International Marketing

Yasmine Ouadaf
Yasmine Barkia
Nada Soufiani

Spring 2020
 Table of contents:

-Company Overview
-Geographical Setting
-Micro Environment
-Macro Environment
-History of the company
-Pricing Strategy
-Competition
-CBBE
-Recommendations
Company overview and history:

Sephora is a chain of stores selling French perfumes and cosmetic products whose origins
date back to 1973, having experienced strong development since 1993, and owning the
LVMH group since 1997.

Quickly after this acquisition, Sephora had a policy of significant expansion through points of
sale all over the world. This distribution network, a component of LVMH's “Selective
Distribution” division, thus joins perfume brands such as Guerlain, Parfums Givenchy, or
Parfums Christian Dior within the group. The company has chairman and chief executive
officer Christopher de Lapuente, one of the members of the LVMH executive committee.

The name Sephora comes from the biblical character Séphora (Hebrew: ‫ִפֹורה‬
ָ ‫ צ‬Tsippôrah),
wife of Moses. The Nouvelles Galeries group opened the first Sephora store in Paris in
19733. This store was bought by the British group BOOTS, which opened 38 stores in
France. In 1993, the 38 Sephora sites were bought by Dominique Mandonnaud, creator of the
current concept. He abandoned his SHOP 8 brand in favor of Sephora and implemented his
concept throughout the perfumery under the Sephora brand.
 Dominique Mandonnaud opened his first open-access perfumery in Limoges in 1969 and
developed the concept during the following years5.
In 1997, Sephora was bought by LVMH4 for 344 million euros,. In the following years ,
under the impetus of the two chief executive officers Pierre Letzelter, then Jacques Lévy in
2003, the company embarked on a policy of opening stores abroad, notably in the United
States from 1999, then from the mid-2000s, in the Middle East, the United Arab Emirates,
Eastern Europe, and China.
However, this internationalization is difficult because it did not take into account the
expectations of customers in the countries concerned. In 2002, while Sephora lost the
equivalent of 130 million euros for 800 million euros in turnover, the twenty or so stores
opened in Germany, Japan and the United Kingdom were closed while retaining the eighty
stores in the United States.
In addition, under the impetus of David Suliteanu, director Sephora in the United States, the
brand markets the products of small designers to cope with the refusal of large French brands
to be marketed at Sephora. In France and in Europe, the most popular products of the
American Sephora are imported by the president Jacques Lévy6: Sephora markets these
products on an exclusive basis, with success as for the anti-wrinkle StriVectin-SD. Then, this
exclusivity policy is extended to specific products of the brands of the LVMHn 1 group, such
as Benefit.
In the 2000s, Sephora also created a private label with its name and inaugurated the “beauty
bars” which were opened to offer customers on-site beauty treatments, followed by “nail
bars” and “styling bars”. For the hairstyle.
In July 2005, the sephora.com site (accessible in the United States since 1999) was opened
for France and became, at the beginning of 2006, the most visited French Sephora store in the
chain.
In October 2014 Sephora unveiled an ambitious plan to continue its global growth. The brand's
objective is to increase its overall turnover by 10% per year on average over the next five years.
Sephora wants to continue to open around 100 stores worldwide (2,000 stores in 31 countries in
October 2014). The brand plans to reach 5 billion in turnover in 2014.

Sephora products:
Our brand operates with more than 300 retailers and suppliers. It also means that
Sephora sells a variety of products between cosmetics, make up, facial masks,etc . These
products come from different retailers such as : NARS Cosmetics, Make Up For Ever, Too
Faced Cosmetics, Anastasia Beverly Hills, Urban Decay,Fenty Beauty, Huda Beauty Benefit
Cosmetics, Amazing Cosmetics, First Aid Beauty, Lancôme Cosmetics, Chanel, Dior etc.
This will allow us attract a high number of customers that are very used to these products and
these brands.
Geographical setting:
To introduce this new brand to the Moroccan market, we decided to open our first store in
Casablanca ( the economical capital) most precisely in Morocco Mall which is the biggest
mall in Morocco . We are also thinking to open more stores in the biggest cities such as
Marrakech, Tangier and Agadir.
 (Moroccan MAP with its biggest cities)

Micro environment:
After a deep research , we decided on how to manage the micro environment in order to
succeed in bringing Sephora to the Moroccan market with no problems .

Suppliers: Sephora has already its own suppliers that are counting of 300 and more , retailers
from over the world ship their products to Sephora’s warehouse and we would like to
continue the same way.

The main competitors are mentioned before: Beauty success, YAN&ONE and MAC
cosmetics.The advantage we will have after setting sephora stores in many cities is reaching
the maximum number of customers while our competitors are only available in Casablanca
and Marrakech .

➔ Customers: We will be dealing with moroccan customers especially women and girls
since they are interested by cosmetic and beauty products.
Macro Environnement:

After the deep analysis provided above of the target market, we will move to the
macroenvironment. Primark in the Moroccan market is surrounded by many external forces
that can affect the brand. Starting with the economic forces, we need to take into
consideration the GDP of the country. It is an important tool to know whether the Moroccan
economy is growing or facing a recession. If the country is facing a recession, the new
business, SEPHORA will face many challenges, and will have some difficulties to grow.
Also, it helps in making investment decisions. According to countryeconomy.com, “The
GDP figure in 2018 was $118,534 million” (2018). Morocco has known an increase of 3
percent comparing to 2017. It didn’t face a decline, which means the Moroccan economy has
known a growth. We have more chances to grow in the Moroccan market, as it is an economy
that has known an improvement. The second part of the macro environment we need to value
is the political forces in the country. Each business needs to respect the laws and regulations
of the country. We need to be familiar with the corporate taxes’ regulations in Morocco. “The
corporate tax rate in Morocco stands at 31 percent”. (Trading economies, 2018). We need to
be able to pay these taxes one time. That being said, our resources need to meet our expenses.
Our turnover needs to be very high by having a high number of sales, so we can pay the
taxes. The third one is the socio-cultural forces. Each country has its own culture, and each
population has its own values. The fourth one is technological forces. If we do not follow the
technology, we may miss many opportunities. In Morocco, according to Telecom.com, the
number of smartphone users is 41.5 million users. (2018) It is a big number that motivates us
to be active on social medias, so we can reach these 41.5 million people. They may be our
customers, and we will do our best to make them loyal to us.

Hofstede Insights:
According to the Hofstede 6-D Model, the deep drivers of Morocco’s cultures in respect to
Power Distance, Individualism, Masculinity, Uncertainty Avoidance, Long Term Orientation,
and Indulgence are as follows:
● Power distance
Hierarchy in an organization is a reflection of inherent inequalities. Centralization is
common, and subordinates expect guidance and direction on their roles. The ideal boss is a
benevolent autocrat.
Morocco is a hierarchical society. This means that people accept a hierarchical order in which
everybody has a place and in which there is no need for further justification. This hierarchical
pedigree is, however, less obvious in Morocco in comparison to other countries.
● Individualism
Morocco is a collectivist society. It manifests itself in the close long-term commitment to the
group a person belongs to based on loyalty and trust, which overrides other societal rules and
regulations.
Moroccans are strongly dependent on relatives and to a lesser extent on friends, in certain
settings such as family and tribe. Moroccans tend to be more collectivist. But in a business
environment, individualism prevails.
Another interesting aspect is the perception of offense. In collectivist societies offense leads
to shame and loss of face.
● Masculinity
A masculine society (high score) gets drive from competition, achievement, and success. It
starts in school and continues to prevail in other organizations.
On the other hand, a feminine society (low score) is a society in which people care most
about the quality of life.
Morocco gets an intermediate score of 53 on this dimension.
● Uncertainty avoidance
Countries exhibiting high uncertainty avoidance maintain rigid codes of belief and behavior
and are intolerant of unorthodox behavior and ideas. In these cultures, there is an emotional
need for rules (even if the rules never seem to work), there is resistance to innovation, and
security is an important element in individual motivation.
Morocco has a very high preference for avoiding uncertainty; it scores two times higher than
Asian countries. I think that it is mainly due to the role religion plays in Morocco.
● Long Term Orientation
With the very low score of 14, the Moroccan culture is clearly normative. People in such
societies have a relatively small propensity to save for the future and a focus on achieving
quick results.
Although Moroccans prefer working with past acquaintances, they do not emphasize at the
beginning on establishing a long-term business relationship.
Contrast this with the Chinese culture where long-term orientation is a crucial part in carrying
on a successful business deal, and only time can help establish trust in business relationships.
 ● Indulgence
Morocco has a culture of restraint. Restrained societies have the perception that their actions
are restrained by social norms and feel that indulging themselves is somewhat wrong. The
only difference that I can highlight is the fact that the Moroccan restraint has its roots in
religion rather than simply social norms and tradition, as in other restrained countries.

Why Morocco?
The cosmetics market in Morocco is estimated at 1.09 billion in 2017, according to the study
"Morocco Cosmetics Market Size, Sliare & Trends Analysis Report". It should almost double
by 2025. Inventory of the sector, its opportunities, its limits and its future projects. This
change in consumers' lifestyles, the awareness of the importance of using care products and
the increase in purchasing power of the middle class, are the main causes of the increase in
demand for cosmetic products in Morocco. The recent financial crisis, which has affected the
whole world and impacted the cosmetics market, has had no effect on the demand in
Morocco. Indeed, retail sales in the Moroccan market show a constant evolution due to the
increase in domestic consumption. A French study estimates that the hygiene expenses of
Moroccan households would represent 1.35% of their income in rural areas. In urban areas,
they are 1.80%, i.e. a consumption of 65 DH per year per inhabitant. Care products would
represent 60% of the global cosmetics market. A strong demand is recorded for make-up
removers, anti-stain and sunscreen products. Specialists are therefore unanimous in saying
that the perfumery and cosmetics market is relatively buoyant and competitive although
considered narrow compared to the European and American markets. The study indicates that
the sector is still growing at an annual rate of between 10 and 15%. Selective lines are
expected to grow by 20% and the consumer segment is expected to follow the same trend. On
the supply side, the market is divided into two main segments: mass market and selective
(luxury) products. In Morocco, 70% of retail sales take place in open markets, small
neighbourhood shops and traditional stores. However, supermarkets and outlets should gain
market share by 2025. Especially when one takes into account that international retailers in
Morocco only operate through partnerships. Shopping centres have also grown rapidly in
Morocco in recent years, and the trend is expected to continue in the coming years. Not to
mention online sales, which are also growing rapidly in the country. All these elements
indicate the growing potential of the retail sector in Morocco, and therefore that of the
cosmetics industry.
● Counterfeit and consumer safety:
According to a 2012 UMPIC study, losses of between $200 million and $400 million are
reported annually due to smuggling and counterfeiting fraud. In order to v remedy, the main
operators in the sector, which control about 80% of the market, namely, L'Oréal Maroc,
Pelissard, Avon, Pierre Fabre, Colgate Palmolive, Procter & Gamble and Unilever, formed in
2017 the association Cosmétiques Maroc. Their association aims at two major points: to
structure and develop the activity and to guarantee the safety of consumers. The objective is
to ensure product traceability and to counteract sales in the informal circuit which impacts the
image of the brands distributed on the market as well as the annual sales achieved.

Consumer buying habits:

● Variety Seeking Buying:
Makeup and skincare consumers are constantly looking for better alternatives and higher
quality products. Makeup trends change at a fast pace and there are always new products on
the market.
 ● Value Over Price:
Consumers are increasingly willing to pay more in order to buy something they consider
valuable, especially in the beauty and care department.
● Social Media Influence:
Social media influencers’ ability to influence big groups of people makes them powerful
allies for cosmetics companies because the cosmetic industry is one largely based on
appearances and perceptions.

Distribution:
Our plan for Sephora’s implementation in Morocco is to first open a physical store in
Morocco Mall Outlet in Casablanca. As we know, Moroccan customers have a preference for
large shopping places and the Morocco Mall Outlet knows high customer traffic and we
believe it is the most appropriate place for Sephora to open its first retail store. In addition,
Sephora would also launch its online retail platform to accomodate the needs of customers
who won’t have access to the physical store. Online shopping is a growing trend in Morocco
since the start of the lockdown and we believe this trend will subsist after the pandemic.
Finally, it would be a good idea for the brand to open pop up stores in other cities such as
Marrakech, Tangiers or Agadir, to assess the customer behavior in those cities compared to
the Casablanca hub and to increase brand awareness throughout the country.

Advertising and Promotion:

To advertise the launch of Sephora in Morocco, we followed the six steps of the Integrated
Marketing Communications Planning strategy.
· Step 1: Communications Research
Highlight the brand’s most appealing features to the Moroccan market: foreign expertise,
large range of options, international products
· Step 2: Market Segmentation
Sephora would target large cities population, 20-60 years age group, women and overall,
people who care about their physical appearance, beauty and care users.
· Step 3: Product Positioning
Since Sephora offers different brands with different pricings, their proposition is affordable
for a wide range of budgets.
· Step 4: Communication Objectives
- Raise brand awareness
- Build customer traffic
- Enhance brand image
· Step 5: Budget
A percentage of sales of last quarter of 2019 will be dedicated to the advertising and
promotion campaign
· Step 6: IMC Components
- Traditional advertising in women lifestyle magazines
- Online advertising on social media

The pricing strategy:

For the pricing strategy that the Moroccan sephora will adopt is competitive pricing. With its
large variety of product lines, with 300 sub brands, present, Sephora offers a range in price,
which includes both for mass collection as well as some unique high end products. Sephora
manages the pricing and can afford competitive pricing through low overhead costs,
because of operational efficiencies. The lower operational costs allow it to have greater
margins, which it can use to lure retailers and also in marketing tactics. Discounted offers
through Beauty insider are also offered. The pricing in its marketing mix is also is managed
through gifts and reward points from ‘Beauty insider’ option available on the store., where
customers can sign in and search for products as well as earn rewards and discounts.
Sephora follows competitive pricing tactics, mostly due to low operational costs, it can define
its price based on market trends. It targets upper and upper-middle class section of society
as its target customer. In the beginning, the company will be catered to women who are
status and beauty conscious but with time it will add men’s products in its portfolio and has
started targeting both men and women as its target customers.
The company will position itself as a unique and qualitative brand that offers best products at
affordable prices. It bears low overhead costs due to operational efficiencies and thus can
afford to pass the margin to its customers via reasonable pricing.
Sephora faces lots of completion from rival brands and has adopted a competitive pricing
policy that is lower than rival brands. It will also use promotional pricing and offer incentives
and discounts to its loyal customers.

Competitors:
In the Moroccan beauty industry, Sephora will have as direct competitors, Yan&one as the
main competitor since it is the largest department store of beauty products in Morocco. Other
direct competitors will be Mac, a makeup brand that has many stores around Morocco, in
Casablanca, Agadir and Marrakech. And Flormar another makeup brand which is a turkish
brand that is very successful here in Morocco.
For the indirect competitors, Sephora will have online shops that sell all kind of beauty
makeup and delivers the product to your home. It will have as indirect competitors the small
local shops that also offers beauty products. There are parfumeries like beauty sucess, and
shops that sell natural ingredients like herbs and plants used to create natural masks and
scrubs.

CBBE:

Recommandations:
Installing an iPad at every section throughout the store is a key solution to address offline
problems. The iPad will serve as a multi-purpose platform aimed at making the offline
shopping journey easier for everyone.
WE want our Shoppers to be able to scan the chosen product in the iPad which can display
the price ranges available for that specific product. For ex, if a customer picks up and scans
the 50 SGD red matte lipstick, the iPad can display the average price of all the red matte
lipsticks available, and display the range of red matte lipsticks of other brands from lowest to
highest prices. This gives the shopper a clear idea of the price range and other options
available without feeling lost or overwhelmed. Shoppers would also be able to input their
budget and the iPad can display all red matte lipsticks available within budget.
Furthermore, Sephora Morocco will be the first Sephora store in Africa that’s why we wanted
it to make shipping Available in most of African countries so that all the region can benefit
from our products.
References:
https://www.hofstede-insights.com/country/morocco/
https://www.mediamarketing.ma/article/ZZPCHZCG/le_marchae_des_cosmaetiques_au_mar
oc.html
https://s3487967.wordpress.com/2017/03/28/first-blog-post/
https://www.marketing91.com/marketing-mix-of-sephora/
https://www.sephora.fr/