1. ExecutiveSummaryWhen itcomes to positioning strategies, brands have to consider three critical issues whichare defining the Frame of Reference, Points of Parity (POP) and Points ofDifference (POD). When the Frame of Reference has been defined with thetargeted consumer market and nature of competition, brands can define the correspondingPOP and POD associations.
POP arethe elements that are considered mandatory for the brand to be a player in aspecific market, which enables consumers start considering a brand along withits competitors. Whereas, POD are the elements that make the brand unique andbrings its competitive advantages. The positioning framework based on POP andPOD will be applied in studying branding practices of the two popular skincarebrands: SK-II and Origins. Notlimited to analyzing the similarities and differentiations in branding SK-IIagainst Origins from the company perspectives, the report also bring to light certainconsumers perceptions towards to the two brands based on our empirical researchconducted among targeted audience.
Thiscomparison is expected to give an idea of whether or not there could be a gapin branding as planned and as perceived by consumers in reality.2. Anoverview about SK-II and Origins2.1 SK-IIBrand SK-II wasoriginally developed by Japanese scientists in 1970. Its very first cosmetics products were launched under thebrand Max Factor Secret Key with Pitera in December 1980, which was laterrebranded to Max Factor SK-II. In 1991, the brand was brought over by Procter& Gamble (P&G) and renamed to SK-II as current. Since then, P&G hasmadeSK-II become the prestige skincare product line of this company. Over more thanforty years of development, SK-II has been one of the leading premium skin carebrand not only in East Asia but also in other large markets like America andEurope.
In 2012, SK-II earned its spot among billion-dollar brands of P&Gwith millions of users worldwide. (P&G, 2012)2.2 Origins Brand In1990, ORIGINS was launched as one subsidiary of The Estee Lauder Companies whichis a global manufacturer for well-known skin care and cosmetics brandsincluding Clinique, MAC, Bobbi Brown, Aveda and Tom Ford, etc. In 1991, ORIGINsopened their first store in Harvard square, Cambridge in the US. Just in a fewyears later, in 1995, they started their first international store in London,UK. At the time Origins celebrated its 10th anniversary in 2000, thebrand was already present in 15 international markets across America, Europeand Asia. Until now, after nearly thirty years of development, Origin hasbecome one of the most popular skincare and cosmetics brands, which is knownfor its return to Nature and commitment to Environment.
3. Pointsof Parity and Points of Difference in brandingA greatbrand is built through right strategies, which can not fail to mention theright segmentation, targeting and positioning strategies. According to theStrategic Brand Management book by Kevin Keller, when deciding its brand positioningstrategy, a company needs to establish its Points-of-Parity (POP) andPoint-of-Difference (POD) to create the right brand identity and brand imagery.A meaningful and targeted Points-of-Difference will give competitive advantageto the brand and strengthen its unique sell point. The associations of PODshould increase the chances that consumers will choose a specific brandproduct.
It is the association that are unique for the brand, stronglyappreciated and favored by customers. (Keller, Apéria, & Georgson, 2008).On theother hand, there are so many brands playing in the same categories.
Hence, a companyneeds to associate several perceptions towards its the competing brand in orderto navigate consumers to the most favorable brand for them. This makes Points-of-Paritybecome mandatory for the company and the consumers. There are three differenttypes of POP: category POP, which are associations that the customers considermandatory for a brand to fit in the specific market, competitive POP that areassociations that aims to constrain a competitor’s points of difference and POPassociations that are shared between the company and its competition (Carlsson , 2012)Throughits positioning strategy, a brand informs consumers what it stands for.Therefore, POPs and PODs are specific to the attributes, benefits and uniquevalues of the brand. The three means-end chain of attributes, benefits andunique values provides a positive resolution of imperatives and amplifies thepsychological involvement of consumers.In thisreport, we will discuss about POP and PODin branding SK-II against Origins, based on the observation to both brandsas well as the understanding of targeted consumers’ perceptions towards the twobrands in reality.
4. Comparison of POP and POD between SK-II andOrigins4.1 Points-of-Paritybetween SK-II and OriginsAddressing Skin Concerns -Signs of AgingWomen,especially in the age of late 20s to 40s generally suffer great skin concernswith various signs of aging, including the skin texture, skin elasticity,wrinkles, uneven skin tone and skin radiance. Therefore, they look for skincareproducts that can help improve their skin appearance to get back the feeling ofyouth, beauty, consequently their happiness and confidence. Competing inskincare category, and targeting this group of consumers both SK-II and Originsoffer the benefit of addressing those skin concerns to users. SK-II hasremarkable anti-aging series while Origins also commits to bring a more lastingyouthful appearance with their product lines. Consisting of NaturalIngredientsBothSK-II and Origins are rooted from with same promising value of naturallyderived ingredients in their skincare product. For SK-II, it emphasizes on theuse of Pitera as the main ingredient, which was developed by Japanesescientists.
After years of research, finally in 1970 they found Pitera as the best beautyingredient that can help address all theskin problems. Pitera is basically a natural by-product of yeast fermentation.It contains amino acids, minerals, vitamins, and organic acids, which is provento effectively improve skin lucency, decrease wrinkles and lighten dark spots.
SK-II keeps developing its products through more scientific testing andinnovation. It tries to find different feature of Pitera and collaborate itwith innovative technology to create the new product line.Meanwhile,Origins develop their products with more than 600 kinds of plantation forexample Anogeissus, Apricot, Chamomile etc. from allover the world. The brand also tries to keep searching to discover more naturalingredients that can help for caring the skin.Independence to its parentcompanyThesetwo skincare brands have stores operating globally and even keep expanding tonew countries and regions.
However, not many know that either SK-II or Originscomes from very popular parent companies. SK-II is owned by Procter and Gamble(P&G), while Origins is owned by Estee Lauder. This might be because thebrand image of the parent companies are totally different from their target ofbrand positioning. For SK-II, as it positions itself as a premium skin care, itmight devalue its brand image if it is associated with P&G. Since P&G,as the parent company, is worldwide known as a consumer goods manufacturer, itmight confuse SK-II customers in perceiving it as premium goods. Also forOrigins, as we know Estee Lauder, its parent company, is a prestige skincare,makeup, fragrance and hair care brand which image does not match with the ideaof minimum natural green beauty that belongs to Origin. That is why neitherSK-II nor Origins finds any advantage in associating its brand with thepopularity of the parent company.
4.2 Points-of-Differencebetween SK-II and OriginsBrand PromiseAlthoughboth SK-II and Origins resonate the natural ingredients as their value, thebrand promise to their customers are different. SK-II communicates about skintransformation, promising a clear crystal skin as the result of its signatureingredients, Pitera, that has been through the test of time. The essential skinnutrients contained in Pitera works in balancing the smoothness, clearness,firmness, radiance and fine lines of the skin over the flow of the time. On theother hand, Origins’ promise is emphasizing on the well-being of your skin via thesense of purity.
Moreover, the focus is not only in skin caring but also in thewell-being of planet. That is why Origins also put a concern on manufacturingthe products with an eco-friendly practice and recyclable packaging. It createdthe first cosmetic container recycling program in the industry after that theybecome the first prestige natural skin care brand. It also ensures thecustomers that the products are 100% made from organic ingredients and freefrom artificial or chemical materials. Caring the skin while caring the planetis the core promise of Origins to its customers.Reasons To Believe (RTBs)SK-IIand Origins have different RTBs to convince consumers about their productbenefits.
SK-II is using PITERA, their unique ingredient with a whole story of exploration, experimentationbehind. The Japanese scientists discovered the beauty secret when havingobserved workers at a sake brewery where the elderly workers had wrinkled facesthat showed their age, but their hands were smooth, clear and younger lookingfrom years of submerging their hands in the fermented yeasts. In the followingdecades, the formula of Pitera continuously evolves through more in-depthscientific testing and innovation. As a result, SK-II skincare productsare believed to transform skin condition to achieve smoothness, clearness,firmness, radiance, and fine lines over flow of the time. Originsis using varied types of natural ingredients which is scientifically tested toproduce extracts which are believed to deliver high performance to theconsumers. For example, their best seller product, Anti-Aging Power Serum, usedAnogeissus plant which comes from Africa. This kind of plant is believed andstudied producing fibrillin, the protein which gives skin youthful firmness.
Brand Communication CampaignInterms of communicating the brand promises to the customers, SK-II and Originsobviously show different approaches. In mostof SK-II’s advertisements, the brand tends to employ female celebrities who aregenerally perceived as the definition of beauty by majority. Based on theregion where SK-II is targeting, in accordance, the advertisement will featurethe local female celebrity. In Western countries, SK-II introduce CateBlanchett as the face representative for the western markets. The objectives ofsuch approach is to deliver the impression of SK-II’s ability in effectivelygenerating crystal clear skin. SK-II localizes the idea by referring to thedefinition of beauty which the customers are familiar with, so that the customerscan easily find relevant and and well resonate themselves with the promisingresult of using SK-II products. Furthermore,SK-II always put focus on their targeted customers in communicating theirvalue.
The campaigns done by SK-II always bring up woman issues such asempowering women, inspiration for woman and transforming social constructiontowards woman. One of its famous campaigns was “Change Destiny”. The campaignpromoted the message that every woman should be able to feel proud of what theyhave achieved and who they are, regardless of age and they should not beconstrained by artificial timelines and expiry date labels placed on them bysociety. This campaign helped the brand to increase awareness in the China marketand boosted brand equity from sixth place to second in the skincare category (Long,2017).
Originsas it claims to be environmentally friendly products for skin, tends to displaythe nature and the plantations it uses as product ingredients on the advertisements.That is why we can find only few advertisements of Origins that are displaying humanface. All the advertisements display the rich of nature in various kinds ofplantation which people may not even familiar with. The main idea that thebrand aims to delivery is treasuring the skin nutrition from nature’s wealthwithout causing any harm to the nature. It tries to address the concern ofbeing responsibility to the nature while consuming a product. While the planetserves the needs of human beings, it is important to keep the planetwell-being. Through this communication approach, Origins is largely perceivedas an ethical brand.
Consistently,Origins always brings up the green issues in its marketing campaigns. Forinstance, one of their campaigns is about planting trees in purpose of keepingthe air and water clean, especially restoring the areas damaged by wildfires.Through this reforestation project, it aims to provide proper food and housefor tons of wild creatures. In partnership with the American Forests’ GlobalReLeaf and other local organizations, it aids reforestation projects around theworld.
Along with the campaign, Origins increase its brand awareness throughendorsement by celebrities as well. However, the celebrities who endorse Originsproducts tend to be those who is actively involved in green campaign andenvironmental concerned activities. Oprah Winfrey who is also known to be asocial influencer including in environmental issues, in the early 2000s, sheonce endorsed one of Origins products. Given Oprah’s influence in her heyday,sales of Origins Ginger bath products soared, and Ginger Souffle remains one ofthe top sellers over a decade later (Kahn, 2015)Competing segments &Channel Distribution Interms of competing segments, SK-II chooses to place itself as a high-end brandwhile Origins more likely serves for the mass market. As a result, we findSK-II and Origins use different channel distribution besides their exclusivestores. For SK-II, it casts as a high-end department stores where we can find itstanding side to side with luxury brands such as Shu Uemura, Yves SaintLaurent, and Estee Lauder.
The price of the products is also placed in the rangeof premium products’ pricing. SK-II also supports its premium brand positioningby providing high-class customer service such as beauty lounge where thecustomers are treated exclusively based on their skin type and needs.On theother hand, Origins chooses to have its products distributed through health andbeauty stores to massively reach its targeted consumers. Through positioningitself in the mass consumer brand level, Origins has more likelihood to gaincompetitive advantage for it offers quite exclusive “green value”.
Customersmight find it as an additional value when they get the quality and theeffectiveness is as good as other products, while at the same time feel likehaving been contributing to environment protection. As international level,there are still not many remarkable green products, Origins might stand in thesame reputation with brands such as The Body Shop, Bath & Body Works. 5. Consumers’Perceptions towards SK-II and Origins BrandsIn theabove part, POP and POD in branding by SK-II and Origins from the companies’perspectives have been discussed. The companies would definitely want theirchoices of branding to be properly reflecting as planned when it comes toconsumers’ mind. However, reality is not always ideal. In order to understandconsumers’ perceptions towards SK-II and Origins brands in terms of their POPand POD, an online survey among defined target consumers has been conducted. Agroup of 50 female Korean consumers aged 18-45 years old with a majority of age25-35 (50%), who have bought and used skincare products at least once in thelast 6 months, have been asked about the brand awareness, imagery, andpositioning (See Appendix 1 for questionnaire details).
The survey is limitedin Seoul (Korea) area, where both brands are available. The findings arediscussed in the following part.SK-IIenjoys very high brand awareness with up to 90% respondents having heard of thebrand. The most prevalent touch points include TV commercial advertisements (58%),SK-II stores in department stores (48%), and online ads (38%). SK-II isperceived as a premium brand by 54% respondents which is matching with thebrand’s strategy.
Its perceived point of difference are reflecting via top 4 attributes: premium, high performance,care for women and consequently, expensiveness. It can be seen that those differentiationattributes are not only related to the segmentation strategy, but at the sametime associated with product functionality and emotional connection, yet whichare not at the significant strong level. Moreover, in consumer mind, SK-II isunlikely a brand which is natural-based, or inspirational enough, although “inspiration”is the specific attributes, besides care for women is likely to be deliveredintentionally by the brands through itslatest communication eg. Change destiny. On theother hand, Origins’ brand awareness is lower among respondents with only 70%of them having heard of the brand, mainly thanks to its presence at stores (48%)and online advertisements (24%). They are perceived as more likely a massbrand. Also, there is only 60% of respondents find Origins’ differentiation toother skincare brands, compared to 76% of SK-II.
However, Origins’ points ofdifference include: Natural (74%) and Care for environment (36%), which highlymatches with the its choice of branding strategy.6. ConclusionBasedon the findings above, it can be concluded that between the two brands, Origins is likely more effective in registertheir brand imagery and positioning based on POD and POP in consumer mind.
However,given the fact that up to 40% consumers do not find Origins, as a total brandstay different from other cosmetics brands, Origins brand may investigate andconsider adjusting their approach of POD in the context that natural-basedproducts and “green-concept” are becoming saturated to consumers because ofbeing used by a number of brands. This concern is even more obvious if puttingin Korea market specially where Innisfree (by Amore Pacific) or NaturalRepublic are Prominent natural-based brands. Meanwhile,SK-II are successfully positioning themselves as a premium brand, however, moreefforts could definitely be invested in order to strengthen the key attributesof both functionality and emotion, which did not come out as strong as expectedin consumers’ perception.