A mini case study on Loreal,including its Marketing strategies and SWOT

1. L’OREAL
A GLOBAL COSMETIC BRAND

3. SYNOPSIS
 France based leading global cosmetic company.
 Founded in 1909.
 Led by Lindsey Owen Jones, the chairman and
CEO of the Company.
 Achieved double digit profit for eighteen
consecutive years.
 Business in 130 countries with a turnover of around
13.7 billion Euros.
 Only cosmetic company in the world to own more
than one brand franchisee.
 Cosmetic industry refers to the cosmetics, toiletry
and perfumery industry brands.

4.  Segmentation on the basis of product usage
 Luxury
 Consumers
 Professional
 Pharmaceuticals
 L’Oreal remained as a global leader in the industry with a market share of
16.8 percent.
 Due to increased focus on ‘wellness’, company focused mainly on
 Cosmecuiticals
 Neutraceuticals

5. BRAND AMBASSADORS IN INDIA

6. STRENGTHS OF L’OREAL
66,600
employees
23 Global
brands
130 Countries
38 Factories
5.7 billion units
in 2011
Global
presence

7. Focused strategy to
become Global brand
Hair color Skin care Hair care
Fragrances Color
cosmetics

8. ROAD TO SUCCESS
 Company Launched the legendary advertisement campaign “Because I am
worth it” for promotion of a hair color.
 Extraordinary distribution channel to the US, South America, Russia and
the Far East.
 Diversification into wide range of beauty products.
 Expanded globally by introducing Maybelline in USA.
 Relationship with its customers- Personal beauty advisers at department
stores.

9. MAYBELLINE A MILESTONE
 Acquired in 1996, when lost its focus and band equity.
 Tagline: “Maybe she’s born with it”. “Maybe its Maybelline”.
 Already well known for ordinary color lipsticks and nail polishes in USA.
 Promoted the products by adding a tagline “Urban American chic” .
 Expanded to Japanese market as well, and captured nearly 56% outside the
US.
 Celebrities for promoting brands.

10. BRAND STRATEGY
 Maybelline's success proved L'Oreal's philosophy by embracing two
different cultures (French and American).
 L'Oreal acquired different unknown brands and gave a facelift, repacked and
marketed them aggressively.
 Promoted brands according to their national culture.
 Maintained image with the help of research centers in Paris and New York.
 Attained 493 patents registered on the company name in 2001.
PACKAGING

12. • To keep the different
brands in one basket and
yet keeping the
differenciation.
CHALLENGE
• Good brand management
was all about hitting the
right target audience with
the right product.
STRATEGY

13. FINDINGS & LEARNING
Brand
Diversity
• Famous for its Huge brand diversity and brand management
in different countries and cultures.
Good
Research &
Developme
nt
• Highly efficient R&D department.
• Spending 3% revenue on R&D each year.
• 2700 researchers. Worldwide.
Modernised
approach of
advertising
• Celibrities from different cultures are used for advertisements.
• Programs and events adds more effect to advertisements.

14. Target Market
• Middle aged and working women became the main target of
the company.
Awareness
• Established education centers are in many countries.
• Conducted programs related to hairdressers.
Mass
Marketing
• Opted complete makeover of the companies by providing
wide range of products.

15. Brand
Positioning
• Company has a strong and long-term brand positioning
specially within the minds of middle age women and teenage
girls.
POP & POD
• L’Oreal does not appreciate points of parity.
• They believe to provide products different from their
competitors (P&G and Kevin care).
Science Based
Approach
• Known as Scientific beauty company.

16. Brand
Consistency
• L’Oreal focuses over all to improve and develop the different
brands it acquired in different regions.
• Maybelline is the best example of consistency.
Distribution
Channel
• Distributed is done with respect to its need and is cost
effective.
• Used agents and consignments to USA, Japan and other
Asian countries.
Understanding
s
• Company was brilliant in identifying the needs, cultures and
aspirations of different kinds of customers in diversified
regions.

17. QUESTIONS
Critically comment on L’Oreal’s global brand management strategies. Do you
think L’Oreal’s strategies were primarily responsible for its impressive financial
performance? What other factors helped the company remain profitable since over
two decades?
Yes, of our point of view the strategies were primarily responsible for L'Oreals
impressive financial performance and its amazing brand recognition. This is
because it made sure that each of its brands had its own image and took care that
its image do not overlap with the image of another product or company.
Developing of new innovative products a strong Development & Research
Department with a lot of know how. They expanded in important national markets
and invested in new facilities. Adding glamour to its brand to make it more
appealing and famous was another factor for its worldwide known performance.

18. 2.WITH SPECIFIC REFERENCE TO MAYBELLINE, CRITICALLY COMMENT ON JONES
STRATEGY OF ACQUIRING RELATIVELY UNKNOWN BRANDS OF DIFFERENT CULTURAL
ORIGINS, GIVING THEM A MAKEOVER AND MARKETING THEM GLOBALLY. WHAT ARE
THE MERITS AND DEMERITS OF ACQUIRING AN EXISTING BRAND VIS-A-VIS CREATING
A NEW BRAND?
 Acquiring an existing brand
Advantage
 Economies of scale
 Profit centers are already in place
 Expand geographically
 Better positioned to evaluate intrinsic value
 Complement your existing product lines
 Disadvantage
 Hard to chose a befitting one
 Failure to clear seller's potential liabilities
 Over leveraging

19.  creating a new brand
Advantage
 Spread the culture of its own company
 Explore the new area
 Get the support from the local government
 Expand the effect of own brand
 Disadvantage
 More expensive than acquiring the existing one ,hard to run
 Create the new market ,it will take a long time
 If it is fails, it may affect you main brand product

20. STRATEGY DID THE COMPANY FOLLOW TO ENSURE THAT THE IMAGE OF ITS
BRAND DID NOT OVERLAP? HOW AND WHY L’OREAL DID ENCOURAGED
COMPETITION AMONG ITS BRANDS IN PARTICULAR SEGMENTS AND AT THE
SAME TIME PREVENT THE BRANDS FROM CANNIBALIZING EACH OTHER?
 Loreal followed a multi-brand stratergy
 Adapt market share
 Equal opportunities to al brands
 Inter-brand (self) competition
 Freedom to develop and innovate better product
 Positioning Strategy:
Repositioning of brands
 Repositioning according to :
Changing preferences
Opinions of customer

21. DICLAIMER
 This presentation has been created by Nalin
Subham, IIT ISM Dhanbad, during a Marketing
Internship by Prof. Sameer Mathur , IIM Lucknow.