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Rebuilding in Double Time

By: Karen A. Newman
Posted: September 5, 2008
Shinzo Maeda

Shiseido President Shinzo Maeda

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Now, Maeda leads the company in executing the current plan—which, in broad strokes, promotes becoming thoroughly committed to customer-oriented marketing, building a solid profit structure and improving the execution and speed of all reforms. “By pursuing these themes, we aim to maximize brand value and transform Shiseido into a company that consistently achieves operating profitability above 10% over the medium to long term,” said Maeda. Key strategies include reforming domestic marketing activities and accelerating expansion of the company’s China business, along with fundamental restructuring. Here’s a snapshot of current conditions and a peek at the plan.

Mega-line strategy

Reforming domestic marketing activities means refining brands and product lines that act, in Maeda’s view, as a valuable management resource in connecting Shiseido with its customers. “We undertook brand strategy renovation and promoted our ‘mega line’ concept aimed at acquiring the number one position in each category,” said Maeda.

The current three-year plan promotes “thoroughly customer-oriented marketing” by renovating brand strategy to refine brands and lines, valuable assets that Maeda said “link us with our customers.” The plan includes a fundamental reorganization of the formerly segmented portfolio for Shiseido’s regional lines into two broad categories: lines that expand customer contact points and lines that deeply entrench customer contact points, which cultivate customer relationship in limited retail channels.

The mega line concept aims to create leading lines in their respective categories. Maeda believes that merging and reorganizing existing lines enables intensive, effective spending in nurturing lines with new value that earn the overwhelming support of customers. The August 2005 launch of Maquillage in the makeup category and renewal of the Uno line in the men’s category are two such examples. Six months later, sales and recognition levels for these lines had significantly exceeded original projections, said Maeda.