MARKETING PLAN

L'ORÉAL COSMETICS
Prepared By:

1. Mahaam Naz
2. Aqsa Hassan
3. Kanza Nasim
Date: 12 November, 2018. 4. Zara Younus
S
Table of Contents

1. Executive Summary
2. Situation Analysis
3. Market Summary
4. Market Info graphics
 Geographic
 Demographics
 Psychographics
5. Market Trends
6. Market Growth
7. SWOT Analysis
8. Competitor Analysis
9. Marketing Strategy
10. Mission
11. Marketing Objectives
12. Target Markets
13. Positioning
14. Marketing Tactics
 Product
 Price
 Place
 Promotion
15. Financials
16. Sales Forecast
17. Controls
18. Contingency Plan
EXECUTIVE SUMMARY

L'Oréal S.A is a French cosmetics and beauty company founded by Eugène Paul Louis
Schueller in the year 1909 with headquarters in Clichy, Hauts-de-Seine and the main
office in Paris. It is the 1st cosmetics group worldwide. L'Oréal has its operations in over
130 countries on five continents, operates 42 manufacturing plants, 6 research and
development centers throughout the world and own almost 40 different subsidiaries. It
is a business rich in meaning, as it enables all individuals to express their personalities,
gain self-confidence and open up to others. Beauty is a language.
L’Oréal is entering its second century of beauty with an even stronger belief in its
mission: to offer populations all over the world products attuned to their needs, their
cultures and their aspirations. Since its creation by a researcher, the group has been
pushing back the frontiers of knowledge. Its unique Research arm enables it to
continually explore new territories and invent the products of the future, while drawing
inspiration from beauty rituals the world over. Beauty is a science.
Providing access to products that enhance well-being, mobilizing its innovative strength
to preserve the beauty of the planet and supporting local communities. These are
exacting challenges, which are a source of inspiration and creativity for L’Oréal. Beauty
is a commitment.
By drawing on the diversity of its teams, and the richness and the complementarity of its
brand portfolio, L’Oréal has made the universalisation of beauty its project for the years
to come. L’Oréal, offering beauty for all. L’Oréal is an international company and their
product is selling everywhere in the world, however depends on the cultural, economical
& social factors women’s demands are quite different from each other. L’Oréal offers
different product different countries in order to give fulfilment to all women. Beauty is
universal.
The beauty gesture is at the heart of L’Oréal’s profession.
It expresses an eternal and universal need: taking care
of oneself and enhancing the appearance, to feel a sense
of inner harmony and attunement with others.
SITUATION ANALYSIS
L’Oréal is well-known and very longstanding brand
however, in order to maintain in the market place they
need to develop their products against to their
competitors. One of the major issues for L’Oréal over
the coming years is responding to new patterns of
worldwide cosmetics consumption. This is both a
challenge and a tremendous opportunity for research
and innovation, which has decided to make the great
diversity of beauty rituals a source of innovation all
over the world. An analysis of the existing situation
with respect to the market of cosmetics indicates that
there are various major players in the market that has
resulted into stiff level of competition within the
industry. There are various companies offering
different kinds of cosmetics targeting different
customer types. The situation with respect to
cosmetics dealers in the industry implies that different
sellers are targeting different customer types such as
cosmetics for oily skin, anti-ageing etc. There is higher
competition level in the industry and branded
companies such as Mac Revlon¸ Etude, Oriflame and
many more. The situation is therefore highly difficult
for the cosmetics companies to penetrate the existing
market.
MARKET SUMMARY

In a worldwide market undergoing a complete transformation. Over the past two decades,
declining fertility and mortality rates have resulted in a rise in the aging population, globally.
Strong desire among men and women to retain youthful appearances has groomed and
nurtured the cosmetics industry, worldwide. Rapidly aging demographics has led to a robust
demand for anti-aging products in order to prevent wrinkles, age spots, dry skin, uneven skin
tone, and even hair damages, creating room for new innovations in cosmetics, thus boosting the
industry growth.
By 2050, the population over 60 years of age is expected to reach 2.09 billion. The life expectancy
for women is predicted to rise from 82.8 years in 2005 to 86.3 years in 2050. Whereas for men,
the expected increase for men in the corresponding period is from 78.4 to 83.6 years. Notably,
the share of elderly people for cosmetic products is on rise.
There is a considerable rise in disposable incomes over the past decade. The growth in global
economies, changing lifestyles, rising demands of skin and sun care products due to varying
climatic conditions encourages the growth of the market for cosmetics. A shift of preference
towards natural and organic beauty products, particularly in U.S. and European countries,
fosters the growth of the cosmetics market. Rising demand for natural, herbal and organic
beauty products creates potential opportunities for manufacturers to innovate and develop new
products in accordance to consumer preferences.
L’Oréal is making new advances to offer the best in cosmetics to as many people as possible.
As the biggest beauty brand in the world, L’Oréal Paris has an unparalleled commitment to
technology, research and innovation, providing groundbreaking, high-quality products for
women, men, and children of all ages and ethnicities. L’Oréal Paris is notably dedicated to
celebrating the diversity of beauty.
 TOP FACTORS IMPACTING
GLOBAL COSMETICS MARKET
 TARGET MARKETS

Makeup is an essential part of most women's look from a dab of blush to luscious, shiny lip shades,
women luxuriate in using make-up to enhance their natural beauty. There are cosmetic choices for
the career woman, the mom-on-the-go and even the pre-teen who receives her first make-up kit
from mom. Each has her own makeup needs, and L’Oréal cosmetics target their brands accordingly.
MARKET INFOGRAPHICS
The profile for L’Oréal customer consists of the following Geographic, Demographic,
and behavior factors.

GEOGRAPHIC
Geographic: Global, hemispheric, national, state, city, postal code, climate, rural, urban
(Wood, 2007, p.67) L’Oréal has no set geographic target area. By leveraging the
expansive reach of the internet and multiple delivery services, L’Oréal can serve both
domestic and international customers. However, this is clearly known that urban area’s
people pay more attention towards cosmetics than rural area’s people therefore the
brand is preferred in urban area. Climate is another crucial factor because in some
countries temperature is quite high all year therefore it is not able to use make-up in
extreme hot weather.

3%
9%

31%

13%
Asia, Pacific
Western Europe
North America
Latin America
Eastern Europe
Africa-Middle East

20%

24%
DEMOGRAPHICS

Age: 15-40 years old

Gender: Female
Education: Undergraduate and above
Occupation: Students and adults
Income Range: Above 15K

PSYCHOGRAPHICS
Perception: Quality products that are well
known and functional
Motivation & Needs: Uplifting self-esteem,
enhancing beauty, fulfilling emotional needs
and higher status
Attitude & Personality: Self-conscious
and confident
 MARKET TRENDS

Holding around 40% of worldwide market growth, L'Oréal has now shifted its strategy
in recent years, moving away from its previous aim to be the number one beauty
brand to instead become “ the number one beauty tech company” by offering
valuable services concerning the new era’s inclination towards technological
advancement . Although L'Oréal has been selling quality products for 110 years with
23% share in global beauty market but we need to offer services to sustain our
success. Reality beauty services are being brought through custom beauty apps which
includes the creation of 1st virtual makeup tester app “Makeup Genius”

,offering tools that allows consumers to try 300+ L'Oréal products online to see how
they look.
Mostly consumers are now on the journey of exploration, rejecting the traditional
products and seek out diversified brands to satisfy age-old desire to look beautiful.
Partnership-startup with Veleza-an app that directly links users to beauty experts and
Preemadonna- a high-tech app that uses a phone’s camera to put nail art onto nails
and other high-tech apps will enable consumers to capture the best for themselves.
INNOVATING FOR THE BEAUTY
OF THE FUTURE
E-commerce is an increasingly important growth area for L'Oréal with an astonishing
growth rate of
+33.6% in 2017 and recorded more than 2billion pounds from online sales equal to 8%
of its total revenues . These facts surely support the idea of worthwhile focus on e-
commerce for brands rendering L'Oréal to have created an in-house tech arm
containing 3000 experts to bring in digital transformation beauty market. Through
online services, demand for customization & personalization will be enhanced further
by letting customers experience the offerings right at their place and acquire them
through tools of e-commerce (platform of Instagram & Facebook).
Digital Marketing is a more current trend, pouring in more growth diversification.
Another fashion is demand for personalization & customization which is met by
putting-forth frequent renovations and new products that can fulfil the desire coming
out from the hearts of customers as they’re worth it.

L'Oréal is partnering with Facebook to develop

Augmented reality-AR experiences for its brands.
Furthermore, it’s a great opportunity to get its
extended brands in front of more than 2 billion
people which is a useful measure to enhance
customer base along with fulfilling desire for
instant gratifications.
 MARKET GROWTH
The worldwide cosmetics market, estimated at a total of 205 billion euros, was
stronger in 2016, with growth of +4.0%. In this supply-driven market, spurred by
innovation, quality and perceived results, L'Oréal strengthened its leadership.

GROWTH OF THE WORLDWIDE

COSMETICS MARKET OVER TEN YEARS

+5.0%

+4.6% +4.6%

+4.2% +4.0%
+3.9%
+3.8%
+3.6%

+2.0%

+1.0%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
SWOT ANALYSIS:
STRENGTHS:
 Continuing research and innovation in the
interest of beauty which assures that L'Oréal
Cosmetics offers the best to their consumers.
 L'Oréal is leader in the growing cosmetic
industry despite the competition in the
market.
 High-end advertising through influencers
which adapts to the culture of target
audience.
 Well-segmented product line across different
pricing tiers.
 Moderately significant working conditions
backed with the trust of 82,600 employees in
150 countries.

WEAKNESSES:
 Decentralized organizational structure. Due
to the many subdivisions of the Company,
there is also the difficulty in the control
L'Oréal.
 Stiff competition from other leading cosmetic
established brands.
 Less pro-active in the natural /organic
category. It could benefit from greater
penetration in this category.
OPPORTUNITIES:
 L'Oréal can tap the growing
market that ranges from the
affluent, the aging and also the
masses of many countries.
 Greater market share because
of numerous patents
registered by the company.
 Growing demands for beauty
products.
 Potential to attempt for
organic/natural category
share accompanied by market
gap.

THREATS:
 Growing competition within
the field of cosmetic brands.
 Economic downturn that is
quite evident in other
countries.
 More emphasis on luxury
brands, L'Oréal Group may be
producing the best of its line,
people may find that their
products are not of their basic
needs and may skip buy
L'Oréal products.
Competitor
Analysis
An analysis of the
competition level in
the industry implies
that there are various
global players in the
industry that have
significant level of
reputation and
presence. The
existence of so many
players at the global
level poses significant
level of threat in the
form of higher
competition level
within such industry.
These are the major
industry players in
dealing with the
cosmetic products.
KEYS TO SUCCESS:
 Firstly a global beauty market that will continue
to grow in the coming years due to the
emergence of the new middle and upper
classes who are powerful consumers of beauty
, especially of premium products. But also the
result of major shifts which reveal new needs,
such as urbanization or ageing population.

 Secondly , L'Oréal is the archetype of the

“Beauty Pure Player” _nothing but beauty for
all types of beauty and our unique expertise
acquired over 110 years , allows us to
understand , in extreme detail , the desires and
aspirations of consumers all around the world.

 Thirdly , our fundamentals, the reasons for our

success today which will be the reasons for our
success tomorrow , the obsession of innovation
and superior quality more important than ever
in a world of ratings and reviews . Our
continuous strategic focus on Research &
Innovations helped in making our brands
already billionaires and will continue to make
the difference in future.

 The forth reason is our superior digital prowess

in a world where technological development is
crucial factor for determining the success of
any business segmentation.
MARKETING STRATEGY

L’Oréal is looking to better understand its fashion and

beauty consumers as part of a new strategy which
involves “looking external to drive internal change”,
according to the company.
Hugh Pile, who joined the company as CMO nearly nine
months ago, told Marketing Week: “We want to be
inspired by the world out there, whether its
technologies, new consumer behaviors, trends and new
partnerships, and then use that to drive internal change
to make sure we’re absolutely the forefront of where
we need to be as a business.”
L’Oreal is also looking to partner with new
technologies, including a neuroscience company, which
will allow the company’s insights team to measure the
brain’s response to a piece of creative through
electromagnetic pulse caps.
“What this allows us to do is understand the essence to
driving great creativity,” Pile says. “That will ultimately
be the thing that separates us from our competition.”
The company is also working with influencers such as
vloggers and bloggers, who add credibility to a brand
and allow the company to identify and capitalise on
trends.
It is focused on becoming the world's largest cosmetic
company. The strategy of conquering a billion new
consumers has led to L’Oréal reorganizing its Research
to get as close as possible to tomorrow’s markets and
consumers. By establishing poles to bring together R&I
expertise in each major world region, the group is
bringing its innovation model up to date, while adapting
to the needs of Chinese, Indian and Brazilian consumers.
Today, innovation is born in the places where
consumers live, and local markets will soon inspire
products for the whole world. The transformation is
already well under way.
MISSION
L’Oréal believes Beauty is universal. It has set itself the mission of offering
all individuals worldwide the best of cosmetics innovation in terms of quality,
efficacy and safety. By meeting the infinite diversity of beauty needs and
desires all over the world, it enables all individuals to express their
personalities, gain self-confidence and open up to others.
MARKETING OBJECTIVES:
 To further strengthened the products in makeup and skincare category through
product development and product line strategies.
 To increase the sales growth particularly in Asian region.

TARGET MARKET:
The company has segmented the market based on the demographic factors such as
L’Oréal LUXE for upper middle and upper-class customers who wear beauty as their
identification, Dark & Lovely for African women’s majority of which are working
professionals. It also aims to target women with beauty concerns or issues such as
signs of ageing or dry/oily skin. This strategy would focus on women 30 and over to
reduce the signs of ageing.
POSITIONING
The brand has positioned itself as most ethical cosmetics and beauty Care
Company focusing on Universalisation i.e. respecting the differences in
cultures, desires, and aspirations of the internal & external stakeholders.
L’Oréal target customer are mostly women but they will also focus more on
men. It is a high end brand which indicates that their target customers are
people with high income. Using this brand gives them a touch of class and
sophistication. As customers perceive L'Oreal as a favorable brand, it has thus
successfully created a positive and distinct image in the minds of customers,
which further strengthens its positioning.
MARKETING TACTICS:
he single objective of marketing program is to position L’Oreal, as the premier
cosmetics accessories in the domestic as well as the International market. The
marketing program will seek to first create customer awareness, concerning the
product and then develop customer base. Specifically L’Oreal marketing program is
composed of following approaches to product, pricing, distribution and
communication.

PRODUCT:
L'Oréal has a wide portfolio of brands under them. The marketing mix product strategy can be
understood by analysing their entire portfolio. They produce products related to all beauty and
cosmetics under four major divisions namely

• L'Oréal Luxe : Kiehl’s, Lancôme, Yves Saint Laurent, Ralph Lauren, Giorgio Armani, Diesel, Clarisonic

• Consumer Products division: L'Oréal Paris, Garnier, Maybelline New York, Shampoo

• Active Cosmetics division: Vichy, La Roche-Posay. Sanoflore

• Professional Products division: L'Oréal Professionnel Paris, Kerastase, Matrix

Under these product divisions L'Oréal have products like eye-liner, mascara, eye shadow, nail polish,
nail polish remover, lipstick, lip-liner, lip gloss, cleanser, foundation, concealer, and blush for face,
hair color in various shades, hair care, shampoos, conditioner, toners, hair spray and serum. All
these are produced and innovated based on customer preferences and needs. These are available in
different sizes and price ranges. L'Oréal products are properly tested as per international testing
standards without harming any animals in the process.

PRICE:
L'Oréal is one of the leading global cosmetic brands. The
consumer products division brands are distributed in retail
channels making it available to the mass market. As a result
they earn huge profits from this division. The professional
products are available at salons worldwide so when a
customer visits these salons they are ready to pay for these
products as they are not priced very high. The Luxe division
products are available at supermarkets, cosmetics stores,
own brand outlets and even online. However, these products
have a premium price and customers are even ready to pay a
premium for these products owing to quality and reliability
over competitors. L'Oréal prefers to maintain value based
pricing strategies for most of their products. L'Oréal always
brings about innovations across their various product
divisions thereby penetrating the market with different price
levels. Thus, the pricing strategy in the marketing mix
of L'Oréal is based on premium pricing, competition,
geography served and product demand.
PLACE
Based on their different product divisions their products are made available to the
customers worldwide. L'Oréal also makes sure they have vast distribution networks to
enable a strong market presence. They have acquired many different companies
worldwide to make increase their brand presence. Over the years, L'Oréal has grown
and is now present in 130 countries in 5 continents. Each of their products are
available at department stores, retail outlets, pharmacies, salons, cosmetics stores,
own brand boutiques and even e-commerce websites.

PROMOTION:
L'Oréal being an international brand has its promotions done at various levels in
different countries. They also have a very strong ad slogan “Because we’re Worth It”
with a strong message to attract customers. The brand has an aggressive marketing
mix promotional strategy. Attractive models are their brand ambassadors like Jennifer
Lopez, Naomi Watts, Cheryl etc for various campaigns all over the world and and
international face for most of their TV, print and digital advertisements. L'Oréal even
use word-of-mouth marketing strategy which has become viral especially in India.
L'Oréal also have various CSR commitments like:
• Project CARE which cultivates citizenship by performing various social welfare
activities in areas like Child Education, Health, Safety and Environment.
• YOUNG WOMEN IN SCIENCE in partnership with UNESCO to help young women to
achieve their dreams and aspirations of pursuing careers in science.
• BEAUTIFUL BEGINNINGS with the objective of providing skilled training to
uneducated young women from disadvantaged sections of society to help them either
start their own salons or be a part of existing beauty salons thus making them more
economically secure
FINANCIALS
Estimated at more than 200 billion euros, the worldwide cosmetics market
has grown steadily, spurred on by innovation and the limitless diversity of
consumer aspirations. It is a market driven by the development of social
media, increasing urbanisation worldwide and rising growth in online beauty
spending due to the expected growth of the high-income class between
now and 2030, an increase in life expectancy and the continued desire for
products that are new, different and better. In this context, L’Oréal has
maintained its leadership.

Growth in 2017 Growth in worldwide online cosmetics sales

Share of e-commerce in the beauty market in billions of USD

SALES FORECAST:
CONTROLS
The purpose of L’Oréal marketing plan is to guide the organization. The
following areas will be observe to measure the performance.
● Revenue and unit sales: monthly and annual.
● Expenses: monthly and annual.
● Customer satisfaction.
● New product development.

CONTINGENCY PLAN
The plan is to explore new opportunities to expand the market and steel
market share from competitors. If our market share is not matching our
expectations the market research data will be used as a guideline to provide
us clues as to what changes are needed.