P&G LOOKS TO R&D FOR BEAUTY EDGE
Byline: Cara Kagan
NEW YORK — Six years after its acquisition of Noxell Corp. and its Cover Girl brand, Procter & Gamble is getting serious about the beauty business.
The consumer products giant is at last putting its sizable research and development muscle behind not only Cover Girl but its Max Factor brand.
Charles Busta, vice president and general manager of Procter & Gamble’s cosmetic and fragrance division, recalled that when Noxell’s pioneer, Dr. George Bunting, was building that brand in the Forties and Fifties, the company acquired a reputation for turning department store winners into successful drugstore beauty products.
“Cover Girl used to be a fast follower,” Busta said, with a large grin on his face. “We were small R and big D. We didn’t have the research capability that you normally see today, but we could develop something really fast if someone else had already formulated it. That all began to change, he noted, when P&G acquired Noxell in 1989 and then purchased Max Factor from Revlon in 1991.
Busta outlined a roster of spring foundation and mascara launches for both Cover Girl and Factor, which the company considers to be cutting-edge. But while retailers applaud P&G’s strides toward innovation, many question whether that alone is enough to keep mass market leader Cover Girl on top and to help struggling Max Factor back to its feet.
Retailers ranked in-store promotion and presentation, plus advertising, as equally important parts of the marketing equation. “It’s great that P&G has woken up and now understands the importance of technologically advanced products. That is the future of the mass market, especially with the aging of America,” said Carol Allman, director of merchandising at Eckerd Corp. in Clearwater, Fla. “But the competition has woken up, as well.”
“I do think they are becoming more technologically advanced than the basic me-too attitude of the past,” agreed Denise Valerio, merchandise manager of Longs Drug Stores of Walnut Creek, Calif. “Technology brings news and excitement to the category. But marketing is the key. Cover Girl is great with advertising, and that gets customers in the store. But I would like to see more activity at the store level and sampling.”
Retailers praised Cover Girl for being the category leader in national ad spending with an annual budget estimated at around $55 million. But many retailers find its in-store and sampling efforts limited.
“Traditionally, we have not done much sampling,” Busta responded. “But we are going to get more aggressive with the number of trial sizes we ship to stores.”
He noted that the company would also sample the company’s major spring foundation launch, Balanced Complexion Liquid Make-Up, via direct mail and with counter-top displays. As an example of how Cover Girl has upgraded its in-store appearance, Busta pointed to a new merchandising unit, called the Graphic Information System, that is now rolling out to the brand’s major doors. Max Factor appeared to receive higher marks, although its annual advertising budget, estimated at around $20 million, is seen by retailers as a competitive disadvantage.
Allman at Eckerd said, “They are doing great things with sampling, and they are a good line. But they need to spend more in national advertising. A TV presence reinforces image, and without it, you lose the impulse spenders.”
“We feel that we are spending equal to or above the other comparable-sized brands on the market,” replied Jim Stengel, marketing director of Max Factor International.
According to the IRI market research organization, with or without technological innovation Cover Girl has been the top-selling mass brand of cosmetics for the last several years. Cover Girl finished its latest fiscal year on June 30, with a 23.1 percent share of the $2.2 billion cosmetics market, or $508 million at retail, up from 22.5 percent, or $495 million, the previous year.
Max Factor commanded 6.6 percent of the market, or $145 million at retail, up from 6.5 percent, or $143 million, the previous fiscal year.
P&G first jump-started its technological efforts two years ago, when it launched Cover Girl’s Ultimate Finish, a compact foundation with a creamy formula that dries to a powdery finish. According to Busta, the item is now the company’s number-two selling brand of foundation, behind its classic Clean Make-Up brand.
“I think Ultimate Finish is something they do have an edge on,” said June Taylor, senior director of cosmetics and fragrances for Phar-Mor Inc. of Youngstown, Ohio. “They were the first ones to bring this type of technology to the mass market. We sell an awful lot of it.”
This spring Cover Girl will use the same technology to extend its Replenishing foundation — which has moisturizers, Vitamin E and Aloe — into a new compact makeup called Replenishing Liquid Powder Make-Up. It will be available in eight shades with a suggested retail price of $5.95 per compact.
Another new spring foundation entry will be Balanced Complexion Liquid Make-Up for combination skin, which the company classifies as being partly dry and partly oily. According to company research, 40 percent of females aged 18 to 34 claim to have this condition.
Cover Girl asserts that the new brand is a first in the mass market. In the past, companies have dealt with combination skin by treating either the oily or the dry area of the face, but not both.
Each of the 12 shades will have a suggested retail price of $4.50, as will each of the six shades of new Balanced Complexion pressed powder.
Cover Girl will back the new facial makeup with print and TV campaigns that will break in July. Throughout this year, it will also offer money-back guarantees in national ads for Balanced Complexion.
“In mass they pretty much own the foundation and powder business,” said Phar-Mor’s Taylor. “Between the Cover Girl name, their clean fresh positioning, their intelligent usage of the top models, and the fact that they spend a lot of money on advertising, all of their foundation launches are strong.”
In addition to powering up its foundation business, Cover Girl will bolster its mascara presence.
The company has reformulated its number one brand of mascara, called Cover Girl Professional. Executives maintain that the new version makes lashes longer while preventing the globbing and clumping that often occurs with the use of conventional mascaras. The new formula will be available with either a straight or a curved brush in three colors. Each tube has a suggested retail price of $4.25. A waterproof version will bow in April. A new print and TV campaign will break toward the end of this month.
While retailers welcomed the new entries, some criticized the brand for playing to its strengths and ignoring other important categories.
“They really need to get behind their lip and nail businesses more,” Eckerd’s Allman said. “I would like to see them bring innovation to these categories, as well.”
Cover Girl’s lipstick business will get a lift next month with a new print campaign for its Continuous Color lipstick. TV spots will follow in late spring, Busta said. The ads feature newly signed Cover Girl model Helena Christiansen, and an 800 number offering a money-back guarantee. This offer will also be promoted at the store level through shelf talkers on the new Cover Girl display.
Cover Girl is also out to jazz up its in-store presence. The new Graphics unit, which averages 12 to 14 linear feet, was designed to more clearly identify each product’s benefits and to simplify the shade selection process, while adding a dash of glamour by including photos of Cover Girl models.
So far, the unit has met with a mixed response from retailers.
“This method has definitely simplified the selection process,” said Longs’ Valerio. “I’m in favor of anything that helps the consumer understand more at the point-of-purchase. This unit will help them in terms of selling basic business, which translates into real business for us.”
“The new planogram is cleaner, and it’s a good start for the company, but it’s still not as a good as, say, L’Oréal’s,” said Carl Lynch, cosmetics and fragrance buyer for I Got It at Gary’s in Eagleville, Pa. “One problem with it is that they have left the majority of their merchandise carded, and their competition is moving more and more toward uncarded merchandise, which I am doing extremely well with.”
Lynch added that Cover Girl still had a way to go in terms of generating excitement at the store level, saying, “I have companies, like Revlon, who send manicurists for nail enamel promotions and estheticians to do makeovers.”
Foundation and mascara are also figuring into Factor’s spring launch schedule with three new makeup products and one new lash builder. “Max Factor has a legacy in face and eyes,” Stengel said. “But there were areas in these categories we wanted to round out. We have a great following with our Pancake and PanStick foundations but are underdeveloped in liquid formulations, which is a more popular product form.”
Stengel noted that Factor will add two liquid foundations to the Factor foundation franchise for a total of four.
The new entries are Rain, a moisturizing product, and Balancing Act, a product designed to balance combination skin through a similar technology to Cover Girl’s Balanced Complexion entry.
Each of the new foundations will be available in 12 shades, with a suggested retail price of $8.25.
According to Stengel, print advertising for Balancing Act will break in late spring, with a TV campaign following in the summer.
Factor is also getting into the compact makeup category with eight shades of Silk Perfection Compact Make-Up.
“It has a similar technology to Ultimate Finish, but we have done the product in a Factor way,” said Stengel, referring to its sleeker compact, hot-stamped in gold, and to the product’s loftier price point of $6.95.
Factor’s mascara business got a boost last month with the launch of S-T-R-E-T-C-H mascara, a lengthening product. Previously the company only marketed 2,000 Calorie mascara, a thickening formula. Each tube has a suggested retail price of $5.15.
“I am extremely impressed with the new products both from an R&D and a follow-through standpoint,” said Sheri Ralston, cosmetics and fragrance buyer for Thrifty-PayLess of Wilsonville, Ore. “All of the formulations and packaging are nicely tied-in and researched. We cut them back significantly three years ago and are slowly giving them more space.” But while the company is introducing new products, its main focus for nearly a year has been to generate trials of its existing lineup.
In September, the company started distributing a counter tester unit — the Cosmetician Counter Sampling Kit — with a broad range of Factor products that consumers are allowed to try.
Stengel noted that this year Factor will be inserting samples of its new foundation formulas into the kit, which is placed only in accounts with beauty advisers.
“That tester unit really brought in creativity and innovation,” said Long’s Valerio. “We have it in 80 stores, and more want it. Customers want to touch and try the product. This gives them a way to do it.”
Accounts without cosmeticians have been offered sampling programs with trained personnel to hand out trial sizes of lipsticks and foundations.
Many retailers have cited Factor’s aggressive sampling campaigns, which also include heavy couponing, as helping to turn the brand around.
“The tester kit and its sampling program has that whole touchy-feely philosophy that our customer is looking for. I only wish we could have gotten more,” Ralston said. “We will support the brand and its recent efforts wholeheartedly.”