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Shiseido — The Asian Cosmetic Brand (Second of Two Parts)

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Brand Strategy

Shiseido has followed a strategy which is not so common for Asian brands expanding beyond the region. Shiseido has used acquisitions as a main channel to gain foothold in the crucial cosmetics markets of Europe and United States. As cosmetics is an industry primarily driven by aspirations, lifestyle issues and images, Shiseido decided on the acquisition path to gain visibility, acceptance and access to established customer bases in new markets rather than spending years to establish the Shiseido brand from scratch.

In order to gain an entry into the French and thus the European market, Shiseido acquired the Carita brand and prestigious salon on the Faubourg St. Honore in Paris in 1981. The salon with it distinguished and rich clientele of royalty and celebrities commanded a unique position in the French market. To gain an entry unto the North American market, Shiseido acquired Unilever’s Helen Curtis in 1996. These acquisitions gave Shiseido an opportunity to build on something strong already in those markets.

Future Challenges

Despite Shiseido’s enduring success for more than a century, Shiseido faces a new set of challenges as it travels ahead into new markets with different demographics, increased competition and multiple segments.

Continue the Asian-western blend: One of the main challenges for Shiseido going ahead will be to maintain the blend that it created between the oriental mystique and western cosmetics science and technology. It becomes significant as Shiseido has been acquiring brands in the US and Europe with its own heritage and unique brand stories. Given this, it will be quite a challenge for Shiseido to carry on with the blending as that is one of its strongest differentiation factors.

Consistency in positioning: Predominantly, Shiseido has been positioned itself as a high-end premium and luxury brand in the US and European markets and it spans the entire market spectrum from low-end, value, middle and luxury segments in Asia. With customers traveling around the world, a global media landscape and with internet making information flow across countries much easier, Shiseido should take steps to ensure that it conveys its varied positioning carefully in its different markets.

Maintaining a strong brand architecture system: Managing the brand architecture can prove to be a very challenging task for Shiseido. Shiseido has been engaged in three main activities: Acquisitions of brands in Europe and US, importing new non-Shiseido brands into Japan through the brand holding company, and introducing multiple brand extensions in the market.

Given the diverse market segment Shiseido’s brand extensions serve, these brand extensions will obviously have their own brand image and personalities. Integrating them with the parent brand and managing their interactions with the parent brand will be quit challenging.

Developing the corporate brand in the western world: Even though Shiseido has been quite successful by following the acquisition strategy, it is yet to build a very strong corporate brand in the US and Europe markets. As it has been acquiring brands with a loyal customer base, to modify the brand identity and personality of the acquired brand to suit the overall Shiseido brand architecture can prove quite challenging. Developing a strong corporate brand with a unique identity and personality will be very crucial for Shiseido’s long term success.

Print ed: 04/09


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