suggested as the reason behind its slowdown in the market. Indeed, P&G India posted its slowest growth rate in more than a decade. Read more here.
However, despite this slight hiccup, the good outweighs the bad. It was the success of high end brands such as MAC, Origins, and La Mer that boosted Estée Lauder’s third quarter results – Read more here, while family favourite The Body Shop used the launch of a new premium range in August to try and drum up support for the brand after a turbulent few years. Arnaud Jeanteur, General Manager of The Body Shop, said at the time, “The Body Shop has always been an accessible brand and it will remain so. But some customers want more sophisticated products and they are happy to pay a little more for them.” Read more here.
And so it remains to be seen whether the penchant for premium continues in the coming year, but if the giants of the industry are to be believed; it’s a guaranteed route to success.