Sephora Case History, Issue And Objective, Competitors (Case Study Sample)
Here are some helpful guidelines that you may want to think about for analyzing the Sephora case:• Analyze all of the marketing issues in the case – while the main issue that Julie Bornstein faces is how to justify and allocate $2 million for social media, there are a number of other issues that you might want to think about and comment on.• Consider using any concepts/tools that we’ve covered in class – think about all of the topics and tools that we’ve already covered in class. Think about which ones would be appropriate for Sephora.• Pay attention to both the analysis as well as the structure and organization of the paper – you submission will be evaluated on both your ability to understand the important issues and analyze them as well as your ability write a thoughtful, well-organized report.
Regarding the supplementary spreadsheet, there are 3 separate tabs for you to work with. Consider the following:• Distribution:o Fill in the green cells with your recommended investment, based on the number of units for each item on list.o There are several mandatory investments; these can’t be changedo There are some optional Investments which will only accept a “yes/no” response.o As a result of your decisions, make sure that you provide in your paper the acquisition cost, the cost of impressions, and the total value of the customer base• Tab Digital Marketing:o All of the digital media options are put into several major categories. Display your decisions by creating charts for these categories. You aren’t required to use the graphic that is shown, however. • Tab Total Investments:o This tab includes the entire marketing budget. Based upon your analysis, please fill in the green cells.
Remember to describe all of your decisions and calculations in your paper.
Sephora Case Study
Sephora was founded by Dominique Mandonnaud in 1969, France. It was first established as simple perfume shop and by 1979 it had expanded to several store chain. Originally, the company was set as a self-service store that offered a wide range of products. As Sephora continued to grow, it was rebranded in an attempt to expand its market niche. After the rebranding, the founder established several branches across France something that increased its market share to 8% in the country. In 1997, Sephora was purchased by LNMH, luxurious product chain at a cost of $262 million. After the purchase, the company included a wide range of products and services to its portfolio. Under the management of LNMH, Sephora entered the international market by opening its first oversees store in New York City, United States in 1998. Like any firm entering the global market for the first time, Sephora experienced various challenges especially in the supply chain due to stiff competition from strong established companies such as Clinique and Estee Lauder. This led Sephora to initiate partnership relations with unknown brands. It was through these relationships that innovation and creativity for their brands was born to introduce new supply channels as well as line of products and services. Sephora had to address various issues in their line of division especially the supplies from their direct suppliers. The bottom line, Sephora offers more than 190 brands ranging from typical classics to new and exotic brands; in this regard it provides more than 21,000 products.
All of Sephora's direct marketing and digital initiatives Sephora Beauty Insider and Sephora.com are managed by Sephora Direct Group. Currently, its budget is estimated to be $22 million where and estimated amount of $8 million is allocated to online marketing. Much of the budget is allocated to online-search marketing. The social media, mobile and video is awarded $1 million representing less than four percent of the total marketing budget. Bornstein wants the social media, video and mobile marketing budget to be increased by an addition of $1 million to make a total of $2 million.
Sephora spends huge funds on online-search advertising by purchasing keywords related to its products. Search marketing represents the largest component of the company's marketing budget and contributes much to its traffic through its website. Another key element in Sephora's marketing mix is email marketing especially for the Beauty Insider program. In the modern business world, social is a crucial element for any company to invest in due to its popularity in attracting more clients and is becoming the easiest and cheapest way to shop especially in the younger generation. According to Sephora's financial reports, its mobile shopping has been increasing and that is why Bornstein wants the social media marketing budget to be doubled to create more value to its customers. It is believed that the more value a company creates, the more profits it gets.
CASE ISSUE AND OBJECTIVE
The core issue of this case is to justify why the $1 million additional budget for social media campaign is necessary by evaluating the involved platforms and how the marketing budget will be allocated to each platform to produce the expected results. In justifying this budget, Bornstein should make various decisions in regard to Social Media and how they will create value to their customers. Some of this decisions include:
* How can the connections with customers be strengthened?
* Can the User Generated Content (UGC) be integrated into the brand and how can it be done?
* Should they include the “Beauty Talk” into the marketing ...
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