The Grayson Report

Survival of the Fittest

By Suzanne and Bob Grayson, Grayson Associates | July 8, 2009

There is no magic wand to make the recession go away, but there may be a star to lead us. And, as you might have guessed, the star is your brand.Often we are asked by news journalists such “piercing” questions as, “aren’t all products really the same, just the packaging is different?” Our answer is, “no, most products are different from each other but they are “perceived” as equally satisfactory. Or, as in the case of anti-aging products, “none of them perform as hyped-expected.”

There’s a new report under the combined auspices of NPD and IRI merging data from U.S. mass and prestige channels for the first time (Wal-Mart omitted, of course!). “The Beauty Cross Channel Monitor” merged the brands from the two channels into one and reported the following ranking:
1. Oil of Olay
2. Clinique
3. Neutrogena
4. Estée Lauder
5. Lancôme
6. L’Oréal
7. Clean & Clear
8. Aveeno
9. Private Label
10. Shiseido

Much like reading chicken entrails, you can study this list and come away with several interpretations. First and foremost, there is not equal distance between the ratings. On a scale of 100, Olay might be 100, Clinique 70, Neutrogena 69, Estée Lauder 48 and Lancôme 40.Second, this list is in dollar volume, which simply means the Clinique and Neutrogena might be equal in dollars but Neutrogena might sell three times as many units.

Given all of that, private label, never considered a real threat in this area of the beauty business, is surprisingly strong, beating out brands such as Pond’s, Nivea, Garnier and Vaseline. Because PL will most likely be the least expensive brand in mass, its rank in units would be dramatically different. And, in this value-driven economy, PL is likely to become even more important—especially if it’s done a la Target, with a “branded” look and feel.

Two other significant factors add to PL’s strength. One, PL here translates into many individual product/store brands, not one specific branded item such as Sonya at Target.Apparently enough consumers are satisfied with results of a variety of PL products, without the image part of the mix. These products are in the basic bread-and-butter lotions/creams in the category, much to the chagrin of the branded marketers. If consumers believe that these products are just as good as the “high-priced spread,” what does that say about what the majors are spending on technology to feed innovation? Two, the number of SKUs in PL are insignificant compared to leading brands. What does that say about productivity per SKU and space? Once the bean counters start slicing and dicing the numbers, as the song goes, “they’ll be some changes made.”

Locate Your Star

That brings us back to a star to lead us by—the brand. Every purchase is made on the basis of the price/value relationship, no matter the price or channel! The value can be real or imagined, and it has many components (See The Grayson Report in Happi, September 2008)! The woman who buys La Mer at some outrageous price, sincerely believes she is getting her money’s worth, especially since the product in use is not visible to anyone else. It’s not like whipping out a Chanel lipstick in a restaurant for all to note. And who has verbalized “value” as the brand positioning better than L’Oréal’s “Because You’re Worth It!”

It comes down to building a stronger brand. That’s the second half of the price/value relationship. Pity the poor marketer who must resort to price in order to make this quarter’s figures. Thus, the focus should only be on value–anyone can cut the price, but a real marketer is primed to increase value. In the May issue (p. 46) we discussed The Rules of Engagement which form one point of the star to guide us. The second “star” corner is what will soon be well-known as Sensory Marketing.The text book comes out in December and the first MBA course, cleverly called Sensory Marketing, will be taught at the University of Michigan.One disclaimer: Not all the features will apply to every product category.

The concept starts with the senses and holds that the more the senses can be involved, the stronger the brand. The fives senses, as you know, are touch, taste, smell, vision, and audition. Depending on the category some are more important than others, and some not at all applicable.

Starting with sight—think Tiffany color or the pink ribbon for breast cancer. The Gaultier fragrance bottle is a perfect example of shape.When you hear Intel Inside little bells go off, and who can forget the smell of Noxzema? Years ago, marketers discovered flavored lipgloss and it’s still going strong, although the flavors haven’t gone much beyond cherry and chocolate.P&G has revisited, with an all-court-press, visual effect products to both “stop and hold” the consumer in an ad, or in store, and to support claims. If you are simultaneously distinctive enough in several of these areas, your brand will be more differentiated, perhaps more protected and stronger for it.

Another point on the star comes from a new book by Kate Newlin titled “Passion Brands.” Applying the concept to beauty isn’t easy, but it can be done, and viral marketing makes it far easier. We recently came across a 40-year-old report that tells the story. Back in the 1960s, when the toothpaste category was dominated by Colgate, P&G and Lever Brothers, a new brand of toothpaste was introduced by Smith Kline & French called AquaFresh. SKF had no business trying to horn-in! At Lever, every new paste (competitive or its own) was tested for acceptable taste by measuring against Colgate, then the most popular product. Colgate beat AquaFresh 80 to 20—an impossible failure. Yet, AquaFresh shot up to a 15 share of market almost overnight.Yes, it was a very strange taste, but passionately loved by a strong segment of the market.(See Outlast Lipstick, below.) At that same time Estée Lauder’s Youth Dew —the classic love/hate fragrance built that company. And what about Giorgio? Have you noticed any love/hate fragrances lately? Maybe a little passion is what the fragrance business needs these days, instead of panel tests which bring products to the middle—acceptable by most, but without passion. Finally, what about all the competitors that tested Cover Girl’s Outlast Lipstick when it was introduced?“Will never make it,” “Wrecks the lips—too dry,” “Mass market consumers will never use a two-step product,” but where there’s passion for performance, it goes to the top.

The easiest way to understand passion is to ask iPod owners to explain the device. You can’t stop them. There’s passion for Starbucks and Costco, too. Sometimes you may not even realize the passion that exists for your brand. Remember when Coke tried to change the flavor after losing taste tests to Pepsi? Years ago, Coors devotees bought the beer in Denver brought it to the East Coast. Lastly, how about Twitter?

Well, we only have a three-pointed star to lead you by, but hopefully, that’s a start. Trust us, we’ll finish that star for you.

☺Surprise, Surprise

The Aveda ad (below) doesn’t even mention green or organic. It’s just a fashion story. Oh yes, in the left side column it states, “Up to 99% naturally-derived ingredients”—so you don’t forget that it was there first.The purple logo matches her hair, we’ll have to wait to see if this will become a signature color for Aveda.

Aveda puts a new spin on natural with this ad. Unfortunately, the product name gets lost.
You know, utilizing the sense of vision as a mnemonic device and carried through on the package. Neat job. Too bad the product name is so insignificant in the ad. But the permission-to-try is great—if you can find it— a free sample if you mention the ad, go to the website, etc. Finally, just when the world is going green, Aveda is putting fashion, beauty and perceived benefits in the mix. That’s adding aspirational value; i.e., value for “me” and not just the universe!

Cover Girl on the Attack

For years, P&G’s Olay has used price-comparison advantages versus department store brands, before it became de rigueur to provide additional value. While it may, or may not have provided the glide from prestige to mass, this advantage certainly put some oomph into the brand.

Now, here comes Cover Girl into the fray (below), taking on Lancôme, Benefit and Bare Escentuals all at once.Another first is showing the actual comparison prices!(Savvy shoppers will know that the CG’s MSRP prices will be even less in Wal-Mart). When was the last time you saw even one price in beauty ads?How about never! The sub-head reads, “Department store beautiful, without a department store price!”

P&G wins on product and price in this latest ad for Cover Girl cosmetics.
Now, consider the price/value relationship.It attempts to increase the value by equating these products (benefits) with the top category products sold in prestige stores. Final touch—the new shades in LashBlast are called LashBlast Luxe.Smashing! The first page of the three-page spread, not shown for space reasons, is a close up of Drew Barrymore with “Glisten Up Big, Bold Lashes, now with a hint of shimmer. That’s power.

For more power – here’s the sequence of. P&G’s gradual absorption of Cover Girl into the Olay brand.First it was a CG product “with Olay ingredients.”Then CG Ageless Foundation as “Olay and Cover Girl.”And now, the TV spot for the product described as “Olay’s Cover Girl Ageless Foundation!”Can you just see how they laid out the end game, and then the steps to get there?After many years of trying, CG will now be a truly global brand. The true definition of power in the marketplace? Fearless!

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About the Authors
Suzanne and Bob Grayson are respected, professional marketers, having spent their careers with the leading companies in the beauty industry before starting their successful consulting business in the early 1970s.Their consulting clients have included Avon, Bristol-Myers, Estée Lauder, Procter & Gamble, Revlon and Cover Girl, among others. They reside in San Juan Capistrano, CA and maintain an office in New York City. For more information, they can be reached at or