Marketing Channel Choice Strategy Of Low-end Cosmetic Brands: Taking Brand LP As An Example

Marketing channel strategy in Fast Moving Customer Goods (FMCG) industry is an important strategy for FMCG companies and brands, especially for the low-end cosmetic companies which manage various marketing channels. This paper used the sales data from Brand LP, the model of the low-end cosmetic companies. First I analyzed the current situation and the development during last three years of their marketing channel, via statistical analysis. Then I made the empirical analysis with serious econometric models to analyze the main regional factors when Brand LP selected modern trade, one of the main four channels of Brand LP.The result showed us three key points. First of all, the modern trade and the department store were the most critical marketing channel of Brand LP, which had contributed 80 percent of total sales value. Meanwhile, the modern trade management was the key difference between the high-end cosmetic brand and the low-end cosmetic brand. Although the marketing share of E-commerce channel was not so huge, but had amazing growth during the last three years. Second, the sales data of last three years showed that the performance of Brand LP’s marketing channel was influenced by the product category. For instance, the skin care category and the makeup category relied on the traditional department stores, while the most of men’s care and the hair care category were sold in modern trade, especially in supermarkets and convenience stores. The most sales of E-commerce came from skin care and men’s care products. Third, the sales share of modern trade was effected by the regional factors, such as the development of local retail chain enterprises and the local population of the youth and the middle-aged, which had the significant positive affection for the sales share of modern trade. But the income level of local citizens had little negative affection.This research put forward some suggestions to low-end cosmetic brands. In the first place, brand managers should make a full consideration to the products characteristics while making the marketing channel plan and choosing different channels. In the same time, the modern trade can be largely put in regions with wildly distributed retail chain stores and large population of youth and middle-aged. But in regions with high level of income and economic development, low-end brands should pay more attention to the channel diversity and balance. At that time, multi-channel strategy is a suitable choice.