Made by:Jibin C JosephPGDM 11-13IFIM B School, Bangalore

Global Brand StrategyClass-2

CASE

About L'Oreal

Founded: 1909, Paris

Worlds largest cosmetics & beauty company

Mission statement:

“L'Oreal has set itself the mission of offering all women and men worldwide the best of cosmetics innovation in terms of quality, efficacy and safety. It pursues this goal by meeting the infinite diversity of beauty needs and desires all over the world. Beauty is universal.”

Summary of the case

L'Oreal's Philosophy: Selling the science of beauty in a jar.

L'Oreal started by French chemist Eugene Schueller developed a hair color known then as ‘Aureole’ for Persian hairdressers.

L'Oreal then went to consumers through various channels according to consumers psychographic & psychological profiles.

But its international image hampered as Persian beauty products was considered expensive.

Contd..

Inter brand 2011: No- 40, above Nestle, Jhonson & Jhonson & Nivea.

66,600 employees 23 Global brands 130 Countries

38 Factories 5.7 billion units in 2011

Global presence

Focused strategy to become Global brand

Hair color Skin care Hair care

Fragrances Color cosmetics

Product Portfolio

Consumer products

Major acquisitions

UNISA

JADE

U.S.A

CHILE

GERMANY

ETHNIC BRAND

CHINA

CHINA

Year- 1999

Added Men's beauty products to its portfolio

Local consumer understanding

Created ‘Geocosmetics’ to study the need, habits & trends around the world.

Loreal institute for ethnic hair & skin research in Chicago – 2003

Research center in Pudong, China -2005

12 evaluation centre around the world.

Local teams tweak the products with the help of these research.

Local products taken to global. Eg: Garnier men

Promising new markets

Promising new markets

Region specific products

MEXICO W. EUROPE ASIA

E. EUROPE INDIA

Brand Diversity

Products followed specific channels: L'Oreal Paris sold through retail outlet but with restriction on product placements.

CHANNELS BRANDS

Professional L'Oreal, kerastase,Redken, Matrix

Food, Drug & Mass L'Oreal, Garnier, Maybelline, Softsheen carson

Perfumeries & departmental stores

Lancome, Biotherm,HR

Pharmacies Vichy, skinceuticals, sanflore

The Body shop Body shop

Villages lacked retail infrastructure in India & Pakistan, So Garnier was sold in kiosks.

Category named Masstige – Mass+ Prestige.

Premium but attainable.

R & D helped in keeping the brand relevant for longer period of time.

Eg: Genfique- youth activating concentrate helped revive the premium Lancome brand. It was backed by 10 years of research

L'Oreal's marketing excellence

Acquired in 1996, when lost its focus & brand equity

Tagline: Maybe she’s born with it. Maybe its Maybelline!

Major overhaul in its operation, branding & advertising.

Ad spend increased by 30% to $70 million.

Modernized approach to advertising & was targeted to working women class who were in need of speedy makeup.

Used its technological innovations to address this demand.

It went to 70 countries & sales grew 93% from 1996 to 2002.

Redken launched in Latin America in 1990’s and was in 13 Latin American countries by 2008.

Education program aimed at top hairdressers with product tailored to Latin Americans.

Sales growth of 20% from 2005-2008

By 2008, over 4000 luxury salons adopted Redken in Latin America.

Launch of INOA in western Europe - 2009.

Training sessions provided to 80,000 hairdressers.

Result: 36000 salons adopted INOA in just 3 months!

To back that- Strong Ad campaign on internet & women magazines.

Brazilian women

Top beauty spenders

Traditionally they bought from door to door sales rep.

Big Local players.

L’Oreal hired personal beauty advisers at department stores

Telling the story

Aging population in west Ethnic groups around the globe

Aspiring customers in the east Interest of beauty among men

Ad Spending

Fame by association

SPOKESMODELSarah Jessica Parker

Eva longoria

Scarlett Johnson

Gerard butlerPatrick Dempsey

Aishwarya

Sonam Frieda Pinto

Spokes models around the world

HUNGARIAN

ITALIAN

ETHIOPIA

GERMANARABIC

Other Associations

Major sponsor of Cannes film festival.

Also sponsored the festival’s dinner & after party which benefitted AmFar (American foundation for AIDS research)

Film & TV placement

L’Oreal Brandstorm

Marketing as recruiting. (Launched in 1992)

Contest for students of marketing major

In 2011 contest was to design an Ad concept to attract men to professional salons.

Contest helps L'Oreal to identify new talents.

43,000 STUDENTS

285 UNIVERSITIES

43 COUNTRIES

PRINT MEDIA DIGITAL MEDIA

Smart spending

Ad spending shifted towards internet

Example

User could upload their hair style. It also had ‘how to’ videos

Example

Digital marketing innovation- 3D scanning booth at retail stores

Example

L’Oreal’s Grassroots campaign

Helped 4000 salons to build their Facebook page

L’Oreal offered instructional videos, and training & advertising credits to the salons.

Also displayed products in tabs & ‘how to’ videos

Example

L'Oreal's official Youtube channel: ‘Destination Beauty’

Web personalities to pitch products. Eg Michelle Phan

Finally..

To double its customer base to 2 billion & increase to

50% from 30% share of sales in emerging

market

Brand Report Card

The brand excels at delivering the benefits customer truly desire

L’Oreal have products for various categories like mass, medium and high end.

Ability to reach global audiences via intensive advertising.

Specialist hairdressing cash-and-carry outlets (e.g. Aston and Fincher).

L’Oreal created a virtual personal stylist -eliminated changing room line hassles.

-multiple applications of skincare & cosmetics.

1 9/10

The brands stays relevant

User Imagery: - L’Oreal have different range of products for various categories like mass, medium and high end.

Usage imagery: - L’Oreal products is been used for skincare, makeup and hair care.

Personality: - L’Oreal is a sincere and competent as they are consistent with their innovation.

2

Continued The feeling brand tries to elicit in customers: -

L’Oreal is a purposeful brand as it tries to provide quality products at affordable prices.

Relationship with its customers: - L’Oreal is building a committed relationship as they hired personal beauty advisers at departmental stores to engage with customers.

L’Oreal poured 5bn into R&D

9/10

The pricing strategy is based on consumers’ perception of value

masstige (a combination of mass and prestige).

And the two key tenets are: - L’Oreal products are considered luxury or premium

but attainable. L’Oreal had price points that filled the gap

between mid-market and super-premium products.E.g. L’Oreal Paris was L’Oreal’s leading “masstige”

brand and one of the first brands globally to offer high quality at an affordable price.

3 9/10

The brand is properly positioned

L’Oreal do not appreciate points of parity as they believe to provide products different from their competitors (P&G and Kevin care).

CDR Special Report says that From the beginning L'Oreal has kept itself on the cutting edge of beauty care.

L’Oreal has always been guided by the conviction that science-based approach to the beauty business will lead to a meaningful point of difference for the consumer and they achieved it.

4 8/10

The brand is consistent

Maybelline is the best example of consistency of L’Oreal i.e. new ways to expand old brands and ability to shift images.

Maybelline released a new makeup collection that featured bright colors called Miami Chill. This was important for two reasons: For consumers it was,’ Wow, is this Maybelline?’ For retailers it was a signal that the company was

changing.

5 10/10

The brand portfolio and hierarchy make sense

6 9/10

The brand makes use of and co-ordinates a full repertoire of marketing activities to

build equity• Brand name designed:- Hair color formula known as

“Aureale”.• Slogan: - "Because you're worth it".• Brand awareness: - Through advertising of $4.56 billion in

2009 and in 2011 they have put 18.1% more towards its advertising budget.

• L’Oreal gradually reduced some of its ad spending on traditional media and shifted towards internet.

• Push and pull strategy: - Garnier Fructis launched a user-generated website which was focus of a major campaign and provide a chance to win prizes or vacation packages.

7

Continued….

LOGO PACKAGING SIGNAGE

L’Oreal sold cosmetics through a variety of channels, including department stores and other retail locations, duty free shops, online and via direct marketing to professionals in the beauty industry

8/10

The brand’s managers understand what the brand means to consumer

To know the likes and dislikes L’Oreal has spent 3.5 % of its revenue on R&D.

Each of the division L’Oreal have, each division has its own marketing team to ensure each brands integrity.

Brands are to be sold to a particular type of customer through a particular distribution channel.

Managers know that they can’t play with the position of the brands, so they don’t play with that. The only trick is to innovate things inside the brand.

8 9/10

The brand is given proper support, and that support is sustained over the long

runL’Oreal has spent its 3.5% of its revenue in

R&D Even at the time of recession L’Oreal signaled

that it would be interested in buying an Indian skin care brand which shows that they were more concerned to keep them self up by acquiring a new brand even during market downfalls.

Ex:- Maybelline.

9 10/10

The company monitors sources of brand equity10 8/10

Rating for L’Oreal (1-10)

• Question 1 - 9 points.• Question 2 - 9 points.• Question 3 - 9 points.• Question 4 - 8 points.• Question 5 - 10 points.• Question 6 - 9 points.• Question 7 - 8 points.• Question 8 - 9 points.• Question 9 - 10 points.

• Question 10- 8 points.

1. Why did L’Oreal acquire Body Shop? In your view was it a sound global strategy.- B22. Is the organization structure of L’Oreal aligned with its global brand strategy? Why or why not.-C23. What are the different cross cultural consumer group segments which L’Oreal is targeting and how.-C24. “Think global act local” is the approach of L'Oreal. How are they practicing this in developing Asian markets.-D25. How L'Oreal's acquisitions, contribute to their competitive advantage on a global scale.-D26. How does L'Oreal leverage various consumer touch points across diverse cultures?-B2

Questions for you!