L’Oreal – Building a Global Cosmetic Brand

Raghunath Ganti

L’Oreal Brand Management Strategy

“Hitting the right audience with the right product”

• Regular new products, new markets, new Brands• High R&D

“Diversity is a Priority” – French Company to United Nations of beauty• Multiple Brands of different origins • Brand repackaging and selling• Maintain Local culture• Local Leadership – multiple creative

Clear Brand Positioning

• Precise positioning and segmenting with little overlaps

L'Oreal Case - Brand Management - Sec A2

L’Oreal’s Brand Essence

• Quality• Elegance, Sophistication• Status Symbol• Stylish

Brand Attributes

Brand Benefits

Brand Positioning

Brand Personality

Value Proposition

Brand Vision and Objectives

Brand Essence

We want people everywhere to have easy access to our products through a presence in outlets that match their individual lifestyles.

• Constantly innovate to give best products• Provide value to all stakeholders

• Enhances self image – ‘I am worth it’

• Live the ‘beautiful life’ you dream of

• World’s number one brand

• Young,• optimistic, • Informal,• Feminine

• Break the norms,

• Freedom

• Follow the culture you want to

• Global Luxury Brand Name


• Trustworthy• Elegant• Caring• Luxurious

Maintains Profits –Major Success Factors

Strong Leadership

• Taking the path few choose• Inter Brand Rivalry• Freedom to innovate

Consumer Understanding

• Offered something different• Differentiation in an undifferentiated market

• Emotional attachment and great communication

Offering Wide Range

• Ensured that company never faced an downward phase – something would always work

• Address major segments yet not cannibalize• Consumers had the power to CHOOSE and be what they want to be

Staying ahead• Huge R&D – always innovating – leadership support• Offering the ‘in thing’ – neutraceuticals and now “ The Body Shop”• Being aggressive – Promotion, Bargains


Profits Through Brands

Analyze indicators

Analyze success factors and risks in the brand value creation process

Strategic planning

Coordinate brand management targets with corporate Strategy

Operational planning

Focus brand identity, define and prioritise operational levers for target achievement

Compare brand targets/Implem

entation

Consistent brand presentation through alignment of marketing activities with the brand targets

Steering and controlling

Transparent monitoring of Implementation success to Increase reaction speed and focus on the result

Unpredictable - Trend dependent,

Pull Based

- Brand target in-line with corporate targets

- New Brands Acquired giving huge profits

Inter Brand Competition encouraged to improve at all levels

All Brands in all markets, one Brand focused on based on local culture

Top management clear about goals and implementing the same

Create and Maintain Brand Profits…Adapted from www.markenscorecard.com

- Market leader – 16.8% share; - double digit profits for 18 conse. yrs;

- only company present in all 4 segments;- operations in 130 countries;


What and Why of Maybelline

• Diversify away from Europe to become a globally recognized Brand

• Make the brands embody their country of origin

• Acquired an US based Brand, complete makeover and target new consumer segment and retain American Image

• Brand did not have a strong image so rebranding exercise needed to a success, else • Company’s diversifying strategy could have been badly hit

Objective of acquiring

Intent post acquiring

Maybelline

What Could have gone

wrong

Success Factors

• All aspects addressed – Location, Target audience, Attributes,• Innovation done to come up with better products• Expanded it internationally immediately to leverage the gains made


Existing Brand vs New Brand

Merits

• Complete control over the Brand – Building to

maintaining

• Can develop it meets some specific future needs of

consumers

• Huge investments

• Success not guaranteed

• Timeframe long – Returns take time

Demerits

Creating

a New

Brand


Merits

• Ready Market – Consumer Base.

• Allows breaking into a new market, consumer segment.

• Can be used as aggressive or defensive strategy

• Success can be estimated in advance

• Altering brand image - difficult

• Possible need for immediate investment

• Possible impact on base Brand

Demerits

Existing Brand vs New Brand

Acquirin

g a

existing

Brand


L’Oreal’s Portfolio Management“It is a very carefully crafted portfolio. Each brand is positioned on a very precise segment, which overlaps as little as possible with the others."

What They Do

• Acquiring local brands around the world

• Retain local cultural aspects of the brand and make them major Brands

• Narrow target of customers• Developing emotional attachments with consumers

• Offer all Brands, promote one Brand


Why it succeeds

• Little overlap between Brands• Ensures no cannibalization – future enhanced

by inter brand competition

• Freedom for Brands to innovate and develop new products

• Entire spectrum of consumers and products addressed

Thank you…


L’Oreal – Building a Global Cosmetic Brand

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