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SERVICE MARKETING
CASE STUDY
SERVICE MARKETING
CASE STUDY
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ACKNOWLEDGEMENTS
At first, we would like to give big appreciate to Hoa Sen University and my
lecturer – Ms. Pham Tuong Linh for giving us the chace and opportunity for our group to
join in this subject – Service Marketing.
Specially, I would like to express my thankful to my lecturer who have give us
the knowledge also help us a long during the process of implementation and completion
this final report.
Finally, we would like to express the thankful to all members in team for
supporting each other to complete the final report successfully.
Sincere thanks!
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ABSTRACTS
Sephora is one of the well-known beauty brands nowadays, and Sephora has
improved and conducted a lot of service strategies to get that success. Our report is to
discuss and analyse about the success of Sephora. The report has five main parts.
In the first and second part, we introduce the overview, target customers,
competitors of Sephora and the services that Sephora has as well.
In the third part, we discuss about service strategies that make Sephora success
and the concepts as well as the theories applied to those strategies.
The are four main concepts and theories was applied to Sephora’s service
strategies: Gaps Model of Service Quality, Service Quality Dimension, Levels of
Relationship Strategies and Service Guarantees which are analysed in the fourth part.
In the final part, we also mention about some challenges in Sephora’s service and
our recommendations which could help Sephora deal with those challenges. Sephora has
a trouble about solving customer’s complaints so we put forward our solutions which can
build the customers’ trust in Sephora.
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TABLE OF CONTENTS
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TABLE OF FIGURES
Figure 1: Sephora on Google Trends from 2014 to present (Google-Trends, 2018) ....... 2
Figure 2: Sephora on Google Trends from Nov 2017 to Dec 2017 (Google-Trends,
2018) ................................................................................................................................. 3
Figure 3: Sephora's keywords on Google Trends (Google-Trends, 2018) ....................... 3
Figure 4: CashStar ............................................................................................................ 4
Figure 5: Sephora Favorites Give Me Some New Lip Kit .............................................. 6
Figure 6: Sephora Favorites Summer Sun on the fly ....................................................... 6
Figure 7: Mini Makeover .................................................................................................. 7
Figure 8: Sale for VIB Rouge ........................................................................................... 8
Figure 9: Gaps Model of Service Quality......................................................................... 9
Figure 10: Employee comments about Sephora's traning program (Glassdoor, 2015) .. 10
Figure 11: Levels of Relationship Strategies .................................................................. 11
Figure 12: Case 1 - Complain of Parthvi in Sephora website (Parthvi, 2018) ............... 13
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I. Company Introduction
1.1. The birth of Sephora
Sephora was founded in France by Dominique Mandonnaud in 1969 with the first
item being perfume. In 1988, the first Sephora store was opened in New York with more
variety of goods than ever before. So far, Sephora has a total of 2,300 stores in 33
countries worldwide with an expanding base of over 430 stores across the Americas and
sells more than 11,000 products from 250 brands around the world. (Sephora, 2018)
(Sephora, 2018)
1.2. Sephora’s target customers
Women are the main target audience Sephora is divided into two groups:
o The first group is the group from the 25-30 years old facility is "self serve" they
liked to experience and try out the new products.
o The second group is the 40-60 years old who came to Sephora to receive
counseling from the staff.
In fact today a lot of men have found to Sephora to find products that match the needs
of the self. (Dudko, 2012)
1.3. Competitors of Sephora
- Marionnaud: The company was founded in 1984 and is headquartered in Paris,
France. Marionnaud manufactures and distributes perfumes, cosmetics, and beauty
products. The company operates in the beauty treatments and care, luxury goods,
accessories, etc. (Bloomberg, 2018)
- Nocibé: The company was founded in 1924 and is based in France operates a
chain of perfumery and beauty products retail stores. It also sells products online.
(Bloomberg, 2018)
- Ulta Beauty: the largest beauty retailer in the United States and founded in 1990.
The company offers over 20,000 products from around 500 beauty brands that are
established and featured on all categories and prices, including Ulta Beauty's private label.
(Ulta, 2018)
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- Shipping & Delivery: When your order is ready to be shipped, you will receive a
shipment confirmation e-mail. In addition, Sephora has attractive delivery policies for
customers especially for customers in the US like free ship with orders $50 and over and
have a gift cards, etc.
- Beauty Insider Program is Sephora's a free rewards program in the United States
and Canada lets you earn points on all your merchandise purchases and redeem on
rewards. the reward is the advanced prototype you receive rewards when reaching the
eligible purchase.
- Beauty Talk: If you have concerns about the beauty or the questions about beauty,
then will join the community of beauty talk and get advice from experts of the Sephora
and the professional shoppers.
- Sephora Cards: Sephora has three membership cards white (0-200 points) black
(200-1500 points), gold (over 1500 points). In the two hundred points accumulated, the
cardholder will receive a gift voucher via email in exchange for a loyalty card.
- And some more services which will be discussed in below sections.
(Sephora, 2018) (Sephora, 2018)
III. Description of the company success
3.1. The situation of the company before, during and after transformation of
success
According to Google Trend, in more previous 14 years, the brand of Sephora is not
as popular as itself nowadays. It is sure that brand awareness of customers about Sephora
at that time is not higher than now because search results of Sephora on Google search is
very little, at 7 worldwide searching times in January 1, 2017. In contrast to this, brand
awareness of people with Sephora has dramatically increased between 2004 and 2018.
Although the data fluctuated, it has been in upward trend in general. As it can be seen
from the chart below, the data peaked at 100 worldwide searching times in November,
2017.
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You can see from the chart below, there is a peak of the data at 100 searching times
from November, 2017 to December, 2017. This is the time when Sephora sold
“SEPHORA FAVORITES Give Me Some New Lip Kit”.
Figure 2: Sephora on Google Trends from Nov 2017 to Dec 2017 (Google-Trends,
2018)
Although 14 years passed, keyword “Sephora birthday gift 2016” in searching on
Google Search has been rising by 3.850%. Therefore, customers have maintained the
interest in Sephora’s beauty gift sets.
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3.2. Services that make Sephora success
3.2.1. CashStar Commerce
Figure 4: CashStar
With CashStar Commerce, Sephora digital gifts to customers that support anytime,
anywhere digital access, continual balance information and personalization of shopping
experiences. Gift gives can personalize Sephora eGifts by uploading photos and videos,
and have the option of selecting the Beauty Studio Service eGift card, which comes with
the added value of a 45 minute in-store customer makeover in addition to the face-value
of the card. By integrating gifting into Sephora-to-Go app, customers have one convenient
place to store their gift cards and are no longer losing their digital gifts in crowded email
inboxes, leaving their plastic gift cards behind at home, or wondering what the remaining
balance is on their cards.
Sephora has driven more store visits through personalized product recommendations
by strategically packaging eGift cards with in-store services. In addition, the eight times
faster growth Sephora has experienced since implementing CashStar Commerce, Sephora
has seen a 51% redemption rate within the first month of activation, and a 30% higher
initial purchase value compared to plastic gift cards. Sephora's success reflects consumer
demand for these programs, as well as the power of CashStar's prepaid commerce
solutions to drive customer acquisition, engagement and loyalty. (Business Wire, 2015)
3.2.2. The Beauty Talk
Beauty Talk is a social network about make beauty that people can learn about how
to makeup from Sephora’s beauty experts and interchange information together into
forum. When the customers have a question about beauty, they can click on the “Beauty
Advice” tab localize on the top navigation menu. From concern about skincare to concern
about make-up, Beauty Talk provides particular tips, advices.
“Beauty Talk” is turning-point of Sephora.com that create an actual beauty entrance.
Beauty Talk successed with Ratings & Reviews feature, which allows customers to post
reviews of the thousands of products Sephora’s offer. It offers customers the following
breathtalking new features:
o Ask a Beauty Question: Customers consider Beauty Talk as the starting point for
their latest beauty needs. They can ask any beauty questions and get instant
responses from other Sephora shoppers and from Sephora as well.
o Watch. Learn. Love.: Video Tutorials with Sephora's professional makeup artists
providing detailed demonstrations of beauty techniques.
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o Beauty Talk Spotlight: Featuring Beauty Talk's contributor of the week, as well as
the best advice and most clever comment.
o Top 10 Product Lists: Where beauty celebrities, brand founders and artists share
their favorite products.
o The Lounge: Where the customers can share their hauls and beauty confessions.
Beauty Talk enables customers to get advice easily on any beauty needs, share what
they like, their latest haul, tips and questions via images, videos and comments. (LLC,
2010)
3.2.3. Beauty gift sets
One of reasons which has contributed to the success of Sephora at the present is
Sephora’s beauty gift sets. These gift sets not only are sold on Sephora website but also
are displayed at Sephora’s stores around the world.
Sephora usually supplies gift sets mixing products of different brands and put them
into a set or a box. In the fact that the price of such a set will always be cheaper than the
real value of one. In addition to that, Sephora usually sells these beauty gift sets in months
at the end of the year such as November and December or on each season or whenever
Sephora like. For example, Sephora provides a summer travel set with 4 best-seller
products, which is perfect for traveling on summer vacation, is known as Glow Recipe
Sleeping Mask, Kiehl's Crème de Corps, Supergoop! Defense Setting Mist Sunscreen and
Drunk Elephant Cream. Besides, the value of this set is $30 but Sephora sold it at $20
which is not expensive and cheaper than its value. This gift set was created by Sephora
because target customers tend to travel many countries around the world on summer
vacation and have the strong demand of wearing sunscreen and cream for taking care of
their skin on hot summer. This demonstrates that Sephora successfully met the basic
demand of their customer. (Sephora, 2018)
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Figure 5: Sephora Favorites Summer Sun on the fly
There is the other example for Sephora’s gift sets, which is “SEPHORA
FAVORITES Give Me Some New Lip Kit”. This set includes some lipsticks of brands
such as Huda Beauty, Marc Jacobs, Smashbox, treStiQue and Fenty Beauty. “Give Me
Some Lip Kit” first appeared in last December, 2017 but it was intended for 2018 Spring's
newest edition at the price of $28 without $80 in comparison with its value. (Sephora,
2018)
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Because of a chance of buying value sets with best deals, Sephora has attracted so
many loyal customers. Thus, Sephora has continued to develop a large variety of brands
of product and increase target customer’s brand awareness day by day.
3.2.4. Staffs and samples
Sephora possesses so many stores over the world, which helps Sephora approach
more target audiences from a variety of countries.
At Sephora’s store, customers will have the opportunity to interact with Sephora’s
nice staffs and to select free samples to bring it to their homes. When a customer is in
Sephora’s store, he or she will be carefully and enthusiastically served by staffs. For
example, the woman customer wants to buy a product “Too Faced Born This Way
Foundation” but she does not know which kind of tone that is suitable for her to use on
her face. She need not to worry because Sephora’s staff will carefully consult with her
that which tone is right for her skin tone such as tone of Vanilla being created for fair skin
and neutral undertone. If she does not have a light skin and warm undertone or cold
undertone, Vanilla can exactly match her skin.
Customer can have the chance to get 4 free sample with every online order without
using Sephora coupon code. Moreover, there are tons of samples of skincare and makeup
products at Sephora’s stores. When you come to Sephora’s stores to buy something, you
are not sure that should you buy the product you want and you just go around. After that,
you can go outside and come home with at least 20 samples on your hand. The samples
at stores are always available for customers to free select when they want to try a product
before making buying decision. Take “Dior Addict Lipstick” with the color of 639 as an
example. Customers can take the sample below to your home.
In addition to that, Sephora usually has “Mini makeover - Fifteen minutes make-up
service” such as contouring for customer when they are in a store. The service is totally
free. In makeup process, Sephora’s makeup-staffs will tell customers the product they
used and customers will be tempted to buy this product if they feel good.
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By providing samples, makeup service at stores and store assistants at hand, Sephora
allowed customers to actually experience the products they’re buying and control their
own shopping experience. (The-Krazy-Coupon-Lady, 2018)
3.2.5. Sale for VIB Rouge
Sephora maintains their relation with loyal customer by VIB Rouge who are V.I.P
customers. If customers spend $350 in a calendar year, they can earn VIB status. And
they have to spend $1000 to earn the uber-exclusive VIB Rouge status. Sephora usually
has the price policy such as discounting 20% all products on the online website for who
are VIB Rouge twice per year. (The-Krazy-Coupon-Lady, 2018)
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IV. The company’s service strategies and concepts, theories applied
4.1. Gaps Model of Service Quality
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iQ and Fragrance iQ machine. In addition, Sephora also provide the Beauty Studio,
Styling Bar, Nail Studio, etc. inside the store. The layout of Sephora stores is well-
organized. The store has been divided into many different areas based on brands and
product’s functions such as make-up, skincare, etc. (Sephora, 2018)
The provider gap 3 (the performance gap) requires Sephora to concentrate a lot about
the personnel. Sephora University is the place where training Sephora’s personnel, staffs
are trained carefully and they have to follow some specific rules (e.g. wearing make-up
when working). Sephora’s staffs are educated about new products as well as how to use
them, and they will be provided those products to try. But provider gap 3 also depends on
customer factors, so Sephora will get harder to narrow this gap if there are so many
problems from customers. (Sephora, 2018)
There are a lot of service companies which have troubles with the provider gap 4 (the
communication gap). Sephora has done well in general (e.g. customers can receive
samples when they are shopping in Sephora stores and on Sephora’s website as well, Mini
Makeovers (fifteen-minute make-up services) are totally free, the quality of mobile
application will always be updated, etc.), but sometimes there are still some mistakes such
as the amount of products can’t supply enough for customers when Sephora has an sales
promotion or customers can’t receive the samples when they purchase online. Therefore,
Sephora has to do more to narrow effectively this gap and we will discuss more clearly
about this problem of Sephora in the recommendation section. (The-Krazy-Coupon-Lady,
2018)
4.2. Service Quality Dimensions
- Reliability: Sephora promises that they will provide product samples for
customer, and customers always receive at least three samples when they purchase in
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Sephora or online as well. Besides, the promises about price, beauty services, shipping
and return, etc. are always executed.
- Responsiveness: Customers always s receive advisories from Sephora’s personnel
not only in Sephora stores but also on Sephora website, customers can ask directly the
staffs in store when they have questions, and the live chat box is always available on
Sephora website. If customers want to return the products they bought online, they can
go to the nearest store to return and they don’t have to wait to return products online.
- Assurance: Sephora’s staffs are trained carefully by Sephora University so they
have the expert knowledge which can consult, do make-up process, solve the problems,
etc. for customers. Therefore, customers will trust them more.
- Empathy: Sephora’s personnel are careful and friendly, they want to make
customers feel more confident through their advisories, product samples or their beauty
services such as Mini Makeover or Beauty Studio. Staffs can know each customer have
which skin type and what products or make-up look they prefer to service those customers
effectively.
- Tangibles: As we have mentioned before, there are so many equipment in Sephora
store which can help customers more when purchasing. Online customers who can’t visit
the stores can use Sephora Mobile App to find out more about their needs as well as to
try the technology like the equipment in Sephora store such as Virtual Artist, Color iQ,
etc. Besides, there are Beauty Studio, Nail Studio and Hair Studio with modern facilities
in-store which can help customers meet their needs.
4.3. Levels of Relationship Strategies
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- Financial bonds: Customers will receive many rewards gifts and benefits
corresponding to their points through Sephora cards programs which we have mentioned
in before. Besides, Sephora not only provides products and services with stable price, but
also has many of promotions almost the time. In addition, customers could received many
discount codes from Sephora. Sephora also collaborates with VIB to conduct the sale for
VIB Rouge (Sephora’s bundling and cross selling strategy).
- Social bonds: Sephora’s staffs are always pleased to listen and consult for their
customers, so the relationship between them can be improved. Sephora creates the Beauty
Insider Community, so customers can talk to each others, get advices, join groups, etc.
Therefore, customers can build the relationship with the others easily. (Sephora, 2018)
- Customization bonds: Customers’ private information of course will be secure,
and Sephora just use that information to serve customers better (e.g. Sephora using online
customer behaviors which based on the customers data to increase customer experience).
Besides, Sephora usually has the innovations about the technology, services and products
to make customers more satisfied. (Honigman, 2018)
- Structural bonds: The structural bonds are popular in the B2B market. To
Sephora, it’s quite hard about the integrated information systems and join investments,
but Sephora can share the equipment with customers (e.g. Virtual machine, Color iQ and
Fragrance iQ machine which help customers as well as the company).
4.4. Service Guarantees
Sephora’s service guarantees are both for internal (staffs) and external (customers).
Sephora’s staffs don’t need buy their own make-up products because when Sephora
has new products, they have to learn about those new products and they also will be
provided the sample or sometimes full-size products to try and use. Sephora provide 20%
discount for staffs, that number even increase to 30% discount on winter holidays, and
staffs will receive 40% discount for the Sephora’s collection. Besides, Sephora commits
to improve the staff’s selling skills and provide the knowledge about products, services
as well. (Raga, 2017)
If the customers feel dissatisfied with the products they have bought from Sephora,
they can absolutely return those products based on the Sephora’s policies about returns
and exchanges, even the products purchased online can be returned at the store. That
service guarantee totally depends on the satisfaction of customers. (Sephora, 2018)
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sample (Sephora will give samples of some products with orders). And the order was not
delivered on time, and then her order was missing the items she had ordered and Sephora
had automatically canceled the order and said the order had sold out. Then she went to
the web to check and found the goods still. She calls for Sephora's customer care and
reflects with the staff. (Parthvi, 2018)
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the product. Later, Jeilissa felt the employee regarded her as a thief because of her bad
attitude. Jeilissa was angry and left, not buying any products. (Jeilissa, 2017)
Figure 14: Case 2 - Reply by customer service personnel of Sephora (MeganBT, 2017)
→ Recommendation: Sephora should consider training new employees about attitude
towards the customers elaborately to prevent extending the provider gap 3. Besides,
Sephora should respond to customers’ complaints in public so other customers can know
how Sephora handles the problems, so they can put more trust in Sephora.
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