How Aveeno Choose Segments and Perform Positioning

How Aveeno choose segments and perform positioning

Introduction

Aveeno is a skin and hair care product manufacturer and a subsidiary of the pharmaceutical and consumer goods multinational conglomerate named Johnson & Johnson. It founded in 1945 in the United States which has branched all over the world including in the UK by offering a special range of cosmetics made of natural and high-quality ingredients attracts a group of customers who concern about the environmentally friendly and healthy lifestyle. This paper aims to analyse the situation and positioning of Aveeno within the UK market. Firstly, a variety of observations have been conducted in supermarkets, health and beauty retailers and pharmacies nationwide along with a number of assumptions about the segmentation and target market of Aveeno. Then, it focuses on the discussion of Aveeno’s positioning in terms of the marketing mix 7Ps of product, price, promotion, place, people, process and physical evidence by comparing with relative competitors in the market.

Segmentation and target market

The target market of Aveeno is segmented based on demographic and psychographic criteria concentrating on gender, age and lifestyle which conduces to its choice of target market. It is evident that females who are health conscious ranging in ages from 25 to 34 are more likely inclined to purchase natural or organic products (Key Note, 2015). An ecologically aware group of consumers (i.e. ‘LOHAS’) tends to concern about green and ethical issues and prefers spending money to improve personal health (Kotler et al., 2012). Thus, the target market of Aveeno is possibly focused on the mature females in the middle class or above who may be willing to pay a price premium in order to achieve healthy and secure life goal. This segmentation and targeting helps Aveeno to differentiate itself from other beauty manufacturers who have chosen a heterogeneous approach serving a variety of customer groups to secure market share. In contrast, Aveeno has adopted a homogenous measure relying on a special segmentation to seek and occupy the certain market share which is conducive to enhancing the competitiveness in the market. Accordingly, Aveeno may offer its segment with products and service which can meet the needs and wants of them.

Aveeno’s positioning and market mix

As a result of the recognition of established segment and target market, Aveeno has to develop its offerings which aim to match customers’ needs, perception, preferences and behavioural dimension to secure its market share.

In line with the initial observation of the products about the packaging has been conducted in the supermarkets or health and beauty retailers, the containers of Aveeno body lotion and cream with the handy shape and the user-friendly design of pump head helping to keep hygiene are different from other skin care products such as E45 and Neutrogena body lotion. It is also worth pointing out that the prominent colour usage of the containers with creamy yellow and olive green implies a natural and warm sense of the ingredients and a metaphor of the brand message. It is evident that among a variety of products with the similar function exhibited on the shelves Aveeno can easily draw attention from customers particularly females who more likely care about natural and organic beauty products. Conversely, other competitors mainly focus on bright colours or pure white colour which can be seen as a signal of different segmentation and targeting. For example, E45 packages its products with pure white tubes indicating the medical expertise inheritance. Another distinctive design of the packaging is the printing of oats pattern at the left part of each container indicates that the natural ingredients arouse the customer imagination. Using the neutral and natural colours and oats pattern could leave consumers a powerful metaphor for the sense of natural ingredients.  

Within the supermarkets and health and beauty retailers observed, Aveeno took up a large-scale shelf space and leading positioning. The exhibition of Aveeno products focused on the featured products location such as body daily moisturising lotion at eye level followed by other products such as shea butter series whereas other brands may share one or two shelves at the bottom. The unique and unified packaging design of products has created an impressively visual impact on customers.  However, the occupation of sizable space might be associated with the timing of the observation being Christmas promotion period.

Aveeno provides the UK market with its star products (i.e. body lotion and cream) which have been proven to be effective to dry skin or itchy problem. Following earlier observation of its competitive products, it is obvious that the marked difference in price exists between Aveeno and E45 which is a skin care product brand made in the UK. The price of E45 is 12% cheaper than Aveeno per 100 ml on the basis of prices observed on 3 December 2015 (excluding promotional pricing). As mentioned previously, the targeting customers are seeking for a healthy lifestyle and preparing to pay a price premium for the products which can match their preferences and values well. Aveeno has targeted a group of female customers who more likely care about sustainable environment development and personal health improvement with middle or middle to high disposable income. Thus, Aveeno can enhance the loyalty of customers and capture more new customers to some extent if they offer the high quality products made of natural or organic ingredients to established segment.

Another important dimension of Aveeno products helping to strengthen the competitive edge is the brand heritage. The company was founded in 1945 in the United States introducing the Soothing Bath Treatment contained 100% natural colloidal oatmeal, known for its ability to preserve moisture and relieve dry and irritated skin. This allows them to connect to an old customer base, many of whom have developed a strong brand loyalty. Thanks to unique use of natural ingredients and therapeutic heritage, Johnson & Johnson acquired the brand in 1999, which has improved the brand recognition on the global level. The unique heritage of dry, itchy even eczema skin problems treatments has differentiated Aveeno from other competitors successfully.

In order to compete in European market, the quality of products is key to win the competition. Since the ban on animal testing for products sold within the EU came into force in March 2013 (Key Note, 2015), Aveeno persists on no animal tests in accordance with the legislation of the EU and using recycled materials for packaging to help to reduce waste and limit the carbon footprint on earth can be seen as the points of parity (i.e. POPs) of marketing positioning in the EU market since other brands employed the similar methods. However, it should be recognized that the points of difference (i.e. PODs) of Aveeno are unique which is based on the development of its heritage of natural ingredients application and recognition of established health conscious segment, Aveeno can offer the market with unique products made of natural ingredients such as oats and soy. It is evident that colloidal oatmeal may be beneficial to skin moisturizing and sensitization (Bowe and Pugliese, 2014). By comparing with E45 with the similar function of dry or sensitive skin treatments, Aveeno chooses to provide ‘natural products’ to map its positioning. Aveeno does not attempt to position itself as a brand of simply moisturizing and antipruritic products as other competitors, it tries to occupy a secure market place where the certain segment may pour more attention to lifestyle choice.  This is an essential dimension of them to gain more engagement at psychographic level than many other competitors.