Running Head: L’Oreal India: Where Beauty Meets Tradition 1

L’Oreal India: Where Beauty Meets Tradition

Week 5: L’Oreal

Uriah J. Bisson

MKT650B(M0): Marketing Strategy

Professor Dr. E. Anne Busse

October 25, 2019

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Table of Contents

What are the opportunities and challenges of building brands in large, fragmented, and

value-conscious emerging markets such as India? ................................................................ 3

What were the reasons for L'Oreal's initial failed entry into India? How did the company

tailor its marketing mix to succeed in India? Is localization the answer to successful

market entry and development? ................................................................................................ 4

Discuss L'Oreal's market development strategies for the underpenetrated and

unorganized professional hair-care segment. ......................................................................... 5

References: ................................................................................................................................... 7
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What are the opportunities and challenges of building brands in large,

fragmented, and value-conscious emerging markets such as India?

Many opportunities exist for L’Oreal in building a brand in a large, fragmented, and

value-conscious emerging market in India. The first opportunity for L’Oreal is that they

will be able to offer products to consumers in India that they actually need. India women

are conscious about their hair with aspects of greyness and dryness. Women

consumers in India did not have a product that both performed how they wished nor in

their price point. When L’Oreal did their research, they created the product Garnier

Color Naturals which helped Indian women consumers both fill the self-consciousness

with being able to dye their hair and fit within their price points. The biggest

opportunities are to give India products they will actually help improve their lives and to

be innovative enough to gain first mover advantage in market share for these new

products.

The challenges that L’Oreal faces are both, the cost of market research to

understand their consumers, and how the market is fragmented with competitors.

L’Oreal is not able to use the marketing techniques, or even the same products they

offer in other parts of the world such as the United States. Extensive market research is

required to understand the consumers of India and how to build the brand with the right

image. Market research can take a considerable amount of time and costs quite a bit. A

whole new set of products will need to be manufactured to fit the needs of consumers in

India. This is a challenge both in time and funds. With a fragmented market such as

India, even though L’Oreal can spend all the time and money it wants on market
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research and new products, it will never be the number one choice for consumers of

India because of the other competitors.

What were the reasons for L'Oreal's initial failed entry into India? How did the

company tailor its marketing mix to succeed in India? Is localization the answer

to successful market entry and development?

L’Oreal faild with their initial attempt to enter into India’s Market for several reasons.

The first reason was because L’Oreal’s shampoos “Ultra Doux” were not easily

noticeably amid prevailing shampoo brands such as Sunsilk, Clinic Plus, and Clinic All

Clear from established global giant Hindustan Unilever and local brands such as Chik

and Ayur (Shamdasani, 2017, pg. 3). L’Oreal failed to perform their initial market

research with their second product line in the anti-aging cream line. The anti-aging

cream was a big trend all over the world, except for India. L’Oreal did not understand

their targeted market and did not create enough brand recognition to gain a competitive

advantage with the launch of the Ultra Doux shampoo line or the anti-aging cream line.

L'Oreal took it upon themselves in 1996 to undertake a project to understand the

real needs of Indian consumers (Shamdasani, 2017, pg. 4). L’Oreal conducted research

to see what the consumers of India actually needed and what their price points were.

India consumers needed a hair care product that would dye their roots, and have a price

point acceptable by costs conscious consumers. In 2007, L’Oreal released their “L’Oreal

Excellence” product line aimed towards women who needed to color their roots. L’Oreal

localized their advertising and made agreements with 2,500 shops in India to stock the

product line. In addition, L’Oreal made the price point of $7 for small packets. Normally,
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a kit would cost $99, but consumers in India could not afford this option, thus L’Oreal

created a small powder dye packet for a fraction of the costs.

Localization is not the complete answer to L’Oreal’s case with India, but it certainly

helped. When L’Oreal took initiative to conduct research to comprehend what the needs

and wants for beauty in India were, they gained valuable information pertaining to what

products and price points India desired. When L’Oreal started to manufacture the

products in India and hire local people to help make the products, this showed the

consumers that L’Oreal was interested in their needs. By L’Oreal localizing their

advertising to consumers of India, they were able to gain market share. Even though

locliziation helped L’Oreal gain marketshare, its competiors found success in the never

ending competition of the “beauty race” (Shamdasani, 2017, pg. 8).

Discuss L'Oreal's market development strategies for the underpenetrated and

unorganized professional hair-care segment.

L’Oreal realized that the India salon sector was highly unpenetrated and largly

unorganized market (Shamdasani, 2017, pg. 5). L’Oreal adopted a strategy that they

would implement long-term. L’Oreal invested in educating and training different size

salons about the L’Oreal Professional Paris and Kerastase Paris product line and how

to use them. L’Oreal eventually opened five regional training centers and taught salon

owners how to use these products, while stocking their shelves with the product line.

By L’Oreal offering these training classes, they helped small India salons transition into

a better-quality salon in regards to products and knowledge. Some of these salons even

turned into chains. Once this strategy was deemed a success, L’Oreal eventually
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opened an academy where they teach 20,000 hair dressers a year in cutting, styling,

coloring, and straighten.

It was through education that helped L’Oreal penetrate the professional hair care

segment. By demonstrating that L’Oreal cared for the Indian consumers and their

haircare needs, helped L’Oreal gain market share. L’Oreal invested in innovative

products pertaining to the needs of India and provided an educating and training format

facility that helped them land space on salon shelves. This marketing strategy helped

L’Oreal understand the needs of their consumers in India and provide products they

actually wanted while building trust and brand equity.

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References:

Aaker, D. A. (2018). Strategic market management (11th ed.). New York: John Wiley &

Sons, Inc.

Shamdasani, P. (2017). L’Oreal India: Where Beauty Meets Tradition. Ivey Publishing

2017-09-29. W17601