1. applied in studying branding practices of the

1.        
Executive
Summary

When it
comes to positioning strategies, brands have to consider three critical issues which
are defining the Frame of Reference, Points of Parity (POP) and Points of
Difference (POD). When the Frame of Reference has been defined with the
targeted consumer market and nature of competition, brands can define the corresponding
POP and POD associations.   

POP are
the elements that are considered mandatory for the brand to be a player in a
specific market, which enables consumers start considering a brand along with
its competitors. Whereas, POD are the elements that make the brand unique and
brings its competitive advantages. The positioning framework based on POP and
POD will be applied in studying branding practices of the two popular skincare
brands: SK-II and Origins.

Not
limited to analyzing the similarities and differentiations in branding SK-II
against Origins from the company perspectives, the report also bring to light certain
consumers perceptions towards to the two brands based on our empirical research
conducted among targeted audience.

This
comparison is expected to give an idea of whether or not there could be a gap
in branding as planned and as perceived by consumers in reality.

2.        
An
overview about SK-II and Origins

2.1  
SK-II
Brand

SK-II was
originally developed by Japanese scientists in 1970. Its very first cosmetics products were launched under the
brand Max Factor Secret Key with Pitera in December 1980, which was later
rebranded to Max Factor SK-II. In 1991, the brand was brought over by Procter
& Gamble (P&G) and renamed to SK-II as current. Since then, P&G has
made
SK-II become the prestige skincare product line of this company. Over more than
forty years of development, SK-II has been one of the leading premium skin care
brand not only in East Asia but also in other large markets like America and
Europe. In 2012, SK-II earned its spot among billion-dollar brands of P&G
with millions of users worldwide. (P&G, 2012)

2.2 Origins Brand

In
1990, ORIGINS was launched as one subsidiary of The Estee Lauder Companies which
is a global manufacturer for well-known skin care and cosmetics brands
including Clinique, MAC, Bobbi Brown, Aveda and Tom Ford, etc. In 1991, ORIGINs
opened their first store in Harvard square, Cambridge in the US. Just in a few
years later, in 1995, they started their first international store in London,
UK. At the time Origins celebrated its 10th anniversary in 2000, the
brand was already present in 15 international markets across America, Europe
and Asia. Until now, after nearly thirty years of development, Origin has
become one of the most popular skincare and cosmetics brands, which is known
for its return to Nature and commitment to Environment.

3.        
Points
of Parity and Points of Difference in branding

A great
brand is built through right strategies, which can not fail to mention the
right segmentation, targeting and positioning strategies. According to the
Strategic Brand Management book by Kevin Keller, when deciding its brand positioning
strategy, a company needs to establish its Points-of-Parity (POP) and
Point-of-Difference (POD) to create the right brand identity and brand imagery.
A meaningful and targeted Points-of-Difference will give competitive advantage
to the brand and strengthen its unique sell point. The associations of POD
should increase the chances that consumers will choose a specific brand
product. It is the association that are unique for the brand, strongly
appreciated and favored by customers. (Keller, Apéria, & Georgson, 2008).

On the
other hand, there are so many brands playing in the same categories. Hence, a company
needs to associate several perceptions towards its the competing brand in order
to navigate consumers to the most favorable brand for them. This makes Points-of-Parity
become mandatory for the company and the consumers. There are three different
types of POP: category POP, which are associations that the customers consider
mandatory for a brand to fit in the specific market, competitive POP that are
associations that aims to constrain a competitor’s points of difference and POP
associations that are shared between the company and its competition (Carlsson &
Kristina, 2012)

Through
its positioning strategy, a brand informs consumers what it stands for.
Therefore, POPs and PODs are specific to the attributes, benefits and unique
values of the brand. The three means-end chain of attributes, benefits and
unique values provides a positive resolution of imperatives and amplifies the
psychological involvement of consumers.

In this
report, we will discuss about POP and POD
in branding SK-II against Origins, based on the observation to both brands
as well as the understanding of targeted consumers’ perceptions towards the two
brands in reality.

4.   Comparison of POP and POD between SK-II and
Origins

4.1 Points-of-Parity
between SK-II and Origins

Addressing Skin Concerns –
Signs of Aging

Women,
especially in the age of late 20s to 40s generally suffer great skin concerns
with various signs of aging, including the skin texture, skin elasticity,
wrinkles, uneven skin tone and skin radiance. Therefore, they look for skincare
products that can help improve their skin appearance to get back the feeling of
youth, beauty, consequently their happiness and confidence. Competing in
skincare category, and targeting this group of consumers both SK-II and Origins
offer the benefit of addressing those skin concerns to users. SK-II has
remarkable anti-aging series while Origins also commits to bring a more lasting
youthful appearance with their product lines.

Consisting of Natural
Ingredients

Both
SK-II and Origins are rooted from with same promising value of naturally
derived ingredients in their skincare product. For SK-II, it emphasizes on the
use of Pitera as the main ingredient, which was developed by Japanese
scientists. After years of research, finally in 1970  they found Pitera as the best beauty
ingredient that can help address all  the
skin problems. Pitera is basically a natural by-product of yeast fermentation.
It contains amino acids, minerals, vitamins, and organic acids, which is proven
to effectively improve skin lucency, decrease wrinkles and lighten dark spots.
SK-II keeps developing its products through more scientific testing and
innovation. It tries to find different feature of Pitera and collaborate it
with innovative technology to create the new product line.

Meanwhile,
Origins develop their products with more than 600 kinds of plantation for
example   Anogeissus, Apricot, Chamomile etc. from all
over the world. The brand also tries to keep searching to discover more natural
ingredients that can help for caring the skin.

Independence to its parent
company

These
two skincare brands have stores operating globally and even keep expanding to
new countries and regions. However, not many know that either SK-II or Origins
comes from very popular parent companies. SK-II is owned by Procter and Gamble
(P&G), while Origins is owned by Estee Lauder. This might be because the
brand image of the parent companies are totally different from their target of
brand positioning. For SK-II, as it positions itself as a premium skin care, it
might devalue its brand image if it is associated with P&G. Since P&G,
as the parent company, is worldwide known as a consumer goods manufacturer, it
might confuse SK-II customers in perceiving it as premium goods. Also for
Origins, as we know Estee Lauder, its parent company, is a prestige skincare,
makeup, fragrance and hair care brand which image does not match with the idea
of minimum natural green beauty that belongs to Origin. That is why neither
SK-II nor Origins finds any advantage in associating its brand with the
popularity of the parent company.

4.2 Points-of-Difference
between SK-II and Origins

Brand Promise

Although
both SK-II and Origins resonate the natural ingredients as their value, the
brand promise to their customers are different. SK-II communicates about skin
transformation, promising a clear crystal skin as the result of its signature
ingredients, Pitera, that has been through the test of time. The essential skin
nutrients contained in Pitera works in balancing the smoothness, clearness,
firmness, radiance and fine lines of the skin over the flow of the time. On the
other hand, Origins’ promise is emphasizing on the well-being of your skin via the
sense of purity. Moreover, the focus is not only in skin caring but also in the
well-being of planet. That is why Origins also put a concern on manufacturing
the products with an eco-friendly practice and recyclable packaging. It created
the first cosmetic container recycling program in the industry after that they
become the first prestige natural skin care brand. It also ensures the
customers that the products are 100% made from organic ingredients and free
from artificial or chemical materials. Caring the skin while caring the planet
is the core promise of Origins to its customers.

Reasons To Believe (RTBs)

SK-II
and Origins have different RTBs to convince consumers about their product
benefits. SK-II is using PITERA, their unique ingredient with a whole story of exploration, experimentation
behind. The Japanese scientists discovered the beauty secret when having
observed workers at a sake brewery where the elderly workers had wrinkled faces
that showed their age, but their hands were smooth, clear and younger looking
from years of submerging their hands in the fermented yeasts. In the following
decades, the formula of Pitera continuously evolves through more in-depth
scientific testing and innovation. As a result, SK-II skincare products
are believed to transform skin condition to achieve smoothness, clearness,
firmness, radiance, and fine lines over flow of the time.

Origins
is using varied types of natural ingredients which is scientifically tested to
produce extracts which are believed to deliver high performance to the
consumers. For example, their best seller product, Anti-Aging Power Serum, used
Anogeissus plant which comes from Africa. This kind of plant is believed and
studied producing fibrillin, the protein which gives skin youthful firmness.

Brand Communication Campaign

In
terms of communicating the brand promises to the customers, SK-II and Origins
obviously show different approaches.

In most
of SK-II’s advertisements, the brand tends to employ female celebrities who are
generally perceived as the definition of beauty by majority. Based on the
region where SK-II is targeting, in accordance, the advertisement will feature
the local female celebrity. In Western countries, SK-II introduce Cate
Blanchett as the face representative for the western markets. The objectives of
such approach is to deliver the impression of SK-II’s ability in effectively
generating crystal clear skin. SK-II localizes the idea by referring to the
definition of beauty which the customers are familiar with, so that the customers
can easily find relevant and and well resonate themselves with the promising
result of using SK-II products.

Furthermore,
SK-II always put focus on their targeted customers in communicating their
value. The campaigns done by SK-II always bring up woman issues such as
empowering women, inspiration for woman and transforming social construction
towards woman. One of its famous campaigns was “Change Destiny”. The campaign
promoted the message that every woman should be able to feel proud of what they
have achieved and who they are, regardless of age and they should not be
constrained by artificial timelines and expiry date labels placed on them by
society. This campaign helped the brand to increase awareness in the China market
and boosted brand equity from sixth place to second in the skincare category (Long,
2017).

Origins
as it claims to be environmentally friendly products for skin, tends to display
the nature and the plantations it uses as product ingredients on the advertisements.
That is why we can find only few advertisements of Origins that are displaying human
face. All the advertisements display the rich of nature in various kinds of
plantation which people may not even familiar with. The main idea that the
brand aims to delivery is treasuring the skin nutrition from nature’s wealth
without causing any harm to the nature. It tries to address the concern of
being responsibility to the nature while consuming a product. While the planet
serves the needs of human beings, it is important to keep the planet
well-being. Through this communication approach, Origins is largely perceived
as an ethical brand.

Consistently,
Origins always brings up the green issues in its marketing campaigns. For
instance, one of their campaigns is about planting trees in purpose of keeping
the air and water clean, especially restoring the areas damaged by wildfires.
Through this reforestation project, it aims to provide proper food and house
for tons of wild creatures. In partnership with the American Forests’ Global
ReLeaf and other local organizations, it aids reforestation projects around the
world. Along with the campaign, Origins increase its brand awareness through
endorsement by celebrities as well. However, the celebrities who endorse Origins
products tend to be those who is actively involved in green campaign and
environmental concerned activities. Oprah Winfrey who is also known to be a
social influencer including in environmental issues, in the early 2000s, she
once endorsed one of Origins products. Given Oprah’s influence in her heyday,
sales of Origins Ginger bath products soared, and Ginger Souffle remains one of
the top sellers over a decade later (Kahn, 2015)

Competing segments &
Channel Distribution

In
terms of competing segments, SK-II chooses to place itself as a high-end brand
while Origins more likely serves for the mass market. As a result, we find
SK-II and Origins use different channel distribution besides their exclusive
stores. For SK-II, it casts as a high-end department stores where we can find it
standing side to side with luxury brands such as Shu Uemura, Yves Saint
Laurent, and Estee Lauder. The price of the products is also placed in the range
of premium products’ pricing. SK-II also supports its premium brand positioning
by providing high-class customer service such as beauty lounge where the
customers are treated exclusively based on their skin type and needs.

On the
other hand, Origins chooses to have its products distributed through health and
beauty stores to massively reach its targeted consumers. Through positioning
itself in the mass consumer brand level, Origins has more likelihood to gain
competitive advantage for it offers quite exclusive “green value”. Customers
might find it as an additional value when they get the quality and the
effectiveness is as good as other products, while at the same time feel like
having been contributing to environment protection. As international level,
there are still not many remarkable green products, Origins might stand in the
same reputation with brands such as The Body Shop, Bath & Body Works.

 

 

5. Consumers’
Perceptions towards SK-II and Origins Brands

In the
above part, POP and POD in branding by SK-II and Origins from the companies’
perspectives have been discussed. The companies would definitely want their
choices of branding to be properly reflecting as planned when it comes to
consumers’ mind. However, reality is not always ideal. In order to understand
consumers’ perceptions towards SK-II and Origins brands in terms of their POP
and POD, an online survey among defined target consumers has been conducted. A
group of 50 female Korean consumers aged 18-45 years old with a majority of age
25-35 (50%), who have bought and used skincare products at least once in the
last 6 months, have been asked about the brand awareness, imagery, and
positioning (See Appendix 1 for questionnaire details). The survey is limited
in Seoul (Korea) area, where both brands are available. The findings are
discussed in the following part.

SK-II
enjoys very high brand awareness with up to 90% respondents having heard of the
brand. The most prevalent touch points include TV commercial advertisements (58%),
SK-II stores in department stores (48%), and online ads (38%). SK-II is
perceived as a premium brand by 54% respondents which is matching with the
brand’s strategy. Its perceived point of 
difference are reflecting via top 4 attributes: premium, high performance,
care for women and consequently, expensiveness. It can be seen that those differentiation
attributes are not only related to the segmentation strategy, but at the same
time associated with product functionality and emotional connection, yet which
are not at the significant strong level. Moreover, in consumer mind, SK-II is
unlikely a brand which is natural-based, or inspirational enough, although “inspiration”
is the specific attributes, besides care for women is likely to be delivered
intentionally by the brands  through its
latest communication eg. Change destiny.

On the
other hand, Origins’ brand awareness is lower among respondents with only 70%
of them having heard of the brand, mainly thanks to its presence at stores (48%)
and online advertisements (24%). They are perceived as more likely a mass
brand. Also, there is only 60% of respondents find Origins’ differentiation to
other skincare brands, compared to 76% of SK-II. However, Origins’ points of
difference include: Natural (74%) and Care for environment (36%), which highly
matches with the its choice of branding strategy.

6. Conclusion

Based
on the findings above, it can be concluded that between the two brands,  Origins is likely more effective in register
their brand imagery and positioning based on POD and POP in consumer mind. However,
given the fact that up to 40% consumers do not find Origins, as a total brand
stay different from other cosmetics brands, Origins brand may investigate and
consider adjusting their approach of POD in the context that natural-based
products and “green-concept” are becoming saturated to consumers because of
being used by a number of brands. This concern is even more obvious if putting
in Korea market specially where Innisfree (by Amore Pacific) or Natural
Republic are Prominent natural-based brands.

Meanwhile,
SK-II are successfully positioning themselves as a premium brand, however, more
efforts could definitely be invested in order to strengthen the key attributes
of both functionality and emotion, which did not come out as strong as expected
in consumers’ perception.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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