DIM marketing campaign for L'Oreal

Direct and Interactive Marketing Management

Module 4MMC7A9.2

Semester 2, 2013

Coursework: Part 2 – Recommendations Report

Group Members:

Poonporn Laoruanglert 13685463Kasamaphan Lourvanij 13642615

Vasilisa Luchina 13078946Anna Gazhonova 14074811

Valentina Shevchenko 14079995

26nd March 2013

Word Count: 3,500 words

Executive Summary

L’Oreal is one of the biggest companies in the beauty industry. It was founded in

1909 and soon it became a worldwide famous company which now comprises such

well-known brands as Garnier, Kielhs, Redken, Lancôme.

This report describes the direct marketing campaign for the anti-aging skin care

collection Reviatlift proposed by DIMax agency.

In order to promote Revitalift collection, direct marketing campaign strategy will

comprise two tactics: acquisition aimed at gaining new customers and their retention.

Direct mail, direct response advertising, which comprises billboards throughout the

UK and four magazines which are most popular among the target audience, e-

newsletters will be used for acquiring new customers through five step approach.

Loyalty scheme and Regular customer updates (through website and Facebook page)

will be used as part of retention tactic.

According to the estimations made by DIMax agency this direct marketing campaign

will generate £6,283,000 of revenue and the ROI will constitute 1:5.3.

Table of Content

Executive Summary.......................................................................................................2

Table of Content.............................................................................................................3

1. Direct Marketing Strategy......................................................................................4

1.1 Objectives.............................................................................................................4

1.2 Overall Strategic Approach..................................................................................5

1.3 Segmentation and Targeting................................................................................5

1.4. Positioning Statement..........................................................................................5

1.5 Positioning Matrix................................................................................................6

2. Campaign...............................................................................................................7

2.1Creative Brief........................................................................................................7

2.2 Tactics.................................................................................................................8

Media Used............................................................................................................8

3. Acquisition Programme Flowchart......................................................................13

Acquisition Objective...............................................................................................13

4. Acquisition Programme Schedule........................................................................14

5. Retention Programme Flowchart.........................................................................14

Retention Objective..................................................................................................14

6. Retention Program Schedule................................................................................18

7. Measurement........................................................................................................18

Response Rate/Conversion Rate: Measure the Results............................................18

8. Evaluation............................................................................................................20

9. Budgets & bottom line forecast results................................................................20

Estimated Revenue...................................................................................................21

Estimated Profit and ROI.........................................................................................21

Conclusion....................................................................................................................22

Bibliography.................................................................................................................23

1. Direct Marketing StrategyL’Oreal Revitalift Line

1.1 ObjectivesOur objectives are not just to keep current customers but also to recruit new ones.

According to Mintel report, it can be seen that main reasons for purchasing an anti-

ageing products for women are good quality of products, as well as good advertising

and customer’s feedback (Mintel, 2012). Hence, our direct marketing campaign will

focus on communicating the message about the exclusivity and uniqueness of using

Revitalift product.

L’Oreal Revitalift is now on the initial stage of its product life cycle.

Figure: 1 Product Life Cycle.Source: Mintel

At this point the fundamental marketing communication objective for L’Oreal

Revitalift is as follows:

L’Oreal Skin Care Revitalift

To create widespread awareness for at least 30% in the next 12-week

period by generating interest and desire among the target audience.

This central aim drives three main objectives of the direct marketing campaign:

Create а database of new/potential customers of 1.1 million people across UK

that can be used to activate the direct marketing campaign.

Attract 150,000 new customers to activate and drive people to store

Drive £6,283,000 of turnover through the development of these campaigns

1.2 Overall Strategic ApproachThe marketing strategy of our campaign has two tactics – acquisition and retention.

1.0 Acquisition tactic is aimed at gaining new customers using direct mail, e-

newsletters, direct response advertising (OOH, magazines,).

2.0 Retention tactic employs loyalty schemes and customer updates via e-newsletters

and social media.

By combining these two tactics L’Oreal Revitalift Line will be able to gain bigger

market share in the UK.

1.3 Segmentation and Targeting

The target group for L’Oreal Revitalift includes females aged from 45 years old and

above, belonging to social classes B, C1, C2. According to the UK National Statistics

data, this particular group composes large number in the UK population today.

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1.4. Positioning Statement

For modern energetic ambitious women who want to look good and attractive at all

times. L’Oreal Revitalift is the number one multi-action innovative collection of

products which help to slow down the process of aging. Unlike other skin care

programmes, Revitalift targets 10 signs of ageing in one which makes it the most

effective anti-aging cosmetic product.

1.5 Positioning Matrix

Figure 2: The Brand Positioning: L’Oreal Revitalift anti-ageing Line versus competitors.Source: own work

According to the graph above L’Oreal Revitalift is perceived as a high quality

collection with reasonable prices compared to other anti-aging products in the same

market. Olay has a slightly lower price but it has worse standard, whereas such

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premium quality lines as Clarins, Lancome and Estee Lauder are much more

expencive. It gives L’Oreal a product advantage over its competitors.

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2. Campaign

2.1Creative Brief Brand

Product

L'Oréal Group

Skin Care Revitalift

Brand Essence Caring, rejuvenating and renovating

Target Social classes: B, C1, C2

Age groups: 45-54, 55-64, 65+

Gender: Female

Existing Customer: current users of L’Oreal

New Target Market: women who care about their appearance and who need high-quality skin care collection for affordable prices

USP Innovative anti-aging formulae that targets 10 signs of ageing

What do we want the campaign to achieve?

Acquisition: to gain 150,000 new customers registered during the campaign

Retention:

Retain current customers

Retain acquired customers and win their loyalty

How do we want the target to feel about the product after the campaign?

It is necessary to create the image for Revitalift products as innovative and being able to slow down aging, thus, making Revitalift an alternative to plastic surgery.

Revitalift collection should become ‘First in Mind’ variant when it comes to decision making process. Women should be informed that being more affordable Revitalift collection is of as high quality as more expensive competing products.

Message Points/Reason Why

Revitalift collection consists of 16 products for different types of skin which

repair deep-set wrinkles

have double lifting effect

prevent new wrinkles

nourishe skin


Mandatories L'Oréal slogan “Because we’re worth it”

Media Outline Women magazines E-newsletters OOH Social media Direct mail

Timing September 2013 – August 2014

Budget £2,000,000

Table 1: Creative Brief.Source: own work

2.2 TacticsThe marketing strategy of the campaign will include both acquisition and retention

tactics aiming to gain new customers and keep existing ones. The main message

which must be conveyed throughout the campaign is that innovative Revitalift

collection may serve as an alternative to plastic surgery.

Media Used

Direct MailDirect mail will be sent out using rented list, which will enable to communicate with

the right target group. It is expected to get 960 responses out of 19,200 mails sent.

Newsletters informing about Revitalift promotions in different retailer stores and also

samples of products will be sent through mail system once in 2 weeks.

E-newsletterUsing rented list for new customers newsletters will be e-mailed weekly. They will

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Pic. 1: Direct Mail newsletter and sample of Revitalift cream


inform about web-site updates, new articles and videos uploaded there and also give a

couple of beauty advices for women aged over 45. This campaign aims to get 10

responses out of 5,000 e-mails sent.

Out of HomeOutdoor media works effectively due to the fact that a customer comes across the

same message frequently. In order to reach wider audience 1,500 Revitalift billboards

will be placed in London and other big cities of the UK: Manchester, Leeds,

Birmingham, Sheffield and Edinburg. The campaign will last for one month.

Pic. 2: Outdoor advertising

At the bottom of every billboard L’Oreal web-site address will be given in bold. The

nearby message will invite customers to visit the web-site and register there.

MagazinesSince press is the medium which enables very precise targeting, three magazines

which are most popular among women aged over 45 belonging to B, C1 and C2 social

classes have been chosen for direct response advertising campaign. These are monthly

glossy magazines Women & Home, Sunday Time Style and Good Housekeeping,

Tatler.

Revitalift collection will be advertised in these magazines. The URL of L’Oreal

relaunched web-site will be placed in the noticeable place. Underneath there will be a

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message inviting customers to register on the web-site and join L’Oreal loyalty

programme.

Additionally vouchers/flyers with a special reference number will be attached to

magazines. It will enable customers to get a discount when buying a Revitalift

product. The only thing which will be necessary here is to register reference

number/bar code on the L’Oreal web-site. It will also help to encourage more people

to visit the web-site.

The following magazines were chosen to promote L’Oreal Revitalift brand due to the

following reasons:

They reflect target audience lifestyle

High coverage among the target audience

High circulation figures in the UK

High recognition among the fashion conscious consumers

Pic. 3: Magazines11 | P a g e


Title UK & EU

Circulation

Readership

(‘000)

Cost per page

(£)

Target

audience

profile

Good House keeping 182,146 762 19,000

Style-conscious opinion formers with a medium disposable income and a passion for home decoration, travelling, beauty

Tatler 85,084 204 10,700

Up market, affluent individuals who have lavish lifestyle. Average house hold income: £122 746

Woman & Home 165,575 463 23,900

Concentrated in the B, C1, C2 35-65 demographic group

The Sunday Time Style 85,655 520 10,500

Smart, sophisticated and intelligent women (B,C1,C2) image conscious women aged 45+.

Table: 2 Total Readerships. Source: Mediatel, 2012.

Adverts will be published in four issues of each magazine on the second step of the

campaign (sending out the message) and in four issues on the fourth step (resending

the message).

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Social Media

Facebook fun page will be created in order to announce special offers, new products,

and events. Additionally, customers will also be able to share their photos,

information and give advises.

Website and Online ShopIt has been decided to re-launch L’Oreal’s website, as it has several drawbacks: it’s

not informative enough; the design is too simple and not attractive; colors of the

website are dark and give negative impression; lack of consumer engagement.

The new website will be designed in bright, warm colors and will have an easy-

understandable navigation. It will have new features such as advices from experts,

different articles about health and beauty, consumer reviews, price comparison.

Every product will have detailed description. The website will be updated every 2

days. The most important change will be in dividing it into different age categories

enabling customers to go straight to their age category and to choose products that

suits their age. Additionally, each category will have articles and advices about

beauty. Revitalift line will be in 45+ category section and will have its own mini

videos on how to prolong the youth of the skin and live chats with L’Oreal’s experts

where women in real time could ask them their questions. The only thing which will

be necessary for the customer to get an access to all these useful resources will be

register on the web-site which will enable L’Oreal to collect customer data.

In addition, there will be created an ecommerce platform (on-line shop) that will be

rolled into L’Oreal’s main website. By selling products directly (without a retailor

store as a mediator) L’Oreal will get an opportunity to establish closer relationship

with its customers.

Relaunched web-site and on-line shop will provide the customer with expert advices,

detailed information and useful videos which will help to win customers’ trust and

loyalty.

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3. Acquisition Programme Flowchart

Acquisition Objective

To achieve 150,000 people registered on the website and thereafter to

purchase products from online shop and in-store

To generate £6,283,000 revenue

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Pic. 4: Web-site pageSource: own work


Figure: 4 Acquisition programme flowchart.Source: own work

To make the campaign effective as much as possible it must have a multi-step approach.

Step 1: Hot list

The hot list of 150,000 names will be rented.

Step 2: Sending out the message

The aim is to promote L’Oreal through direct mail, direct response advertising, social

media and e-newsletters.

Step 3: Measurement

After the first message is sent we will measure the number of new customers.

Step 4: Resend the message to stimulate action

The same means as on the second step will be used (via direct mail, direct response

advertising, e-newsletters) for those who for some reason missed or ignored the first

message.

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Acq

uisi

tion

Step 1: Hot ListLifestyle List

(New Customers)

Step 2: Sending out the first message

Direct ResponseAdvertising

Out of Home

Magazine ads

Online Media

www.L'Oreal.co.uk

FacebookDirect Mail

Step 3: Measurement

Step 4: Resent the message to stimulate

action

Direct Response Advertising

Magazine ad

Online Media

www.L'Oreal.co.uk

FacebookDirect Mail

Step 5: Measurement


Step 5: Measurement

The effectiveness of this direct marketing programme will be measured by the number

of newly registered customers and the number of purchases made.

4. Acquisition Programme Schedule

Table 3: Acquisition Program ScheduleSource: own work

5. Retention Programme Flowchart

Retention Objective To retain new customers

To generate £6,283,000 revenue

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Figure: 5 Retention program and Campaign Flowchart Source: own work

Campaign 1: Loyalty Scheme

By creating а unique loyalty scheme, it will help to increase satisfaction level

of customers, as well as improve relationship with them. It can also help to get

vаluаblе insights into buуеr bеhaviоur and to collect customer data. L’Oreal

loyalty card, which will be called “L’Oreal with L’Ove”, will give a sense of

privilege to its members.

1. By becoming a member of “L’Oreal with L’Ove”, customers will receive 2

plastic membership cards with the starting amount of 10 points on both of

them. The member retains one and has an option of giving second card to

friend. а2. With every purchase customers will get certain number of points

1 pound = 1point; 100 points =10 pounds gift voucher to spend on

the next purchase or 10% discount of the next purchase.

3. There will also be special gifts and surprises for “L’Oreal with L’Ove”

members, such as gifts for Christmas and Mother’s day.

4. “Revitalift Tea Party”

“L’Oreal with L’Ove” will create a special event for the most loyal

45+ members. It will be an informal gathering in the format of tea

party. In this event women can socialize, share their experience with

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Ret

entio

nCampaign 1: Loyalty Card

Membership card - L'Oreal with L'Ove

Collecting Point

100 points get 10 pounds gift voucher

1,000 points get special treatment

Special offer

Revitaeift Tea Party

Surprise gifts - Free dilivery

Get double point when purchaseing on your birday

Campaign 2: Customers updated

Online Mediawww.loreal.co.uk

Facebook


L’Oreal, give their opinion on products, telling what they want to get

in the future from L’Oreal, particularly in the category 45+.

5. Another great opportunity for members to receive an exceptional benefit is to

collect 1,000 points and to get a special treatment in one of L’Oreal’s salons in

London. It can be a makeup session, a blow dry, or a manicure/pedicure.

6. On their Birthdays customers will

get double points for their

purchases.

Pic. 5: The example of the loyalty card of L’Oreal with L’Ove.Source: own work

Campaign 2: Customer Update

Keeping customers updated is very

important.

New products and special promotions will be announced through L’Oreal website and

Facebook. Every registered customer will get link onto web-site/Facebook update by

e-mail.

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Pic. 6: The example of online media: L’Oreal Facebook.Source: own work

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6. Retention Program Schedule

Table 4: Retention Programme ScheduleSource: own work

7. Measurement

Response Rate/Conversion Rate: Measure the ResultsType of Media Number

of contacts

Response Rate (%)

Conversion Rate

Cost per each media channel (£)

Expected Spending

per transaction

(£)

Expected Revenue

(£)

Social Network

Facebook 47,536 0.2 1 in 8 237,680 20 4,753,600

Out of home

Billboards 13,436 5 1 in 6 2,687 20 53,740

Magazines

Woman and Home 5,920 3 1 in 4 1,973 20 39,460

Sunday Times Style

17,700 3 1 in 4 5,900 20 118,000

Good Housekeeping

8,528 3 1 in 4 2,843 20 56,860

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Tatler 27,680 3 1 in 4 9,227 20 184,540

Direct Mail 19,200 5 1 in 6 3,840 20 76,800

Е-Newsletter 5,000 0.2 1 in 6 25,000 20 500,000

Company Website 5,000 0.2 1 in 6 25,000 20 500,000

TOTAL 150,000 314,150 6,283,000

Table 5: Shows the results of response rate and conversion rates for the campaign.Source: own work

Out of Home

Outdoor campaign (billboards) will be measured by eyes on Impression system

(EOIs), where results will be gained from different types of data, i.e. survey, blogs,

data analytics and customer reviews.

Е-newsletters

To measure response rate in this campaign there will be developed 4 different types

of mails that will be sent to trial group of customers - 600 people in 5 big cities across

the UK (London, Manchester, Birmingham, Leeds, Edinburg). The type of e-mail

that will receive higher response and conversion rates will be sent to the rest of the

target audience.

Print Advertising

The response rate to the campaign will be measured by inserting voucher/flyer with

bar code/reference number on each of them. Hence, if a customer wants to get a

discount when buying a Revitalift product she will need to register this number

online. That is how the exact number of customers will be measured.

Social Media/ Online

Social media will be tracked by the number of fans, likes, comments.

Facebook: number of likes of the L’Oreal Revitalift page.

Website: number of visitors, comments in the blog and customers

feedbacks.

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8. EvaluationEvaluation process will be in the end of the campaign. The final campaign results will

be evaluated and compared with initial objectives.

Type of Media Initial target (Responses) Forecast results (Responses)

Е-newsletter 300,000 members 3,800,000

Facebook 50,000 fans 120,000

Magazines -Print 8,000 promotion users 10,000

Out of Home 1,000,000 positive responses

1,000,000

Total Responses 1,358,000 4,930,000

Table 9: Evaluation of the CampaignSource: own work

9. Budgets & bottom line forecast resultsDirect

Marketing Tools

Description Size Frequency Price

(£)

Out of Home

Billboard 1,500 in London, Manchester, Leeds, Birmingham, Sheffield and Edinburg

6 Sheet

(3ft x 6ft)

1 month 387,500

Magazines

Woman & Home

Full Colour Full Page 4 issues 76,500

Good Housekeeping


The Sunday Times Style


Tatler Full Color Full page 4 issues 350,000

Direct Mail (unit cost – 0.1 p) 300,000 30,000

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mails

Direct Mail Production 11,000

E-newsletter (unit cost – 0.1 p) 500,000

e-mails

50,000

Company

Web-site

Expansion of company web-site

Maintenance fee

10,000

7,000

Facebook Monthly admin (unit cost – 200) 5 1,000

TOTAL 1,168,284

Table 8: Budget and bottom line forecast resultsSource: own work

Estimated RevenueAll sorts of media used in the direct marketing campaign for Revitalift will cost

£314,150. Both acquisition and retention parts of the campaign will produce

£6,283,000 of revenue.

Estimated Profit and ROI

According to the estimations of the expenditure and revenue of the campaign,

£5,968,850 of profit will be generated.

Relying on all these calculations the campaign’s return on investment has been estim-

ated. It shows how much the company will get in return for the investment it made. It

will allow the company to decide whether it worth to invest in the campaign or not.

The ROI from the direct marketing campaign for L’Oreal Revitalift will be 1:5.3.

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Conclusion

The value of the UK beauty industry is over £15bn. Unlike many other industries it

was not heavily affected by the economic crisis because of womens’ “obsession”

with keeping their beauty.

Revitalift is a new skin care collection for women aged over 45. Now it is on the

introductory stage of its life cycle, therefore it needs to be widely promoted. In order

to get higher results and implement more precise targeting a number of direct

marketing techniques must be employed.

For customer acquisition direct mail, e-newsletters, direct response advertising and e-

commerce will be used. These tools will enable to attract new customers. For the

purpose of retaining customers loyalty scheme, which will have several levels, will be

worked out. Members of the “L’Oreal with L’Ove” loyalty scheme will not only get

different prizes and discounts but will also get an opportunity to participate in L’Oreal

special events for those who use Revitalift.

This direct marketing campaign is estimated to generate £6,283,000 of revenue which

makes it a good investment for L’Oreal.

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DIM marketing campaign for L'Oreal

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Transcript of DIM marketing campaign for L'Oreal