Benefit Cosmetics – Change Case Study

Executive Summary

            Benefit cosmetics will be launching a new product line this coming year. This line of products within the launch are all for one product category. Particularly this category has been mainly controlled by one other cosmetic brand. The size of this launch will change the face of Benefit cosmetics. The organization brought on new employees specifically for this launch. Compared to other launches that Benefit has accomplished there has never been a team strictly for a specific product launch. The departments within Benefit are in silos, meaning that they operate within their own parameters and lack open lines of communication. All departments have been now forced to operate as a team. Out of the necessity of the newly open working environment, the work flow has increased. Another factor of this open working environment is the proprietary flow of ideas has also increased.

Problem

            The preparation for this launch has been in the works for the past 18 months. Each department has developed new content in order to usher this massive product launch. Departments that, previously, had not communicated openly with each other are now developing new strategies in preparation for the launch. One of the biggest changes in organization would be the massive influx within the digital marketing department. Benefit is relying on bloggers, and vloggers to really push these new products. The organization is also focusing on visual merchandising, hosting events, and including a pre-launch plan. Marketing in a whole has also dealt with an environmental change with their strategy and increase in department budget. The longevity of increased revenue that will be generated by the 48 new brow products will also need to be maintained. These products will need to carry Benefit into their expected sales quota as there is no contingency plan if the whole line fails to produce revenue. 

Method

            Benefit has the luxury of having Louis Vuitton, Moet, Hennessy (LVMH) as their parent company since 1999. Many cosmetic organizations are not as fortunate to have such a deep-pocketed backer. How can Benefit sustain such a massive product launch into a relatively new and unknown territory? Benefit being owned by LVMH affords them the opportunity to be adventurous. The cosmetic organization that currently has the only product line that Benefit is pursuing is relatively small and can only manage to keep stock out of necessity. Cosmetic tutorials are trending in social media. Benefit calls these bloggers “Influencers” and they recognize how important they are to the overall success of products in the cosmetic industry. A traditional billboard might be viewed a few hundred times a week but a blogger will have a few million views a day.   

             As stated before the departments within Benefit are communicating openly for the first time. The work flow has increased but so has the ownership of ideas. Once an idea is presented each department is eager to lay claim on it and any following production of said idea.  The ownership of ideas and the unwillingness to contribute internally is a sign of resistance (Block, 2011). Employees recognize that there has been slightly higher tension during boardroom meetings when the discussion of ideas is presented. The departments struggle to hold on to their old identities, while dealing with new identities within the new organization (Beer, 2007). 

            There are possibilities that the product launch is not as big of a success as predicted. In preparation to the launch Benefit has flown Influencers to New York, Las Vegas, and Hawaii. Leaning so heavily on Influencers could be an extremely smart move or a move that provides no follow through. Another issue that could possibly arise is the fact that there are 48 additional products that the counter employees and counter managers need to be experts on. The new product towers will have a DIY amenity called the “play station”. The play station will help consumers by systematically identifying the issues that they are having and then providing them with a solution. Testers will be on the play station only and the individual products will be placed below. Benefit has also laid ground work for assisting consumers and they are: identify her concerns, determine her goals, and provide a solution to her problems. Benefits mission is to empower women and live their DNA that was established by Jean and Jane Ford. Benefit’s motto is: laughter is the best cosmetic.

Six Pillars of the Benefit DNA

  • The sand Francisco scene from the 70’s, all about pushing boundaries and being innovative
  • Fake-its and instant beauty solutions, unique products that are instant gratification products that are easy to use and basically like a problem solution type of product
  • Creative packaging and irreverent names, Benefit is identifiable by the packaging and names of things
  • The duality of bold and girly, empowering women and pushing the limits of being accomplished all the while doing it while looking good
  • Brow bars, founders said that eyebrows are the frame to the face, maintains loyalty, and benefit is the largest employer of aestheticians in the entire world, in 50 countries.
  • Laughter and fun, everything has to be fun

            The product category currently only has one other competitor involved in this product line and that is Anastasia Beverly Hills. Benefit aims to attack all aspects of this category and dominate the market. In preparation for the launch Benefit will host multiple product samplings and flash sales at various locations.  Benefit’s vision is to be the leader in instant brow solutions. They also have a four-tiered strategy for communications. The first is to fuel and engage the conversation around the 48 products to be launched. Secondly, it is benefit culture to disrupt the norm and provide consumers a glimpse at the transformation that is possible with the new products. Third, Benefit intention is to meet their consumers needs via clear product communication offering a solution to any dilemma. Lastly, Benefit will educate the consumer how to obtain perfection in this category. 

There is a 6-week launch period and every department has a set goal. Benefit will have to sell the forecasted amount during every launch. Dependent on the product there is short-lived effect to the company. An ‘A’ launch of 48 products vs 1. So in essence this is like launching a whole new brand. The organization only operates with at most 200 products, this new launch will take the brand to total of 248 products. The profitability Benefit needs will be a large undertaking because the company has never operated above 200 products previous to this upcoming ‘A’ launch. There are ‘B’ and ‘C’ launches but nothing with a ripple effect the size of the ‘A’ launch. Having to treat this launch like a whole new brand forces all departments to create certain strategies that are far more elevated and more advanced because of the sheer number of products that are in the launch. The category that all 48 products are going to be in is somewhat of a small category that is controlled now by only one company on the market.

            Benefit will host four different phases of their digital marketing plan. Phase one will be the introduction of the products. Phase two will drive the excitement about the products and include tutorials and host an Influencer meet and greet. Phase three will deal with solving brow dilemmas that consumers face and provide them with solutions. Phase four will be hosting a Facebook live session with a cosmetic expert and will also assist in the correct ways shape, fill, and style looks. Benefit will also be using a distinctive hashtag so their loyal consumers can follow the progressions of other consumers. Digital advertising has been given three times their usual annual budget in order to ensure the success of the massive launch. The primary focus will be awareness of the products, ensure consumer needs are met by the products, provide instant solutions at a lower price, and finally to convert the consumer to using purely Benefit products only. Benefit also has a timeline where flash sales, in-store as well as online, and influencer appearances in major market areas. 

            Benefit’s motto is: laughter is the best cosmetic. Jean and Jane wanted to create an environment that was fun and acutely transparent. Their approach was from a different perspective. The first boutique was a locker room type setting so women could feel more relaxed. Fundamental ideas are what made Benefit successful. According to Beer (2007), organizations that provide a democratic environment usually give people less to lose, thus employees are more open to change. Like in all professional environments benefit employs systematic reviews. These reviews cover personnel, profit margins, product sales, and various other aspects of Benefit. 

There is already a sense of urgency with the employees that were interviewed pertaining to this launch (Kotter, 1996) Benefits competitive situation will be relatively weak since their strategy now is filling a void in product supply (Kotter, 1996). All departments, for the most part, are making considerable effort at communicating between each department. The timeline that will accommodate upcoming press events provides the employees that will be pushing these products with short-term wins before the entire collection launch in June (Kotter, 1996). The education department will be primarily responsible for harboring and providing the new approaches necessary for this launch (Kotter, 1996). They will also be at the helm of providing instructional material for the additional employees needed for dealing with the influx of business that is forecasted after the launch. 

Analysis

Data has been collected from both printed sources and employees within the organization. The interview data amongst the six interviewees remains conclusive. All interviewees provided consistent information when posed with the question as to how this launch would change Benefit cosmetics. The answers differed some but the attitude towards the launch remained positive and also a sense of excitement. Cosmetics are all about following trends. Advertising also plays a vital role when a new launch is expected to roll out. All cosmetic counters in department stores seem to all blend with each other. Another question that was asked was how Benefit plans on standing out above them all while having a major product release. The answer was advertising strategy, both through traditional means of advertising and relying heavily on social media outlets.

An interview with the Director of Education, Courtney Sorah-Reyes, she spoke about how this particular launch will force strategy to be focused more on long-term goals. She reiterated that Benefit has had massive success with short-term product launches. The fact that these products will be ingrained into the permanent Benefit catalog will be the real test of whether their strategy change has been a triumph or a failure. Sorah-Reyes cited an article from the (National Purchase Diary, 2016) stating that eyebrow products continually outperformed any other category in cosmetics. She believes that her organization is on the right path in order to achieve dominance over the brow product category. Sorah-Reyes also mentioned the openness of internal department communications. She stated that currently work flow is at a strong pace but is still reserved as to whether or not it will maintain its current openness. 

Change Model

As mentioned earlier Benefit has the ability to broaden its scope of marketing due to themagnitude of their parent organization. Jean and Jane incorporated the “DNA” when they first started the company in the 70’s. The brand is known for throwing parties indepartment stores just to attract customers. The salespeople are encouraged to stopcustomers walking by with enticing them with party favors and offering freedemonstrations.Benefit is unique because their informal organization somewhat acts as its formal as well. The company represents a carefree, woman first lifestyle and culture. The closeness thatall employees seem to have makes them standout above other neighboring cosmeticbrands. The fun names and pictures on their products seem to extend on the people whowork for Benefit. Individuals should embrace the Benefit lifestyle while maintaining a strong work ethic. The term “work-hard, play-hard” seems to best embody the employees of Benefit.   

SWOT Analysis

            Benefit cosmetics is a worldwide leader in cosmetics and known previously for their brow bars. Having their name already associated with brows gives them a step up on the current competition. Benefit also has the backing of a major conglomerate who have shown their happiness with what Benefit as an organization brings to the table. Having such a respective backer gives Benefit the freedom to explore unchartered territories and the ability to take risks that other cosmetic organizations can not. 

            Benefit is stepping into a realm already controlled by a revered cosmetic brand that has been strictly in the brow business for sometime now. Their competition already has a strong customer base and loyal followers to their established products. Benefit will step in as the new kid on the block in this respective category. Assuming that the marketing forecast is accurate Benefit will become the brow authority. 

            When expanding a business there will always be more growth by current employees and more opportunities new employees to step in. Benefit will also be presented with ample opportunities if the 48 new products excel on the market as they are expected to do. The separate departments within the corporate field of Benefit have already experienced the wealth of knowledge that can be shared when communication is free flowing between them. Benefit already hosts the top selling mascara (They’re Real Mascara) in the world, with one being sold every 10 seconds. The expansive edition of brow products will only cement Benefit as a top contending cosmetic company in the world. 

            While Benefit enters in this new era of products and new openness of business communication within departments, the launch has yet to take place. All employees really need to be on board with the new products. Education on 48 new products can be stressful on some employees. The education department must make excellent resourceful use of time and material so the counter employees are not left in the dark. 

PEST Analysis 

            As with most large organizations the CEO will need to ensure that the openness of the organizations does not fall back into idea grubbing as they were before. The general managers on each continent will have to maintain positive control on numbers of products sold and also, which products are trending the most in their respective territories. All of these numbers will need to be antiquated as to ensure no loss of profit due to product placement does not take place. 

            As stated earlier, Benefit has the incredible luxury to be part of a very large conglomerate. This is not to say that economic portions still do not play a vital role in the interworking’s of Benefit’s finances. The increase of revenue that is expected form the new 48 products and the expansion of the new category need to have longevity in order for Benefit to compete in the market. If the longevity of revenue is not maintained the whole product line could be scrapped and the company would be out millions of dollars. 

            The cosmetic world is a social phenomenon in that the majority of sales now are expected to be spurred on by social media influencers (Fine, 2016). Social patterns are followed closely by both cosmetic corporations as well as influencers. Trending cosmetics can spike revenue for corporations and can also lower others (Fine, 2016). Benefit is also launching a gratis engine as a way to entice their employees to partake in extended online training sessions. During these online classes the employee will learn valuable knowledge about products, product, placement, and product makeup. 

Conclusions and Recommendations

            Benefit must maintain an open communication network within their corporate departments. Education should be disseminated down from the education team directly to the counter managers to ensure appropriate training is distributed to the employee. Key influencers should maintain constant feeds to their followers to maximize the number of consumers reached. There should be an open line of communication with the counter managers so they are able to provide the education team with valuable feedback from consumers. The marketing department should be transparent with their intentions so all parties are able to participate in future public relation events. The Benefit employee must buy in to the new brow products and be able to educate the consumer on differences and product makeup.

Recommendations

  1. All Benefit employees must be on board with the CEO and his view for the future of Benefit. 
  2. Employees should look for the bright spots (Heath & Heath, 2010). The adjustment to the open communication and the new strategy concerning the growth of benefit should be avenues of education for the employee. 
  3. The gratis engine should be fully functional to encourage employees to gain advanced knowledge on the 48 new products. 
  4. Maintain open lines of communication instead of falling back into the rut of complacency. Harboring ideas serve no value to Benefit cosmetics, education directors, counter employees, or consumer. 
  5. Host multiple influencer events that allow more consumer interaction 
  6. General managers should have a direct contact with counter sources as to ensure trending products are kept in stock and all employees are knowledgeable on popular products. 

Next Steps

The client, Courtney Sorah-Reyes, can meet with the General Manager of North America, CEO, and fellow directors to discuss the findings of this report. 

  • Disseminate information from each department into a communal working document
  • Display each departments schedule openly so all each department has an opportunity to attend events
  • Have the counter employees in for a focus group to discuss what changes they would like to see implemented
  • Have a designated employee to ensure department communication remains open
  • Educate each employee on the importance of the upcoming launch and what they could do to secure its success
  • Instill the Six Pillars of the benefit DNA in all employees

References

Beer, M. (2007). Leading Change. HBS No. 488-037. Boston, MA: Harvard Business

Publishing. Retrieved from https://cb.hbsp.harvard.edu/cbmp/content/44943053

Block, P. (2011). Flawless consulting: A guide to getting your expertise used (3rd ed.).

San Francisco, CA: Pfeiffer Publishing.

Fine, J. B. (2016, February 19). The power 25: WWD beauty inc’s first annual ranking of

beauty’s strongest brands. Retrieved April 06, 2016, from http://wwd.com/beauty-industry-news/beauty-features/power-25-beauty-brand-ranking-10349629/

Heath, C., & Heath, D. (2010, February 1). Switch: Don’t solve problems – Copy success.

Fastcompany.com.

Kotter, J. (1996). Leading change: Why transformation efforts fail. Harvard Business Review.

Boston, MA: Harvard Business Publishing.

National Purchase Diary.  (2016, February 03). U.S. prestige beauty industry grows 7 percent in

2015. Retrieved April 07, 2016, from https://www.npd.com/wps/portal/npd/us/news/press-releases/2016/us-prestige-beauty-industry-grows-7-percent-in-2015/

Worley, C. G. & Lawler, E. E. III. (2006). Designing organizations that are built to change. MIT

Sloan Management Review.

Wyman, O. (2003). The congruence model: A roadmap for understanding organizational 

performance. Delta Organization & Leadership. New York, NY: Oliver Wyman.