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Beauty’s New Game: Segmentation

NEW YORK -- When manufacturers and retailers convene this weekend at the National Association of Chain Drugstores Marketplace convention in New Orleans, tailored marketing strategies will be just one of the many topics of discussion.<BR><BR>Stores...

NEW YORK — When manufacturers and retailers convene this weekend at the National Association of Chain Drugstores Marketplace convention in New Orleans, tailored marketing strategies will be just one of the many topics of discussion.

Stores that used to pride themselves on the fact that every unit within a chain had the exact same merchandise, located precisely in the same location, are now customizing the merchandise mix based upon consumer demographics.

Among the merchants adopting the approach are Kmart, Wal-Mart, PayLess Drug Stores, The Rx Place, Gordon’s Discount and Thrift Drug.

“That way, they are not wasting space by selling items that won’t turn in that store,” explained Monika Torrence, vice president of product management at Spectra Marketing of Chicago.

Many retailers have identified their stores that have higher ethnic traffic, in order to insure that those units have a wider selection of color cosmetics.

The use of point-of-sale scanner data is allowing chains to dissect each store’s audience and determine which products best suit its complexion.

But today’s targeted marketing goes well beyond minor changes in the product lineup. Some chains are going so far as to create entirely different store layouts for their various units.

Targeted marketing is also on the minds of manufacturers, although there is much debate on which way to approach the strategy.

The discussion centers around whether a company should launch a completely separate line to meet the needs of each segment of the population — such as certain ethnic groups or women over 35 — or to incorporate the appropriate shades and formulations within an existing brand.

One thing, however, is clear: Segments that were once considered niches are now the subject of intense marketing campaigns.

Many companies are now looking to concentrate more on teenagers, women over 35 and darker-skinned women, including Hispanics and Asians, as well as African-Americans.

“There is no longer one standard of beauty,” said Kathy Dwyer, executive vice president of marketing for Revlon. “This forces the issue of how your products should be presented. You have to evaluate if your product line or lines represent the whole population rather than just one segment.”

Companies such as Pavion and Maybelline have broken out separate lines based on demographics such as age and skin tone.

L’Oreal and Procter & Gamble prefer the master brand strategy. Both companies have expanded their major skin care and treatment lines to include a vast range of products suitable for most skin types and tones.

And Revlon has been doing a bit of both.

WWD has compiled a pictorial section to provide a preview of the wares that will be displayed at this year’s Marketplace.