Tarte Cosmetics

COMPANY ANALYSIS:

Tarte Cosmetics is a cosmetics company (including

skincare and makeup) created and based in New
York City. It was founded in 2000 by Maureen Kelly,
who is also the CEO of the corporation at the
present time.

Tarte’s philosophy consists on creating sustainable

products made of natural and healthy ingredients
for the skin avoiding animal cruelty.
Therefore, their products are cruelty-free, which means that neither the final
product nor its ingredients have been tested on animals.

History:

Tarte Cosmetics was founded by Maureen Kelly. She

was studying a PhD in psychology at Columbia
University when she decided to pursue her interest in
cosmetics as she could not find effective makeup she
liked; she wanted natural makeup that gave a
glamorous look. However, none of the brands already
created fit her interests and she thought about
creating her own.
Kelly started the company with the support of her first husband. She began to
research cosmetics and worked out from her apartment until her first product was
developed; a cheek stain.
The cheek stain caught the attention of beauty writers a week after launching in
Henri Bendel, a very well-known shop in New York City.
Kelly spent much of the first
two years delivering sample
products to the mail rooms of
magazine publishers, hoping
they would invite her back.
As sales continued, Tarte
launched in Sephora in 2003,
one of the most important
makeup and
cosmetics shops all over the world, and two years later on QVC.
In March 2014, Tarte Cosmetics was
acquired for $135 million by the Japanese
company Kosé Corporation, which wanted
to expand into North America.
In June 2018, Tarte announced the revival
of its sister brand, Awake, which produces
a line of cruelty-free skincare products.

Procuct range:

Nowadays, Tarte has become one of the most popular makeup brands
worldwide, so it has developed a wide range of products that can be found either
online or in-stores, like Sephora, Ulta, etc.
To understand and classify the products that Tarte manufactures, they will be
divided in the function that the product carries out, that is to say;

MAKEUP:
-Products for the face (foundation, concealer, primers and setting products such
as sprays or powders)
-Products for the cheeks (blushes, bronzers and contour and highlighting
products)
-Products for the eyes (eyeshadows, mascaras, eyeliners, eyebrows and false
lashes)
-Products for the lips (liquid lipsticks, lip glosses and normal lipsticks and lipliners)
-Brushes and tools

SKINCARE:
-Oils, treatments and masks
-Moisturizers
-Cleansers and face wash
-Hair and body care
-Self-tanners

Makeup Skincare
Products for the face Oils, treatments and masks
Products for the cheeks Moisturizers
Products for the eyes Cleansers and face was
Products for the lips Hair and body care
Brushes and tools Self tanners

Makeup
Products for the face 59
Products for the cheeks 48
Products for the eyes 149
Products for the lips 55
Brushes and tools 73
 Skincare
Oils, treatments and masks 28
Moisturizers 29
Cleansers and face wash 13
Hair and body care 11
Self-tanners 2

As we can see, the makeup section in this brand is much larger than the skincare.
The number of products in the makeup section is much superior than the one in
the skincare section, so the makeup market is more important for Tarte and has
more sellings than the skincare market.

One of the main reasons for this is the fact that Tarte was created as a makeup
company, and it was decided to expand and start creating skincare products
afterwards, so it is very well-known as a makeup company, but not really as a
skincare option.

ENVIRONMENT ANALYSIS:

Tarte operates in the cosmetics and makeup industry. To understand more in-
depth its environment, we will study its microenvironment and macroenvironment.

Microenvironment:

The microenvironment consists on those agents which are very close to the
company and are in constant interactivity with it.
-Suppliers: companies that provide raw material to produce goods and services.
The company may influence the supplier if it is large, has market power,
bargaining power and a large number of suppliers. In Tarte’s case, most of their
suppliers come from USA companies, as they believe in fair jobs and cruelty-free
products, so they don’t have suppliers from countries as China, where testing on
animals is required by law.

- Intermediaries: this is what we call distribution network. They operate in the

distribution channels, necessary in many cases because of the physical distance
between the production and the point of sale. The intermediaries influence the
actions of marketing on price issues because there is an added element
(distribution) and that makes the good and / or final service more expensive.
Tarte’s intermediaries are mostly the shops they sell in. Around the world, their
most important intermediary, who has a presence through most of the developed
countries is Sephora.

-Public administrations: it will influence setting opening rules, taxes,etc. that affect
the company. The cosmetics administration has to set the taxes and every
monetary issue that can affect the price of the product, as well as its income.

-Competitors: companies that manufacture and / or sell the same good or service
as yours. The market can decide between one or the other.
Tarte’s most important competitors are other American cruelty-free makeup and
cosmetics brands trending on social media, such as Urban Decay, ItCosmetics,
Too Faced, Marc Jacobs. This brands are as important as Tarte and have similar
products to it, and they are also sold around the world.

Macroenvironment:

The beauty industry is diverse, comprising more than just makeup and skincare
products. You can’t forget about the small stuff, toothpaste and deodorant. But
even though the products in this industry are endless, they all focus on selling
one specific idea: a better you.

Beauty brands supply the tools to improve your appearance and your feelings
about yourself. Toothpaste makes your breath smell better. Deodorant stops
body odor. Makeup makes your face look enhanced.

POLITICAL FACTORS: STRICT GUIDELINES

Product safety is a hot topic in the United States and Europe. It’s more openly
discussed in the cosmetic segment of the beauty industry since these products
are designed for the skin

Many brands in this industry either import ingredients from other countries or sell
directly on foreign land. They’re required to follow all political and legal
requirements in whichever country they’re in, and it can be complicated. For
example, Europe and Canada have harsher ingredient requirements. Out of 1328
cosmetic ingredients, they’ve banned over 500.

ECONOMIC FACTORS: A RECESSION-RESISTANT INDUSTRY

Unlike many others, the beauty industry is quite resistant to economic recessions.
It even survived the Great Recession of 2008. Still, consumers got more
conscious and started to buy products more according to lower prices (budget-
friendly.

But in 2015, The United States beauty industry generated over $56 billion dollars,
with hair care leading the way. Skincare was a close second and was expected
to reach over $11 billion in 2018. It’s not just women; men are spending more of
their incomes on products to clear their acne and get rid of scars.

Furthermore, cosmetics comprise over 14% of the market share with oral hygiene
dropping to the bottom of the list at only 5.6%.
SOCIAL FACTORS: BRAND LOYALTY

Customers will try an assortment of products until they find the one. After they do
find one that suits their preferences they become brand loyalists.

In addition, often when someone finds their favorite shampoo from Company A
and then finds out a new product that the company has manufactured, they also
decide to buy that product. For example, if a consumer usually buys a shampoo
from a company and then the company launches a moisturizer, they are very
likely to buy that new product as they are loyal to that brand.

That’s why, cosmetic companies are trying to make their best to get good reviews
from their consumers. One bad opinion in the internet can change everything.

TECHNOLOGICAL FACTORS: 24-HOUR ACCESS

The internet really did revolutionize the beauty industry. You can buy almost any
product and get it delivered to your home in a day or two. That’s good and bad
for big name brands like Tarte.

Any new beauty brand can sell their products through Amazon or set up a shop
on Etsy. Many sell directly through their site (e-commerce) with no plans to ever
put their products in stores. Sure, the big brands are well-known with a higher
chance of keeping their customer base, thanks to brand loyalty. But these new
shops offer exactly that: something new, shiny.

If you have Asian hair or African American hair, the big name companies typically
don’t develop products specifically for them. But these smaller brands are slowly
starting to fill that need.
LEGAL FACTORS:

Ingredients in the beauty industry are tricky. They can be regulated without also
being approved. The Federal Food, Drug and Cosmetic Act (FD&C Act) and the
Fair Packaging and Labeling Act (FPLA) are the leading laws in which the beauty
and cosmetic industry must follow.

The FD&C monitors ingredients based on their use while the FD&C ensures
there’s misinformation branded on the products. If there are issues, the product
may not get to be selled, either in-stores or online.

Additionally, if ingredients aren’t according to this associations they can be

banned, which is very common in Europe.

ENVIRONMENTAL FACTORS: AN ATTEMPT IS BEING MADE, BUT THE

EFFECTS ARE SMALL

The beauty industry is focusing more than ever to try and go “green.” Their
packaging is becoming increasingly eco-friendly for less stress on the
environment. But there’s still a growing issue with heavy plastic usage within the
cosmetic and skin care segments.

The type of ingredients used in everything from shampoo to spray deodorants

can have a terrible effect on the environment. Even though brands are taking
steps to improve the ill effects, there’s still a long way to go to see results.
SWOT (Strengths, Weaknesses,

Opportunities y Threats) analysis and

development of new products:

The SWOT analysis allows us to know in what situation the company is thanks to
the analysis of its internal characteristics (strengths and weaknesses) and its
external characteristics (opportunities and threats).

STRENGTHS: WEAKNESSES:
-It has a very good reputation. -Little brand in comparison to its
-Very spoken in social media. competitors, as for example L’Oreal,
-Reconnaissance around the world. Chanel, etc.
-Constant need of innovation
-Dependence of personal tastes
OPPORTUNITIES: THREATS:
-New market segments -Global recession
-Constant changing fashion -Unemployment
-Geographical expansion -Increasing number of competitors

In conclusion, after seeing all the products that Tarte carries out and studying
their opportunities and SWOT analysis, from my point of view the most interesting
idea of a product to launch might be more products for the cheeks, as makeup
sellings are increasing around the world and cheek products are trending on
social media due to the high presence of highlighting products, bronzers, etc. on
Instagram, Twitter, etc. I think the most important consumers of Tarte’s products
are very influenced by social media, as they are usually young people who are
easily influenced by the opinions that they see on the internet.
In particular, the best idea of a product to launch might be a face palette
composed by highlighters, bronzers and blushes, and they should focus on doing
it with influencers, as their products are not usually promoted by them.