Parfume Industry

The Perfume Industry

Perfume entered the western world through Arabic influence in the 14th century . The perfume industry prospered in Renaissance Italy as well as in France . With perfumes in demand from the Royalty , perfume development escalated in France . France quickly became the European center of the perfume industry . This is a distinction the France holds to this day and age

Today , fragrances account for 14 of the 150 billion dollar personal care market - a net annual global spending of 21 billion on perfumes and colognes . Compared to other sectors of

the personal care market , the fragrances market is less concentrated . The top three firms - LVMH (Louis Vuitton , L 'Oreal , and Estee Lauder , only hold a combined 25 .2 share of the fragrances market . This three firm concentration ratio is low compared to the concentration ratio of make-up (38 .2 ) and hair care (47 .8 . Fragrances are also more dominant in Western markets where they account for 30 of cosmetic purchases compared to single digit penetration in Asian markets (Euromonitor Market Research International , 2002

While the concentration ratio for fragrances reveals that there is ample competition in the fragrances market , such may not be said for the individual products . A few established scents like Chanel no . 5 are able to maintain a consistent market share (Euromonitor Market Research International , 2002 . However , the perfume market for the most part is characterized by short lived best sellers . The turnover of new fragrances is high with new scents being constantly launched (Euromonitor Market Research International , 2002 Weisman , 2007

If we are to look at the marketing strategy of the perfume industry based on Michael Porter 's generic strategies framework , it would appear that the fragrance industry employs a differentiation strategy . The choice of this strategy could be seen in the marketing campaigns employed by the fragrance companies as well as the value of perfume in contemporary western society . Fragrances are marketed like fashion advertising heavily on fashion , society and image magazines . These advertisements promote the created image of the perfume brands or companies with print advertisements showcasing models or other abstract displays of beauty or prestige . It is very unlikely that someone will encounter a perfume advertisement that stresses the value or cost of the perfume - perfume simply is not sold using a cost /value leadership strategy . Similarly , perfumes are not sold as targeting specific applications . There is no perfume for dinners , or for dates or for casual Fridays . While advertisements may showcase these images , Tommy Hilfiger cologne is sold as Tommy Hilfiger cologne . The focus of these perfumes is limited to the image that the perfume company is marketing for the fragrance . Rather than a specific focus for these fragrances their images serve to differentiate them from one another . People buy perfumes according to their promoted image , not for their use

We now examine the value of perfume to consumers . We should also consider how perfume shares several values with fashion . Perfume , like fashion is seen as an expression of individuality . You...