1. HERBORIST Luxury Brand StrategyPT12 Ding Jie (Kingsley) 2012095

2. HERBORIST Luxury StrategyFounder: Shanghai JahwaShanghai Jahwa is the leading enterprise of daily chemical industry, owns Liu Shen, Maxam, HomeAegis brands in the fields of large circulation market, and HERBORIST, CHINFIE, Goff, Adidas(dealer)and other brands in the fields of segment market. Among them, the large field of Liu Shen and market segments field HERBORIST two brands income over 70% of the cosmetics business. Boston Matrix H HERBORIST Market 10% CARG LiuShen L H21.0X Market ShareL 3. HERBORIST Luxury StrategyHERBORIST: The luxury brand of JahwaHERBORISTs success came quickly, as Chinese women immediately recognised in HERBORISTs plant-based products, beauty supplements and teas, with their holistic virtues, the ancestral recipes that HERBORIST has adapted by combining them with the latest bio-technologies. HERBORISTs beauty rituals invite each woman to indulge in a highly personal and infinitely enjoyable beauty experience, with the certainty that, day after day, the vitality of her skin will be visibly and lastingly restored.3 4. HERBORIST Luxury StrategyHistory:The reserch on Herboist was formally initiatedThe nationwide franchise system was launchedHERBORI ST SPA openedHERBORIST Whitening Revitalizing Mask won COSMO special recommendat ion award.Aug.1998 Apr.2005 Jul.2001 Dec.1995 Nov.2005 Sep.2002 Jan.2000 First exclusive Establish HERBORIST store at Shanhai ed first joined the world HongKon famous cosmetics g based chain store exclusive Sephora store at Mongkok4the establishme nt of Chinese medicine instituteDec.2007 2008 Succeeded in its entry into the cosmetics market of ParisFrom the research of popularity of cosmetics brands made by Baidu ,HERBORI ST won best popular2009 2010 Entered Holland market and initiated the China tour for European media. 5. HERBORIST Luxury StrategyMain Product Category: Basic Care & Special Treatment5 6. HERBORIST Luxury StrategyMain Product Category: Food Therapy & Aromatherapy6 7. HERBORIST Luxury StrategyTechnology: Scientific Research BackgroundHERBORIST Herb Research Institute On Nov. 29, 2007, HERBORIST Institute was formally initiated. It becomes the first top-end scientific research institution that specializes in herbal cosmetics both in China and the world. Following natural and balanced beauty, it combines traditional herbal prescriptions with modern high technology. In addition, it heralds a new era that time-honored prescription is carried forward with high technologies. HERBORIST conducts research jointly with DermoScan Lab, Derma Development Lab and many other partners on herbal product innovation ranging from the theoretical research on traditional Chinese medicine, prescription analysis and medicine selection to extraction process, efficacy assessment, prescription development and safety evaluation. The Institute is committed to applying modern scientific research management concepts, rejuvenating the application of traditional Chinese herbal technologies and Chinese medicine culture in fashion consumables sector, and pushing the elements in Chinese culture to step onto the mainstream stage of world fashion consumables by relying on innovation.7 8. HERBORIST Luxury StrategyBrand DNA: Natural And BalanceThe beauty of health originates from natural and balance theory Following the classics of Chinese cosmetology, adopting integral ideas, and combining the peculiar herbal essence of China and the latest modern biotechnical achievements, HERBORIST provides consumers with natural and effective hair care and skin care products to create the beauty from root.8 9. HERBORIST Luxury StrategyBrand DNA: Traditional Chinese Medicines HerbalHERBORISTs lines of products are based on traditional Chinese medicines herbal science. HERBORIST introduces you to the properties of some of the thousand mixed flowers used as active elements in its products. The time-honored cosmetology of China is still charming in todays instrument civilization, which reflects modern peoples sensation of returning to nature.9 10. HERBORIST Luxury StrategyBrand Code 10 11. HERBORIST Luxury StrategyBrand Code 11 12. HERBORIST Luxury StrategyBrand Culture Foundation1:HERBORIST, as the first modern herbal full products of China, reflects the essence of Chinese culture that pursues nature and balance and mirrors the philosophy that refreshing, natural and healthy beauty is bound to stem from the root. HERBORIST likes to share with you the secret of skin care and hair care as well as physical and mental balance. Offering Thanksgiving and Supporting Environmental Protection HERBORIST always advocates healthy, refreshing and natural life attitude and undertakes to provide each consumer with natural, safe and mild products as well as systematic and friendly services. HERBORIST offers Thanksgiving to the society it originates from nature and rewards nature. It will take the initiative to support environmental protection. 12 13. HERBORIST Luxury StrategyBrand Culture Foundation2:2009, at 11th anniversary, HERBORIST received a new born of the brand. The new brand image and new packaging made HERBORIST more fashion and elegant. Meanwhile, HERBORIST advocated the idea of Cultivate Green, to make people Thinking Green, ActingGreen 13 14. HERBORIST Luxury StrategyBrand Culture Foundation3:The mystery of beauty, the balance of Yin and Yang. Yin and Yang are the fundamental elements of Tao, on which the entire harmony of the Cosmos lies.Together, these two principles form a perfect whole, as in dissociable as masculine and feminine, hot and cold, sun and moon, black and white, empty and full. HERBORIST has formulated the Tai Chi skincare line in accordance with this ancestral belief. Its products are a true source of balance, energy, serenity and beauty. They work as one, each echoing and completing the other to successively stimulate the bodys inner capacities. Together, they boost energy forces while soothing the mind to enhance beauty. There lies the secret of serene, luminous beauty. 14 15. HERBORIST Luxury StrategyCompetitive EnvironmentIn the domestic marketIn international market Hard to be accepted by foreign people Less experience The control of the sephora The competition in the international market is fierce. There has been a westernworship phenomenon in the Chinese market Small market share The competition in the domestic market is very fierce 15 16. HERBORIST Luxury StrategyPublic VS PrivateEstablish flagship stores: Most like the Spa Club 1) Flagship stores in line Jahwa create stylish corporate strategy 2) To establish the image of HERBORIST 3) Flagship stores is a life club, not a sales cannel. ignore the conflict with SEPHRA, also preliminary exploratory the foreign consumers for Chinese-style spa reactions 16 17. HERBORIST Luxury StrategyDemocratic VS ElitistHERBORIST Spa model is established purely as a member of the value-added services at 2002,and the main source was initially located in Shanghai, so the three Spa shop is purely for customer service. During this time the Spa service is both pros and cons.Pros 1) Improve customer loyalty. 2) Collect a lot of customer information 3) The formation of client assetsCons 1) Scattered resources, internal organizational chaos 2) Working capital is too high 3) Manufacturers to service providers lack of experience, the establishment of the high cost 4) Corporate financial burden is too heavy 17 18. HERBORIST Luxury StrategyTradition:Knowledge of plants is an ancestral tradition in China, and for thousands of years the Chinese have drawn on the healing powers of plants. Balance between Man and Nature is the source of vital energies that bring longevity and well-being, and enable us to go through life with the serenity of mind and body in perfect harmony. Inner beauty and visible beauty nature each other. 18 19. HERBORIST Luxury StrategyTimelessness:For thousands of years, the Chinese have drawn on the healing powers of plants. Circa 2800 BC, the legendary Emperor Shennong studied 365 plants for their therapeutic properties which he then compiled in a treatise, the Ben Cao Jing, according to the flow of energy they release in the body. This work has been passed down and remains an authoritative voice in Chinese herbal science today. True to these age-old principles, HERBORIST combines the power of plants with the most innovative modern cosmetic formulations. 19 20. HERBORIST Luxury StrategyUniqueness: The central strategy of HERBORIST is Brand difference.At technical level, there are mainly two different kinds of cosmetics, one bases on biochemistry, such as Dior, Lancome and Chanel which are all top brands, and the others base on plant pink additive, such as LOCCITANE, Kiehls and Avene. According to the principle of herbalists doctor, HERBORIST added some assorted herbals into its products, not only made an extreme representation of herbals but also made visible difference from foreign cosmetics. HERBORIST expanded its market and made good effect to popularize HERBORIST to international market. 20 21. HERBORIST Luxury StrategyProductThree Star Product Carry the Brad Code and DNA Consistently.Whitening Revitalizing MaskAll-day arousing & moisturizing lotion 21 Tai Chi Detoxifying & Nutrient Clay 22. HERBORIST Luxury StrategyPriceAs the top Chinese cosmetics brand which established shops in the top store in China, and the top Chinese cosmetics brand whose sales volume gained top 10 in Sephora chain stores and made profit, HERBORIST was a successful sample of Shanghai Jahwa, and its price has exceeded many international well-known brands such as OLAY and LOREAL. The same time with keeping the uniqueness of its products, HERBORIST also has to keep its price at a middle level as a premium brand. According to current sale results of HERBORIST, its green-white series products are sold among famous brands such as Este Lauder, Dior and CLARINS, which means it has successfully come from the mid to premium brand market. 22 23. HERBORIST Luxury StrategyPlace: Han Fang SPA 23 24. HERBORIST Luxury StrategyDistribution Landscape:By extending exclusive brand stores & franchise stores, HERBORIST will have built more than 540 stores by the end of 2008, which will cover around 140 cities of China . HERBORIST promotes a consistently healthy, fresh and natural living attitude by providing every consumer with natural, safe and effective products through friendly and professional service. 24 25. HERBORIST Luxury StrategyDistribution Image:Shanghai JahwaHERBORISTHanFang SPAInternationalSEPHORAHanFang SPADomesticDirect SalesOwnCounter 25 SPAShopDirect Sales 26. HERBORIST Luxury StrategyDomestic Model and StrategyHERBORIST construction of three phases domestic channels from 1998 to 2008Exclusive StoreMall CounterSPAOperated stores and franchise expansion mode Lay a solid foundation for the early and steady development, adhere to selfstrategy. the stores can be a predecessor of Spa Club Choose to acquire a mature franchise, implement proprietary channels, enhance the image, and use these client resources, so that they become small dealersStore counter at Shop and supermarket With the popularity of foreign brands to enter the occupied store counter Large supermarket chains have shaken off the image of low, so HERBROIST set up counter in supermarket to expand its cannel 26 27. HERBORIST Luxury StrategyDomestic Distribution Phrase 1:First phrase: 27 Build brand exclusive stores, stated in shop Single sales channel Set up professional image of luxury cosmetic 28. HERBORIST Luxury StrategyDomestic Distribution Phrase 2:Second phase: 28 First try mode of dealer Cultivate loyal channel customers HERBORIST Spa Club opening 29. HERBORIST Luxury StrategyDomestic Distribution Phrase 3:Third phase: 29 Spiral expansion, franchise bulk copy Back domestic large shopping malls counters and supermarket chains to establish counters Extended HERBORIST Kampo spa 30. HERBORIST Luxury StrategyInternational ModelInternational Distribution Model FactoryDirect exporting foreign sales representatives foreign distributionAgentCustomer 30 31. HERBORIST Luxury StrategyInternational Agent SelectionThe standard of choose distribution agent of HERBORISTOwns huge sale networkHave ability to deal with the problem of brand awareness foundationPositive image 31 SEPHORA sole agent 32. HERBORIST Luxury StrategyInternational StrategyBrand-name strategyselect a target market strategic planningInternationalization strategyexport license product localization brand localizationInternational sales channels corporate with SephoraInternational science and technology strategyadvanced technology and equipment corporate with 5 universities to establish the joint laboratories and research centers 32 33. HERBORIST Luxury StrategyDigital StrategySEPHORA Site Official SiteSPA Site 33 34. HERBORIST Luxury StrategyMarket PerformanceIn 2007, it achieved revenue of 420 million Yuan, and the quantity of exclusive shops rose from 10 in 2005 to 400 in 2007.3 In September 2008, HERBORISTs products were on sale in 30 Sephora shops in France, not long, the number rose to 70. In 2009, the revenue of HERBORIST in France exceeded 10 million Yuan, and the global retail sales revenue exceeded 600 million Yuan. 2009 HERBORIST entered into the Turkish market with Sephora, and then entered into the Italian and Spanish markets. Because of successfully entering into European markets, HERBORIST acquired more acceptations of Chinese domestic consumers. 34 35. HERBORIST Luxury StrategyMarket SWOTSTRENGTHSWEAKNESS China's first modern herbal medicine Reasonable sales channels First move into the European market Communication and marketing management Have difficulties in innternationalization Sephora is the only distributor Performance pressure Accept the new brand.OPPORTUNITIESTHREATS With the sephora help move into the European market. Not so much foreign competitors fashionable in in Europe The revival of Chinese culture Compete with famous cosmetics brand Sephora's terminal control The impact of the same type of brand agents Financial crisis 35 36. HERBORIST Luxury StrategyMarket Strategy Recommendation:HERBORIST needs to find another way to shaping consumer awareness, improving the product visibility and formatting the characteristics of their products. HERBORIST also should expand sales channels, at the same time, maintain the agency relationship and actively develop new sales channels. HERBORIST needs to develop a cost prior str ategy, compressing channel costs to increase efficiency, and achieves cost priority. HERBORIST also needs to develop a strategy of differentiation, with using of Chinese eleme nts, to create different channels compared wit h foreign companies, so that making consume rs feel a big difference in cognition. 36 37. HERBORIST Luxury StrategyConclusionsThe Jahwa HERBORIST brand has been the pursuit of "the beauty must come from the origin can only be beautiful and perfect." philosophy. That is the reason it can maintain a unique brand image for consumers. HERBORIST starts entering the international market, and intends to expand the international markets while setting goals can have a clear direction for the domestic and international segments, and make the policy consistently, The most important thing is how make an effective marketing strategy for international consumers, so as to promote the brand while also consolidating its market position. 37 38. HERBORIST Luxury StrategyTHANKS 38