Procter & Gamble rightly decides to pull Max Factor from the US market
Procter & Gamble has decided to pull the age-old Max Factor brand from the US, but continue with it in other markets. In the US the company will focus on its Cover Girl brand, which leads the colour cosmetics market with its more subtle and subdued colours, offering the girl-next-door image much preferred by American women.
The Max Factor brand, on the other hand, is characterised by deep and bright colours, which do not appeal to American colour cosmetic tastes. The brand is, however, more in tune with European fashions. By keeping Cover Girl for the US and Max Factor for the rest the world, Procter & Gamble aims to cater for two very different markets.
Cover Girl leads the US market
Cover Girl is the leading colour cosmetics brand in the US, commanding approximately 9% share of the market. Over the last five years the brand has posted a 3% CAGR, making it the third most dynamic in terms of growth, contributing over US$150 million to the overall US$850 million growth of the US colour cosmetics market.
Cover Girl has developed a trendy, sporty image with its subtle colours which appeal to American tastes. American consumers prefer more natural looking fashion icons such as Jennifer Aniston and Cameron Diaz. One of the brand’s mottos – ‘take off the mask’ – rightly targets American women’s casual attitude towards beauty.
Max Factor falls out of favour with US consumers
Max Factor is the opposite to what Cover Girl represents. Max Factor is an age-old brand dating back to 1904. The brand is dominated by the colour black and its lipsticks mostly come in bright crayon-type colours. Its heavy texture has led to a famous saying that if one uses Max Factor one needs to bring the Kleenex along.
This ties in with the brand’s origins as it was first developed for the film industry. The brand was used by celebrities such as Lucille Ball and Charlie Chaplin, among others. It has stuck to its original form, thus failing to keep up with American tastes.
Max Factor popular worldwide
Although Max Factor has fallen out of favour with the American public, it is still popular worldwide, and is the second leading brand in Russia and the UK. This again has to do with very different fashion tastes, with European consumers preferring brighter colours and heavier textures.
Good decision to keep two distinct brands
Procter & Gamble could have introduced subtler and softer colours to its Max Factor line instead of phasing it out from the US market, but this would have meant further investment in advertising to create a different brand image. Procter & Gamble’s financial performance has not been satisfactory of late, with the company reporting a decline in sales growth for the last few quarters.
The company is under significant pressure from shareholders to reduce its production costs. It has been reported that the firm has been slashing its advertising budget. Under the circumstances, it would not have been a good strategic move to introduce new colours and textures to its Max Factor brand to make it marketable in the US.
The decision to pull Max Factor from the US market is a good one. The colour cosmetics market in the US is becoming increasingly competitive, with both L’Oréal and Mac gaining share. It is important that Procter & Gamble maintains its share for Cover Girl. Focusing on Cover Girl makes financial sense as not only will it help the company retain its leading position, but it will also require less investment as the brand already sports the right image in the market.