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BA 656 – International Consumer Audit Paper: Tarte Cosmetics 1

BA 656 – International Consumer Audit Paper: Tarte Cosmetics

Jamie AngoveBellevue University

Dr. Okash


Table of Contents

Abstract................................................................................................................................4

Executive Summary.............................................................................................................5

Company Profile and Brand Overview................................................................................6

The Brand and the Product..................................................................................................7

Government and Political Landscape..................................................................................8

Economy............................................................................................................................10

Socio-Cultural Trends........................................................................................................11

Technological Environment...............................................................................................11

Environmental Climate......................................................................................................12

Legal Environment.............................................................................................................13

Market Segmentation.........................................................................................................14

Competition in the Market.....................................................................................15

Consumer Needs and Opportunities for Innovation..............................................16

Potential for Product Extension.............................................................................17

Product Position.................................................................................................................19

Pricing................................................................................................................................20

Distribution Strategy..........................................................................................................21

Promotional Strategy.........................................................................................................22


Cultural Values and Customer Satisfaction.......................................................................24

Conclusion.........................................................................................................................26

References..........................................................................................................................27

Appendix............................................................................................................................32


Abstract

This paper is focused on Tarte brand cosmetics and its ability to be positively integrated into the

English cosmetics market. A complete audit has been conducted to compare the brand

personality and positioning against English culture, norms and preferences. Research was

conducted on the English market as a whole, evaluating the governmental, economic,

technological and environmental climate. Tarte analysis has been conducted and proves a

positive match to English preferences and buying habits.

Keywords: Tarte, cosmetics, England, culture


Executive Summary

Tarte has been a well-known, preferred premium cosmetics brand in the United States

since the early 2000s. The brand has received positive feedback for its commitment to

responsible production and product sourcing as well as societal marketing. Recently, Tarte has

been introduced to the market through limited distribution, and it has been received with

enthusiasm. This paper will analyze English culture, current environmental factors, and the

attributes of the Tarte brand to prove it can be successfully expanded through additional

distribution channels in England.

Product

Tarte offers a wide variety of color cosmetics, all using ethically sourced and tested

ingredients and presented in chic, fashion-forward packaging. The English market has a strong

preference for premium cosmetics, and these consumers have demonstrated a strong demand for

the brand in their market (Partington, 2014).

English Environment

Larger metropolitan areas’ economies, where color cosmetics are in the highest

demand, are on the rise (PwC, 2015). Although unemployment is high, inflation is low, and the

economy is still recovering, the cosmetics industry remains strong (“Skincare industry profile:

United Kingdom,” 2014). The make-up industry had a market value of 2,110.5 million dollars in

2012 and is expected to grow to 2,660.2 by 2017 (“Make-up industry profile: United Kingdom,”

2013).


Company Profile and Brand Overview

Tarte cosmetics began in a small New York City apartment in 1999 with a vision of

providing better quality products made from natural ingredients (Newman, 2007). The

company’s founder, Maureen Kelly, demonstrates a passion for development through Tarte’s

wide expanse of products and colors, and Ms. Kelly has a special knack for marketing which can

be seen through Tarte’s chic, fashion-inspired packaging (Newman, 2007). The cosmetics market

has been shifting towards an eco-friendly, cruelty-free focus, but Tarte was ahead of the trend; its

products have been based on natural ingredients, superfruit infused products, a strict no animal

testing policy, and packaging devoted to reducing, reusing and recycling (Newman, 2007; Kelly,

2012). Tarte is a leader in the earth-engineered beauty market with a mission to promote “health

couture” cosmetics and educate women on the benefits of being beautiful on the inside and out

(Newman, 2007).

Despite wide growth and demand for Tarte cosmetics in the United States, the brand

was completely unavailable in England until 2014 (Partington, 2014). Cosmopolitan UK cited

Tarte as one of the top eight American brands English and United Kingdom women wished were

available in early 2014 (Partington, 2014). Later that year, QVC launched Tarte in England and

the United States Sephora online store began selling Tarte to English consumers (“Tarte lands in

the UK. Here’s what you need…, 2014). Tarte is unavailable for English consumers to touch and

test prior to purchase, targeting a very limited market of people most likely already familiar with

the brand.

While brick-and-mortar stores are becoming less important for many purchases, stores

like Best Buy have struggled with matching prices to online competition as consumers use its

showrooms to try out products before bargain shopping online. Cosmetics require the same “try-


before-you-buy” opportunities for consumers, especially first time purchasers. Finding the right

color match for all-over foundation and a blush complimentary to skin undertones requires

consumers to test products in person. Tarte is still not available in this capacity to English

consumers today.

This paper will outline a proposal to integrate Tarte cosmetics into department stores in

England, highlighting the consumer need that will be fulfilled by widening the distribution of the

brand. England has a demand for Tarte cosmetics, and it is up to the company to optimize its

penetration into the English market by providing its products to consumers in an optimal

cosmetic-purchasing environment.

The Brand and the Product

Tarte designs cosmetics that are completely vegan, cruelty-free and mostly eco-friendly

(Kelly, 2012). Products include basics such as foundation and concealer, colorful eyeshadows,

lipsticks, cheek stains, and bronzers, eyeliners, mascara, and beauty brushes. Each of Tarte’s

cosmetics is sold in a uniquely designed, fashion-inspired package intended to project the

brand’s position of being trendy, chic, environmentally-conscious, and unique (Newman, 2007).

Tarte’s products are best described as prestige brands: the brand name, stylish packaging, and

high quality ingredients validate premium product pricing that customers are willing to pay. One

of Tarte’s best-selling products is its Amazonian Clay 12-Hour Full Coverage Foundation with

SPF 15, available in at least 24 shades to fit most skin tones. The product is priced at just under

40 dollars, compared to a drugstore brand such as Maybelline that costs six dollars.

Tarte is a cosmetics brand targeted at young women, estimated ages 20 to 30, with an

interest in environmentalism and making healthy choices. Consumers likely have disposable


income or are willing to sacrifice on other luxuries in order to afford cosmetics they adore.

Consumers may be described as Bohemian; they are earthy, environmentally responsible and

support cruelty-free practices (Campo, 2013). Consumers do not want to be tied to a typical

“granola” image, and they are still conscious about the availably of various shades, product

performance, and overall packaging (Campo, 2013). It is these attributes that attract young,

image-conscious women to Tarte’s responsible-yet-fun products.

Tarte was sold to Kosé in April, 2014, with a guarantee that the brand would not change

its product or mission. Kosé intentionally held off on introducing the brand into its home

Japanese market due to a lack of brand presence in the country, an absence of anything similar in

the “high performance natural” cosmetics category, and an instinct that Japanese consumers

would not be drawn to the chic packaging that Tarte is well-known for (Wetherille, 2014).

Additionally, Kosé opted out of introducing Tarte into the Chinese market due to the company’s

strict “no animal testing” policy; China mandates that animal testing be performed on all

cosmetics (Wetherille, 2014). It is clear that Kosé is maintaining the identity of the Tarte brand

by making smart marketing decisions; however, the English market, ready to embrace Tarte, still

has a void in the availability of its cosmetics.

Government and Political Landscape

England is often grouped into the United Kingdom, sharing government, population

measurements, and statistics on demographics with the larger country which includes England,

Scotland, Wales and Northern Ireland. The country is governed by a constitutional monarchy

with its capital in London, England (Central Intelligence Agency, 2015). England itself consists

of 27 two-tier counties, 32 London boroughs, the City of Greater London, 36 metropolitan

districts, and 56 unitary authorities (Central Intelligence Agency, 2015).


As a constitutional monarchy, the country is currently ruled by Chief of State, Queen

Elizabeth II alongside Prime Minister David Cameron (Central Intelligence Agency, 2015).

Prince Charles is heir to Queen Elizabeth’s throne. Monarchy is strictly hereditary, so heir to the

throne will always follow the current Queen’s bloodline (Central Intelligence Agency, 2015).

The prime minister is elected after campaigning as a leader of a majority party or coalition

(Central Intelligence Agency, 2015).

The United Kingdom’s constitution is unwritten, consisting partly of statutes and partly

of common law and practice (Central Intelligence Agency, 2015). The legal system follows a

common law organization and consists of a nonbinding judicial review of the Acts of Parliament

(Central Intelligence Agency, 2015). Citizenship is granted in the United Kingdom by descent

only, meaning one parent must be a citizen of the country (Central Intelligence Agency, 2015).

To become a naturalized citizen, one must live in residency for five years (Central Intelligence

Agency, 2015).

Several groups currently apply political pressures on government entities (Central

Intelligence Agency, 2015). The Campaign for Nuclear Disarmament supports non-violent

protest and encouragement for the British to disarm nuclear weapons (Campaign for Nuclear

Disarmament, n.d.). The Confederation of British Industry (CBI) promotes conditions to assist

U.K. businesses of all sizes in competition and prosperity (CBI, n.d.). By lobbying and

campaigning and through political access, the CBI provides market leading economic surveys

and forecasts, provides influential thought leadership, and guides business decision making by

providing strategic insight (CBI, n.d.). The CBI also assists in linking businesses to the right

people to create business opportunities for prosperity (CBI, n.d.). The National Farmers’ Union

often aids in making legislation and determining prices (Massey, 2012).


Economy

The current Gross National Income in the United Kingdom is $43,430 (The World

Bank, 2015). Additional the Gross Domestic Product has grown to 2.9 as of 2014, but is

expected to decline to 2.2 by 2017 (The World Bank, 2015). Growth in the U.K. slowed slightly

in 2015, but lower oil prices assisted in keeping demand growth strong (PwC, 2015). Economists

expect that any global environment improvements would also lead to accelerated growth rates in

the U.K. (PwC, 2015). Larger metropolitan areas lead the current economy recovery growth,

averaging three percent in 2015 through 2016 in London and the South East (PwC, 2015).

Inflation has remained relatively low in the United Kingdom. In 2013 it was 2.6

percent, but has shrunk to 1.5 percent in 2014 (Central Intelligence Agency, 2015). The

unemployment rate, however, has increased in the same period of time: unemployment was at .6

percent in 2013 and increased to 6.2 percent in 2014 (Central Intelligence Agency, 2015).

While the overall economy is still under pressure, the cosmetics industry remains strong

and proves to be in good economic standing to support Tarte’s entry into the market. In 2013, the

skincare market in the United Kingdom was almost 2,813.6 million dollars, and it is expected to

increase to 3,174.1 million by 2018 (“Skincare industry profile: United Kingdom,” 2014). Facial

care is the largest segment of the skincare market, representing over 60 percent (“Skincare

industry profile: United Kingdom,” 2014). The make-up industry alone had a total market value

of 2,110.5 million dollars in 2012, expected to grow to 2,660.2 by 2017, see Appendix A

(“Make-up industry profile: United Kingdom,” 2013).


Socio-cultural Trends

The entire United Kingdom population is 63,200,000, 84 percent of which is the

population of England, 53,000,000 (Office for National Statistics, 2011). Tarte’s target market is

women, ages 20 to 30. The United Kingdom’s population is 50 to 52 percent female: 2,084,000

females aged 20 to 24 and 2,188,000 aged 25 to 29 (United Nations Statistics Division, 2015).

The mean age for females to marry in the U.K. is 27 (United Nations Statistics Division, 2015).

The education level for women in the U.K. as of 2012 is seventeen, while the overall education

level is 16 (Central Intelligence Agency, 2015). Tarte consumers are often young, educated and

single, which translates well into the U.K. market.

The overall population of the United Kingdom is expected to reach 68,631,000 by 2030

(United Nations Statistics Division, 2015). The healthy lifespan of U.K. female residents is 68.4

years, with an overall life expectancy of 89.2 years (Eurostat, 2013). Currently the country has

the fifth highest immigration population: 8.5 million (United Nations Statistics Division, 2015).

The economic and labor markets are major drivers of international migration, and language,

study opportunities and establish networks often encourage people to immigrate to the country

(Markaki, 2015).

Technological Environment

As a fully developed, long industrialized country, the United Kingdom is very similar to

the United States in technological development and technology usage. In terms of marketing

reach and opportunity, the country has strong availability of internet, television and radio. Cell

penetration is 78.5 million, or 124 percent of the population since many users have more than

one cellular phone (Central Intelligence Agency, 2015). Internet reach is 57.3 million, or 91


percent of the population (Central Intelligence Agency, 2015). The country had 940 television

stations as of 2008, 206 AM radio stations and 696 FM stations (Central Intelligence Agency,

2015).

Social networking is also very popular in the U.K.: 65 percent of online adult users have

a social networking profile (“Adults’ media use and attitudes report 2014.” 2013). Nearly all

users with a profile have one on Facebook, and users with only a Facebook profile (and no other

social networking profile) have fallen to only 43 percent (“Adults’ media use and attitudes report

2014.” 2013). Three out of ten online adults have a Twitter account, and one out of five have

YouTube (“Adults’ media use and attitudes report 2014.” 2013). Lastly, 60 percent of users visit

social media sites more than one time a day (“Adults’ media use and attitudes report 2014.”

2013).

Environmental Climate

The climate in the United Kingdom is often thought of as cold and dreary. In reality, the

coldest months of December and January average about 38 to 40 degrees Fahrenheit (The World

Bank, 2015). The rainy season begins in August with average rainfall of four inches, and

increases through December when averages reach 5.25 inches (The World Bank, 2015). Primary

weather-related hazards include winter windstorms and floods (Central Intelligence Agency,

2015).

The United Kingdom’s per capita energy usage as of 2011 was 2,973 kilograms of oil,

decreasing by 2.81 percent from 2005 (Central Intelligence Agency, 2015). Carbon dioxide

emissions per capita were 7.86 kilotons in 2010, decreasing by 1.87 percent annually from 2005


(Central Intelligence Agency, 2015). Carbon dioxide emissions for the country total 493,505

kilotons (Central Intelligence Agency, 2015).

Climate change has impacted the U.K., and goals have been created to reduce

greenhouse gas emissions (Central Intelligence Agency, 2015). The country reduced industrial

and commercial waste in landfills in 2005 to 85 percent of what it was in 1998, and it recycled or

composted at least 25 percent of its waste (Central Intelligence Agency, 2015). Additionally, the

U.K. participates in international environmental agreements in the areas of air pollution,

biodiversity, climate change, hazardous wastes, and ozone layer protection, amongst others

(Central Intelligence Agency, 2015).

The current environment and efforts to improve emissions make the United Kingdom an

ideal market to meet the Tarte brand’s goals: produce environmentally friendly products that

improve skin health and make women feel more beautiful.

Legal Environment

The United Kingdom conducts a lot of business with the United States. The Federal

Trade Commission and Department of Justice oversee trades between these countries (European

Commission, n.d.). Dedicated agreement exist to offer best practices between these countries,

and they include the Best Practices on Cooperation in Merger Investigations and additional

agreements regarding positive comity principles and application of competition laws (European

Commission, n.d.). The overall goal of these contracts is to promote cooperation and

coordination between countries, governing their trades.

The European Commission (EC) is an executive body of the European Union (EU) that

manages antitrust laws by proposing legislation, implementing decisions, upholding treaties and


managing business of the European Union (European Commission, n.d.). The EC has several

treaties that prohibit agreements between businesses that may restrict competition and prohibit

dominant businesses from abusing their position by charging unfair prices, limiting production,

or refusing to offer new products to customers to meet their needs (European Commission, n.d.).

Discrimination laws are also upheld by the EU in the United Kingdom. The EU works

to prevent discrimination on the grounds of racial or ethnic origin, religion or belief, disability,

age, sexual orientation or sex (European Commission, n.d.). The EC specifically takes action to

raise awareness on discrimination, consumer rights and business obligations, supporting

development of equality policies, engaging in and offering anti-discrimination training activities,

and pushing for business-oriented diversity management. (European Commission, n.d.). The

Racial Equality Directive and Employment Framework Directive both promote equal treatment

in employment and occupation for all United Kingdom residents.

Market Segmentation

The market for premium cosmetics in England is very strong. English women, in

particular, spend more on beauty products than any other European Union country (Forsey,

2008). English women have an appetite for innovation in the cosmetics industry and prefer

higher priced products (Forsey, 2008). Even when the economy was at a very low point in 2012,

the health and beauty market in the United Kingdom was strong (Morley, 2013). Boots, a

cosmetics industry leader, saw a profit increase of 5.2 percent (Morley, 2013).

The United Kingdom has 2,084,000 females aged 20 to 24, and 2,188,000 aged 25 to 29

(United Nations Statistics Division, 2015). The total United Kingdom population is 63,200,000,

of which England makes up 53,000,000 or 84 percent (Office for National Statistics, 2011). This


translates to a potential cosmetics target market in England of 3,588,480 ((2,084,000 x

84%=1,750,560) + (2,188,000 x 84%=1,837,920) =3,588,480). 93 percent of women in the

United Kingdom wear color cosmetics, further refining the target market to 3,337,286 people

(“Go!,” 2014). The prestige, higher end cosmetics market has seen the largest recent increase,

and 42 percent of United Kingdom consumers choose prestige brands (“Go!,” 2014). For Tarte,

this translates to a possible consumer base of 1,401,660 women avidly seeking color cosmetics.

Additionally, brand loyalty in cosmetics is strong: two in five women who buy prestige

foundation rarely change the brand of face makeup that they purchase (“Go!,” 2014).

Competition in the Market

The skincare industry has a strong leading player in the market: L’Oreal with 24.4

percent of market share (“Skincare industry profile: United Kingdom,” 2014). The cosmetics

market is slightly more fragmented with four top players holding 58.1 percent of the market

share, two of which are L’Oreal and Coty (“Make-up industry profile: United Kingdom,” 2013).

Both companies have a leading brand that provide ample competition for Tarte: L’Oreal’s Urban

Decay and Cody’s Rimmel London.

Urban Decay is a brand founded on the promise of edgy cosmetics with bold, unique

colors (Urban Decay, n.d.). It is known for experimental shades and innovative products, with

one of its best sellers being an Eyeshadow Primer Potion that promises crease-free eyeshadow all

day and night (Urban Decay, n.d.). Urban Decay has prestigious, eye-catching packaging and is a

cruelty-free brand, much like Tarte (Urban Decay, n.d.). Urban Decay is also a prestige brand

and is sold at specialty cosmetic stores. It has the largest potential for keeping or taking Tarte’s

consumers interested in bold, unique color palettes and the offer of color-stay foundational


products. Urban Decay does not have as strong of a focus on environmentally friendly or skin-

protecting ingredients as Tarte does, and it is not committed to lessening its carbon footprint.

Rimmel London is very different from Tarte in its ingredient-sourcing, production,

pricing, and commitment to cruelty-free products. It is a competitor to Tarte primarily in its wide

variety of color options and its availability in the English market. Rimmel London’s focus is on

new shades and products, avidly advertising its easy-to-use, versatile and accessible products

(Rimmel, n.d.). It is sold at a lower price point, typically in drugstores, although available in

beauty store, Ulta (Rimmel, n.d.). Its products are not cruelty-free or focused on healthy

ingredients and positive skincare regimens. Rimmel London’s biggest benefits are that it offers

many colors, frequent new products, and is inexpensive so consumers can try new products

frequently. Typically, it is not a direct competitor of Tarte.

Customer Needs and Opportunities for Innovation

The fashion industry has a strong influence on the make-up market (“Make-up industry

profile: United Kingdom,” 2013). United Kingdom consumers prefer to differentiate themselves

through various styles and the wide array of brands offered in the cosmetics market, choosing

colors and products that project their personality (“Make-up industry profile: United Kingdom,”

2013). Due to the volume of brands available on the market, retailers are obliged to offer buyers

what they want (“Make-up industry profile: United Kingdom,” 2013). As consumers with strong

brand preferences and purchasing power age, the biggest opportunities for innovation lie in anti-

aging products including hydration, spot correction, and fine line reduction (“Go!,” 2014).

Prestige brands also have the opportunity to engage new consumers with smaller sized, trial

option products that are purse-friendly and easy to use (“Go!,” 2014). Marketers’ focus in this

category should be highlighting product formulations and ingredients as a way to prove


worthiness of prestige pricing (“Go!,” 2014). Fortunately, the Tarte brand is built on premium

quality ingredients and has built brand loyalty based on its environmentally savvy manufacturing

practices.

The cosmetics industry continues to grow, with more competition entering the market

regularly (“Skincare industry profile: United Kingdom,” 2014). Primary drivers of growth

include the ageing of developed country’s populations, growth of the middle class, technological

developments in the industry and an increase in health and wellness awareness (“Skincare

industry profile: United Kingdom,” 2014).

Innovation in the cosmetics market can be seen in the vast variety of anti-aging products

becoming available. Premium anti-aging products are the strongest growth category for

cosmetics companies (“Skincare industry profile: United Kingdom,” 2014). Ultraviolet ray

protection has also taken off and is offered in most foundations and face lotions (“Skincare

industry profile: United Kingdom,” 2014). Both Tarte’s BB tinted face cream and Amazonian

Clay 12-Hour Full Coverage Foundation contain SPF protection. Given Tarte’s consumer

demographic of women 20 to 30, the company should continue adding anti-aging products to its

line in an effort to meet the needs of consumers beginning to fight signs of aging in their

twenties.

Potential for Product Extension

As the market becomes more saturated, the need for personalized and targeted products

grows (“Skincare industry profile: United Kingdom,” 2014). The increased focus on health and

wellness provides an opportunity for Tarte fitting its core mission to use “skinvigorating”

ingredients (Tarte, n.d.). Tarte has several products targeted at anti-aging: Maracuja oil described


as providing firmer, brighter, smoother skin, Maracuja neck treatment targeted at improving the

appearance of skin on the neck, and Maracuja C-brightener eye treatment that claims to hydrate,

firm and brighten the eye area (Tarte, n.d.). Tarte could extend its brand by creating a fine line

and wrinkle reducer that provides proven results while promising the same dedication to earth-

friendliness, cruelty-free testing, and attractive packaging. Following this proven process for

product development, Tarte would ensure and improve brand loyalty by offering a product that

enables loyal customers to purchase from Tarte rather than buy a competitor’s wrinkle-reducer

that the customer is likely using.

External influences on this brand extension include the aging of the overall population in

developed countries, as well as the aging of Tarte’s primary target consumer. Culture in England,

much like America, encourages women to look young and beautiful for as long as possible.

While Tarte has several products that aid in fighting facial signs of aging, the gap in a wrinkle

reducer likely drives loyal customers to purchase this product from competitors.

Internally, Tarte is probably less motivated to create a new, wrinkle reducing product. It

likely sees its general Maracuja oil as a similar substitute since the oil promises firmer, brighter

skin. Additionally, Tarte likely faces a difficult process of obtaining ingredients that fit the

product’s core values while also promising results. Traditional anti-aging products may contain

ingredients obtained from animal by-products (Dallmeier, n.d.). Tarte would need extensive

product sourcing and testing before being able to release a new wrinkle reducing product, which

would take significant time and resources.


Product Position

Tarte cosmetics is positioned as a healthy, environmentally conscious brand aimed at

attracting young, fashion-forward consumers. Tarte competes in product quality, in both

ingredients and production techniques, and does not attempt to attract money-conscious

consumers in the cosmetics market. Competitor Urban Decay is also positioned in the premium

cosmetics market, using its own unique positioning. Urban Decay is focused on an edgy design,

offering alternative colors to the traditional palettes of pink, red and beige. Tarte’s unique

positioning comes from its ecological-focus and couture packaging.

Tarte’s other competitor in the United Kingdom market, Rimmel London, is positioned

entirely as a less expensive drug store brand. The company attracts consumers through offering

beauty products for budget-conscious consumers. While still fashion-forward and cutting edge

on new product features including an eyeliner with Precision Micro tip for fine lines (“Rimmel

debuts its spring lineup,” 2013), Rimmel competes in a different market than Tarte and Urban

Decay.

Tarte was likely positioned in the United States initially to early adopters: fashionable

big city dwellers eager to buy new, trendy products shortly after their introduction (Schiffman &

Wisenblit, 2015). Some very early consumers were probably innovators, learning about the

brand from an exclusive fashion publication then spreading their love of the new product to the

early adopters via word of mouth. In the English market, Tarte already has a level of notoriety as

it is currently available through online Sephora purchases and QVC. As such, the innovators and

early adopters have probably already tried the brand through one of these other forums. The

biggest benefit to launching the brand in-store is to expand to a new market of early to late

majority adopters; those that have avoided the risk of springing for a pricey premium brand


cosmetic without waiting for peer confirmation of its value (Schiffman & Wisenblit, 2015).

Early and late majority adopters will also welcome the benefit of being able to actively sample

the brand in-store before making a purchase.

Pricing

Tarte’s position in the cosmetics market enables a loftier pricing strategy consistent

with other prestige cosmetics, opposed to a strategy focused on meeting the needs of price-

conscious customers. The premium price of Tarte products also supports the brand’s position by

telling consumers that the product is high-end, offers luxury as well as environmental

sustainability, and is worth the additional cost. This pricing strategy is consistent with prime

Tarte competitors, and an accepted practice among cosmetics consumers.

While the keystone markup in fashion is typically 50 percent, premium cosmetics come

in at 60 to 80 percent (Waits, 2010). Tarte’s ingredients are higher quality and ecologically

sourced, so this standard markup yields less profit for the company. Additionally, selling Tarte in

a department store incorporates additional distribution factors, e.g. cosmetics salespeople, and

the company needs to factor this additional expense into the markup as it will likely be assessed

back to the company by the department store. Given these details, it is recommended that Tarte

leverage the full standard premium cosmetics markup of 80 percent. As an example, Tarte’s

Amazonian Clay 12-Hour Full Coverage Foundation retails on Sephora.com for $39.00

(Sephora, n.d.). It is likely the product is already marked up 75 percent, with the actual cost

being about $23 ($23x.75=$17.25+$23=$40.25). Adding an extra five percent to account for

retail sales distribution, the foundation should be priced at $41.50 ($23x.80=$18.40+

$23=$41.40).


Discounts are not common on prestige cosmetic products as they provide a conflicting

message to consumers about the value of the product. However, selling Tarte cosmetics as part

of a department store retail operations allows for a unique opportunity to leverage exclusive

“Friends and Family” sales. Tarte products should be allowed to be sold during these promotions

for a small fixed percentage discount, following the guidelines of other premium store brands.

The exclusivity of the event, typically only offered to core customers and department store

friends and relatives, provides an exciting opportunity to save on Tarte products, purchase

several more items than consumers typically would, but still ensures customer loyalty year-round

since these events are typically held only once a year.

Distribution Strategy

The consumer decision-making process is integral in Tarte’s implementation of a

broader distribution strategy in England. Many English women are already consumers of prestige

cosmetics, and research has shown that consumes in the United Kingdom are less brand loyal

than the United States (Schiffman & Wisenblit, 2015). This provides an advantage for Tarte

since English consumers are more open to the prospect of trying a new brand.

Consumers begin with identifying a need that is not met with their current beauty

regimen (Schiffman & Wisenblit, 2015). For potential Tarte consumers, this need may be finding

a more environmentally suitable product or a cosmetic with more natural, skin-improving

benefits. The consumer would then begin a pre-purchase search (Schiffman & Wisenblit, 2015).

This search could lead consumers in the direction of Sephora online sales, currently available

and offering Tarte, or it could land them in department stores.


Expanding Tarte distribution to department stores is the best strategy because it allows

consumers to sample the product in person. Currently, English consumers are only able to

purchase on QVC or Sephora, leading to a more limited trial of products whereas consumers may

purchase one item or several sample sizes before committing to the brand. In-store sampling with

Tarte-educated cosmetics sales people would provide product awareness and promotion,

improving the chances that the consumer would purchase more than one product in their first

visit.

Promotional Strategy

England’s strong demand for premium cosmetics paired with a specific demand for the

Tarte brand strong enough to bring it to the market via QVC set the stage for incorporating the

brand into department store sales. The cosmetics market in the United Kingdom reflects strong

buyer power and diversified retailers (“Skincare industry profile: United Kingdom,” 2014).

While most cosmetics are purchased from supermarkets (46.9 percent), the second largest

distributor is specialist retailers (18.6 percent) (“Skincare industry profile: United Kingdom,”

2014). English women are strong buyers of high end cosmetics, and they prefer to purchase them

in specialty shops that cater to the exclusivity and class that premium brands provide.

Studies have also found that major manufacturers advertise to consumers to effectively

build brand loyalty (“Make-up industry profile: United Kingdom,” 2013). When it comes to

loyalty, consumers prefer designer brands over retailer products, further creating opportunity for

Tarte to make its entry as a department store brand (“Make-up industry profile: United

Kingdom,” 2013).


Research found that the primary driving force behind using cosmetics is the personal

satisfaction of preserving an attractive appearance (Costa, 2012). In advertising products, there is

a growing desire for brands to feature a range of products that work together rather than just

focusing on a single product at a time (Costa, 2012). Additionally, more women are choosing

products that accompany a healthy lifestyle to amplify anti-aging benefits: 76 percent of survey

respondents agree that the right beauty products can maintain a youthful look longer, and 64

percent say that eating the right food is most important towards looking beautiful (Costa, 2012).

Last, the study showed that most respondents preferred to see naturally beautiful women with a

few aging lines used in advertising (86 percent), and 50 percent are concerned when photographs

of celebrities are airbrushed (Costa, 2012). The resulting market relies on products that are

natural and healthy, are advertised and can be purchased as part of an entire line, and are

promoted by striking, yet real women they can relate to.

The resulting promotional strategy should be targeted at the key audience, English

women ages 20 to 30, using media that they are most likely to respond to. Women in this

generation, Millennials, respond strongly to online advertising and social media campaigns. They

are tech-savvy and appreciate receiving brand education as part of media campaigns

(Schoenwalder, 2015). Online media should also be leveraged to push sales promotions and

periodic e-coupons to target new consumers and build brand loyalty. Women in this category are

avid smartphone users and frequently leverage codes that can quickly be accessed at a touch of a

button to receive promotional discounts.

In addition to online media, targeted consumers would also respond to print ads in

beauty magazines. These would include top magazines such as InStyle, Marie Claire, Stylist, and

Glamour. While online media is often preferred by Millennials, sales of beauty magazines are


still strong: In Style has a sell-through of 59.7 percent and Marie Claire has 50 percent, both high

above the average sell-through of 34 percent (Bercovici, 2004). Tarte should also continue to

leverage its catchy, fashion-forward packaging when introducing its products to England since

the packaging is both recognizable and helps to distinguish the brand as valuable and unique.

Extending the brand to include a wrinkle-reducing product also fits into the overall

promotional strategy of advertising an entire line of products, making it easier for consumers to

switch to exclusively using Tarte beauty products. Environmentally, health-conscientious

consumers would be served by a cosmetics line advertised as fitting all of their beauty needs:

fashion-forward products and packaging, environment- and animal-friendly production, and

healthy, skin-invigorating ingredients.

Cultural Values and Customer Satisfaction

Rokeach Value Surveys can be used to evaluate personal values and establish an

understanding for marketers on a culture’s terminal values, those that represent desired end-

states of existence, and instrumental values, the means to achieve the ends (Schiffman &

Wisenblit, 2015). While little research exists on terminal and instrumental values for English

women in particular, many of Tarte’s core principles are represented by match individual’s shifts

towards values of materialism, youthfulness, ecological responsibility and personal health

(Schiffman & Wisenblit, 2015). These values are matched to Rokeach end terminal values of

living a comfortable, dosed with happiness and pleasure.

Tarte’s position as a leader in eco-friendly, skin-benefitting, and youth-inspiring

products are reflected in these core values. Americans and Brits alike have become more aware

and invested in purchasing environmentally friendly products. They seek cosmetics that make


them appear youthful, and products that will keep them healthy. However, materialism is still

present: women still want to look beautiful and use purchases of premium goods to feel better

about themselves and their status (Schiffman & Wisenblit, 2015). People want products that are

higher quality rather than just abundant which Tarte offers in the form of premier cosmetics.

Maintaining customer satisfaction is also significant to engaging consumers and

improving loyalty for long-term growth. Customer satisfaction and customer-company

identification have a positive effect on loyalty and willingness to pay for the brand (Haumann,

Quaiser, Wieseke, & Rese, 2014). Further, customer satisfaction has a more prominent effect on

these attributes (Haumann, Quaiser, Wieseke, & Rese, 2014). Customer-company identification

is more effective in the long-term for stabilizing customer loyalty and driving desired consumer

outcomes over time (Haumann, Quaiser, Wieseke, & Rese, 2014).

To evaluate Tarte’s customer satisfaction, a quick glance at Tarte’s Facebook page

reveals over 600,000 consumer likes, Twitter shows almost 250,000 followers, and Instagram

demonstrates another 3.1 million followers. Being customer centric does not just mean having a

lot of social media followers; it also means providing good problem resolution and complaint-

handling. The Better Business Bureau reflects only five complaints filed in the last three years,

three of which were in the last twelve months (Better Business Bureau, 2015). It could be

presumed that problems with cosmetics do not generally incite enough frustration from

customers to report an incident to the Better Business Bureau, but one positive finding is that no

website has been created by a pool of frustrated customers wishing to vent about the Tarte brand

(unlike other cosmetic companies, e.g. MAC). Additionally, Tarte products sold on Amazon

average four to four and a half stars when rated by consumers (Amazon, 2015).


Conclusion

Tarte Cosmetics has a strong brand positioning and has already proven desirable in the

English market. The values of the company and product options provided to customers are in line

with English preferences. This audit paper has proven that Tarte can be easily integrated into

broad English market through department store distribution since the brand is a good fit for

English consumers.


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