YVES ROCHER Group 5 Ina Kachan-Gallagher Natalia Hrebien Bayrin Guzel Tara Mahon Danielle Manter

Yves Rocher a leader in botanical cosmetics -Europe - Asia - USA

Mission: To look at the world through new eyes, to unlock nature’s mysteries, to offer women botanical beauty care that cherishes and protects sensitive skin.

Target market In need for safe and effective everyday skin care products for home use. Mid-income Shop in retail outlets (vs online and catalogs)

Recognizing the Need Minimal sales - ( weak promotion and poor distribution) US market’s vast amount of product variety and high competitiveness Increase brand and product awareness Strongly believe to attain great success based on former experience in European and other foreign markets

Company’s Objectives Capture 20% of the US skincare market 25% Increase Sales within the first quarter of 2008 Strongly concentrate on increasing customer awareness through brand awareness campaign and product samples.

Distribution Objectives Department stores, specialty skincare stores, convenience stores [depending on product] Introduce a larger variety and more in depth product lines Monitor enough inventory to stock and distribute directly to Yves Rocher’s retail stores

Distribution Tasks Gather information on target market shopping patterns Provide for hands-on tryout of products Sell against competitive products Maintain inventory storage to assure timely availability. Provide consumer satisfaction policies

Last Phase of Channel Design –Organizations reflect: New distribution objectives Marketing strategies for Sensitive Skin Care Line Uphold Values, Objectives, & Strategies of company Channel Member Selection

Option 1 Yves Rocher Manufacturer Independent US Distributor Consumers Department Stores Category Specialists Service Retailers CatalogE-retailer Yves Rocher outlet

Yves Rocher Manufacturer Department Stores Category Specialists Services Retailers Catalog YR Stores future E-retailer Consumers Option 2

Choosing Best Structure: 1. Qualitative Judgmental – Heuristic Approach - Priority of the control over promotion called for a shorter channel 2. Aspinwall’s analysis replacement rate medium gross margin medium adjustment to the market medium time of consumption medium searching time medium

Level of Intensity: brand exclusivity vs coverage Market Coverage Product Exclusivity Exclusive Selective Intensive

Evaluating Market Variables Geography -2 Production and Distribution Warehouses -Efficient and Low Cost Size -Market Penetration -High Customer Satisfaction -Lower Price Point Density -Widespread Behavior -Personal Use -Gift Giving

Evaluating Product Variables Bulk/Weight -Not Excessive size or weight -Sold in Large lots/Bulk Unit Value -Few Intermediaries = Lower Prices = Higher Market Share Standardization -High Standardization (L’Oreal, Revlon…) -All Natural Ingredients Newness -High Control of Advertising and Promotion -Direct Distribution increases “voice”

Evaluating Company Variables Size -Smaller in Volume of Sales and Consumer Awareness -Increase Brand Awareness by Effective Advertising -Channel Power and Control less Necessary Financial Capacity -Current Presence in Europe as Support System -Large enough to Control our Distribution and Promotion Managerial Expertise -Utilize experience of European Sales Force -Introduce American Sales Force Objectives -Control of Promotion, Place, and Price

Evaluating Environmental Variables The Economy Recession: Consumer spending ↓ Channel members stuck with expensive inventories Inflation: Prices ↑ Consumer spending is hard to predict

Changing Sociocultural Patterns in the U.S –Age patterns –Educational trends –Family Structure –Ethnic Mix –Changing Role of Women Sensitive skin formulation Diverse population Large Target Market

Competition in the U.S.

Technological Innovations The Internet - Retail online sales = 2% of total sales across all channels - Steady growth - Electronic marketing channels Accelerated product development software (Optiva) - Improve flow of info among R&D, marketing and manufacturing - Improve communications and individual / departmental productivity - Enhance customer service - Accelerate time to market of new products - Maximizing product performance and increasing profit margin.

Legislation Affecting Marketing Channels FDA Regulations The Food, Drug, and Cosmetic Act - Adulterated cosmetics - Misbranded cosmetics The Fair Packaging and Labeling Act Cosmetic Good Manufacturing Practice Guidelines

Channel Member Selection Selective Distribution Technique –Department Stores Bloomingdales, Macy’s, Nordstrom, Boscov’s, Dillard’s, and Lord & Taylor –Category Specialists Sephora, Crab Tree & Evelyn, Bath & Body Works, Essentials, and Long’s –Service Retailers Spas, dermatological centers

Steps in Channel Member Selection Finding Prospective Members –Utilize current sales organization Internal External Determining Suitability –Credit & Financial Stability –Existing Product Lines Competitive Compatible

Securing the channel members strong discount rates promotional and advertising support exclusive image management assistance (training programs for services providers, market analysis for all retailers, inventory minimization by implementing just-in-time technology, in-store promotional help and other supportive measures.)

Future Redesigning (adding wholesaler) Introduction of new product line Manufacturer owned retail stores