UNIVERSITY OF NEW YORK IN PRAGUE European Business Administration ANALYSIS OF THE MARKETING COMMUNICATION STRATEGIES OF SEPHORA IN THE CZECH REPUBLIC 2018 DINH HAI TRIEU UNIVERSITY OF NEW YORK IN PRAGUE European Business Administration ANALYSIS OF THE MARKETING COMMUNICATION STRATEGIES OF SEPHORA IN THE CZECH REPUBLIC 2018 MENTOR: WILLIAM PATTISON Statutory Declaration I, Dinh Hai Trieu, declare that the paper entitled: “The Analysis of Marketing Communication Strategies of Sephora in the Czech Republic” was written by myself independently, using the sources and information listed in the list of references. I am aware that my work will be published in accordance with § 47b of Act No. 111/1998 Coll., On Higher Education Institutions, as amended, and in accordance with the valid publication guidelines for university graduate theses. Prohlašuji, že jsem tuto práci vypracoval/a samostatně s použitím uvedené literatury a zdrojů informací. Jsem vědom/a, že moje práce bude zveřejněna v souladu s § 47b zákona č. 111/1998 Sb., o vysokých školách ve znění pozdějších předpisů, a v souladu s platnou Směrnicí o zveřejňování vysokoškolských závěrečných prací. In Prague, 27.4.2018 Dinh Hai Trieu Acknowledgments My three years at the University of New York in Prague are considered by of the most valuable journeys I ever had the chance to take. I would like to pay special thankfulness, warmth, and appreciation to the persons below who made my research successful and assisted me at every point to cherish my goal: My mentor, Professor William Pattison for his vital support and assistance. His encouragement made it possible to achieve the goal, help and sympathetic attitude at every point during my research helped me to work in time. My Mom and Dad, family members and friends, without whom I was nothing; they not only assisted me financially but also extended their support morally and emotionally. I take this opportunity to express gratitude to all of the Department faculty members for their help and support. Table of Contents Introduction .................................................................................................................. 1 1. Literature Review ...................................................................................................... 2 1.1. Development of the cosmetics industry ..................................................................... 2 1.2. The role of marketing in the cosmetics industry .............................................................. 5 1.3. Marketing communication.............................................................................................. 7 1.4. Marketing Mix and the 4Ps of marketing ......................................................................... 7 1.4.1. Product ............................................................................................................................. 8 1.4.2. Place ................................................................................................................................. 8 1.4.3. Price .................................................................................................................................. 9 1.4.4. Promotion ....................................................................................................................... 11 2. Industry analysis of the Czech cosmetics market ....................................................... 13 2.1. Czech cosmetics market ................................................................................................ 13 2.2. PEST Analysis ............................................................................................................... 14 Political factors ......................................................................................................................... 14 Economic factors ...................................................................................................................... 14 Social demographic factors ...................................................................................................... 15 Technological factors ................................................................................................................ 16 2.3. Competition on the Czech cosmetics market ................................................................. 18 3. Sephora and its Marketing Communication Strategies ............................................. 22 3.1. Company overview ....................................................................................................... 22 3.2. Sephora in the Czech Republic ...................................................................................... 25 3.3. Range of goods ............................................................................................................. 26 3.4. Selected marketing communication strategies of Sephora in the Czech Republic ............ 27 3.4.1. Advertising ...................................................................................................................... 27 3.4.2. Public relations ............................................................................................................... 31 3.4.3. Personal selling ............................................................................................................... 32 3.4.4. Direct marketing ............................................................................................................. 34 3.4.5. Online communication – Social Media ........................................................................... 36 3.4.6. Press Events .................................................................................................................... 39 4. Primary Research ..................................................................................................... 41 4.1. Research method and its objective ............................................................................... 41 4.2. Methodology ............................................................................................................... 42 4.3. Results of the research ................................................................................................. 47 Place ......................................................................................................................................... 47 Habits, behavior, and decision – making .................................................................................. 48 The perception of the brand .................................................................................................... 48 Loyalty program Sephora Club ................................................................................................. 50 Suggestions for improving marketing communications ........................................................... 51 4.4. Conclusion of the research ............................................................................................ 52 5. Evaluation and Recommendations ............................................................................ 55 Conclusion…………………………………………………………………………………………………………………..Er ror! Bookmark not defined. Abstract The aim of this research is to present a detailed and thorough analysis of major marketing communication trends in the cosmetics industry, specifically focused on the impact Sephora in the Czech Republic. In order to properly analyze Sephora and its role in the Czech Market, this thesis will first outline a literature review of marketing communication and describe how the industry has developed from the nineteenth century until now, presenting a detailed history of the evolution of the cosmetics industry. Next, the thesis will provide a detailed industry analysis of Sephora in the Czech Republic and give examples of Sephora's marketing communication activities, providing in-depth critiques of the strengths and weakness of Sephora’s marketing strategies and contrasting them with their major competitors, both those in direct sales and online outlets. These strategies will also be analyzed in terms of their effectiveness in engaging with customers across different income brackets. Finally, the thesis will analyze the results of a focus group conducted to gain a better understanding of the average customer’s perception of Sephora, patterns of shopping behavior, and receptivity to the marketing communications strategies of Sephora. Finally, the thesis will present its findings, evaluations, and recommendations concluding in a summary of the same. Introduction This thesis aims to display the marketing communication strategies of Sephora in the Czech market. This topic was selected to demonstrate the vital importance of marketing communications strategies when dealing with non-essential, that is today, luxury good—in this case, cosmetics. For the analysis of marketing communication in the cosmetics industry, this thesis will focus on Sephora - one of the leading cosmetics companies in the world. The cosmetics industry, as it is perceived today, has experienced significant growth over the years. The domestic manufacture and production of cosmetics products transformed into a real industry in the nineteenth century. This evolution led to an exponential increase in the variety of products, sales channels, and increased competition. Additionally, it began to influence the ways in which business owners reached out to their customers. People were subjected to the first rudimentary