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LITTLE FALLS, NJ, January 28, 2008
– Beauty industry analysts at worldwide consulting
and research firm Kline
& Company are calling Thursday’s announcement
by Estée Lauder to marry its powerhouse Clinique
brand with specialty pharmaceutical company Allergan
a shrewd diversification strategy by the cosmetics
maker. The strategy will allow Estée Lauder to gain
a foothold in the booming medical distribution channel.
It will also position the Clinique brand for growth
through cross-channel marketing and help balance
the overall lackluster performance in the prestige
beauty market, according to Kline.
“Estée Lauder has always been innovative and
aware of the value in diversifying their channel
mix,” says Carrie Mellage, director of the Consumer
Products practice for Kline’s market research
group. “With low, single-digit growth in the prestige
skin care market, the Clinique brand has suffered
somewhat, along with the rest of the market. Meanwhile,
the medical channel is growing fast, posting a
16.5% jump in 2007. It’s no surprise that Estée
Lauder would see the opportunities here and tap
into this outlet.”
Estée Lauder is set to begin manufacturing and
distribution of its new Clinique-branded line
of skin care products, to be marketed by Allergan
and sold only through doctors’ offices, in the
fall. The new line will be designed to complement
in-office procedures, a product strategy that
has surged in popularity over the last year, according
to Kline’s research. The deal will also bolster
Allergan’s position in the medical channel, where
it already has a solid presence with its Botox,
M.D. Forte, and Prevage brands. There will likely
be other cross-channel benefits for the Clinique
brand as well.
“The medical channel is actually a drop in the
bucket compared to the overall Clinique reach,
so this move is not likely a purely sales-driven
strategy,” says Karen Doskow, project manager
for Kline’s Consumer Products practice. “It’s
also about brand extension––a marketing play to
extend the Clinique brand, similar to the way
Dove, Aveeno, and Neutrogena have used doctors
as a marketing channel by asking them to recommend
their products to patients. It builds credibility,
and it’s an opportunity to grow outreach efforts
across all channels.”
Doskow also points out that one reason for the
unprecedented growth in the medical channel is
the surge in the number of physicians dispensing
skin care products to their patients. According
to data from Kline’s in-depth report Professional
Skin Care 2007, due to be published
later this month, dermatologists and plastic surgeons
are now being joined by a new category of “other”
physicians, which includes general practitioners,
gynecologists and obstetricians, and even dentists.
“We’ve seen a 36% jump in the number of ‘other’
medical specialties now dispensing skin care products
to their patients,” Doskow says. “Dermatologists
and plastic surgeons are losing their market share
to other specialists who are now treating patients
for conditions like adult acne and age spots.”
“This all adds up to a potentially greater market
share for the Clinique brand and underscores the
value of diversification across multiple channels
in order to achieve optimum market reach.”
For more information about Professional Skin Care 2007, go to www.klinegroup.com/reports/y562ghijk.asp.
About Kline
Kline is a worldwide consulting and research firm
dedicated to providing the kind of insight and
knowledge that helps companies find a clear path
to success. The firm has served the management
consulting and market research needs of organizations
in the chemicals, materials, energy, life sciences,
and consumer products industries for nearly 50
years. For more information, visit (www.klinegroup.com)
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