Repositioning for a European Launch

Repositioning for a European Launch
Aok Repositioning for a European Launch Julia Albrecht

Agenda Analysis of Aok Competition Analysis Market Trends Recommendations for Aok Packaging Brief

Aok Skin care brand Slogan: “Naturally effective”
Claims to provide “Naturally clear skin at every age” Its roots lie at the Baltic Sea Comprehends nature as a source of beauty Belongs to Mass-market brand, distributed through supermarkets, department stores and drugstore chains Available in Germany and Austria

Brand History 1885: Invention of „Seasand Almond-bran“ by the pharmacist Wilhelm Anhalt in Kolberg (health resort at Baltic Sea, today Poland) 1903: Aok becomes registered trademark Aok = Anhalt Ostseebad (health resort Baltic Sea) Kolberg Early mission: „To preserve and accentuate natural beauty“  „Beauty is a gift“ First products: Almond-bran powder, Almond-bran Soap and Seasand Almond-bran (used as Peeling or Mask)

Brand History 1974: Introduction of skin care series for different types of skin (cleansers & creams) 1982: Introduction of “First Beauty” to target teenagers with impure skin 1983: Henkel acquires Aok cosmetics 1988: Introduction of the slogan “Naturally effective” 2004: Introduction of “Pur Balance” to target above-20-year-olds with impure skin 2006: Introduction of “Clear Action for men” to target male teenagers 2007: Relaunch and Launch of “Pur Lift” to target above 30-year-olds with first wrinkles and impurities

Packaging and Portfolio Evolvement
“Pur Balance” reduces impurities; for >20-year-olds “Kräuter Aktiv“ for greasy and mixed skin; with herbs “Vitamin E“: reduction of first wrinkles; canceled in 2006 “First Beauty Cooling“: extra strong against pimples Extra moisturizing for dry and sensitive skin with almond 1903 “First Clear“ (Anti-Acne) 1980s “First Beauty” 1982 “Clear Action“ for men; canceled in 2008 1990s Since 2000

Aok Today Cancelation in 2008

Product Portfolio First Beauty Pur Balance Pur Lift Packshots
Cleansing (4 SKUs) Care (2 SKUs) Cover (4 SKUs) Cleansing (5 SKUs) Care (7 SKUs) Cleansing (4 SKUs) Care (5 SKUs) Portfolio Young women < 20 Young women >20 Women >30 Target Pure skin + mild care Pure skin + moisturizing Pure skin + Lifting effect Benefit Mint + Yoghurt extracts Tea + Ginseng extracts Soy-protein + Ginseng extracts Ingredients Ø Price € 4,99 € 5,99 € 6,99

Internal BCG Matrix Pur Lift Pur Balance First Beauty Clear Action
Growth Pur Lift Pur Balance Accounts for around 40% of Brand Revenues First Beauty Clear Action Market share

Communication History
1903 Informative Explaining the Aok philosophy 1926 Informative and emotional society ladies 1970s Informative The correct way to clean and care

Communication History
1997 1980s 2004 Sales Promotion “Get to know your skin” Accompanied by personal consultation The “Aokanerin” as brand symbol: active, self- confident, natural women Pur Balance TV Spot Setting: Baltic Sea

Communication Today http://de.youtube.com/watch?v=TMrzeGXcrfM
Baltic Sea always chosen as setting Starring naturally beautiful women Emotional appeal by using humor Example: current spot for Pur Lift (Summer 2007)

Brand Equity Pyramid Brand Salience (Awareness) Product Core
Communication Core Less loyalty because no more products for the “old” customers? Brand Resonance High credibility due to history High quality ingredients Reliability Tradition Consumer Judgements Consumer Feelings Effective and reliable reduction of impurities Gentle & nourishing Pure skin for women at every age For natural beauty Brand Performance Brand Imagery Skin care With natural ingredients For impure skin Brand Salience (Awareness)

Brand DNA Natural beauty Natural ingredients Pure skin The sea
Cleansing and care For women at every age

+ competition from Store Brands
Main Competitors 1. First Beauty Bebe Young Care ( only in Germany) Clearasil Garnier (Pure) Neutrogena (Visibly Clear) L‘oréal Paris (Pure Zone) Nivea Visage Young 2. Pur Balance Garnier Pure 3. Pur Lift Nivea Visage Olay L‘oréal Paris Garnier (Nutritionist) Neutrogena (Pure Glow) + competition from Store Brands

Main Competitors – Clearasil
The first effective acne medication ever introduced for teenagers; created in 1950 by Ivan Combe in the US Today the brand belongs to Reckitt-Benckiser Product lines: Deep Cleanse, Spot Control, Ultra, Blackhead Control Mainly cleansing and special treatment products Brand DNA: Fights acne Aggressive Provides clear skin Causes confidence Dries out skin For teenagers

Main Competitors – Neutrogena
First product under Neutrogena brand was a soap, that restored the skin pH, rinsed quickly leaving no soap residue (invented1954 in the US) Johnson & Johnson acquired the brand in 1994 Products today: Facecare, Bodycare, Haircare, Suncare, decorative cosmetics; in Europe only Facecare and Haircare Facecare Portfolio: Pure Glow – cleansers and moisturizers that brighten skin and leave it glowing, like a spa treatment Deep Clean – cleansers that penetrate deep into the pores dissolving dirt, make-up and oil Visibly Clear – Anti-bacterial cleansers and special treatments that fight and prevent spots and blackheads Norwegian Formular – moisturizers and cleansers that make dry skin soft and healthy

Main Competitors – Neutrogena
Brand DNA Norwegian Formula Hand-cream Dry skin Dermatological Celebrity spokespersons Acne-wash

Main Competitors – Garnier
Garnier originally was a Haircolor and –care brand The brand was acquired by L‘oréal in 1964 Products today: Haircare, Haircolor, Hairstyling, Facecare, Bodycare, Suncare Facecare portfolio (main subbrands): Pure - cleanses and purifies oily and impure skin Total Comfort - provides 24-hour moisturization to soothe and protect dry skin Nutritionist – combats signs of dullness, fatigue and dryness Ultra Lift - reduces deep wrinkles, makes the skin firmer and smoother (Re-) Density - reduces wrinkles and plumps-up the look of mature skin

Main Competitors – Garnier
Brand DNA Take care Dynamic Natural ingredients Laboratoires Natural beauty Colorful

Main Competitors – Nivea
Nivea Cream was invented in 1911 by Beiersdorf in Hamburg, Germany Nivea was the first stable oil in water cream in the world Soap, Powder and the first haircare products (“Hair-milk”) followed Products today: Facecare, Bodycare, Handcare, Bathcare, Haircare, Deodorants, Suncare, Lipcare, Decorative cosmetics, Men’s Care, Babycare Facecare portfolio (main subbrands): Nivea Visage Young – for mixed and oily skin Nivea Visage Sensitive – for sensitive and dry skin Nivea Visage Oxygen Power - Oxygen boost & all day hydration for all skin types Nivea Visage Q10Plus – Anti-wrinkle, with coenzym Q10 Nivea Visage DNAge – Anti-Age, increases surface skin cell renewal

Main Competitors – Nivea
Brand DNA Caring Trusted brand Natural beauty Nivea = the “snow-white“ Pure and simple Family Blue and white

Main Competitors – L‘oréal Paris
L‘oréal originally was a Haircolor brand In 1907, Eugène Schueller, a young French chemist, developed the first L’oréal innovative hair-color formula Products today: Haircolor, Haircare, Hairstyling, Facecare, Bodycare, Suncare, Men‘s care, Decorative Cosmetics Facecare portfolio (mainly care, few cleansing products) Pure Zone – Continuous purity for Teenage skin Hydrafresh – Active Hydration for young skin Nutrissime – Intense hydration for sensitive and dry to very dry skin Wrinkle Decrease (Collagène) – Active care fighting first wrinkles Derma Genesis– Helps to renew the skin cells for a younger looking skin Revitalift – Intensive Anti-wrinkle and firming from age 40 Age Perfect – Care for mature skin from age 50 Age Re-Perfect – Care for very mature skin from age 60

Main Competitors – L‘oréal Paris
Brand DNA Innovative “Because we are worth it” Advanced technologies Promises not always believable Paris High-end

Main Competitors – Olay
Oil of Olay Beauty Fluid was born in the early 1950s The Beauty fluid was developed to give women what they really wanted: younger-looking, beautiful skin In 1985 the brand was acquired by Procter & Gamble Facecare portfolio today: Classic – Range of moisturizing beauty fluids and cleansers Complete - deep, rich moisturization with added vitamins and SP15 Total Effects – fights 7 signs of ageing Regenerist – regenerates the skin and makes it look younger Definity - helps reduce the appearance of discolourations, age spots, uneven skin tone and fine lines

Main Competitors – Olay
Brand DNA Anti-Age Oil Advanced technologies For older women Beauty treatment High-end

Competitive BCG Matrix
Growth Market share

Competitive Positioning
Young Target Older target should not be neglected  Growth! Men Women Old Target

Hedonistic Natural Ingredients High- tech Formulas Natural positioning should be strengthened Functional

Traditional Traditional positioning should be strengthened, more skin problems targeted  Growth! Adresses many skin-problems Adresses few skin-problems Innovative

Competitive Brands by Skin Type
Anti-Age Mature skin Normal skin Sensitive/ dry skin Greasy/ Mixed skin Impure skin X x Opportunity for stretching

POP/ POD Aok vs. Competitors
POPs Synthetic ingredients Botanic extracts Natural Beauty Promise of clear skin PODs Baltic Sea ingredients For pure skin at all ages Addresses combination of impure skin/ wrinkles Long tradition

Aok Weaknesses and Challenges
Low Market share and growth in Germany Not targeting older segment Only focusing on impure skin Claiming to be natural while it is far from being organic  threat from real organic products Loss of roots (Pharmaceutical, Baltic Sea) Brand name without meaning to non-German consumers Not strong and differentiated enough to survive in European mass-market

Aok Today and Future Direction
Natural Functional Native Adressing one need Adressing many needs Cosmopolitan Emotional High-tech

The European Face Care Market
The face care market has been growing in the past and is forecasted to grow in the future at a moderate rate Supermarkets and hypermarkets are the most important distribution channels (42.7%) Specialist retailers and pharmacies together distribute a further 44.7% of the market's revenue

Market Trends Anti Age Biggest segment in face care market
In the past two years ( ) this segment has grown more than 50% in absolute value (Source: Datamonitor) (Source: Datamonitor) Skin Care Revenues by age (Dec. 2006) Older population makes up most of face care revenues Growth is very likely to continue due to ageing of population (Source: Consumer Panel Copras) (Source: Eurostat)

Market Trends Wellness
Combines health with beauty, sport, tourism, urban daily life, and environmental awareness “Wellness focuses on positive, preventative action — getting the body into shape and keeping it that way in spite of stress, germs, age, and anything else that ails us” Business Week (April 11, 2005) estimates the U.S. market at $400 billion Skin care brands opening spas (new ways of distribution)

Example: Biotherm Facecare, Make up, Bodycare, Suncare, Men‘s care with thermal plankton Over 50 years ago Biotherm biologists discovered thermal plankton's affinity with the skin and its effectiveness 20 years of research were necessary to obtain a more active and concentrated form: Pure Thermal Plankton Luxury brand distributed through specialist stores and pharmacies

Example: Nuxe Founded in 1957 by a Paris pharmacist with a fascination for phytotherapy and aromatherapy Cosmetological concept combining nature, health and beauty NUXE = Nature + Luxe (Luxury) Principles: no mineral oils, non-comedogenic products, no synthetic coloring agents, no animal ingredients Main products: Facecare, Bodycare The brand owns several Spas across Europe

Market Trends Natural and Organic Cosmetics
Growth of more than $2 billion, to $6.1 billion between 2002 and 2006 and projected sales of nearly $10.2 Billion until 2012 in the US (Source: "Natural and Organic Personal Care Products in the U.S." report) More than € 1 billion in sales and a growth of 20% in Europe in 2006 (Source: The European Market for Natural Cosmetics, report by Organicmonitor) Organics personal care market in the UK valued at $12.0 million in 2001, rising to US$16.3 million in 2006; forecast for 2011 is $21.9 million (Source: Datamonitor) Germany with largest growth: projected market share of organic cosmetics of 10% in 2012 (Source: The European Market for Natural Cosmetics„ report by Organicmonitor)

Market Trends Natural and Organic Cosmetics
Organic cosmetics are usually certified to ensure credibility There is no common European certification The Ecocert (France) and the Soil Association (UK) label are internationally used; however, each body uses slightly different standards for organic cosmetics

Example: Yves Rocher “The world leader in botanical Beauty Care”
Natural, accessible beauty – beauty for every woman The Yves Rocher product line contains over 150 active plant ingredients Founded over 40 years ago by Yves Rocher First product: a simple cream, based on the Lesser Celandine plant and produced in the family attic Distribution through own stores

Example: Weleda Anthroposophic and Homeopathic Medicines and Natural Bodycare Founded in Switzerland in 1921 by the Dutch medical doctor Ita Wegman and the renowned philosopher Rudolf Steiner Committed to producing naturally, ethically, safely, without animal experimentation and without damaging the environment Organic certification: BDIH (German) Product portfolio: Facecare, Bodycare, Bath & Shower, Suncare, Babycare, Haircare, Men‘s Care, Dental Care, Deodorants Distribution via specialist stores, pharmacies and drugstores

Example: Sanoflore Founded 20 years ago in south-eastern France
Manufactures organic cosmetics and aromatherapy products Handles all the stages in the aromatic and medicinal plant chain, from cultivation with partner farmers to the finished product Acquired by L‘oréal in 2007 All products are certified by French organic label Ecocert Distribution through pharmacies and specialist shops

Wrap-up: Market Trends
The face care market in Europe is projected to grow and therefore bears some future potential As the population is growing older, Anti-Age is a continuing trend The Wellness Trend has mainly been embraced by luxury brands The natural & organic segment is experiencing tremendous growth A difference is to be made between natural (e.g. Yves Rocher, Nuxe) and organic (e.g. Weleda, Sanoflore) cosmetics  organic products are usually certified! Natural & organic products are mostly distributed through own stores or specialist stores and pharmacies

Recommendations: 1. Strengthen Natural Positioning
Aok is already associated with natural cosmetics by German consumers (in a study conducted by IRI in 2006, 20% of respondents considered Aok to be natural) In order to be successful throughout Europe, the brand needs to build and communicate its natural image further Stress natural ingredients Claim “not tested on animals”  “Leaping Bunny” Logo Ultimately the brand’s products should become organic  certified by “Ecocert” Henkel already avoids animal testing wherever possible Henkel statement on animal testing Henkel is responsible for safety, health and environmental matters relating to the production, distribution and use of its products. In fulfilling this responsibility, the raw materials and finished products are subjected to numerous tests and studies, most of which are required by law. Moreover, Henkel applies additional standards that guarantee a high level of product safety for consumers and the environment. Henkel only performs animal testing if legal regulations so provide and no accepted alternative test methods are available for obtaining the required data. For more than two decades, Henkel has worked intensively on the development of alternative methods capable of providing the information needed without animal testing. Such alternatives are often referred to as in vitro methods (Latin: “in glass”), as the tests are carried out, e.g. on cell systems. The methods developed by Henkel since 1982 include the hen's egg test and tests on cell cultures and skin models, which are especially useful for studying the compatibility with skin and mucous membranes. Many more projects for developing alternative methods are now in progress around the world. In addition to its continued scientific efforts, Henkel proactively works to accelerate the currently long-drawn process of legal accreditation of alternative test methods. The overall objective is to further reduce the number of animal tests and ultimately to eliminate the need for animal testing all together.

Recommendations: 1. Strengthen Natural Positioning
Put emphasis on educating consumers as there is still ambiguity about what “organic” means  through website, PR campaigns, advice at POP, Promo-material Distribution through Drugstores, selected Super- and Hypermarkets  make organic cosmetics available to the masses! Upgrade the brand by also distributing through specialist stores and pharmacies (new competition!) Maintain affordable prices, as high prices are the main barrier for not buying organic cosmetics (Source: IRI Shopper Study in Germany, 2006) The first mainstream organic cosmetic brand: traditional, with modern insights; high quality, but affordable

Recommendations: 2. Stress Heritage
Exploit Baltic Sea heritage to support the natural/ organic positioning and stress wellness aspect  more emotional appeal! Educate consumers about “Kolberg”: Baltic Sea Resort  set-up organic spa at Baltic Sea Develop more products with organic ingredients from the (Baltic) sea, e.g. with algae extracts, sea minerals, mud, orchid extracts Use promotions related to the Baltic Sea e.g. sweepstake with wellness weekend at Baltic Sea as prize Stress that the brand was founded by a pharmacist to build credibility and upgrade the brand Aok‘s heritage is unique giving it a POD; even when facing new competition in new distribution channels

Recommendations: 2. Stress Heritage
Leverage secondary brand equity: Beach & Sea Wellness Wind Baltic Sea Vacation Rich nature Relaxation

Recommendations: 3. Adress More Than One Need
Aok used to address consumers >40 but with its repositioning as “providing clear skin at every age” it started to neglected them Mostly teenagers and people <40 suffer from acne and impurities; “Older” skin has different needs  Focus too narrow; no room to extend the brand! Get rid of the claim „Clear skin at every age“ Come back to a broader positioning “ Natural beauty for any skin” Introduce product lines for other skin types (normal skin, sensitive & dry skin) and especially Anti-Age care! Broader Positioning “Natural Beauty for any skin” focuses on Aok’s core competencies and gives room for brand stretching (even into Body- and Bath & Shower Care possible!)

Recommendations: 4. Modify Name, Logo & Packaging
Give a more internationally understandable association to name: Aok = Apothecary Anhalt‘s Organics from Kolberg Keep claim “Naturally effective” Modernize the logo; link it to Baltic Sea  Example: dune/ waves instead of leaf Adapt packaging to look/ be more natural Recyclable materials (no plastic!) Colors more natural (not as bright) Abstract plant and sea motives Sophisticated/ high quality look Give the products a more sophisticated appearance

Wrap-up: The New Aok Aok – Naturally effective
Naturally beautiful skin Baltic Sea Organics First Beauty With Mint & Chamomile Clarifying and Caring For impure teenage skin Pur Balance With Algae-Extracts & Sea-Minerals Moisturizing, fighting impurities For Mixed Skin Sensitive Care With Sea Buckthorn & Aloe Vera Moisturizing and Nourishing For sensitive and dry skin Pur Lift With Soy-Protein & Rose-Extracts Moisturizing and Firming Fights first lines Pur Age With Orchid-Extracts & Brown-alga Intensive care Anti-Age Apothecary Anhalt‘s Organics from Kolberg

New Competitors (Organic)
Weleda Dr. Hauschka Founded by chemist Dr. Rudolf Hauschka in 1967, inspired by philosopher and scholar Dr. Rudolf Steiner Holistic view of health and well-being: Formulations are based on an understanding of the way skin works and its relationship with overall health Sanoflore Lavera Founded in 1987 by German Thomas Haase Based on idea to provide cosmetics for sensitive and allergy-prone skin; live a healthier lifestyle

Link to specific natural area Simple accessible Anthroposophist approach Link to nature as a whole

Medical Mass Distribution Specialist Distribution General

POP/ POD Aok vs. Competitors
POPs Natural ingredients Organic certification Natural Beauty For all skin types PODs Baltic Sea origin Accessible and simple Based on tradition but contemporary For everybody

European Launch Germany = lead country
Biggest market for organic cosmetics with highest growth rate First launch in Northern European countries Proximity to Baltic Sea Prone to organic products (e.g. organic food sales in Denmark grew 65% during the past three years (Source: Copenhagen Post, Feb 2008)) Next launches Italy and France France next to Germany with highest growth rate of organic segment Italy next to Germany biggest organic market Source: Organicmonitor

Packaging Brief (1) GENERAL PRODUCT INFORMATION
Product: Aok Skincare Range with 5 different Sub-lines Key Communication Objectives for packaging: Communicate revised brand image: natural, organic, rooted at Baltic Sea, accessible, for naturally beautiful skin Clarify that products are organic Reflect high quality and simplicity

Packaging Brief (2) BRAND INFORMATION Product Brand: 5 subbrands
First Beauty Pur Balance Sensitive Care Pur Lift Pur Age Range Brand: Aok Corporate Brand: Schwarzkopf & Henkel  only on back of the package! Symbol of Guarantee: “Ecocert” organic label

Packaging Brief (3) PRODUCT INFORMATION
Product Category Name: Organic Skincare USP: 100% natural, kind to the skin, for naturally beautiful skin First Beauty: fights acne, provides clear skin Pur Balance: fights impurities and moisturizes, provides clear skin Sensitive Care: moisturizing and nourishing, for sensitive and dry skin Pur Lift: clairifying and firming, fights first lines Pur Age: nourishing and lifting, Anti-Age care Competitive Packages: Garnier Weleda Lavera

Packaging Brief (4) PRODUCT INFORMATION
Relative quality level: same quality as Lavera and Weleda; a bit lower quality than Garnier Relative price level: (slightly) lower than competitors Degree of sophistication (design): sophisticated to reflect quality, but still accessible to a broad mass Illustrations/ Photographs: Ingredients  abstract plant motives Product Ingredients: plant and sea extracts First Beauty: mint, chamomile Pur Balance: algae-extracts, sea-minerals Sensitive Care: sea buckthorn, aloe vera Pur Lift: soy-protein, rose-extracts Pur Age: orchid-extracts, brown-algae

Packaging Brief (5) TARGET MARKET INFORMATION
Target consumers‘ sex: female Target consumers‘ age: First Beauty: 12-20 Pur Balance: 20-35 Sensitive Care: 20-40 Pur Lift: 25-45 Pur Age: 35-65 Target consumers‘ socio-economic status: tendency to be well educated, tendency to high income; however Aok wants to make organic cosmetics accessible to the broad mass!

Packaging Brief (6) PACKAGING SPECIFICS
Global image of pack: High quality, timeless, but not old fashioned, natural, simple but with a certain degree of sophistication Type of pack: glass jars in cartons (recyclable paper!), aluminum tubes, glass bottles in cartons Design Example: Korres (

References http://www.aok-kosmetik.de/
IRI Trade Panel (Henkel internal information) Copras Consumer Panel (Henkel internal information) Brand stats: July/August. Brand Strategy, Jul/Aug2006 Issue 204, p50-51

References Facial Care Industry Profile: Europe. Facial Care Industry Profile: Europe, Dec2007 Facial Care Industry Profile: Europe. Facial Care Industry Profile: Europe, Dec2006 “Three trends you must know“. Drug Store News, 2/11/2008, Vol. 30 Issue 2, p90-92 Get Wellness Soon. By: Schwartz, Meredith. Gifts & Decorative Accessories, Feb2008, Vol. 109 Issue 2, p32-38 European naturals market approaches € 1bn. Soap, Perfumery & Cosmetics, Oct2006, Vol. 79 Issue 10, p45-45

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