Made in Italy

Part
01
of four
Part
01

Celebrities - Perfume And Fragrance Launches

With celebrity fragrances, the company manages the whole process from creation to bring the scent to market. The celebrities’ promised involvement in the design process is essential, this is, the celebrity's personality and preferences must be reflected on the product.

THE RISK(S) CELEBRITIES HAVE TO TAKE:

THE PROMISES THE CELEBRITY HAVE TO TAKE:

WHAT IS ASSUMED BY THE PERFUME HOUSE:

WHO DISTRIBUTES, MARKETS, AND ADVERTISE THE PRODUCT?

Celebrity:

The company:


ADDITIONAL INFORMATION:

  • When a celebrity licenses his/her name to a fragrance, he/she is paid $3 million + as an upfront payment. Also, he/she gets between 5 and 10 percent of the total sales of the fragrance.
  • A bottle of perfume usually retail between $60 and $100, but the cost of production is usually about 25% of the retail price.


RESEARCH STRATEGY:

We could find all the information pre-compiled the public domain, however, we could not find the information on the money invested by the celebrities while launching their own perfume and fragrance brand(s). We used the following strategies trying to find this missing information.

To find out the investments made by the celebrities launching their own perfume and fragrance brands, we first checked information portals like Harpar Bazaar, Dazed Digital, Vogue, Glamour Magazine, Cosmopolitan, Elle, among others since these sources have maximum information on the fashion industry with the focus on celebrity fragrances. However, the information found here was general including the best celebrity fragrances across the globe, some cover stories, among other irrelevant information which do not answer the research criteria.
Next, we checked for information on companies websites like COTY, Elizabeth Arden, Approach entertainment, Big Noise, among others which are well-known to work with A-List celebrities launching their line of perfume and fragrances and other cosmetic brands. Here, we wanted to check if the companies have ever shared any success stories about their work with some celebrities worldwide and if they have mentioned anything on the investments done from the celebrities end. However, the information found was mostly on the celebrities they have worked with.
Further, we looked into the popular investments made by the celebrities to find if any investments are related to any perfume and fragrance launch or any other cosmetic launch. We looked into sources like Insider, Money, Market Watch, Love Money, Tomorrow Makers, Forbes, among others where the investments made by some known celebrities like David Beckham, 50 Cents, Ashton Kutcher, George Clooney, Jay-Z, Beyonce, Jackie Chan, and other famous personalities across the globe were mentioned. Unfortunately, we could not find any investment amount relating to the launching of the perfume and fragrance or any other cosmetic brand(s) by any celebrity.

Lastly, we searched through the reports from Bain, Mckinsey, Globe News Wire, PR News Wire, among others where we found reports which mostly covered the fragrance industry overall. However, the reports had very less mention on celebrity fragrance. Also, we noted that no paywalled report may have this information. We also looked into case studies from sources like lvmh, Slide Share, Research Gate, among others where we did find some relevant case studies but mostly covered the part of how the agencies help celebrities during the whole phase of perfume and fragrance launches. Some celebs covered were Jennifer Lopez, David Beckham, among others, but these studies had no info on the investments made b these celebrities.


Part
02
of four
Part
02

Brands - Perfume And Fragrance Launches

Brand fragrances launch their scent lines based on the type of Fragrance as their primary selling point and are distributed through exclusive high-end stores and retail outlets unlike celebrity scents, brand perfumes don't use flashy marketing campaigns and are mostly using innovative technologies and social media for marketing.

findings

STRUCTURE OF LAUNCH/DEAL (Brand perfumes versus Celebrity perfumes)

  • There is a difference in the structure of the deal for Brand/Designer perfumes as compared to Celebrity perfumes.
  • "Celebrity fragrances are different from scents from the big houses — the Armani and Chanel". People associate the celebrity perfume with their relationship with the celebs (smell as the celebrity) but recently people have scaled back on buying fragrances with celebrity names attached to them, and started optioning to buy higher end brand fragrances for higher quality.

DIFFERENCES

  • Celebrity perfumes use celebrity’s name to market the scent unlike Designer scents which focus on the fragrances named after and marketed by fashion brands.
  • Celebrity fragrance companies prefer to associate the scent with the celebrity’s name as their name alone can become the main selling point whereas Designer scents brands are largely "limited to only the most well-known fashion companies and are often expensive due to their high-quality ingredients."
  • Brand loyalty for Designer/brand perfumes is stronger (by sales) as compared to Celebrity perfumes due to their strong brand association and positioning of the product.
  • Some examples of Celebrity scent include-Luscious Pink by Mariah Carey, Nude by Rihanna, Girlfriend by Justin Bieber and others and examples of signature/brand perfumes include Egoiste by Chanel, Dior Homme by Christian Dior, Azzaro Pour Homme by Azzaro and others.
  • Most celebrity perfume makers are not involved in the backstage process of making of the perfume or its marketing or decision-making on the focus groups, whereas, designer/brand perfumes owners (ex: Frédéric Malle) spent years in the perfume and fashion industry before launching his own brand scent and preferred to focus more on content than the container.

REFERENCE CASE

  • French "perfume publisher" Frédéric Malle stated Celebrity fragrances have killed the industry by not focusing on content." The cheaper the perfume, the fancier the bottle". He launched a designer perfume line with Editions de Parfums which is inspired by his years of experience in the fashion and perfume industry and provides the best of fragrance experience called "the epitome of elegance."

MANUFACTURE/DISTRIBUTION

  • Designer scents are mostly limited to well-known fashion companies and distributed at their signature outlets.
  • Brand perfumes are backed by large beauty conglomerates and the distribution takes place in their own high-end specialty stores and retail outlets. Celebrity fragrances opt for self-service distribution.
  • Newer scent brands like Glossier, Phlur and Pinrose are taking a direct-to-consumer approach to scent and are not using the traditional way of celebrity endorsements.
  • Brand scents are "more concentrated and natural ingredients, are usually sold in small or independent boutiques and are less likely to be heavily marketed or endorsed by celebrities."
  • Partnering with large companies that manufacture and distributes fragrances is the common trend followed by brand scents.
  • Unlike brand perfumes, celebrity perfumes are meant for mass distribution and likely to perform well commercially as they "tend to be easy and inexpensive to source and offer an appealing price point to their fan base".

REFERENCE CASE

  • French "perfume publisher" Frédéric Malle was backed by one of the biggest beauty conglomerates in the world, Editions de Parfums and he is expanding his retail footprint and opened his store to launch his designer scent line along with opting for luxury brand stores-Neiman's or Barneys.
  • Celebrity Kim Kardashian West, sells her KKW Fragrance scents at a lower price of $60 each in 2017, wherein it sold over $10 million in a single day, according to TMZ.
  • Jason Wu for his brand scent partnered with Parlux Ltd., a company that creates, manufactures and distributes fragrances and has various brand perfumes like Paris Hilton and other in its client list along with some celebrity scents like Kenneth Cole, Rihanna.
  • Designer fragrance — Derek Lam’s launched his 10 Crosby fragrances targeting millennial and using 10 different filmmakers for advertisement. The distribution was kept tight and the fragrance was exclusively stocked in Sephora and is now also available in Nordstrom with a $38 for just a perfume stick and now the industry sources say sales are already over $10 million.

Pricing

  • Brand perfumes are expensive as compared to celebrity perfumes due to its high-quality ingredients.
  • The brand perfumes can cost $235 as compared to celebrity perfumes being at a lower price of $60 each.

MARKETING & ADVERTISING

  • For celebrity perfumes, the Fragrance companies undertake the marketing and prefer to sell the product with the celebrity name on it as a selling point.
  • Brand perfumes are marketed by fashion brands who do not use the person but the brand name to market the product.
  • The brand perfumes are published by the designers and they also take serious involvement in its marketing and promotion activities which includes-press release, interviews, magazine articles and social media promotion.
  • Celebrities mostly come up with their perfume lines as part of their way to remain in the market after being out in the public eye, hence are not very seriously involved in its marketing activities.
  • Celebrity perfumes mostly opt for splashy marketing campaigns and launches to market the product but do not use the fragrance content which is used as a selling point by brand perfumes such as Chanel. Being this as one of the reason, the sales of top seller brand perfumes have surpassed the celebrity scents.
  • In 2017, most of the brand fragrance marketers opted for innovative technologies and social media to market the brand perfumes along with giving options for virtually try-on a product, share a make-up look and video campaigns.

REFERENCE CASE

  • Frédéric Malle marketed his perfume line launch himself and gave one on one interviews with the press, had a full page in fashion forums like Figaro, Elle and Liberation had news articles written in Herald Tribune.
  • Britney Spears recently did not have any recent album coming up and to cater to the demand of the public for ‘We want more Britney content", instead of releasing more music, came out with a commercial for her new "My Prerogative perfume".
  • Jean Paul Gaultier's limited-edition Classique and Le Male scents were launched by using an episodic film series with DC Comics character’s and associating these scents with the well-known characters on social media.

Research Strategy

In order to provide comprehensive information and insights on the perfume/fragrance launches for brands (Not celebrity perfumes) relating to their structuring, marketing, distribution and product positioning and selling points along with broader comparative to celebrity perfumes on these aspects, we looked through multiple sources such as fashion magazines, articles, perfume market reports, along with branding and marketing blogs and columns -NPD, perfume.org, fashionista, emarketer, vogue, pagesix, dontsmellbad and so on.

Through the search, we found articles from sources dontsmellbad, fashionate, allure which shared key insights on the structuring of the deals which where found to be different for brand perfumes as compared to celebrity perfumes such as brand perfumes structured the launches around focusing the 'fragrance' of the perfume as the unique selling point as compared to celebrity perfumes who sell the products with their names associated with the scent to market it.

Also, articles from pagesix, luxurysociety shared information on the key role of fragrance partners and large conglomerate which back up the brand perfumes and take care of their manufacturing, distribution along with usage of marketing, and advertising tools such as press release, ad campaigns, news interviews and social media for advertising and marketing. In comparison to Celebrity perfumes relying more on splashy marketing campaigns for launches. It was also found that the celebrity perfume pricing is comparatively low priced (even for $60) as compared to brand perfumes (around $235) due to high-quality ingredients.

Additionally, the sources shared related case references of brand perfumes and some celebrity brands to showcase on the related findings — Frédéric Malle, Derek Lam, Jean Paul Gaultier's limited-edition Classique and Le Male scents, Chanel No 5 and others.
Part
03
of four
Part
03

Beauty Line Launches For YouTube Stars

After searching extensively through market research databases, as well as licensing, business, and social media publications, we were unable to determine the risks YouTubers take, the money they invest, or the specific promises they make when launching beauty lines. The segment is understudied and reporting on the subject largely refers to information on the launch and the products themselves, as opposed to the details of the YouTuber's investment and risks. However, the research team was able to gather a few insights into the operational relationship between the companies behind beauty lines/products and the YouTube star that launches the product, as well as the risk companies take when partnering with a YouTuber.


BEAUTY LINE LAUNCHES FOR YOUTUBE STARS

WHO TAKES RESPONSIBILITY FOR THE MANUFACTURING, DISTRIBUTION, MARKETING, AND ADVERTISING OF BEAUTY LINE PRODUCTS?

OTHER FINDINGS
  • According to Sullivan, Manufacturers and licensees take a risk when partnering with a celebrity personality because the celebrity’s behavior may damage the brand name.


RESEARCH STRATEGY:

We were unable to find information and insights about beauty line launches for YouTube stars. However, we were able to find useful insights about who takes responsibility for beauty line operations in deals with YouTube stars, as well as information on Michelle Phan's launch, as well as reactions of Jaclyn Hill's beauty products. This information is likely unavailable because the segment of beauty lines launched by YouTube stars is an understudied topic. Reporting on this subject relates to launch information, as opposed to specific information on money invested, the risks taken by the YouTube celebrity, and the promises the stars typically make in these deals. We employed the following strategies to search for information or insights surrounding beauty line launches for YouTube stars:
STRATEGY 1:
  • Our first strategy was to look for case studies on YouTube stars partnering with a beauty brand. We searched financial and academic databases for existing reports on this segment. This strategy worked to an extent, as we were able to find case studies of a beauty brand which was successful after partnering with a YouTube celebrity. However, the entire report could not be accessed due to paywall restrictions. We expected that this strategy may work as case studies often publish information about the risks, investment, marketing, and other details which could have been helpful in getting some insights on beauty line launches for YouTube stars.
STRATEGY 2:
  • The research team's second strategy was to look for examples of celebrity partnerships with beauty brands to find information on the beauty line launches they made. We looked for financial- and business-oriented publications that would offer examples of partnerships to find information on risks, promises, assumed beauty line. This strategy worked to an extent, as we were able to find information on who is usually responsible for manufacturing and marketing the beauty product. However, there were no insights into other questions, like the risk taken by YouTube stars or investment details.
STRATEGY 3:
  • Our next strategy was to check websites that specialize in publishing licensing-related news and reports. Using this strategy, we found a few beauty brands that partnered with vloggers to market their products. However, there was no information on the requested insights into the intricacies of these beauty line launches. We thought that this strategy may work as these sites typically publish news and reports about the licensing industry and help companies and investors by supplying deep dives and insights into specific industries like the beauty products industry.
STRATEGY 4:
  • Our fourth strategy was to look for website and press releases by beauty product companies (L’Oreal, SLG Beauty, etc.) who made licensing agreements with YouTube celebrities. This way, we hoped to find interviews with the YouTube stars they've partnered with, discussing details of the beauty product line and the licensing deal. However, this strategy did not work as there was no information published about the investments, marketing, or promises made by the YouTubers. This could be due to the fact that companies often keep their licensing agreements undisclosed to maintain a competitive edge.
Part
04
of four
Part
04

White (Private) Label Beauty And Cosmetic Labs

White (private) label beauty and cosmetic labs use multiple forms of ways to lure in their customers, such as offering incentives and offering many other business strategies to complete for them. Due to this, and their tendency for being more personal with their customers, they are earning more credibility and more profit for the services that they perform.


OFFERING INCENTIVES

  • Many private label beauty and cosmetic labs will offer some sort of advantage for small businesses, such as no development costs and no worry about having a limited supply of products.
  • People and companies who work with private labels tend to have a higher profit turnout than other people/companies.
  • Private label beauty and cosmetic companies have the benefit of working with specific classifications that make them more appealing to other companies. For example, some labels are vegan, eco-friendly, etc.

RESEARCH AND DEVELOPMENT (R&D)


ADVERTISING

  • In order to sell their offerings, some private label beauty and cosmetic labs try to make their products seem more unique and appealing to other companies globally.
  • Some other private labels allow for the people or companies that they're working for to have certain labels, such as "Made in U.S."


MANUFACTURING


MARKETING


DISTRIBUTION


RESEARCH STRATEGY:

In order to determine the strategies that the white (private) label beauty and cosmetic labs used to gain more customers, we first tried to search through multiple platforms to find any information on the strategies that these labs may use. We were able to find a few articles that go into detail about the simple strategies that they utilize, such as covering for R&D costs and manufacturing their customer's products for the company. For the rest of the strategies, we had to dig deeper and come up with a different approach to find additional insights into the ways that white label beauty and cosmetic labs sell and structure their offerings.

Next, since we couldn't find any other articles that thoroughly discuss the other strategies used by white label beauty and cosmetic labs, we decided to look at the websites of some private label beauty and cosmetic labs to determine any other ways that they were able to sell and structure their offerings. Upon looking at these websites, we were able to find information about these labs. Some also offering distribution, marketing, and advertising services. In addition to these strategies, many of the websites also mentioned some incentives in order to gain more customers.
Sources
Sources

From Part 04
Quotes
  • "For a small brand or start-ups the advantages of using white label labs include no development costs, low minimums and no concerns about limited supply. The manufacturing company maintains a supply of product and all a brand has to do is apply their custom packaging and labelling to make the product their own. An individual can choose any combination of products, package them as they see fit and sell them under their own brand label. In a sense the brand is a curator rather than a creator."
Quotes
  • "Distributors have more manufacturing power, logistics prowess, and the consumer data to give loyal shoppers across categories exactly what they want. And there’s a huge incentive to wean people off of branded goods and onto retailers’ own product lines: from private-label sales, retailers can make margins 25-30% higher than from manufacturer brands. Though gaining popularity with consumers for high-end cosmetics is hard, initial costs are actually pretty low. Companies can use tried-and-true product formulas and shades instead of starting from square one, eliminating research and development costs."
Quotes
  • "MANA’s color and powder laboratories lead the industry with superior manufacturing techniques, extraordinary textures, meticulous attention to detail, and the newest pigment technology. The result: next-generation products that command attention and are in high demand."