Marketing Strategy for Etude House: Analysis, Objectives, and Tactics

This report presents a comprehensive marketing plan for Etude House, a South Korean cosmetic brand. It includes a situational analysis, objectives, SWOT analysis, and strategies for segmentation, targeting, and positioning. The report also covers marketing tactics, budgeting, and implementation.

Marketing Strategy
12/16/2018
Etude House

Marketing Strategy 1
Executive summary
The purpose of the report includes the marketing plan of the selected company that is Etude
House, a well-known South Korean cosmetic brand. This assignment is the continuation of the
previous assignment in which the analysis for the etude house has been which include macro and
SWOT analysis related to the Etude House. This assignment will include the analysis of the
situation which reflects the opportunities and threats from the internal and external factors.
Further, it includes objectives that are must be formed on the basis of which the strategy related
to the STP, targeting and positioning is done. The findings reflect the marketing tactics of the
company will increase the expenses due to which the company need to bear the losses as
forecasted. In end, the implementation and control of the plan have been done for the Etude
House in South Korea.

Marketing Strategy 2
Contents
Introduction......................................................................................................................................4
About company............................................................................................................................4
Situation analysis.............................................................................................................................5
Company internal.........................................................................................................................5
Market position........................................................................................................................5
Products and service................................................................................................................5
Market analysis............................................................................................................................6
PESTEL...................................................................................................................................6
Value chain analysis................................................................................................................7
VRIO analysis..........................................................................................................................9
Objectives......................................................................................................................................10
SWOT Analysis.............................................................................................................................11
Strategy..........................................................................................................................................12
Segmentation, targeting and positioning...................................................................................12
Segmentation.........................................................................................................................12
Targeting................................................................................................................................13
Positioning.............................................................................................................................14
Value proposition.......................................................................................................................14
Tactics............................................................................................................................................14

Marketing Strategy 3
Marketing mix...........................................................................................................................14
Products strategy....................................................................................................................14
Price strategy.........................................................................................................................15
Place/Distribution strategy.....................................................................................................15
Promotion strategy.................................................................................................................15
Budgeting.......................................................................................................................................16
Profit and loss statement............................................................................................................16
Break-even analysis...................................................................................................................17
Implementation..............................................................................................................................18
Organisational infrastructure.....................................................................................................18
Action plan.................................................................................................................................19
Control...........................................................................................................................................19
Conclusion.....................................................................................................................................20
References......................................................................................................................................21
Appendix........................................................................................................................................23

Marketing Strategy 4
Introduction
The aim of the report is to prepare a comprehensive plan for a brand of Etude House which is a
South Korea cosmetic brand. The company deals with the issues which are faced by the company
related to the products and services. The paper includes the situation analysis which is supported
by the company internal and market analysis. In addition, the objective of the company has
discussed which they won't achieve in the market. Further, the strategies of the company are
discussed which help them to effectively manage the operations. Moreover, the tactics related to
the marketing of the company are discussed with the budgeting and implementation of the plan.
About company
Etude house is well known South Korean makeup colour cosmetic brand which is owned by the
Amore Pacific. In the year 1985, the company came into the existence and the corporate name to
the Oscar Corporation in 1985. Further, in the year 1990, it was incorporated by the Amore
Pacific group. Finally, in the year 1997, the name of the firm changes to the Etude (Etude House,
2018). The company offer a wide and diverse range of cosmetic products which include products
for eyes, lips, hair care, skin care, lips and many others. The cosmetic industry is booming with
this the increase in the competition is one of the major issues which is faced by the company.
(Refer Appendix)

Marketing Strategy 5
Situation analysis
Situational analysis is referred to as the collection of methods that are used by the managers with
the motive to analyse the organisations internal and external environment to understand the
organisation capabilities, customers and business environment (Chernev, 2018). Thus, etude
house internal and external analysis has been discussed which helps them in understanding the
threats and to make the strategies to eliminate the same.
Company internal
The internal analysis helps in analysing the internal factors that can affect the working of internal
operations. The below given is etude house internal analysis: -
Market position
Etude House products are based on the high quality, affordability, lovely design and diverse
colour range which helps them in becoming the leading brand in the market. The company
efforts have offered a strong position in the market as it is considered in the Top 5 Korean
cosmetic market. Etude house is spreading its vision of makeup play as an evangelist of K-
Beauty.
Products and service
Etude house offers the diverse range and products which majorly include the BB cream that
depends on the skin type of customers and colour for them. All the products of Etude Company
offer a neutral shade, simple and fresh look to the customers. The product of the company is
affordable in terms of price with easy to use that can improve the quality of the skin.

Marketing Strategy 6
Market analysis
PESTEL
A PESTLE analysis is a framework which helps in analysing the external factors that can affect
the working of the company (David, 2011). Below given is the analysis of external factors that
impact etude house: -
Factors Description
Political factors The political factors include the rules and regulations that affect the working
of the company. The government has strict regulations for the safety due to
which the company recalled its one of the product that is Etude House AC
clean-up Mild Concealer because of the safety issues. The company said
that there were excessive traces of antimony in them and this is the reason
due to which the company has done voluntarily reporting to Korean
Ministry of food and drugs safety (Heng, 2018).
Economic factors The economic factors that can affect include GDP of the country include
1530.75 billion US dollars in 2017 (Trading Economics, 2018). Moreover,
the rise in GDP leads to the rise in purchasing power which leads to an
increase in sales and demand of products of etude house. This will help the
company in improving the market share, profit and opportunity for
expanding the business.
Social factors Etude house finds most of the people are aware of the use of the healthy and
skin-friendly products that can influence the buying behaviour (Dawson,
2014). Thus, the company has different approaches related to the products
which help them in offering the innovative product at low prices. Etude

Marketing Strategy 7
House has a positive response from the people of the country which is an
opportunity for them.
Technological
factors
Technology has brought the numerous changes in the beauty and cosmetic
industry. The customers are able to access and make the purchase of
products with the help of technology (Frynas & Mellahi, 2015). Moreover,
the advancement in technology is a threat also because the change in
technology brings the change in operations for which the company need
huge funds.
Legal factors Etude house implements all the legal obligations which include Federal
Food, Drug and Cosmetic Act and the Fair Packaging and Labelling Act
while manufacturing and offering the products to the customers. Moreover,
if they found guilty they voluntary themselves.
Environmental
factors
Etude house offers the beauty products and also a concern for the
environment due to which they conduct the environmentally friendly
packing of the products which helps them to abide by all the rules and laws
related to the environmental safety and protection (Ho, 2014).
Value chain analysis
The value chain is a strategic tool which is used with the motive to analyse the internal firm
activities. The goals of the company are to identify the activities that are most valuable for the
company. The value chain helps in understanding the value that the etude house offers to the
customers with the help of primary and support activities. The image reflects the activities that
are included in the activities (Chernev, 2018).

Marketing Strategy 8
Primary activities
In the primary activities, it majorly include the inbound logistics of etude house include the
cosmetic product supply management of the flow of goods at different places. In addition, the
operations of the company include the offering quality cosmetic services easily to the customers
at different places. Along with this, the etude house offers the products at affordable prices to
their customers. Outbound logistics include the operations related to the transport of the products
to the stores of etude house and at the departmental stores. Marketing and sales is essential
element which include the promoting the cosmetic products in the market (Etude House, 2018).
This helps them in managing the operations and to increase the sales. In the end, the service of
the products is one of the major elements which show the service that is offered by the etude
house to their customers. The etude house ensures that they offer delight services to their
customers and after sale support 24/7 (Etude House, 2018).
Support activities

Marketing Strategy 9
The support activities offer the assistance to the primary activities, the major support activity
include technology. In the present era, the change in the technology leads to the change in the
operations of the company. The effective use of technology helps the company in making their
products easily available through online mode. Further, the technology helps in tracking the
distribution of products (Chernev, 2018). Moreover, the procurement of the goods will be done
effectively. Procurement is one of the effective support activities that help the company in
procuring the goods and services to deliver the goods on time. In addition, the human resource
management is another important determinant which supports the services that are offered by the
etude house. At stores, the experience and friendly staff helps in forming the relationship with
the customers that work as additional services for the company (Etude House, 2018). Further, the
firm infrastructure includes the system of the etude house which supports the operations. The
company ensure the effective system with the different departments that perform the work in
which they are specialist.
VRIO analysis
VRIO is the tool which is used by the company to evaluate the organisation’s resources which
offers the competitive advantage. VRIO framework stands for Value, Rareness, Imitability and
Organization (David, 2011). The image given below show how the resources are more on the
resources in the organisation are rare and valuable for the etude house which shows the strength
and weakness of the company.
Is Valuable? Is
Rare?
Is difficult to
Imitate?
Is Organization
Organized
around?
What is the result?

Marketing Strategy 10
NO Competitive Disadvantage
YES NO Competitive Equality
YES YES NO Temporary Competitive Advantage
YES YES YES NO Unused Competitive Advantage
YES YES YES YES Long-Term Competitive Advantage
Objectives
The objectives of the company have been prepared on the basis of the current operations and
future needs of the market for the etude house. The below given are the objectives of the
company: -
 Increase the visitor’s number by 40% during the next 3 years.
 Increase the sales of new and existing products by 20%.
 The objective of the etude house is to increase the brand awareness in the market which is
must to attain the higher position. This can be done by introducing the new products on
the market in next 2 years.
 The company short-term objective is to attract the customers in the market with the help
of different discounts and promotional activities in the next 6 months. This objective can
be measured with the positioning of the company.
 Etude house needs to form the strong brand identity which is possible with the use of the
influences celebrity as the spokesperson and model (Wilson & Gilligan, 2012).
 Etude House has the opportunity of expanding the business in the foreign markets as this
will enhance the visibility of the company.

Marketing Strategy 11
 The objective of the company is to implement the market diversification strategy in
which they can come with the new product in the market in next 2 year.
SWOT Analysis
SWOT analysis is a tool which is used to evaluate the effective strategy in the market. The below
given is the SWOT analysis of the etude house: -
STRENGTH WEAKNESSES
- High quality products
- Diversified products
- Less number of stores
- Weak exposure to public
OPPORTUNITIES THREATS
- Expansion in abroad and domestic
- Targets the young generation
- High substitute products
- Counterfeit products
Strengths
Etude house is taking the advantage of the advance technology with the help of which they are
able to sell the high quality products which are made up of the natural ingredients. In addition to
this, Etude house offer the variety of product that range from the make-up to other different
products.
Weakness
The major weakness of etude house is that they have the limited number of stores in UK market.
Further, the brand is not able to effectively promote their products in the market due to which it
has weak exposure to public (Etude House, 2018).

Marketing Strategy 12
Opportunity
In the UK market, this has been found that etude house can expand their business operations in
the near future which will help them to meet their business objectives. Further, the rise in the
youth offers an opportunity because they make use of the products as it is the part of their
lifestyle (Etude House, 2018).
Threats
The substitutes of the cosmetic products are increasing in the market which is the emerging
threats for the company. Further, the counterfeit products are increasing the threats for the etude
house in the market.
Strategy
This section of the report includes the strategy that is formed by the company with the support of
the STP, branding and value proposition (Baker, 2014).
Segmentation, targeting and positioning
Segmentation
Market segmentation includes the division or group of customers on the different interest and
behaviours. The market segmentation of etude house is given below: -
 Demographic: - The demographic element includes age, gender, income, education and
other factors. The company segment the group majorly with the age group of 10-25, 25-
45, and above with the high and medium income group people. Most of the people who

Marketing Strategy 13
are targeted are youth and women who make the purchase of cosmetic products on
priority.
 Psychographics: - This segmentation includes the personality, emotions that are based
on the behaviour of the customer’s towards the product (Armstrong, Adam, Denize &
Kotler, 2014). There are numerous customers who treat these products as their lifestyle
due to which they make the use of the products on the regular basis. Moreover, people
have a positive attitude towards the cosmetic products which they make use on a frequent
basis.
 Behaviour: - This segmentation includes the behaviour of customers in terms of the
purchase, brand loyalty, benefits of using it and many others. Etude House segment this
market with the motive to get a positive response from the customers. Along with this,
customers who are loyal towards the brand are offered with these services.
Targeting
Targeting is focusing on the group to whom the Etude House wants to offer the services. Etude
house makes use of the differentiation targeting strategy in which they target the different
segments. The major target customers are the young people who fall under the age of 10 to 25
years because this helps the company in attaining more than 40% of the sales. These customers
majorly include the college student who keeps themselves up-to-date and makes frequent
changes according to fashion. In addition, young people are also part of this that makes use of
the cosmetic products on a frequent basis and they are one who remains loyal with the company.
Further, these customers keep a positive attitude towards the product.

Marketing Strategy 14
Positioning
The positioning reflects the image of the brand in the mind of customers. The positioning of the
company reflects the high-quality products with the affordable prices of products. On the other
hand, the competitors of the company like Innisfree, Cosmopolitan and Instant Beauty Fix has
positioning with high quality and high price, moderate quality with moderate prices and
moderate quality with low prices respectively. This shows that the company is able to make their
effective positioning in the market.
Value proposition
The value proposition that is offered by the company to their customers is the innovative
products with the effective experience with the brand. In addition, they want to form the princess
dream for the magical experience.
Tactics
Marketing mix
The marketing mix is the set of tools that are used by the company for performing the work
effectively (Rothaermel, 2015). Etude House marketing mix strategy is discussed below which
include the strategy related to the product, price, place and promotion. (Refer Appendix)
Products strategy
The company consider the product for achieving the success as they offer a wide range of
products which include skin care, makeup, body care and many others for all types of skins
which include sensitive skin, oily skin and combination skin. All these are core products of a
company with this the company offer its products through online mode. In addition to this, the

Marketing Strategy 15
company provides after sale services to their customers in the market which helps them to
receive feedback for their products. Further, the new products of the company will enhance the
Price strategy
Price is the amount of the product on which the customers make the purchase of the product
(Grant, 2016). Etude House keep the affordable prices of the company and to maintain the same
in the market they make use of the competitive marketing strategy which helps them to keep the
prices effectively with the best quality of products. Along with this, the company also offers the
discount to their customers on occasion.
Place/Distribution strategy
The place is the element of the marketing mixes which reflects the location where the product is
available and the way through which the company can make the product available to the end-
users (Hollensen, 2015). The customers in the market prefer to purchase the products either from
the brand store or from the malls. The rise in technology has offered an easy access to products
through online stores. Thus, effective distribution of the products has been done by the company
which helps them in making the products available through all the modes from where they can
purchase the products.
Promotion strategy
Promotion strategy is the way through which Etude house can generate awareness for their
products and services that are available in the market (Išoraitė, 2016). The company promote the
products with the help of different online and offline strategies. In offline strategies, the company
promote the products with the help of advertisement and print media. Though, online promotion

Marketing Strategy 16
is done with the help of social media sites (Luca & Suggs, 2010). Some of the examples are
given below: -
(Source: Atria, 2018)
This has been found that generally, company include offers and coupons to promote the products
in the market which help them in grabbing the attention of customers.
Budgeting
The budgeting reflects the profit and loss that might be faced by the company if the marketing
plan of the company will be implemented.
Profit and loss statement
Etude House
Profit & Loss Statement
Amount ($)
2019 2020 2021
Sales $199,000 $297,500 $395,500
Miscellaneous income $0 $15,000 $25,000
A. Total $199,000 $312,500 $420,500
B. Cost of Sales $109,450 $163,625 $257,075

Marketing Strategy 17
C. Gross Profit (A-B) $89,550 $148,875 $163,425
D. Operating
Expenses
Salary $74,000 $77,700 $81,585
Rent $6,000 $6,300 $6,615
Utilities $5,000 $5,250 $5,513
Insurance $125 $131 $138
Depreciation $7,500 $7,875 $8,269
Marketing $7,500 $7,875 $8,269
Maintenance &
Repairs $1,500 $1,575 $1,654
Other $0 $400 $420
Total $101,625 $107,106 $112,462
Operating profit -$12,075 $41,769 $50,963
Less: Interest $9,500 $11,500 $10,000
Profit before tax -$21,575 $30,269 $40,963
Less: Tax @ 25% -$5,394 $7,567 $10,241
Net Profit AT -$16,181 $22,702 $30,723
Break-even analysis
Break-even analysis Amount
Estimated fixed cost
200,000.0
0
Estimated variable
cost 45%
Break-even point
363,636.3
6

Marketing Strategy 18
Implementation
The implementation plan of the company reflects the activities that are essential to
accomplishing the strategy and tactics. The below given is the discussion of same: -
Organisational infrastructure
Etude house needs to implement the divisional structure in which the work is divided among the
different departments. This will help in accomplishing the marketing plan effectively and will
offer the opportunity to the company to grow in the market (Kotler, 2015).
Action plan
Analyzing the
market
Setting the
objectives
Forming the
strategies
Making the
tactics
Analysing the
financial cost
Executing the
plan
Controlling
the activities

Marketing Strategy 19
Control
This section of control helps in understanding the analysing the opportunity and threats that can
affect the working of the company. The opportunities for the company that are available include
rise in sales, rise in response towards the social and consumer behaviour, development of
technology that helps in marketing. Further, the major threat of the company that is rising in the
competition which can't be controlled which can affect the objectives of the company.

Marketing Strategy 20
Conclusion
In the end, it can be concluded that Etude House is a leading company who have vast
opportunities and minimum threat in the market. This helps the company to grow their market
position in the market and motivates the company to accomplish the objectives. Further, the
company need to form the strategies which include STP and value proposition. In addition, the
tactics are formed which include the marketing strategy related to the product, price, place and
promotion related to their business operations. In addition, the forecast related to the expenses
and cost has been done which shows that in the coming year the company might face the loss but
sooner they are going to attain the profit. Along with this, the breakeven point has been identified
which shows the situation of the no profit and no loss attain by the company. In the end, there is
an implementation plan which shows the steps that are required to be followed for implementing
the activities.

Marketing Strategy 21
References
Armstrong, G., Adam, S., Denize, S. & Kotler, P. (2014). Principles of marketing. 6th edition.
Welbourne: Pearson Australia.
Atria, W. (2018). 5-31 Jan 2018: Etude House Chinese New Year Promotion. Retrieved from:
https://sg.everydayonsales.com/5-31-jan-2018-etude-house-chinese-new-year-promotion/
Baker, M. J. (2014). Marketing strategy and management. London: Palgrave Macmillan.
Chernev, A. (2018) Strategic marketing management. Chicago:Cerebellum Press.
David, F.R. (2011) Strategic management: Concepts and cases. India: Pearson/Prentice Hall.
Dawson, J.A. (2014) The Marketing Environment (RLE Marketing). New York: Routledge.
Etude House. (2018). About Etude. Retrieved from:
https://www.etudehouse.com/int/en/index.php/etudestory#
Etude House. (2018). Etude House. Retrieved from: http://www.adventigroup.com/en/etude-
house/
Frynas, J.G. & Mellahi, K. (2015) Global strategic management. USA: Oxford University Press.
Grant, R.M. (2016) Contemporary strategy analysis: Text and cases edition. New Jersey: John
Wiley & Sons.
Heng, M. (2018) Beauty label Etude House recalls one item in Singapore after excessive metal
traces found. Retrieve from: https://www.straitstimes.com/lifestyle/beauty-label-etude-
house-recalls-one-item-in-singapore-after-excessive-metal-traces-found

Marketing Strategy 22
Ho, J.K.K. (2014) Formulation of a systemic PEST analysis for strategic analysis. European
academic research, 2(5), pp.6478-6492.
Hollensen, S. (2015) Marketing management: A relationship approach. India: Pearson Education
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Granthaalayah, 4(6), 25-37.
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Luca, N.R. & Suggs, L.S. (2010) Strategies for the social marketing mix: A systematic review.
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Appendix