Australian-based Jurlique was acquired by Pola in 2011. Sam McKay, the CEO, heard the news of critical comments about the company and animal testing in a Facebook post. It was a sensitive issue since it was contradictory to the brand's strong environmentally-friendly and ethical positioning. This issue was discussed in relation to the substantial changes in market position, partly connected with a change of ownership. From its focus on core green consumers, McKay sought to broaden the consumer base by repositioning it as making "the most effective products as natural as possible." The company found that Jurlique's image was an asset in attracting Chinese consumers. And because of the issue, its image was tarnished and lost a few customers. However, the use of recycled wood is not allowed under Chinese regulations. Likewise, the mandating of animal testing was a challenge to the brand's global natural brand position.
Geoffrey G. Jones, Andrew Spadafora
Harvard Business School (314087-PDF-ENG)
Mar 24, 2014
Case questions answered:
- What are some key differences in the beauty markets and beauty consumers in China, South Asia, Latin America, and Australia?
- What country or countries do you think Jurlique should expand to first in South Asia? In Latin America? Why?
- Based on the countries you selected in the previous question, are there any challenges in terms of tariffs, product formulation, licensing, or import that Jurlique needs to consider?
- How should Jurlique position its brand in each country? Are they green? Natural? Something else? What is the primary appeal to customers? How can they present a unified brand image in extremely different market contexts?
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Case answers for Jurlique: Globalizing Beauty from Nature and Science
What are some key differences in the beauty markets and beauty consumers in China, South Asia, Latin America, and Australia?
When Jurlique was acquired by the Japanese skincare company Pola Orbis in 2011, Sam McKay, the CEO of Jurlique was thrilled but knew his challenges were not over. There was a plethora of roadblocks in integrating the two firms, which were in the same sector of the market, but had different cultural values. The most sensitive topic was related to Jurlique’s involvement with animal testing of their products, as it seems to be in opposition to the brands ethical positioning and strong ties environmentally friendly ingredients and products.
Pola Orbis knew the products were tested on animals, which is a common practice for many Japanese cosmetic companies. However, the company faced much backlash on social media about animal testing, and so the CEO responded with total transparency, but it did not placate all of the concerned customers and bloggers. McKay knew that going forward, a more complex challenger would arise for the Jurlique brand, especially as it continued its global expansion.
Jurlique was not the first company to enter the natural cosmetics industry. This industry began to rapidly expand in the 19th century, touting products that could make the user ageless and made the users look anything but natural. When entrepreneurial spirits began creating products out of natural ingredients in the attempt to create a more natural beauty product market, there was little consumer interest for many years.
As the decades wore on, the chemical ingredients used in many cosmetic products contributed to mounting health concerns about the carcinogenic nature of the powders and dyes people heaped on their bodies with abandon. This lead to a change in consumer tastes and preferences for natural beauty products as opposed to their chemical predecessors…