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Duty Free & Fragrance

Any traveler who has already flown knowsthe duty-free: these are shops where you can walk to kill time and buy a bunch of discount wonders. Between modern treasure trove and store subject to specific regulations, the duty-free could still be a mystery to some of us.

The main advantage by buying in a duty free is to benefits from more attractive prices. Indeed, as its name specified it, the duty free offers products without any VAT. When flying from France, you can benefit from this discount only if your country of destination is outside the European Union. Since the first of July 1999, if your destination is a country of the European Union, you cannot cut VAT. Four exceptions to the rule: (1) Andorra (2) Channel Islands (3) islands Canary and (4) Gibraltar.

 

“I will buy my fragrance at the duty free” 

In 2014, the average price of a bottle of 50ml perfume is 55€ in France. This is an important amount that includes a VAT of 20%, which means around 9,16€. A fragrance is a good that you buy accordingly to your consumption habits. Studies show that people use around 50ml per quarter. So, the purchase of a fragrance is not an urgent buying. You can estimate when you will need to renew your bottle. On top of this, a closed bottle of perfume can be kept for relly long time.

So, people associate the buying of their fragrance to a specific occasion. If they know that they could save 20%, they will be able to wait to make this action. Moreover, a travel is also usually planned in advance, so people can make associations between their travel and the moment when they will buy a new fragrance.

 

New store compete with the airport 

Since few years, new stores poped up in touristic cities: duty free fragrance stores. For instance, if you go to Paris around Rivoli, you can find many fragrance shops that offers a duty free service.

This service is based on a simple princple: when tourist buy goods in France, they have the opportunity to recover the VAT. Usually this is a long process, tourists have to go and declare the goods that they bought during their trip, show all the bills and then receive the VAT that they spent.

Now, some fragrance shops offer a duty free service which allows tourists to benefit from the VAT discount instanately. This allow those specific shops, located on touristics area to take advantage from the fact that tourist can beneficiate from the VAT discount. Also, they avoid an unfair competition with the airport’s duty free shops. 

 

Article posted by Neal 

Power of retailers

As we have seen in previous articles, most perfumes are sold through selective perfumery. So we can now ask what is the bargaining power of retailers in this market? Is it comparable to the massive retail stores?

We all know the power of retail stores such as Leclerc and Carrefour there is a lot of brand to sell so their power of negotiation is really high. But it’s not the case in selective perfumery. Indeed, it is a highly regulated market which must meet specific standards. The principle of selective distribution allows, as its name suggests, a producer (usually a great brand that wishes to protect) to select a limited number of distributors authorized to sell its products. In other words, the business strategy of the brand is to deliver marketing authorizations for its perfumes to a few stores. Why? First, to control its image. The distribution of these products must meet strict codes presentation and sale is accompanied by personalized recommendations. These qualitative services are part of the brand strategy. To allow a website to sell their products, perfumers may impose and to have a real selling point. This is the case for example of Marionnaud. Because without this real selling point, the qualitative service, which is part of the reputation of leading brands, is no more guaranteed.

Naturally, this regulation is also a way to "hold" the market and prices and avoid the uncontrolled braderies installation. 

  Selective distribution also limits counterfeiting and the establishment of a parallel market, which are hitting the luxury professionals. A market that nevertheless seems well established on the Internet, judging the number of sites, mostly American, which sell branded perfumes.

On this market, the negotiation is more on the type of product than on the price. Because the final customer is willing to pay an high price for a quality product. 

The power of negotiation is not so high on that luxury market because of the lack of competition. The suppliers keep the power because of the brand image. But in this market too, retailers begin to launch Private Label. Not to be in competition with luxury brand, but to be in competition with the product on mass retail market. 

Article posted by Johanna

Brand identity

To become successful, a brand must be unique and easily identifiable. It has to create its own identidy and a positive brand image.

A brand have to make some association and play with emotions, to become a "symbol".

"Marketers should recognize the influence of these other sources of information by both managing
them as well as possible and by adequately accounting for them in designing communication strategies. "

I think taht Jean Paul Gaultier with his perfume "le mâle"  is a good illustration of the diagram above.

The product has attributes and fuctional consequences as a perfume (smell good...) but above that, it plays with emotions.
Indeed, the name of the perfume "le mâle", gives the feeling to men that they are more manly wearing this fragrance.

Then, the bottle is a man body and represent the "raw" man, the very man. The man wearing this fragrance, will be under the impression that he can attract women.

In addition, the perfume is kind of "unique" thanks to packaging.
In general, perfumes' packaging are just a bottle but this one is inside a tin. This comes back to the original idea that it represents "raw" man.

The brand has also made the same thing for women with its fragrance "Classique".

We can also quote the "Fierce" of Abercrombie and Fitch, easily identifiable, it plays on emotions by spreading the fragrance in its outfit stores, and gives the consumer a unique memory.

But we have to underline the difference between the identity and the image of the brand.
The identity is driven by the brand whereas the image is in consumer's mind.
And sometimes, the image not correspond to the identity the brand wanted to give.

As we can saw in a previous article, the Chanel n°5 advertisement with Brad Pitt in 2012 has known a difference between teh identity given by the brand and the image.
Indeed, using a man for a feminine fragrance, the brand  wanted women to identify themselves with the woman who could seduce Brad Pitt.
But it was not the case. Indeed the advertisement has been a very bad reception being seen as ridiculous and not crediblein consumers' mind.



Article posted by Marine

Brand Management on the perfumes market

On the global market, not all the companies have a brand. Branding is a choice, not something that you have to do to be in business. Nevertheless, on the perfumes market, I cannot think of any company that does not have a brand. Indeed, on this very competitive market flooded with numerous brands and products, branding is definitely a way to differenciate from the competitors and add perceived value to the products sold. In this article, I am offering you to study different ways to develop and manage the brand through the personnal identities. 

Personnal identities

• Founders

A founder or a CEO with a strong personality and image is a huge asset for a brand. Indeed, it shows that behind the brand, they are people and that the brand is driven by people. It helps consumers to understand better the values of the brand : the character, motivations and actions of the founder/CEO, when known by the public, have a huge impact on the perception of the company and the brand. 

In the fragrance world, a great example of a founder that made a difference is Gabrielle Chanel. Indeed, Coco was a very charismatic person, known for her determination and ambition. She changed the face of the fashion world by imposing black as the colour of elegance and by removing corset to the feminine silhouette.

In a 20’s fragrances world that glorified the single flower fragrances, she created with Ernst Beaux an abstract, mysterious perfume : a bouquet with over 80 different scents that made it impossible to recognize one scent. Not only she participated to the creation of the scent but she also was the base of the creation of a new brand inside the Chanel brand, the N°5 brand.

Indeed the name of the product, an indentification number, is closely linked to Gabrielle decision and believes (it was her lucky number). The pure and timeless flacon is also linked to her work : the simplification and the use of minimal lines.

Chanel N°5 was even advertised by Coco Chanel herself in her suit at the Ritz : the personnage of Gabrielle was the foundation of the brand and gives a clear message about values and perception of Chanel.

• Endorsement

Celebrity endorsement is widely used in the fragrances sector. Stars are extremely important and valuable to perfume brands, even though it is an expensive choice. Indeed those personalities who usually come from the fashion, movie or music sectors make the brand’s message stand out among the clutter of advertising from competitiors. They create brand awareness, contribute to sustaining a brand’s aura, generate extensive PR leverage and are a great way to attract the consumer’s attention. 

There is an endless list of examples of celebrity endorsements in the perfume industry but I will just quote “La vie est belle” of Lancôme with the endorsement of Julia Roberts.

Indeed, this endorsement was a real success because both the brand and Julia Roberts were compatible and credible : Lancôme’s DNA is femininity, emotion, joie-de-vivre and the actress is well known for her infectious smile, her coolness and sensuality.

Nevertheless, celebrities endorsements can face multiple issues leading to a failure of the campaign. We could talk of a set of “rules” that need to be respected in order for the campaign to be a success : the celebrity must have a global appeal and must be credible for the sector he or she is advertising. Morevoer, the celebrity’s personality must match the brand’s DNA : not only the two have to be compatible but the collaboration has to be relevant.

When these set of « rules » are not respected, the advertising campaign is usally condemned to fail. An example of a celebrity endorsement that was criticized a lot was the N°5 perfume campaign featuring Brad Pitt. Chanel decided to use a man to describe the ideal woman and her perfume : the client would then want to wear the perfume of the ideal woman depicted by Brad Pitt. But this strategy did not pay off because the consumers did not understand the add, they did not see the relevance of the actor in the N°5 story. The campaign lost the feminine, sophisticated and elegant appeal of the N°5 brand. Moreover, some consumers thought a new perfume was launched : N°5 for men.. The result were a campaign that everyone talked about but not in good terms !

Article posted by Marie Lou Van der Houwen

Dior j'Adore evolution

Every single perfumes house has its own communication strategy and Dior is following the same line for J'Adore since its launching in 1999. 

Dior stages an imaginary woman, getting out of a golden dream with a brilliant femininity and the evolution since 1999 of three advertising campaign can show the unreality of the woman at the intersection oh myth and allegory. 

The campaign "Dior J'adore" September 1999 to April 2003 was born of a collaboration between the agency Air Paris and photographer and director Jean- Baptiste Mondino. This woman is an allusion to Kayan women (or Padaung), the famous Thailand giraffe women wearing these high collars brass, but the one chosen by the photographer is Caucasian. His physique is rather thin and conforms to standards of Western beauty, this is obviously a model. She quickly left his humanity when she began swimming in a golden liquid. Actual person it’s gradually returns to rich fantasy in which references to literature, theater, cinema and comics. We have a woman who is a conception of "absolute feminine", a kind of superwoman who is model, icon and goddess. This film offers an experience that could transform any ordinary woman. In this ad the woman is placed on a pedestal and offers an achievable dream for all women.

The second ad (2011 ) shows Charlize Theron at Versailles. More than just a commercial, Dior has relied on a commercial large scale. Rental of Versailles, integration of major Hollywood stars, a whole page of the Sunday TV news to announce the release of the spot... We find the icon of Dior, Charlize Theron who was chosen as a leading figure by Galliano in 2004. In a hurry, we find ourselves immersed in the scenes " backstage " a fashion show where rub shoulders makeup artists, hair stylists, stars from another era and the current face of Dior. Charlize is still as bright and dazzling in this new ad, taking place in the hall of mirrors at Versailles. Perfect to represent the prestige of the brand as well as the atmosphere of the place fragrance: gold.

In this precipitation Charlize see some icons known for their beauty and grace: the American actress Grace Kelly, the singer and also actress Marlene Dietrich and of course the icon, the pin-up Marilyn Monroe. Dior, in this way introduced his muse, the beautiful South African Charlize Theron.

Throughout the commercial, the brand presents us, in a roundabout way, the whole panoply of creation of Dior. You can admire glasses, chains, medallions, the latest Dior couture handbag, Dior couture dresses, Dior lipstick makeup and finally Dior perfume.

In this way, the brand highlights, sells the viewer to other flagship products of its creation. In addition, it is also an opportunity for Dior to penetrate the Chinese market, very attracted by the luxury sector.

The appearance of the product in question, perfume, arrives at ¾ advertising. The presence of product development in both full frames at the end (pack shot) advertising, but also to the camera by Marilyn Monroe. There is no plan demonstration or argument of the product; its late entry allows the brand to build a visual concept for constructing the situation.

We find in the 2014 version of the ad for J’Adore all the Dior codes: the elegance, dream, haute couture, and gold. As we saw in a previous article, Dior makes a point of honour to keep the same line of communication in all its campaigns. The goal is that any woman can access haute couture via the fragrance.

This year again no perfume has succeeded to dethrone the power of fragrance J'Adore developed by Dior. For four years it is leading the sales in the French perfume. According to the NPD panellist, this juice has passed no less than 826,000 bottles a turnover of 55 million euros, an increase of 3% compared to last year. 

Article posted by Johanna

Sources mediacim.com / challenges.fr

 

Chanel N˚5: An incredible campaign for 2014

The new ad for the Chanel N˚5, performed by Gisele Bündchen, suits perfectly the supermodel and gives a global impression about who is the new modern woman.

The story of Chanel N°5

In order to show what is a « modern women », Gabrielle (Coco) Chanel started by breaking the rules, and introduced trousers and tight skirts for women when everyone else was still wearing corsets and heavy skirts.

Not only did she express her willing  to change the society in the fashion industry but also in the way she lived .

While she started to be famous in the fashion industry, the perfumer Enest Beaux, in 1921, proposed a new perfume to Coco Chanel. Convinced by its flavour and its character, Coco decided to adopt it to her personality. The number five was her lucky number, and it was the fifth submission presented to her and that is how the famous Chanel N°5 was born !

Over almost a century, the communication around this perfume –which can be associated to a true jewel – has been adapted in order to be perfectly suited for the modern woman. Just a little over 10 years ago, Nicole Kidman started a new chapter by portraying a woman who decides to break free from it all and then returns to reality, renouncing her desire.

 

An impressing production

This year, the new Chanel N°5 campaign gives the image of a woman who listens to her. In the ad, the supermodel Gisele Bündchen knows exactly who she is and is free to make her own choices.

In order to play on the « glamour » and « endless » image of the perfume, the acclaimed filmmaker Baz Luhrmann (Moulin Rouge, The Great Gatsby), shot the short film. Lo-Fang’s is singing with a cover of the famous « You’re The One That I Want » which establishes the background and the main point of the Chanel N˚5 story.

From left: Karl Lagerfeld, Baz Luhrmann and Catherine Martin (who designed the costumes for the ad) at the unveiling of the short film in October.

“We are in a moment when career or responsibility cannot in itself be fulfilling enough. We are in a moment when the Chanel woman should be someone who can be with herself on a beach or have a moment to herself, can be with her child, have an aspirational career in which she does something that she finds fulfilling. But at the same time, she can have a true relationship and romance. And in the end, our Chanel woman chooses love,” says Luhrmann

The choice of Gisele was not a random choice. Indeed, she is seen as one of the most dynamic women of the 21st century, playing on several boards : mother, model, actress, businesswoman and philanthropist. She is a worthy descendant to other pretty names such as Catherine Deneuve, Carole Bouquet, Nicole Kidman or even Mar.

 “It was a big honour to be asked to do this fragrance. It’s such a beautiful history behind all the amazing women and men. They are all a part of the history of Chanel N°5,” says Gisele.

Budget must be set aside

All this strategy also has an important cost. Indeed, in 2013, Chanel did not hesitate to pay the 7 millions $ fee asked by Brad Pitt. This year, Gisele Bündchen « only » earns 4 millions $.

However, the costs of production with the short movie of 3 minuts 22 seconds, in collaboration with Luhrmann also represents an important investment: around 4 millions $ for the shooting! On top of this, Chanel acted like if they were about to distribute a blockbuster: teasing on the social networks, promotion on tv shows and events with VIPs to screen the short film! 

Article posted by Neal