2. Shiseido Future Solution Total Revitalizing Cream Survey Research Report March 2005 Monique Choi, Miles Perdiguerra, Irene Shang, Orlando Shih, Judi Washington, Fei Xu

3.  1872 – Tokyo, Japan, western style pharmacy  Entrepreneurial, pioneer, visionary  Management Principles (1921)  R&D Oriented – combine nature and science  Diverse Products - skin care, make up, fragrance, etc.  4th Largest Cosmetics Company  FY ’ 04 Sales $5.7 billion  Marketing Strategy – “ High Quality, High Image, and High Service. ” Company Profile “Welcome to a world of beauty and well-being”

4. Target Customer  40 – 60 year old women  Annual household income $60K+  Working women, professionals  College educated  Active lifestyle  Believe in new technology

5. Product Profile  Retail price $225 USD  1.8 oz. (50 ml)  Packaged in an elegant black-green glass jar adorned with gold flecks; a plastic spatula is included  More than 30 ingredients, including two potent ingredient groups  Inner Network Firming Complex  Hydro-Infusion Complex

6. Paper 1 Conclusions The research should help Shiseido to find out how to:  Verify target customers  Reach out to the potential customers  Enhance the educational and promotional programs  Differentiate the products  Seek clear product positioning

7. Survey Introduction & Objectives  Product Selection / Satisfaction  Product Promotions  Distribution Channel  Price  Reason / Frequency of Use  Brand Loyalty

8. Survey Questions  Gender  Age  Annual household income  Children living at home  Skin concern  Skin care routine  Skin care brand  Level of satisfaction  Product improvement  Purchase factors  Anti-aging brand  Purchase location  Information resource  Purchase frequency  Expenses

9. Survey Limitations  Computer with Internet access  Limited number of respondents (N=89)  Limited time  Limited number of options for each question  15% male and 85% female

10. Survey Research Results  75% of respondents were women  66% were all females between the ages of 25 and 44  Income level was evenly distributed among all categories  Female respondents were almost equally concerned about wrinkles and fine lines (32%) as they were with acne (25%)  64% of respondents indicated they did not use one of skin care brands named in the survey

11. Survey Research Results (Continued)  All but one Shiseido user gave the company neutral to positive feedback  81% believe their skin care products could improve with better pricing, more promotions and discounts, better availability through channels  An overwhelming majority purchase skin care products from department stores (42%)  Magazines are the main source for skin care information (38.2%)

12.  Shiseido constitutes a higher market share among respondents than other companies in the survey, but 40% do not use anti-aging products at all  50% of Shiseido skin care product users also use their anti-aging products  Buying frequency is evenly distributed  64% spend less than $500 per year on skin care; only 7.9% spend more than $1,000 per year Survey Research Results (Continued)

13. Target consumers:  Current Shiseido consumers  Younger women: 25 - 44 years old range  Non-users of anti-aging products Recommendations

14. (Continued) Products:  Target younger consumers:  Younger image  New product extension with lower strength  Different packaging  Reformulated to address acne concerns  Quality and effectiveness guaranty:  Product quality control  Research and development (R&D)

15. Marketing and promotion  Build a close relationship with current customers  Communicate with potential customers  Strengthen the positive, unique brand image. IMC  Celebrity spokeswomen: i.e., Charlize Theron  Sponsor events of interest to the younger target market  Corporate partnerships  Magazines popular to the younger target market Recommendations (Continued)

16. Distribution and Channels  More availability through channels → department stores  High-end retail channels  Properly trained employees Price  $225 for Future Solution → too expensive?  People want lower prices and more discounts  Need to maintain luxury image  Smaller package with lower price  Free samples and consultation  Frequent user program  Lower price for the younger version of Future Solution Recommendations (Continued)

17. Thank You

18. Questions?