The report is about evaluating three websites which are Bebe, Shiseido and Mary Kay within two topics in which online customer relationship management and methods of sustaining a competitive advantage. The purpose of this study is to evaluate what is the customer relationship management (CRM) and competitive advantage in each website based on relevant business literature, articles and journals, etc. This report will provide critical on information that finding of these three websites and discuss about what is strength and weakness. The comparison among these three websites was based on the analysis of their features and strategies to implement customer relationship management and competitive advantage. All these three websites fall in the category of fashion and makeup.
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CRM in term of E-Business called Electronic Customer Relationship Management. Organizations are becoming customer focused intensively and customer demands are the priority of organization but the criticality is to meet the expectation of customer and the retention of their loyalty which have become more difficult in today’s world (Disney, 1999) The difficult part of e-business is to get the customer trust on his first time purchase. As all customers have security and safety needs so they seek a reliable company to do business. The situation is different in clicks and mortar store like Tesco, Sainsbury, PC world and Currys etc because these store have physical existence which build customer trust and confidence about organization. E-CRM sets the strategies which are the mixture of business & marketing activities as well as technological process (Anton 1996; Anton & Hoeck 2002).
Shiseido Cosmetic is one of the largest industry sectors, when compared other competitors. Shiseido has high influences in Japan, Europe, America and Asia/Oceania market that hold the leading position at 11% market share (Datamonitor, 2009). This shows that Shiseido Company have better chance to control cost by negotiate with supplier even able to drive the cost down by threatening to switch its supplier if necessaries, and then Shiseido can offer better offer than its competitor.
The Shiseido.com is an interactive website with light music gives a pleasant look to the website. The product presentation is flash based as well as nicely categorized but for the shopping from Shiseido customer needs to make an account first on the website. Shiseido has various stores in different countries. The Shiseido site is attractive in the sense of appearance and the product display but customer cannot purchase product from the website online. The reputation for reliability of any website can be analyzed by the website visits or hit counter.
Mary Kay was founded by Mary Kay Ash 1963; she has started her business with an idea to make more beautiful to women. She has tremendously skills of dynamic speaker, inspiring motivator and visionary entrepreneur, which lead 1.8 millions independent beauty consultants in more than 35 markets worlds wide to their ways of success. Furthermore, Mary Kay Ash Charitable Foundation, started in 1996, the organization is nonprofit establishment that provides funding for research of cancer that affecting women and is dedicated to putting an end to violence against women by supporting women’s shelters and educational programs.
Mary Kay is another cosmetics and Beauty Products website which is excellent in appearance. Its wide range of products is listed nicely in different categories. The history of company is nicely presented and information about its 35 countries is being presented. It nice and interactive features of flash make the website more interactive. The main feature for customer is that this website has online selling feature by their beauty consultants. The problem which customer may face is their long order processing time. The excellent thing in respect of competitor is they have virtual Makeover which is an interactive tool to get customer attention and give a chance to try what customer likes. Mary Kay uploads the pictures in social responsibility section which gives a good impact and social image of company and help customer to build trust on company.
CRM is incomplete if we remove the word feedback from it. Mary Kay has ensured its presence on Facebook, Twitter, YouTube as well as there is its own blog too where different articles and latest development upload by company on regular basis, these all communities and blogs are very helpful in getting customer response as it is very important to get customer feedback nowadays in digitalize media because customer have a lot of choices now. There is another social foundation named Mary Kay Foundation is there to serve the cause of women cancer and domestic abuse. There is a separate research and development about makeup. Most customer have sensitive skins and skin diseases so to cater the needs of makeup for those people qualified experienced professionals team work s on that objective and post their research on Website. The free consultation, free gifts and sample options are there to get the confidence of customer on product.
There are some analyses of the visits on the three websites by customers.
Figure Comparison of three website hit counters and changes in it. (Taken from Compete.com)
In year 2006, Bebe launched ClubBebe for its customer, there was an online community being formed which had almost 1.7 million reported in 2008 (Data monitor, 2009). ClubBebe can initiate the customer relationship management by using customer lifecycle (Dave Chaffey, 2002). Every customer first purchase, they can sign up for the ClubBebe to collect the point. Online customer also takes points on their purchase. This strategy can be helpful to retain the existing customer. On every 250 points customer will get $10 discount coupon (Bebe, 2009). In addition Facebook is one the tool of CRM which helps Bebe to get the new customers and strong the brand image and position by regular updates to the Facebook user it is one one of the strong customer relationship management channel of bebe because there are over 80’000 fans (Facebook, 2009). Facebook is a social network that customer can update news, trend fashion, watch fashion show and occur events. Moreover, they can share the opinion and that opinion will be feedback to the company.
Form the ClubBebe, company customer profile and customer behavior data (www.is4profit.com, 2010). These can attract the old customer to buy a product from Bebe regularly and use their bebe club card to collect the point. Every time that Bebe release new product, there are new customer increase in ClubBebe as well. For the customer who signs up from the Bebe’s website, the company will send the update news to them by e-mail. This is the easy way and very fast to communicate to their customer. Adding up, Bebe store online has part of customer reviews that is the distribution channel to motivate customer buy the product.
According to Reichheld and Schefter (2000) noted that “but if you can keep customer loyal, their profitability accelerates much faster than in traditional businesses. It costs you less and less to service hem”. To increase brand awareness to become the brand loyalty, Bebe had develop their advertisement to increase customer acquisition and retention. During fiscal 2009, advertising expense were $27.5 million that is reduce from previous year were $31 million and year 2010, There is an option to purchase online on Bebe while there are classification through price range of products. Bebe attend to continue to reduce advertising expense but not on the bebe.com (bebe, 2009). Therefore, bebe.com may use these three characteristics to reduce advertising expense and can be achieve customer relationship management that is magnetic, sticky. Retention and elastic extension adds more promotion and making attractive site to acquisition of customer who love online shopping (Dave Chaffey, 2002). Keeping customer who once purchase by providing membership card and persuade them to be a regularly customer.
According to Datamonitor (2009), Mary Kay has several of diversity of products in order to capture multiple consumer segmentation. The products lines in six categories are over 200 premium products such as facial skin care, cosmetic and etc. Mary Kay also has high international presence over 35 markets worldwide, causes high brand awareness and loyalty. This provides Mary Kay ability to withstand any setback and leads to stable revenue growth.
Mary Kay website has many features keep attractive looks that has advantages over competitors, for examples; Commercial advertise that is on YouTube, Social networking as community advertise on Facebook, e-catalog on the website that tells most recent update products and services with price included and furthermore, Mary Kay virtual Makeover that give consumer virtual makeup experiences, it’s give you simulation of ladies with makeup in your own personalize color. These features are considers advantages over competitors’ websites that didn’t have these features. Mary Kay was ranked 7th in customer loyalty (Brand Keys, 2009). This tells that Mary Kay has succeeded create bonding with consumers that resulted more emotional rather than rational that will affected purchasing decision.
In 2004, Mary Kay has improved its IT infrastructure which resulted in creating three separate IT divisions consists of E-commerce, Supply Chain and Back-Office support. Mary Kay’s IT policy is to leases all its IT equipment in two-year time to keep its technology current, then hired Maryville Tech to implement its business service management planned(Halley, L., 2007). All these efforts that Mary Kay put in is to supports its sales consultants in over 30 countries to receive the same standard and more efficiency in electronic transaction of supporting its supply chain process (Richard, G. 2004).
Mary Kay has manufacturing plants located in both US and China. In order to achieve cost strategy manufacturing in China served the purpose of reduced laboring cost and maximizes production output to maintain growth of business in Asia-Pacific region. US plants has registered by FDA and ISO9001 approved in China to meet the quality desired. Differentiate of Product quality, Mary Kay has superior quality assurance team to perform over 1,000 stability studies on products, over 100,000 of analytical measurements of products and packaging and over 300,000 tests on ingredient and finished goods (Mary Kay Quick Fact, 2009).
Shiseido differentiates itself by blending its product of Asian and western together to gain advantages in regional. One of its challenges, Shiseido has high reputation on high quality product made (Shiseido, 2009). Shiseido has high distribution channel also strong brand marketing that increase consumer’s loyalty. Then Shiseido becomes significantly in the world market as it can see by acquire this brand in the United State and Europe because of its unique brand stories and their own heritage (Venture Republic,2010).
Heidi Manheimer, CEO of Shiseido in US, she defines Shiseido as “high quality, high image, high service and its rooted in the Japanese Culture.”. She said she first analyze the entire brand in every product then make sure the company is focusing in the right direction, then Shiseido awarded as 4th Skin Care product in US. These shows that Shiseido strategies were to focus in product differentiated and product developing that resulted in its competitive advantages (Fine, Jenny B., 2009).
Moreover, demand of cosmetic are mostly from 40 to 70 ages (DataMonitor, 2009). This means that there are opportunities to provide product or service in this aging market group. Shiseido Company using this opportunities to gain some more profitability and meet what customer want which is different focus group from competitors.
The brand engagement, brand boarding, and brand loyalty procedure of consumers is more sensitive in emotional than rational all of this is become more significant. In 2009, Shiseido customer brand loyalty award is 55th rank, which up level from 67th rank in 2008 (Ranking the brands, 2009). Consequence, this rank provides evidence that Shiseido focus on building customer advantage. Then it will be bring high customer value and satisfactions, which guides to customer highly repeat purchases and finally to high profitability of company (Kotler & Keller, 2006).
Bebe.com has been online since 28 October 1995 worldwide its traffic ranking is 966 the average number of page views per visit is 9.6 in Canada, Mexico and USA. (dataopedia.com). Bebe compete a distinctive line of contemporary women’s apparel and Accessories While the “company attracts an audience, its target customer is a 21 to 35-year-old woman who seeks current fashion trends to suit her lifestyle” (Morningstar Equity Research) Bebe internationally licensed stores are available in Egypt, Indonesia, Israel, Malaysia, Singapore, Thailand, and Arab emirates (bebe.com).Women retail Industry trend analysis .Below is the analysis according to the Porter’s Five Forces, model which helps to understand the trend of the women retail fashion industry (webuser.bus.umich.edu)
Industry Rivalry (High)
Number of competitors
uneven market shares
Buyer Power (High)
Low switching cost
Limited product differentiation
Supplier Power (Low)
More suppliers than produces
Low information/ switching costs
Barriers to Entry (Low)
Less capital requirement
Non-existent exit costs
Threat of Substitutes (High)
Relative price/ quality of substitute products comparable
bebe Competitor’s Analysis
According to the wikinvest.com bebe annual sale is more than Wet Seal’s but less than both guess? And Express. Wet seal and bebe they both sell products for specially females but guess? And express target both male and females.
Gross Sales ($MM)
Net Income ($MM)
Bebe stores, inc. Announces its Partnership with Titan Industries, in year 2009 which enhance its competitive position (allbusiness.com). Bebe website based on strong features, and attributes. Online services, cheap rates and quality product enhance bebe competitive position. To sustain its competitive advantage bebe has been introduced strong information system and customer relationship management system for example it has been introduced bebe club card and customer tracking number system through which company understand buying pattern of customer. (www.bebe.com) In the light of research we can say that Bebe have a strong quality control and distribution system in which merchandise marketed under the brand name of “bebe”, “BEBE SPORT” and “bebe O” A computer based design system which is used for the production and product development process also enhance its competitive position (Sec.edgar-online.com).
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Mary Kay’s price should be adjusted according to domestic competitors and consumer buying behavior. Product research and development should be focuses on different region according to consumer behavior and favored. Mary Kay should do better in e-commerce if there is internet purchasing or E-Shopping in the website. However, Mary Kay does made a good presence in social cosmetic industry, it will do even better if it use cost quality theory which will preserved its quality production position in the market. Shiseido’s website should be develop as an e-commerce business rather just as advertising its products, because these day this ecommerce market are growth up rapidly as Shiseido can increased its distribution channel to gain more market share. Cost leadership is one of competitive strategy that Shiseido should use, if Shiseido has a ability to manufactured in low cost, it will be expand market target and more profitability. Shiseido should using CRM to learn more on customer behavior and responded or feedback that have been given by them, also news update via email which should reduced Shiseido advertising cost in shop or letter. bebe should plan to target Saudi Arabia, Egypt, Kuwait, Russia, Ukraine, Romania and Mexico, bebe should target both in man and women clothes. Rising manufacturing cost has been created problems for bebe to control on productions cost so company should target those countries which are less expensive for the production for example Bangladesh, Italy, and brazil where labor and production cost is less from other part of the world. Bebe should introduced live communication option on its web sites through company would be able to get face to face feedback from their customer which sustain company competitive advantage for long time.
Market became more saturated because of having a high competition and low barrier to entry in retail web business. Moreover recession has been effected the buyer purchasing power in this context its better for bebe to reduce its inbound and outbound logistics cost. Research has been shown that in last few years bebe spend high amount on its outbound logistics activities which we think company should cut down. Partnership with Titan in 2009 has been taken bebe into new era more partnerships with companies like titan will enhance company web business.
Evaluate from CRM and Competitive Advantage above of Shiseido Company, it can see that uniqueness in itself by combines Asian and western style together and famous on high quality image such as Shiseido website appearance is look perfect however, Shiseido should add some more efficiency by put price and sell it to customer as Business to customer (B2C) . Moreover, level up in Customer brand loyalty award winning of Shiseido are guaranty that customer will repeat their buyer behavior. Mary Kay use direct sale market strategy which has a lots of benefits together with drawbacks. Mary Kay jobs are to motivate all sales person or cosmetic consultants to keep its revenue up high and to provide any necessaries information to them. Judging from all three companies, Mary Kay has the most market value together with it constantly expanding its production rate also its distribution channel. However, in facial care industry forecast it is say to growth every year but it is not permanent and events or disaster could occurred if not prepared. Many big companies should have it countermeasure as a back plan in case there are something happened. For example, International companies like Mary Kay, could have use stock market or future marketing stock to make most of benefit throughout.
Figure Facial Care: Market Share in Asia-Pacific
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