UNIVERSITY OF MUMBAI

(SIXTH SEMESTER)
T.Y.B.M.S.

A PROJECT ON:
MARKETING STRATEGY OF L’ORÉAL

ACADEMIC YEAR
2019-2020

SUBMITTED BY
RODRIGUES SIMONE TREVOR

PROJECT GUIDE
PROF. NEHA MEHTA

DATE OF SUBMISSION
28TH FEBRUARY, 2020

MALINI KISHOR SANGHVI COLLEGE OF COMMERCE

AND ECONOMICS
J.V.P.D SCHEME
VILE PARLE (WEST)
MUMBAI – 400 049
 DECLARATION

I, RODRIGUES SIMONE TREVOR of MALINI KISHOR SANGHVI

COLLEGE OF COMMERCE AND ECONOMICS, of T.Y.B.M.S.
(Semester VI) declare that I have completed this project on the “MARKETING
STRATEGY OF L’ORÉAL” in the academic year 2019 – 2020. The
information submitted is true and original to the best of my knowledge.

DATE OF SUBMISSION
28TH FEBRUARY, 2020 SIGNATURE OF STUDENT
(RODRIGUES SIMONE TREVOR)

CERTIFICATE
This is to certify that RODRIGUES SIMONE TREVOR of MALINI
KISHOR SANGHVI COLLEGE OF COMMERCE AND ECONOMICS,
of T.Y.B.M.S. (Semester VI) has completed the project on the “MARKETING
STRATEGY OF L’ORÉAL”, in the academic year 2019 – 2020. The
information submitted is true and original to the best of my knowledge.

____________________ ________________________
SIGNATURE OF PRINCIPAL SIGNATURE OF PROJECT GUIDE
(DR. MRS. KRUSHNA GANDHI) (PROF. NEHA MEHTA)

_______________________
__ ___________________________________
COLLEGE SEAL SIGNATURE OF BMS CO-ORDINATOR
(PROF. NEHA MEHTA)

_____________________________________
SIGNATURE OF EXTERNAL EXAMINER
 ACKNOWLEDGEMENT

It has always been my sincere desire as a management student to get an opportunity to

express my views, skills, attitude and talent in which I am proficient. A project is one such
avenue through which a student who aspires to be a future manager does something creative.
This project has given me the chance to get in touch with the practical aspects of
management.

I am extremely grateful to the University of Mumbai for having prescribed this project work
to me as a part of the academic requirement in the Bachelor of Management (BMS) course.

I wish to appreciate the management and staff of Malini Kishor Sanghvi College, BMS for
providing the entire state of the art infrastructure and resources to enable the completion and
enrichment of my project.

I wish to extend a special thanks to my project Guide Prof. Neha Mehta without whose
guidance, the project may not have taken shape.

INDEX
 SR. NO. TOPIC PG. NO.

`1 Introduction

2 History

3 L’Oréal in India

4 L’Oréal’s Mission

5 L’Oréal’s Vision

6 Growth of L’Oréal

7 List of Brands owned by L’Oréal

8 Marketing Strategy of L’Oréal

9 Segmentation, Targeting & Positioning on

L’Oréal
10 SWOT analysis of L’Oréal

11 Objective of the research

12 Data Analysis & Interpretation

13 Conclusion

14 Bibliography

15 Annexure

INTRODUCTION
L’Oréal S.A. is a French personal care company, owned by the Swiss company Nestlé S.A.,
and headquartered in Clichy, Hauts-de-Seine with a registered office in Paris. . L’Oréal
international is a group of companies with its branches and subsidiary companies scattered
across the globe. L’Oréal is the world’s biggest cosmetics and beauty products company.
L’Oréal S.A. specializes in the development, manufacturing and marketing process of hair
care, hair color, skin care, perfumes and fragrances, makeup and styling tools for consumer
and professional market. Some L’Oréal products are also based on dermatological and
pharmaceutical fields.

This company operates in 130 countries all over Asia, America, East and West Europe
through 25 international brands and achieved a global market share of 15.8%. Its brands
include well-known names as Lancôme, Maybelline, Garnier, Redken and Matrix. In terms of
its sales figure and market presence globally, L’Oréal as a corporation is tremendously huge.
The company is known for its involvement in research and development – it spent 3 percent
of sales on cosmetology and dermatology research in 2000 and owns a 19.5 percent stake in
the pharmaceutical firm Sanofi-Synthélabo. As of 2020, Françoise Bettencourt Meyers is the
majority owner of the company with a 33.14% stake, after the death of her mother, Liliane
Bettencourt, in September 2017. The company is ranked 8th in the list of most admired
companies and is considered to be one of the first French cosmetic companies in accordance
to an American magazine.

L'Oréal's story begins in turn-of-the-century Paris, at a time when women of the demimonde
dyed their hair, their choice restricted to fiery red or coal black. In 1907, Eugène Schueller, a
young French chemist of German descent, began to concoct the

1
first synthetic hair dyes, using a blend of harmless chemical compounds. The dyes are an
outstanding breakthrough at the time, providing a subtle range of colours in contrast to other
methods on the market, which use henna or mineral salts but produce a bright, somewhat
artificial look. In 1909, Schueller developed a hair dye formula called Oréale. Schueller
formulated and manufactured his own products, which he then decided to sell
to Parisian hairdressers. On 31 July 1919, Schueller registered his company, the Société
Française de Teintures Inoffensives pour Cheveux (Safe Hair Dye Company of France). This
move made him focus and concentrate on researching, starting for his investment to achieve
the beauty for consumers and to look forward with the name L’Oréal. The guiding principles
of this company, which eventually became L’Oréal, were research and innovation in the field
of beauty. With this, Schueller forged the first link in what is still the DNA of L’Oréal:
research and innovation in the service of beauty. In 1920, the company employed three
chemists. By 1950, the team was 100 strong; by 1984 was 1,000 and is nearly 82,000 today.

L'Oréal got its start in the hair-colour business, but the company soon branched out into other
cleansing and beauty products. L'Oréal currently markets over 500 brands and thousands of
individual products in all sectors of the beauty business: hair colour, permanents, hair styling,
body and skin care, cleansers, makeup and fragrance. The company's products are found in a
wide variety of distribution channels, from hair salons and perfumeries to hyper - and
supermarkets, health/beauty outlets, pharmacies and direct mail.

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There are some products which contains the highest growth rates like Lancôme, Giorgio
Armani, Kiehl’s, Kerastase, Maybelline New York and La Roche-Posay contains a range of
exceptionally high quality products that are globally recognized all over the world. Along
with its acquisitions, L'Oréal launched several no. 1 products in the world, including
Maybelline's Water Shine lipstick and Full 'n' Soft Mascara, Age Perfect Skincare by L'Oréal
Paris, Garnier's Fructis Style product line, and fragrances Ralph by Ralph Lauren and Miracle
by Lancôme. L’Oréal’s Products are divided into four categories: Professional Products,
Consumer Products, L’Oréal Luxe Products and Active Cosmetics. Active cosmetics include
brands like Vichy, Inneov and Sonaflore; Luxury products include brands like Diesel, Ralph
Lauren and YSL; Professional products include brands like Matrix Essentials, Mizani and
Kerastase; Consumer products (personal care) include brands like Maybelline, Essie, Garnier,
Magic.

L’Oréal has six worldwide research and development centres: two in France – Aulnay and
Chevilly; one in the U.S. – Clark, New Jersey; one in Japan – Kawasaki, Kanagawa
Prefecture; one in Shanghai, China established in 2005; and one in India. A future facility in
the U.S. will be set up in Berkeley Heights, New Jersey.

L’Oréal mostly emphasizes on building strong consumer relationships, so the company’s

lifestyle and philosophy is to provide more satisfaction to the consumer with the L’Oréal
products. The slogan of company is “Because we’re worth it” and it reflects their consumer-
focused strategy. They also produce products for the kids by the name of L’Oréal kids.
L’Oréal’s major consumer beauty brand L’Oréal Paris has been represented by many strong
female personalities and icons of cinema like Susan Sarandon, Celine Dion, Jennifer Lopez
and many more. Sonam Kapoor, Katrina Kaif and Deepika Padukone have been the
spokeswomen for this brand in India. Miss world 1994 and Bollywood actress Aishwarya Rai
is a global spokesmodel of the brand since 2004.

In 2003, L'Oréal announced its 19th consecutive year of double-digit growth. Its consolidated
sales were €14.029 bn and net profit was €1.653 bn. 96.7% of sales derived from cosmetic
activities and 2.5% from dermatological activities. L'Oréal has operations in over 130
countries, employing 50,500 people, 24% of which work in France. 3.3% of consolidated
sales is invested in research and development, which

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accounts for 2,900 of its employees. In 2003, it applied for 515 patents. It operates
42 manufacturing plants throughout the world, which employ 14,000 people. Cosmetics sales
by division breakdown: 54.8% from consumer products at €7.506 bn, 25.1% from luxury
products at €3.441 bn, 13.9% from professional products at €1.9 bn, and 5.5% from active
cosmetics at €0.749 bn. Cosmetic sales by geographic zone breakdown: 52.7% from Western
Europe at €7.221 bn, 27.6% from North America at €3.784 bn, 19.7% from rest of the world
at €2.699 bn.

L'Oréal Group has its head office in the Centre Eugène Schueller in Clichy, Hauts-de-Seine,
near Paris. The building, constructed in the 1970s from brick and steel, replaced the former
Monsavon factory, and employees moved into the facility in 1978. 1,400 employees work in
the building. The world's largest hair salon is located inside the head office building. As of
2005, 90 hairdressers served 300 women, including retirees, students, and unemployed
people, per day; the customers are used as test subjects for new hair colours.

Attributing much of its prosperity to its global branding strategy, L'Oréal remains confident
that its success would continue into the future. With its strong market position, L'Oréal seems
poised to continue its dominance in the cosmetics industry well into the future.

4
 HISTORY
For more than a century, L’Oréal has been involved in the adventure of beauty. The small
company founded by Eugène Schueller has become one of the top cosmetic groups in the
world. The highlights of the L’Oréal adventure are mentioned below:

1909-1956: The first steps

 1909

Eugène Schueller, a young French chemist, created a hair dye formula called Oréale.

Schueller formulated and manufactured his own products, which he then decided to sell
to Parisian hairdressers. Schueller goes on to create the company that will later become
L’Oréal, the Société Française de Teintures Inoffensives pour Cheveux (Safe Hair Dye
Company of France), on 30th July 1909.

 1910

Eugène Schueller succeeds in convincing Paris hair stylists to use his dyes. He brings in
representatives to sell his products throughout France. He also sets up a hair-coloring school
on Rue du Louvre in Paris. Oréale hair dyes are a great success, even beyond the borders of
France.

 By 1920

Its products were available in a total of 17 countries, including the United States, Brazil,
Chile, Peru, Canada and the Soviet Union, and in the Far East.

5
 1925 (L'Oréal d’Or pour éclaircir)

Schueller continues to innovate in the beauty industry, unveiling L’Oréal d’Or, a

groundbreaking hair-lightening product creating golden tints and lending an even more
natural look to blond hair.

 1928 (Acquisition of Monsavon & Launch of O’Cap)

Eugène Schueller takes over the company Savons Français, which was founded in 1920. The
company’s production site, located at Rue Martre in Clichy, would later become L’Oréal’s
headquarters. O’Cap foam hair wash, drawing its name from the French term for hair
lotion, Eau Capillaire, puts shampoo on the market.

 1929 (Launch of Imédia & L’Oréal Blanc)

In a bid to offer ever more subtle, lasting hair colors, Eugène Schueller seeks to develop an
organic coloring solution able to penetrate the hair fiber called Imédia. L’Oréal Blanc
bleaching powder was a huge success among top hair stylists.

 1933 (Dopal shampoo & women’s magazine Votre Beauté)

L’Oréal finally gives a real shampoo without soap known as “Dopal”, the product range is
still sold today as “Dop”. Schueller also commissioned famous artists of the time to design
posters and also launched his own women's magazine, Votre Beauté.

 1935 (Ambre Solaire sun tan oil)

Schueller develops a skin-protection oil called Ambre Solaire, featuring a warm, amber color,
attractive scent, easy-to-hold wavy bottle design. The rose and jasmine perfume of 1937 were
soon introduced and sold through pharmacies and perfumers and new Italian, Belgian, and
Danish subsidiaries.

 1939 (L’Oréal gets its name)

Even the outbreak of World War II in 1939 failed to curb the company's growth. On 4th April
1939, the Société des Teintures Inoffensives pour Cheveux officially changes its name to
L’Oréal, with premises at 14 Rue Royale in Paris, still the company’s head office today.

6
 1945

L'Oréal launched the first cold permanent wave product, Oréol.

 1951 (Imédia D hair colour)

A research-and-development team of 100 chemists had created further innovative products,

including the first lightening tint, Imédia D. The new Imédia Crème D formula lightens and
colors hair at the same time.

 1952 (Régé Color)

L’Oréal creates a new colour service for hair salons with Régé Color direct dying solutions.
The new easy to apply formula allows the dye to sit on the surface of the hair fiber with the
colour fading after 6 to 8 shampoos.

 1954

L’Oréal advances further into the field of skin care by signing technical agreements with
the Société hygiene Dermatologique de Vichy.

 1955

Always with a view to winning over women and as part of the quest for more subtle, natural
hues, L’Oréal creates its first colour-enhancing shampoo: Colorelle.
 7

1957-1983: On the road to Grand L’Oréal

 1957

Schueller died in 1957 and François Dalle took over as chairman and CEO at 39 years of age.

 1959

Present in the Brazilian market since the late 1930s, L’Oréal responds to the 1950s boom by
establishing a direct presence in the country, forming FAPROCO (Fábrica Produtos
Cosméticos S.A.) in 1959.

 1960 (Belle Color & Elnett hairspray)

Belle Color, one of the very first colouring shampoos, plays a vital role in the development of
the home colouring market. L’Oréal Net for hairdressers in 1958 followed by Elnett
hairspray, a new and extraordinary way to fix hairstyles is launched. A new research-and-
production center was established in Aulnay-sous-Bois, bringing the number of research staff
up to 300.

 1963

The L’Oréal Group is listed on the Paris Stock Exchange which gives it access to new
financial resources. French women discover the secrets of Japanese bathing practices with the
launch of first foam bath, Obao.

 1964 (Acquisition of Lancôme & Launch of Kérastase)

Founded in 1935, Lancôme, a fabulous perfume, skincare and make-up brand available in
many countries, is acquired by L’Oréal as is keen to position itself in the upmarket cosmetics
sector and the perfumery channel. L’Oréal takes hairdressing salons into groundbreaking
territor: haircare, with a specialist range of products called Kérastase.

 1965 (Acquisition of Garnier)

The purchase of Garnier enables L’Oréal to acquire a portfolio of complementary haircare

products with an organic positioning – a different approach to haircare.

8
 1966 (Fidji by Guy Laroche & Récital hair colouring kit)

L’Oréal joins forces with a major French couturier, Guy Laroche, to create a number of
fragrances. The first product of this association is Fidji, which becomes a classic perfume.
L’Oréal launches Récital on the mass consumer market: hair colouring kits designed for
women to use in the comfort and privacy of their own bathrooms.

 1967

L’Oréal launches Mini Vague, a completely new technology that gives the hair softness, body
and bounce.
 1969

The ideal fragrance to capture markets in South America and Asia, Ô de Lancôme is an
immediate success and is still a leading Eau de Toilette today.

 1970

In Biotherm, L’Oréal sees a highly original skincare brand to complement Lancôme and
Vichy. The Group takes over Biotherm and steps up its research effort.

 1972

L’Oréal’s Elsève introduces a new kind of shampoo that enhances the beauty of the hair,
giving it softness, suppleness and shine.

9
 1973 (Acquisition of Synthelabo and Gemey)

With L’Oréal’s research teams now reaching beyond cosmetics and getting closer to remedial
dermatology, the acquisition of Synthelabo, a leading French Pharmaceutical company, gives
the Group the means to develop its dermatological and dermopharmaceutical activities.
Gemey, a make-up brand specialising in foundations and face powders, is acquired by
L’Oréal which helps gain a significant position in retailing make-up market. In 1976, L’Oréal
buys out the mascara brand Ricils and attaches it to Gemey to expand its offer in all make-up
segments.

 1974

Alliance with Nestlé, the agreement which adds to the stability of the Group’s shareholders,
is also conducive to L’Oréal’s international development in certain markets, particularly
Japan, the future bridgehead of L’Oréal’s expansion in Asia. Eugène Schueller's daughter,
Madame Liliane Bettencourt, sold nearly half of her L'Oréal stock.

 1975 (Equalia revolution from Vichy)

Vichy introduces Equalia, a skincare product that restores and maintains exactly the right
balance of water in the skin. This highly scientific expertise is meticulously planned to gain
the support of pharmacists and the medical profession of the day. 

 1978 (Anaïs Anaïs by Cacharel, Magie Noire by Lancôme and Majirel hair colour from
L’Oréal Professional)

The fashion house Cacharel calls on L’Oréal to develop its first fragrance, Anaïs Anaïs,
which becomes the world’s top-selling perfume. After Ô de Lancôme eau fraîche, Lancôme
launches a major new fragrance, Magie Noire. A new molecule is created and patented by
L’Oréal – Ionène-G, which protects the hair both during and after the colouring process. The
first formula hair protecting colouring product – Majirel is created, used by hairdressers.

10

 1979
L’Oréal invests further in research and, in conjunction with Nestlé, establishes the
International Dermatological Research Centre (CIRD) and the Sophia Antipolis technology
park near Nice (France).

 1980

Having revolutionised hair colouring, Ionène-G, the hair protection system, is included for
the first time in a perm solution formula Dulcia to protect the hair’s integrity at the same time
as permanently changing its shape.

 1981

Laboratoires Galderma is established, devoted to the worldwide development and marketing

of world-renowned dermatological remedies effective against skin, hair and nail complaints.

 1982 (Launch of Plénitude, Drakkar Noir by Guy Laroche & Capital Soleil by Vichy)

To conquer the segment in the mass market, L’Oréal creates a new brand of anti-wrinkle
creams – Plénitude, to give women the best that technology has to offer, completely new
active ingredients and unusual textures at affordable prices. Drakkar Noir by Guy Laroche, an
ultra-masculine fragrance is launched. Patented by Recherche L’Oréal in 1982, Mexoryl SX,
an ultra-powerful anti-UVA, revolutionises sun protection. It is used for the first time in
Vichy’s sun protection range, Capital Soleil.

 1983

Laboratoires Garnier launches Ultra-Doux, a new range of family shampoos made from
natural plant-based ingredients such as wheatgerm, lime blossom and camomile. François
Dalle sets up an Applied R&D centre for hair and skincare to tailor the Group’s products to
the Japanese market. The new lab, which has since grown from a team of four people into a
team of 150, is given the task of researching hair and skincare issues to help develop a range
of products in tune with the specific needs of Japanese consumers. Initially based in Tokyo,
the lab moves to Kanagawa Science Park in Kawasaki in 1990.

11

1984-2000: Becoming Number One in the beauty industry

 1985 (Studio Line, Polo by Ralph Lauren, Paloma Picasso and Biotherm Homme
skincare)
L’Oréal creates a complete line of hairstyling products: gels, mousses, sprays called Studio
Line. L’Oréal obtains the Ralph Lauren licence, and continues the fabulous saga of Polo
fragrances for men, created in 1978. The acquisition anchors L’Oréal’s position in the Luxury
Products market in the United States and in luxury men’s fragrances. With an eye to
expanding its fragrance business, L’Oréal teams up with Paloma Picasso, fashion and
jewellery designer, to create fragrances; the brand is an instant success throughout the world.
At long last, the first line of skincare products designed exclusively for men, Biotherm
Homme, is introduced and is still today’s leader in men’s skincare products in more than 70
countries.

 1986

Niosome, the first anti-ageing cream, brings Lancôme into state-of-the-art skincare
technology, thanks to a formula patented by L’Oréal in 1980.

 1987 (Club des Créateurs de Beauté & Basic Homme by Vichy)

L’Oréal puts its energy behind a brand new distribution network: mail-order catalogues.
Teaming up with Les 3 Suisses, one of Europe’s leading mail-order companies, the Group
launches a catalogue of beauty products, known as Club des Créateurs de Beauté (Club of
Beauty Creators). All the products are created by top designers such as make-up by Agnès B.,
haircare products by Jean-Marc Maniatis, to name but a few. In 2008, L’Oréal becomes the
sole owner of CCB. Capitalising on its strong presence in the network of pharmacies, Vichy
launches a comprehensive range of skincare products for men, called Basic Homme.

 1988 (Lindsay Owen-Jones is named CEO)

Under the leadership of this highly unconventional director, the Group undergoes a radical
and profound transformation. Lindsay Owen-Jones takes what is essentially a French export
company and turns it into an international group, operating in over 130 countries and present
in all distribution networks.

12

From a company producing primarily hair care products, he creates a more balanced range of
activities, centred around 5 core businesses: hair colour, hair care, skincare, make-up, and
perfume. From a plethora of national brands, he creates a portfolio of 23 international
megabrands, designed to meet the needs of both women and men throughout the world. And
from a group with an utterly “made-in-France” vision of beauty and elegance, he establishes
a standard of diversity that embraces all types of ethnic needs, all levels of purchasing power,
and all cultural expectations in the realm of beauty.

 1989 (‘Look Good..Feel Better’ programme, Acquisition of Helena Rubinstein & La

Roche-Posay)

L’Oréal is deeply invested in the programme developed in the United States by the Personal
Care Products Council, which helps women cancer patients deal with the physical side-
effects of their treatments. Today, the programme is carried out with support from L’Oréal in
several European countries. L’Oréal acquires the luxurious brand Helena Rubinstein, the
American brand of skincare products which is already well positioned on the European,
Japanese and South American markets. Following Helena Rubenstein, L’Oréal signs a
licensing contract with Giorgio Armani, allowing the company to promote this prominent
name in fashion, in the area of beauty products and fragrance. L’Oréal consolidates its
dermatological expertise and its presence in pharmacy networks with the acquisition of La
Roche-Posay, a high-tech dermatological product recommended by dermatologists all over
the world.

13
 1990 (Launch of Diacolor by L’Oréal Professionnel & Trésor by Lancôme)

L’Oréal Professionnel creates the first tone-on-tone permanent colouring solution, Diacolor,
that does not use ammonia, gently covering up to 50% of grey hair. After Ô and Magie Noire,
Lancôme launches Trésor with Isabela Rosellini as its spokeswoman. Trésor becomes the
world's best-selling perfume and is still today in the top 10 worldwide. 
 1993 (Acquisition of Redken and L'Oréal Brandstorm)

The Group undertakes a series of strategic acquisitions in the United States in order to expand
its Professional Pro-ducts Division and make the United States, the second stronghold for
L’Oréal in the world, after Paris. The 1st step involves the purchase of the premium
hairstyling brand, Redken, with its young, urban, New York-inspired image. The Group also
creates L'Oréal Brandstorm, a business competition, which aims to attract the best marketing
students from around the world, the number of participants of which are remarkable. It
involves every aspect of product development, from market analysis to defining a
communications strategy to packaging design.

 1994

Present in Israel since in 1983 via the Migdal Ha Emek plant, which is the Group’s very first
plant in the Middle-East, L’Oréal reinforces its presence in the country by creating a
subsidiary in 1994.

In 1994, L’Oréal becomes the 1st international cosmetic group to which the Indian
government grants the status of wholly-owned subsidiary. This allows L’Oréal to consolidate
its presence in a country experiencing tremendous economic growth.

Launched in Latin America, Excellence Crème appeared to be a solution for women with dry
or thick hair that required hydration and protection. After becoming a local success story,
Excellence Crème is launched internationally in 1994 and rapidly becomes a world leader in
hair colourants. Today Excellence Crème offers a rich choice of shades for lightening,
darkening or enhancing natural hair colour.

14
 1995 (Force C by Helena Rubinstein and Revitalift by L’Oréal Paris)

Helena Rubinstein encapsulated the benefits of Pure Vitamin C and incorporated it into a
skincare formula—Force C. Plenitude from L’Oréal Paris creates a new offering for women
aged over forty: an eye cream that diminishes the appearance of wrinkles and also improves
firmness called Revitalift, the worldwide best-seller and current mainstay of L’Oréal Paris’
anti-ageing product range.

 1996 (Vichy Homme, Acquisition of Maybellline, Suzhou L’Oréal Beauty Products,

Launch of Garnier Fructis shampoo & Acqua di Gio by Armani)

Aminexil, a molecule patented in 1990, marks a tremendous advance in the fight against hair
loss, which is incorporated for the first time in the Vichy Homme hair loss treatment. The
acquisition of Maybelline, the leader in mass-market make-up in the United States, represents
a strategically important step. Not only does it make L’Oréal the uncontested leader in the
United States—the most crucial market in the world—but it also establishes the company as
the world leader in mass-market make-up. Maybelline opens doors for L’Oréal in Asia—
especially in China, where the company already operates one factory.

In collaboration with Suzhou Medical College, one of the oldest universities in China,
L’Oréal creates the company, Suzhou L’Oréal Beauty Products.

15
In its fluorescent green bottle, Fructis from Laboratoires Garnier has a tidal wave effect on
mass-market points of sale.

Embodying the sophisticated Armani style for men, Acqua di Gio has enjoyed
resounding, unabated success since it first hit the market.
 1997

With Aquasource, Biotherm launches a super-hydrating formula through an extraordinary

advertising campaign. Gemey Maybelline launches Ricils Volume mascara in France, which
triples the volume of the lash from the very 1st application, without clumping.

 1998

L’Oréal partners with UNESCO to launch the “For Women in Science” Awards, to honour
and support accomplished women in the sciences from all around the world. This corporate
sponsorship marks the beginning of a new era of social responsibility for the Group. L’Oréal
acquires SoftSheen, the leading brand on the Afro-specific haircare market, present both in
retail and in salons. With this acquisition, the Group attains a singular expertise in African
hair.

16

 1999 (Anthélios by La Roche-Posay)

The 1st product range to boast Mexoryl XL in 1999 is Anthélios, from La Roche-Posay, an
important name in sun protection.

 2000 (Acquisition of Carson, Kiehl’s, Dermablend & Matrix, Launch of Série Expert &
Watershine lipstick by Maybelline, L’Oréal’s first Code of Business Ethics)

Shortly following the acquisition of SoftSheen, L’Oréal consolidates its position on the afro-
specific haircare market through the acquisition of Carson, owner of Dark and Lovely.
Already widely used in Africa, Carson provides the Group with an opportunity to strengthen
its presence on the continent. The merger of the two brands in 2001 creates SoftSheen-
Carson, the world leader in afro-specific haircare products.

L’Oréal acquires Kiehl’s Since 1851, a niche brand in the luxury market and in terms of
distribution whose approach to product development is far from traditional: highly effective
products made from natural ingredients; no advertising; a wide, targeted sampling for all
formulas; a super-selective distribution; and exceptional customer service. L’Oréal acquires
Matrix, the US leader in professional haircare products, known for its youth, creativity and
quality. The objective is to strengthen the Group’s market share in the US, develop a brand
that complements L’Oréal Professionnel and Redken. Série Expert is launched by L’Oréal
Professional, a line of highly efficient professional hair care products that addresses all
demands and all hair types.

17

Maybelline launches Watershine, which soon becomes the world’s no. 1 lipstick. L’Oréal
acquires Dermablend, an American brand. Created in 1981 by a dermatologist, it is a make-
up concealer designed to cover facial blemishes, such as angioma or scars. As a product that
is both medically based and accessible to a mass market, it was a natural addition to Vichy.

In February 2000, L’Oréal’s first Code of Business Ethics, formalising its values and guiding
principles, was distributed to all employees throughout the world. Enriched by employee
feedback, a second edition of the Code of Business Ethics was launched in 2007.

2001 – Present Day : Diversity of beauty worldwide

 2001 (Acquisition of Biomedical, Repositioning of Mizani, Launch of Novadiol by

Vichy, the e-strat challenge & “Decoding the hair” exhibit)

In 1997, the Group acquired Episkin kit technology - standardized and reproducible
reconstructed skin kits, made available to the scientific and private worlds. In 2001, L'Oréal
opened a new skin bioengineering center in Lyon (France), enabling the use of this amazing
technology on an industrial scale. L'Oréal has joined the "World Business Council for
Sustainable Development," an independent international association of over 150 companies
from all major industries.

L'Oréal has acquired Biomedical, an American brand of professional corrective cosmetic

products, predominantly based on non-invasive acts (peeling, post-cosmetic procedure care),
used and sold by dermatologists. Boosted by the launch of Novadiol by Vichy, this new
expertise brought the first Phyto-Flavone-based treatment to regenerate skin material with
positive results. In the acquisition in 1998 of SoftSheen, the American company producing
hair products for ethnic hair, L'Oréal also acquired one of its subsidiaries, Mizani, its
professional product brand. In 2001, Mizani was overhauled, repositioned as a premium
brand and relaunched by the USA Professional Products Division. The e-strat challenge is a
"business game" which has now become a standard-setter, included on the educational
programs at the world's largest universities, involving over 50,000 participants from 120
countries, and now also a key Group recruitment tool. Via a dedicated website, business
school students from

18

around the world were invited to step into the shoes of a virtual cosmetics company director.
They were asked to make strategic decisions in marketing, research, production, finance, etc.
in comparison with the performance of other students.
 2002 (Innéov, License agreement with Viktor & Rolf, Juicy tubes lip gloss & Absolue by
Lancôme, Prodigy by Helena Rubinstein, Relaunch of Garnier’s Nutrisse)

In association with Nestlé, L'Oréal has entered the market for nutritional supplements for
cosmetic purposes with the creation of Innéov. Along with 2,000 other businesses, L'Oréal
subscribes to the ten principles of the Global Compact, a sustainable development initiative
launched by the UN in 2000.

High-gloss texture on the lips, luscious and transparent colors, playful image, toothsome fruit
flavors: delicious and addictive, Juicy Tubes lip gloss by Lancôme has proved a phenomenal
success worldwide.

The Luxury Products Division has signed a license agreement with Dutch designers Viktor &
Rolf. Their rich, avant-garde universe proved attractive to the Group, which is looking to
expand its designer fragrance division. 1998 saw the European launch of Garnier's Natéa,
which nourishes hair while coloring it. However, the term "Natéa" was not well understood in
the U.S. - a crucial market for the internationalization of Garnier. The brand was thus
renamed Nutrisse, a more accessible name, then re-launched internationally.

19

The global anti-aging concentrate Prodigy by Helena Rubinstein is launched, which is a

pioneering and high tech care product, in keeping with the positioning of the Luxury Sector's
most sophisticated brand.
Legendary Lancôme product Absolue is relaunched in 2002. The first care product
specifically designed for mature skin, which factors in the changes caused by hormones,
Absolue has enabled Lancôme to reach out to seniors - a booming new target sector.

 2003 (Alliance with Mr. Shu Uemura, Acquisition of Mininurse & Research Institute for
ethnic skin and hair)

To speed up Garnier’s roll-out in China, where it already markets the Nutrisse hair colour,
L’Oréal acquires Mininurse. Garnier’s first skincare products are launched under the name
“Mininurse by Garnier”. The Group sets up Research Institute for ethnic skin and hair, which
endeavours to develop knowledge about the skin and hair of individuals of African origin in
order to design products that are better adapted to their needs. The alliance with Mr. Shu
Uemura, a great make-up artist and beauty genius, enables L’Oréal’s Luxury Division to
enter the strategic Japanese market, traditionally served by only local brands.

20
 2004 (Acquisition of Yue Sai, Establishment of new plant in Pune, Abyssine cream by
Kiehl’s, Platinium by L'Oréal Professionnel, L’Oréal Paris’ Men Expert, FlowerBomb by
Viktor&Rolf and L’Oréal’s first Diversity Leadership Award)

The Group opens a plant for consumer products in Pune, 150km from Mumbai. To respond to
Chinese aspirations for brands that respect the specific qualities of Asian skins, L’Oréal
acquires Yue Sai, an affordable luxury skincare and make-up brand that epitomises the
modern Chinese woman.

The first Kiehl’s skincare product to benefit from L’Oréal Research, Abyssine Cream is an
instant best-seller. Its key ingredient – abyssine – comes from micro-organisms that live in
ocean vents and resist extreme conditions.

L'Oréal Professionnel revolutionises the lightening market, which until now had essentially
used powders, by launching Platinium, the first hair lightening paste.

For the first time in the mass market, L’Oréal Paris’ Men Expert offers men a range of
advanced skincare adapted to each type of problem, a new approach that contributes to the
boom in male cosmetics.

L’Oréal’s commitment to address the diversity of its employees, customers, suppliers and
models of beauty earns it the first Diversity Leadership Award for a company from the
Diversity Best Practices organisation. With an impelling name, an explosive floral bouquet,
and a very “couture” appearance, Viktor&Rolf’s first fragrance FlowerBomb shatters the
traditional codes in the world of perfume and is a hit.

22

 2005 (AIDS prevention-agreement with UNESCO, Acqusiition of Skinceuticals, Hypnôse

by Lancôme, Nutritionist by Garnier & Casting Crème Gloss by L’Oréal Paris)

L’Oréal’s Professional Products Division and UNESCO sign a cooperation agreement on

May 3rd 2005 to educate hairdressers about AIDS prevention using the global network of
hair salons is to mobilise the network of L’Oréal trainers to provide clear information about
HIV. L’Oréal acquires Skinceuticals, a premium American beauty care brand for
professionals, used and sold by dermatologists, plastic surgeons and quality spas.
Skinceuticals joins the Active Cosmetics Division. Lancôme adds a new tonality to its
perfumes – the entrancing magnetism of Hypnôse, a sun-drenched oriental fragrance with
woody notes. With its innovative formula of Omegas 6 and 3, and added magnesium,
Nutritionist by Garnier pushes the boundaries of advanced skincare technology even further.
With its new ammonia-free formula, Casting Crème Gloss delivers ultra-glossy highlights,
and optimum coverage of grey hair. The product is an international success.

 2006 (Acquisition of Sanoflore, The Body Shop & SkinEthic, Licensing contract with
Diesel)

The Luxury Products Division signs a licensing contract with Diesel, a cult brand for the 18-
35 age group worldwide, to launch a line of fragrances. A new chapter in L’Oréal’s history
begins in April 2006. After more than 20 years at the helm, Lindsay Owen-Jones becomes
Chairman of the Board of Directors, and Jean-Paul Agon is appointed Chief Executive
Officer with responsibility for the Group’s operational management. He not only intends to
develop the Group, but also to make L’Oréal a great place to work and a “great citizen of the
world”, as befits the global leader in beauty products. L’Oréal receives the Corporate
Diversity Innovation award for its diversity initiatives and especially its innovative brand
products.

Episkin, the Group subsidiary dedicated to reconstructed skin technology, acquires SkinEthic,
one of the major international specialists in tissue engineering. This confirms L'Oréal’s
commitment to developing alternative methods to animal testing.

23

Created by Anita Roddick, The Body Shop brand is reputed for its natural products and its
ethical values of defending the environment. This brand gives the Group new inspiration for
its sustainable development initiatives, and offers the Group valuable retail expertise. L’Oréal
acquires the French pharmaceutical company Sanoflore, specialised in designing,
manufacturing and marketing natural cosmetics produced by organic farming and which are
Ecocert certified.
 2007 (Derma Genesis by L’Oréal Paris, Acquisition of PureOlogy, Shu Uemura Art of
Hair, Fuel for life by Diesel, Lancôme’s Magnifique)

In 2007, L’Oréal Paris makes a major breakthrough with Derma Genesis, the first skincare
range to encourage skin cell growth. L’Oréal acquires PureOlogy, a high-end American
professional haircare brand that targets hair colourists and sales through hair salons. The
Professional Products Division develops the artistic and aesthetic ideas of the Japanese
designer Shu Uemura in hair styling to launch a new ultra-premium brand with a Japanese
touch: Shu Uemura Art of Hair. L’Oréal’s Episkin reconstructed skin kit is approved as a full
replacement method for cutaneous irritation by the ECVAM (European Centre for Validation
of Alternative Methods). This is a major step forward in the development of alternative
methods to animal testing, and rewards over 20 years of L’Oréal research into reconstructed
skin. Using cleverly organised pre-launch buzz (“Are you alive?”), a wild take on aesthetics,
and an ingenious mix of mainstream and new media, Diesel’s first Fuel for Life fragrance for
women and men begins with a bang. L’Oréal creates its Corporate Foundation which is
dedicated to encouraging education, promoting scientific research and helping vulnerable
people. With this initiative, L’Oréal makes a powerful statement of social responsibility, and
takes a major step forward as a corporate citizen. Lancôme’s exceptional new fragrance,
Magnifique, is launched with Anne Hathaway as its Spokeswoman.

 2008 (Acquisition of YSL Beauté & Launch of L’Oréal Professionnel Homme)

A professional haircare line for men: L’Oréal Professionnel Homme with a complete range
(shampoo, care, hairstyling, hair colour) features a star product that addresses the typically
male concern of time-efficiency. In this line, Cover 5 is an ammonia-free hair colour that
covers all grey hair in 5 minutes flat. YSL Beauté and its crown jewel YSL join L’Oréal’s
Luxury Products Division.

24

With this strategic acquisition, L’Oréal opens a whole new chapter in its history with the
ambition of becoming world leader in selective distribution.

 2009

L’Oréal celebrates its centenary in 2009.

 2010
L'Oréal acquires Essie Cosmetics, an American brand known for its ultra-trendy nail
varnishes. This acquisition has strengthened L'Oréal's position on the nail make-up market,
which has grown rapidly in recent years.

 2011 (Acquisition of Pacific Bioscience, Gerland Center, Jean-Paul Agon is appointed

chairman)

With the acquisition of Pacific Bioscience, creator of the Clarisonic brand, L'Oréal has
positioned itself strategically in the market for sonic devices and technologies in the field of
skin care. These micro-massage devices, which can be combined with cosmetic treatments,
represent a new category of skin care that is witnessing rapid growth on the global market.
L'Oréal has opened Gerland, near Lyon, a unique center dedicated to the predictive
assessment of the safety and performance of its ingredients and products. Researchers at the
center's laboratory are working on the reconstruction of biological tissues, skin and corneas,
making use of a range of sophisticated technologies to test thousands of raw materials and
formulas. In December, L'Oréal opened a new subsidiary in Kenya. After twenty years at the
head of L'Oréal, Sir Lindsay Owen-Jones has handed over the chairmanship to his CEO Jean-
Paul Agon. The two roles are now once again reunited. Jean-Paul Agon is now Chairman and
CEO while Sir Lindsay Owen-Jones has become Honorary President.

 2012 (Solidarity Sourcing, World Hair Research Center Acquisition of Cadum Company,
Colombian Vogue Group & Urban Decay Cosmetics)

L'Oréal has officially launched Solidarity Sourcing, a solidarity procurement program which
contributes to the creation of jobs for the economically vulnerable in France and throughout
the countries in which the Group operates. To meet the hair beauty needs of a wide variety of
consumers, L'Oréal has launched its World Hair Research Center in

25

Saint-Ouen, Paris. L’Oréal has acquired the Cadum company, majority owned by the
Milestone investment fund. The hundred-year-old brand has proved an important acquisition
for L'Oréal in France, where the Group has been able to strengthen its position in the hygiene
products market. L'Oréal announces the acquisition of Colombian Vogue group, the
Colombian leader in mass market makeup. Vogue is an important acquisition for L'Oréal
Colombia as it strengthens its position in the very competitive make-up category. Created in
1996, Urban Decay cosmetics is acquired by the Group. With star products in the eye
category such as the Naked Palette, Urban Decay is known for experimental shades, high-
performance products and its fashion-forward image.

 2013 (Acquisition of Interbeauty Products Limited, Cheryl’s Cosmeceuticals, Decléor

and Carita, Creation of Scientific Advisory Board)

L'Oréal announces the acquisition of Interbeauty Products Limited in Kenya that is a

significant player on the Kenyan beauty market, with strong positions in the hair and skin
care markets. L’Oréal announced the creation of a Scientific Advisory Board composed of
nine distinguished scientists, whose mission will be to bring unexpected ideas pertaining to
L’Oréal Research’s fields of interests in order to prepare the future through the exploration of
emerging scientific and technological domains.

L’Oréal India announces the acquisition of Cheryl’s Cosmeceuticals created in 1986, a

pioneer in professional skin care products and treatments in beauty salons across the country.
This acquisition is the first for L’Oréal in India. Decléor and Carita join L’Oréal. These two
emblematic and complementary skincare brands rank as number two on the worldwide skin
care market in beauty institutes, spas and hair salons.

On 23 October 2013, Jean-Paul Agon, Chairman and CEO of L'Oréal, announced the new
commitments L’Oréal has made to reduce by 2020 the footprint of the company while
achieving its business ambition. L’Oréal commits to integrate sustainability all along its value
chain, from research to operations, while sharing its development with communities.
“Sharing Beauty with all” therefore covers four areas: Innovating sustainably - Producing
sustainably - Living sustainably - Developing sustainably with employees, suppliers and
communities. L’Oréal, the historic market leader in the Travel Retail beauty segment,
announces the creation of a Group Travel Retail Division.

26
 2014 (Acquisition of NYX & Magic’s MG brand, Launch of Makeup Genius)

For the first time in its history, L’Oréal has decided to express its conviction that beauty is
essential through a film. Made by the outstanding film director and photographer Peter
Lindbergh, this manifesto-film illustrates the Group’s mission – Beauty for all.

L’Oréal, the world’s leading beauty company, announced today that it has been recognized
by the Ethisphere Institute, an independent center of research promoting best practices in
corporate ethics and governance, as a World’s Most Ethical Company for the fifth
time. L’Oréal has also reached 1st place in the Personal and Household Goods sector and 8th
globally, with a grade of Aa+, in the Covalence Ethical Quote, a reputation index tracking the
world’s largest 581 companies on environmental, social, governance, corporate social
responsibility, ethics and sustainability. A specialist in cosmetic facial masks, Magic’s MG
brand is one of China’s leading brands in this category. Present in China since 1997, this
move marks L’Oréal’s biggest investment to-date in the Chinese beauty market and further
strengthens the Group’s leadership position in the world’s third largest beauty market.

The Group acquires NYX cosmetics. While headquartered in the heart of Los Angeles, NYX
is a global brand available in over 70 countries at thousands of retailers consisting of
specialty beauty and fashion stores, freestanding shops, and beauty supply stores as well as
on www.nyxcosmetics.com.

L’Oréal announces the launch of the first connected beauty digital innovation called “Makeup
Genius” exclusively available through L’Oréal Paris. Makeup Genius enables consumers to
test makeup products using their mobile phone or tablet as a virtual mirror. This innovation
enables L’Oréal Paris to offer all women an unprecedented beauty “e-routine”.

 2015 (License Agreement with Proenza Schouler and Acquisition of Niely Cosmetics)

L’Oréal received the “Disability Matters European Union Award” for the participation of all
65 subsidiaries of the group in the “Disability Initiatives Trophies”. L’Oréal today announced
the signature of a License Agreement with Proenza Schouler, a New York based women’s
wear brand, for the creation and development of fine fragrances.

27

At the “Annual General Meeting” Grand Prix 2015 ceremony held today as part of the Paris
Europlace International Finance Forum, L’Oréal received the Governance Award in
recognition of its strong emphasis on a strategic and dynamic approach to governance.

L'Oréal announced the acquisition of Niely Cosmeticos, the largest independent hair
coloration and hair care company in Brazil.

 2016 (Launch of My UV Patch)

L’Oréal has been named one of the five recipients of the CEO Leadership Award during the
2016 Women’s Empowerment Principles (WEPs) event which was held yesterday at United
Nations Headquarters in New York City. On January 6th, at the Consumer Electronics Show,
L’Oréal unveiled My UV Patch, the first-ever stretchable skin sensor designed to monitor UV
exposure and help consumers educate themselves about sun protection.  L’Oréal Group’s
leading dermatological skincare brand, La Roche-Posay, is introducing a first-of-its kind
stretchable electronic, My UV Patch. L’Oréal and Poetis sign an exclusive research
partnership to pursue a new scientific challenge: bioprinting hair follicles, the small organs
that produce hair. L’Oréal announces a strategic investment in the founders Factory, a leading
multi sector digital Accelerator and incubator based in London. L’Oréal becomes Founders
Factory’s exclusive Partner for investments in beauty Tech Startups worldwide.

 Present day

On 21 October, L’Oréal and Clarins Group signed an agreement for the sale of the Mugler
brands and Azzaro fragrances through the acquisition of the fragrance division of Clarins by
L’Oréal. On 11 December, Prada S.p.A. and L'Oréal signed a long-term license agreement
for the creation, development and distribution of luxury beauty products for the Prada brand.
On 3 February, for the 4th year in a row, L’Oréal has been highlighted as a world leader in
corporate sustainability by the international non-profit organisation CDP, whose annual
environmental disclosure and scoring process is recognised as the gold standard of corporate
environmental transparency. The Group achieved a place on the ‘A’ List for all three
environmental issues covered by CDP scores: climate change, water security and forests.

28

L’ORÉAL IN INDIA

L’Oréal, the world’s leading beauty company has been present in India as a wholly owned
subsidiary of L’Oréal S.A. since 1994. The company has positioned itself as a transformative
beauty leader that upgrades the consumers’ beauty regimes with more sophisticated, safe,
qualitative and efficacious innovations. L’Oréal is the fastest growing beauty company in
India with an annual average of +30.2% and representation in 750,000 points of sale. The
group is the third leading operator in the Indian Cosmetics market with an 8% market share in
the urban areas of nearly €198 million in 2011.

L’Oréal India’s strong commitment to their 2020 road map includes a tangible assurance to
pursue sustainable growth in parallel with sustainable development. Today L’Oréal India is
present in all distribution channels with 14 brands, available in mass market channels
(L’Oréal Paris, Garnier, Maybelline New-York, NYX Professional Makeup); in hair and
beauty salons (L’Oréal Professional, Matrix, Kérastase, Cheryl’s Cosmoceuticals, Decleor);
and in selective distribution (Kiehl’s, Yves Saint Laurent, Giorgio Armani, Ralph Lauren and
Diesel). L’Oréal India employs over 1,600 people across four regional offices, including at its
two manufacturing facilities in Chakan (Pune) and in Baddi (Himachal Pradesh), Its Research
and Innovation facility and at the headquarters in Mumbai.

L’Oréal’s rapid success in India can be explained by its ability to adapt to the demands of a
market where cosmetic routines and purchases are firmly anchored in tradition. Due to the
different standards of living in India, there is a wide range of packaging options and therefore
prices. For instance, Garnier Fructis shampoos are available in sachets costing ₨. 1.5. These
low prices are possible due to local production and raw materials supply, in particular with
the Pune plant that supplies the subcontinent with nearly 85% of its needs. Furthermore,
L’Oréal took a decisive step when it decided to set up a research and innovation centre with
evaluation and formulation laboratories in Mumbai.

In India, L’Oréal has pre-empted about 50% of the professional hair care market with three
of its brands: L’Oréal Professional, Kérastase and Matrix, and has firmly

29

established itself locally by opening dedicated training centres to produce a new generation of
modern hairdressers who start up upscale salons. But the L’Oréal group’s

real strength in this field is from the Matrix brand which was specially developed for the
lowest-earning salons. Matrix is more than just a product to sell; it organises an entire support
programme for its retailers which include salon surveys, sales representatives and training
staff recruitments, as well as quarterly performance reports and training centre creation and
management. Owing to this policy, Matrix reached nearly 26,681 salons and 38,419
hairdressers in 2011.

L’Oréal seized the opportunity to meet the needs of India’s demanding clientele by offering
Indian women products that are modern and innovative yet specific to their existing beauty
habits. Several essential products from the Indian beauty culture have inspired L’Oréal’s
range. The importance of hair care in India was behind the Garnier launch of 2-in-1 shampoo
(shampoo + hair oil), specially designed according to the tradition of oiled hair. Similarly,
Garnier Color Naturals coloration was introduced as a modern alternative to traditional
coloration with henna. The top-selling Colossal Kajal from Maybelline New York was
inspired by women’s use of traditional kajal to line their eyes. Premium mass brand L’Oréal
Paris satisfied Indian women’s strong desire for healthy, smooth and glossy hair by offering
Total Repair 5 shampoo which addressed the 5 topmost hair concerns of the Indian consumer.

30

L’ORÉAL’S MISSION
For more than a century, L’Oréal has devoted their energy and competencies solely to one
business: beauty. 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 has set itself the mission of offering all women and men 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.

Beauty is universal.
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 universalization of beauty its project for the years to
come.
L’Oréal, offering beauty for all.

31

LOREAL’S VISION
BEAUTY FOR ALL, BEAUTY FOR EACH INDIVIDUAL
At L’Oréal, there is no single and unique model of beauty, but an infinite diversity of forms
of beauty, linked to periods, cultures, history and personalities. To draw ever greater numbers
of women and men to use L’Oréal’s products means reaching out to extremely diverse
populations with a vision of universalising beauty. In the company’s view, to universalise
does not mean to impose uniformity, but on the contrary, to be inspired by diversity to
innovate.

OBSERVE LOCAL BEAUTY CUSTOMS

At the heart of this project, Research and Innovation reinvents itself to create cosmetics
products adapted to the immense diversity of the world. In each region of the globe, they
have set up Research platforms, true centres of expertise, designed with tailor-made beauty in
mind. These research poles invent new products that can become worldwide successes. This
is a real turning point in the way we think about Innovation.

FACILITATING ACCESS TO COSMETICS PRODUCTS

In a market undergoing substantial transformations, L’Oréal takes steps forward each year to
make the best in beauty available to everyone. With a portfolio of 32 international brands and
an organisational structure based on distribution channels, they have the ambition to meet the
needs of every consumer according to his or her habits and lifestyle. In its own way, L’Oréal
is thus pushing back boundaries and taking up the challenge of increasingly accessible
innovation.

TO ACCELERATE THE REGIONALISATION OF OUR EXPERTISE

To win over another one billion consumers around the world is an ambitious project that
motivates all their teams. An economic but also human adventure, which requires the rapid
deployment of their forces and an accelerated transformation of the company in every field,
including Research, manufacturing, marketing, sales, human relations and administrative
team. This major project is also an opportunity for innovation and progress to build the
L’Oréal of tomorrow.
32

LIST OF BRANDS OWNED BY L’ORÉAL GROUP

Professional products
L'Oréal Technique
L'Oréal Professionnel, including ARTec and Innate
Kérastase 
Kéraskin Esthetics
Matrix Essentials
Mizani
PureOlogy Research
Redken 
Shu Uemura Art of Hair
Carol's Daughter
Carita
Essie
Decléor
Botanicals Fresh Care
Cheryl's Cosmoceuticals 

L’Oréal Luxe
Lancôme
Yves Saint Laurent Beauté
Giorgio Armani Beauty
Kiehl's
Biotherm
Cacharel
Diesel
Viktor & Rolf
Ralph Lauren Fragrances
Shu Uemura
Clarisonic
Guy Laroche
Paloma Picasso
33
Urban Decay
Maison Margiela
Yue Sai
Helena Rubinstein
IT Cosmetics
House 99
Atelier Cologne
Proenza Schouler

Consumer products
L'Oréal Paris
Color&Co
Ombrelle
Garnier
Maybelline
NYX Cosmetics
SoftSheen-Carson
Carol's Daughter
Créateurs de Beauté
Essie
Magic
Niely
Colorama
3ce

Active cosmetics
Vichy Dermablend
Sanoflore
Acnefree
La Roche-Posay Dermocosmetics
Skinceuticals
Roger&Gallet
Ambi
CeraVe

36

GROWTH OF L’ORÉAL
As per the recent Annual Financial Report, the sales and profit figures of L’Oréal are as
follows:
Best sales growth of the decade: +8.0%
Record operating margin: 18.6%        
Sales: 29.87 billion euros
Operating profit: 5.54 billion euros, an increase of +12.7% 
Earnings per share: 7.74 euros, an increase of +9.3%
Operating cash flow: 5.03 billion euros, an increase of +29.8%
Dividend: 4.25 euros, an increase of +10.4% 

The Board of Directors of L’Oréal met on 6 February 2020, under the chairmanship of Jean-
Paul Agon and in the presence of the Statutory Auditors. The Board closed the consolidated
financial statements and the financial statements for 2019. Commenting on the Annual
Results, Jean-Paul Agon, Chairman and CEO of L’Oréal, said: “L’Oréal closed the decade
with its best year for sales growth since 2007, at +8.0% like-for-like, and an excellent fourth
quarter, in a beauty market that remains very dynamic. All Divisions are growing. L’Oréal
Luxe sales exceeded 11 billion euros, driven by the strong dynamism of its four big brands –
Lancôme, Yves Saint Laurent, Giorgio Armani and Kiehl’s – which all posted double-digit
growth. The Active Cosmetics Division had its best year ever, with La Roche-Posay sales
exceeding one billion euros. Growth at the Consumer Products Division was boosted by
L’Oréal Paris which had a great year. Lastly, growth improved in the Professional Products
Division; the highlight was the double-digit performance of Kérastase. Performances by
geographic Zone were contrasted. The New Markets posted their strongest growth for more
than 10 years. Asia Pacific became the Group’s number one Zone, with a remarkable end to
the year in China, but also good growth in South Korea, India, Indonesia and Malaysia.
Eastern Europe maintained its strong growth rate, and Western Europe returned to growth last
year. North America was impacted by the poor performance in makeup. E-commerce and
Travel Retail, contributed strongly to the Group’s success. E-commerce grew spectacularly
by +52.4% and accounts for 15.6% of sales. Travel Retail maintained its strong momentum
and posted growth of +25.3%.”     

35
PROFESSIONAL PRODUCTS
The Professional Products Division recorded annual growth of +3.2% like-for-like and
+5.5% based on reported figures.
2019 was marked by the Division’s return to a growth rate stronger than the market, with a
clear acceleration in the second half. Haircare, the largest contributor to growth, benefited
from the spectacular dynamism of the Kérastase brand, growing double-digit, combining the
success of Blond Absolu with the solid performance of Fusio-Dose in salons, and the robust
growth of the Total Results  range from Matrix. Hair colour was boosted by Shades
EQ  at Redken, which recorded another year of double-digit growth, and by the success of
the L’Oréal Professionnel iconic franchises Inoa and Dia, driven by Dialight. The Division
strengthens its positions worldwide, driven by sustained growth in the United States and in
the Asia Pacific Zone. Eastern Europe maintained its dynamism. In addition, the Division is
accelerating strongly in e-commerce.

CONSUMER PRODUCTS
The Consumer Products Division ended the year at +3.3% like-for-like and +6.0%
based on reported figures.
L’Oréal Paris achieved its strongest growth since 2007, thanks to major launches such
as Rouge Signature in makeup and Revitalift Filler with hyaluronic acid in skincare, rolled
out all over the world in ampoule and serum format. Garnier recorded growth, driven by
emerging countries, the worldwide success of Tissue Masks and Micellar Cleansing Water,
and its initiatives in organic and natural such as Garnier Organic and Fructis Hair Food.
Furthermore, 3CE Stylenanda continued to prove highly successful in Asia. Skincare
recorded significant growth. In makeup, the market slowed in the developed countries,
especially in the United States. In this more difficult context, Maybelline New
York continued the successful roll-out of Fit Me! and Superstay Matte Ink, and achieved
strong growth in the New Markets.
The Division has accelerated further in e-commerce and in Travel Retail.

L’ORÉAL LUXE
L’Oréal Luxe has grown by +13.8% like-for-like and +17.6% based on reported figures.
The Division outperformed the market and confirmed its success in skincare and
36
fragrances. The Division’s four billionaire brands posted double-digit growth. Lancôme was
driven notably by its excellent performance in skincare, with the Génifique new formula and
the Absolue range, and by the success of its new fragrance Idôle. Yves Saint
Laurent and Giorgio Armani had a very good year in fragrance with the successful launch
of Libre and good performances from Black Opium, Y and Sì Passione, and also in the
foundation category. Atelier Cologne continued to accelerate and Valentino made a good
start. L’Oréal Luxe also confirmed its success in skincare with, among other achievements,
the strong performance of Helena Rubinstein and Kiehl’s, driven by the success of
the Calendula range and Ultra Facial Cream. Overall, L’Oréal Luxe is winning market share,
particularly in Asia Pacific and Western Europe, despite the more difficult context in the
United States. The Division also performed well in a dynamic Travel Retail market, in
Eastern Europe and in Latin America.
Meanwhile, the Division continued to accelerate in e-commerce which now accounts for
more than 20% of its sales.

ACTIVE COSMETICS
The Active Cosmetics Division achieved record growth of +15.5% like-for-like, the
Division’s highest growth rate for 20 years. Growth based on reported figures is at
+17.1%.
The Division’s sales grew at rapid pace, twice that of the dermocosmetics market. La Roche-
Posay recorded double-digit growth, won market share across all Zones, and passed the one
billion euro sales mark. Vichy continued to grow, with particularly good performances in
Eastern Europe and Latin America. The brand is launching Liftactiv Peptide-C, an innovative
anti-ageing product in ampoule format. SkinCeuticals is growing across all Zones, especially
in the United States and in China, where sales have almost tripled in one year. Discoloration
Defense, rolled out internationally, has already become the brand’s fifth best seller. CeraVe,
which is recording spectacular growth in the United States, continues to expand worldwide.
All the Zones contributed to growth, with strong performances in Asia and North America in
particular. The Division is growing in all distribution channels, and continues to accelerate in
e-commerce.

37

MARKETING STRATEGY OF L’ORÉAL

Product

L’Oréal has a portfolio endowed with international standard of brands covering a wide range
of products that covers all lines of cosmetics and responds to the diverse needs of consumers
the world over. All its products pass the international standards of testing. The company deals
in activities related to cosmetics, skin care, hair color, make-up, sun protection, hair care and
perfumes. It comprises of four product divisions – Professional Products, Consumer Products,
Luxury Products and Active cosmetics.

The Professional Products division strives to promote the global development of highly
innovative and exclusive hair care products for salon use, and the expansion of the salon
profession through a policy of active partnership centered on hairdresser training.

The mission of the Consumer Products division is to develop beauty products for the widest
possible range of customers by offering highly innovative products at competitive prices
through mass market retail channels.

The Luxury Products division devotes itself to maintaining the highest possible quality in its
products, packaging, merchandising, and communications, thus confirming the brands as
world-renowned signatures.

The Active Cosmetics division strives to create and develop dermo-cosmetic heathcare
brands that meet the highest standards of skin care safety and effectiveness, as proven by
clinical tests.

In India, L’Oréal operates through all four different divisions that are as follows 
Active cosmetics include brands like Vichy, Inneov and Sonaflore.
Luxury products include brands like Diesel, Ralph Lauren and YSL.
Professional products include brands like Matrix Essentials, Mizani and Kerastase.
Consumer products (personal care) include brands like Maybelline, Essie, Garnier, Magic.
Some of the consumer favorite products of the brand are eyeliner, mascara, eye shadow and
primers for eyes, primer, powder, foundation, concealer and blush for face, lip liner, lip gloss,
lip balm and lip color for lips, hair colors in various shades for hair, Shampoo,
38
conditioner for hair care, moisturizers, cleansers, toners for skin care and hair spray, serum
for hair styling are also used. L’Oréal also has a kid’s line of products. All the products are
available in different product sizes and different price ranges. L’Oréal is also planning to
penetrate the Ayurvedic and herbal industry in the Indian cosmetic section. They are having
ongoing talks with some of the companies like VLCC and Biotique.

Price
The biggest revenue earner for L’Oréal in India is the products related to consumer division.
The urban consumer is not as price conscious as was portrayed earlier. For premium
products, the consumers are ready to dole out premium prices. As many of the L’Oréal
products belong to the high qualitative product group, the company had to maintain
a premium pricing policy for those products. The company has decided to maintain its value
added pricing policies for all its products. Some of the brands under L’Oréal have products
that cater to the middle class section of the society and the pricing policy for these products is
reasonable so that the consumers can easily afford them. Sometimes, in order to penetrate a
new section of the market, the company has offered discounts and schemes especially on
introductory products. This leads to the minimization of prices and leads to an increase in
sales figure resulting in further revenues. In order to strike a reasonable balance between its
products and prices, the company has taken steps to increase its Stock Keeping Units, as this
will help in creating a balance over the pricing policies.
 39

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 is trying to price the products in India comparable to those worldwide by
increasing the number of stock keeping units. 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
L’Oréal has development and research centers in six places worldwide like Japan, France US
and China and its products are available in one hundred and thirty countries of the world. The
various products are found in various outlets like perfumeries, hair salons, super markets,
pharmacies, beauty outlets and even through direct mail.
Besides this, the brand has its own website and has tie-ups with other shopping sites on
internet. With all the needed product information, the consumers can make purchases from
any part of the world. In this changing times internet has become one of the most important
outlet for successful purchasing and buying. L’Oréal’s operations in India are on an ever-
growing path as the awareness of the beauty products has resulted in the brands growth and
popularity. Its operations in India are through its fully owned subsidiary “L’Oréal India”. The
company has set up a manufacturing plant in the city Pune in Maharashtra, India. Most of the
products are imported from abroad and the rest are manufactured in this plant. The successful
growth of the brand in India is credited to the efficient supply channels and distribution
policies.
 40
DISTRIBUTION THROUGH SALONS - In one of its kind distribution strategy, L’Oréal has
appointed skillfully trained hairdressers that work in their own salons and outlets by
providing professional services to the consumers. This includes various treatments and
product awareness campaigns that help in creating a new consumer base. This has led to a
number of L’Oréal salons in India, where consumers come for professional and efficient
treatment and these salons are for both the gender men and women. L'Oréal has trained over
30,000 hairdressers in 300 salons in India in the use of its products.

DISTRIBUTION THROUGH RETAIL - Specially, in India L'Oréal have occupied spaces in

malls and retail stores to popularize and sell their brand. Garnier being their major brand
worldwide is made available in various retail shops, kirana stores and supermarkets in India
thus targeting the mass market.

ONLINE DISTRIBUTION - E-commerce websites have played a pivotal role in the

distribution as through this channel company has witnessed sales growth of 34% in the year
2017 vis-a-vis 2016. Its online sales accounted to $2.5 billion in the year 2017.

TRAVEL RETAIL DISTRIBUTION - Additionally, through Travel Retail channel i.e. duty-
free stores on Airports, it has observed sales growth of 19% (In 2017). The brand has been
continuously focusing on New Markets (40.5% sales in which Asia-Pacific contributes
23.6%) other than Western Europe (31.2% sales) and North America (28.3%).
41
Promotion
In 2013 L'Oréal spent almost $9 billion on promotion. L'Oréal uses all of the tools,
which could be great potential to attract different target groups.

SLOGAN - L’Oréal has an advertising slogan that has always defined the brand. The first
slogan was “Because I’m worth it”. This was later replaced by “Because you’re Worth it” and
in the year 2009, this was again changed to “Because we’re Worth it”. The changing times
along with the mindset and concept can be seen in the changing slogans. The shift to the letter
“we” was to denote the consumer involvement in all the brand products.

ADVERTISING CAMPAIGNS - L’Oréal is a truly international brand and hence its

advertisements are at a premium level. Attractive and well-known models of international
caliber are the part of its promotions. In India, the advertising campaigns are operated
through local methods as well as through global methods to appeal to a wide range of
consumers. The advertisement agency recruited is “McCann Erickson”.  Former Miss World
“Aishwarya Rai Bacchan” has been its brand ambassador and international face and presently
the actor “Sonam Kapoor” has been in the L’Oréal advertisements. The ad campaigns are in
numerous television channels, radio, fashion magazines, hoardings and neon signs.

L’Oréal also focuses on social issues through their ad campaigns such as gender equality and
women empowerment. For instance, L’Oréal recently launched a series of advertisements
that showcase creative interpretations of its products as a measurement of the power of
female leaders.

42
Among the various messages, One ad uses varying lipstick heights as a bar graph comparing
the number of women in company’s leadership with performance and profitability.

SALES PROMOTION - Free products as samples are provided with other products or at
salons to market the new items. Sometimes discounts are offered on some products to
increase the sales figures and to promote the products. In many cases, surveys for customer
satisfaction are carried out amongst the people who have used these products. The results are
then published as part of the promotions. For some of the L’Oréal brands the company has
adopted a “viral marketing strategy” under which the brand and its products are marketed
through marketing messages.  The use of internet has opened new doors for every brand and
in every field be it marketing or promoting.

PUBLIC RELATIONS -
 43
L'Oréal manages various PR activities, for example shareholder fairs, sponsoring various fashion
shows, events including the Cannes Film Festival or launching competitions for hair stylists and
makeup artists.
DIGITAL MARKETING - Through its approach towards digital marketing based on
adaptation of its innovative ethos, multi-brand, and multi-channel, it aims to connect with
clients through emotions, engagement, and experiences. The digital marketing tools that
L'Oréal employs depends on the nature of business. As one could strongly believe that
younger consumers of cosmetics do seek trends and advice on the Internet, the Group is
increasing its social media (Facebook, Twitter, YouTube, Instagram), which allows
customers to stay updated, informed about the news, and voice their viewpoints. Moreover,
the beauty bloggers that L'Oréal works with try, evaluate, and share the Group's cosmetics
with their followers. These both contribute to the brand awareness among the younger ones.
Correspondingly, new mobile applications like Makeup Genius enable people to try products
and see themselves in real time without wearing them, match nail colour with their outfits, or
watch online diagnoses, advice, and video tutorials.
Moreover, for those preferring the digital world, the official website is accessible in 22
languages for 35 countries, making the information available to consumers all over the world.
At the same time, the Group maintains its traditional promotional tools such as TV ads, print
ads, and billboards as complementary strategies to the digital marketing. This way L'Oréal
does not lose the rest of its target group as it represents a constant stream of revenue. All
things considered, it could be seen that L'Oréal puts a significant emphasis on digital
marketing, as currently it belongs to one of its main approaches, which may represent
numerous opportunities for addressing both customers and other stakeholders. Also its
website, social media, and mobile apps are largely utilised owning to the significance and
benefits to the organisation. Overall, it could be recognised that continuous enhancement and
expansion of L'Oréal's digital media could enjoy the benefits of digital marketing, but only
with the support of TV and printed advertising it could contribute to its aim.

With all these promotional activities and campaigns, L'Oréal has managed to acquire a huge
market in India and the world. Hence, this covers the marketing mix of L'Oréal.

44
 SEGMENTATION, TARGETING AND POSITIONING OF
L’ORÉAL

SEGMENTATION

It could be seen that L'Oréal segments its customers into various groups.

DEMOGRAPHIC SEGMENTATION - Firstly, using demographical segmentation

L'Oréal attracts people of different gender (women and men), age (young and older),
and race (diversity) by offering a complex product portfolio of 32 complementary
brands among 5 divisions and 5 product lines. This way, a large number of people
could find a suitable cosmetic product to fit their demands. For example, skincare lines
for mature skin and anti-ageing by Lancome and on the contrary, kids shampoo by
Garnier; or Shu Uemura for Asian Hair and Softsheen-Carson for African hair.

PSYCHOGRAPHIC SEGMENTATION - Concerning the psychographic segmentation,

the Group attracts different social classes by offering products for both the middle class
(the consumer product division products) and the upper social class (L'Oréal Luxe
division products). Additionally, L'Oréal attracts people of different personalities and
lifestyles, which includes travel retail consumers purchasing in duty-free shops or
natural cosmetics lovers. This way, customers' buying behaviour might be stimulated as
clients can self-reflect in the beauty products. For Example, luxury brands like Giorgio
Armani beauty for upper class and NYX cosmetics for the middle to upper-middle class.

BEHAVIOURAL SEGMENTATION - Regarding the behavioural segmentation,

L'Oréal group’s customers based on the benefits they demand from the products. For
example, within the skincare business segment, these might be people seeking products
for anti-aging, cleansers, moisturisers, anti-imperfections, and others.

Overall, one can conclude that the use of multiple customer segmentation bases is due
to the actuality that the customer target group of L'Oréal are a mix of
45
demographic, psychographic, and behaviour segmentations. For example, L’Oréal
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, professional products for customers offerings/ enhancing the looks
of individual customers.

TARGETING
For targeting differently segmented customers with its multiple brands in several product
categories, it has devised differentiation strategy to target middle, upper middle and upper-
income class customers majority of who are working professionals and are those who want to
flaunt their personas.

POSITIONING AND DIFFERENTIATION

Concerning L'Oréal, its large brand portfolio demands a distinct positioning for each brand of
the Group, which could be seen from each of the brands' positioning messages. For example,
two L'Oréal's brands are competing in the same product division, where Garnier is well
known for natural ingredients and strong scientific research, while Maybelline New York
stands for glamour, New York energy spirit, and innovation, could demonstrate the
distinctive positioning. Therefore, L'Oréal focuses on a differentiation strategy by highly
differentiating its products as a result of the many market segments.
Consequently, in customers' minds the L'Oréal Group is positioned as a cosmetic leader with
products of high quality, care, and effectiveness among the large brand portfolio. As an
example, Lancôme products carry the unique characteristics such as elegance, sophistication,
and complementary skin care. They also imply that other L'Oréal's brands targeted a niche
market to obtain stronger market positions than the mass labels. After the organisation's
analysis, it can be stated that L’Oréal uses product differentiation determining the
qualities of the products with a combination of image differentiation due to the distinct
positioning among brands. The group has also positioned itself overall as the most
ethical cosmetics and beauty care company focusing on universalisation, i.e. respecting
the differences in cultures, desires and aspirations of the internal and external
stakeholders.
46

Brand equity in the Marketing strategy of L’Oréal –

L’Oréal group has been ranked 133nd in the Forbes list of Top multinational performers and
379th in the Fortune 500 magazine list. The company has been continuously been in Fortune
500 list for 23 years. The company has been valued at $107.5 billion on the basis of Market
Capitalization method (as of May 2017). Innovations in beauty care & cosmetics have helped
the company to bag many awards and accolades over the years such as World’s most ethical
company award by Ethisphere Institute, Pan European awards etc.

Competitive analysis in the Marketing strategy of L’Oréal –

The Company has been taking several strategies such as upskilling its team, increasing tech
e-commerce visibility, partnering with start-ups such as Station F, Partech Ventures,
Founders factory to be ahead of its peers. The obsession of the customer to have superior
quality products, rising urbanizations and growing interest in social acceptance are some of
the factors L’Oréal play on in the market. It competes with companies such as
Revlon, Lakme, Proctor & Gamble, and Unilever etc.

Market analysis in the Marketing strategy of L’Oréal–

The market is divided on the basis of products offered by the company like makeup, skincare,
Haircare, fragrances. There is an increased demand of the product offered by the company in
the Asia-pacific region (12%) sales growth and the brand has further strengthened its makeup
& skincare category through product development and product line extension strategies.

Customer analysis in the Marketing strategy of L’Oréal –

With its different business segments, L’Oréal serves the businesses as well as the retail/
individual customers. In business segment, its customers are the Salons, Beauty parlors, SPAs
and recreational outlets who serve the end customers with the flagship products of the brand
L’Oréal. In Retail segment, its targets the young, upper middle income and upper social class
customers in the age group of 20-45 years who believe to buy best cosmetic products which
have no harmful side effects.

47

SWOT ANALYSIS OF L’ORÉAL

STRENGTHS IN THE SWOT ANALYSIS OF L’ORÉAL

Largest Beauty/Cosmetics company– Without a doubt, L’Oréal is the largest Beauty and

cosmetics company in the world. Where other companies have a product line concentrating
on cosmetics and personal care, L’Oréal as a company is completely focused on Beauty
products, which is the reason for the phenomenal success of the company in this sector.

Continuous R & D – When it concerns beauty and cosmetics, then only pure manufacturing
is not the way to go. You have to involve Dermatology, cosmetology, skin care, hair care, sun
protection and various sciences into it. The effect of a cream under hot and cold conditions
can be very different. Hence, there are continuous R&D experiments going on at L’Oréal to
ensure the safety of their consumers and also to keep trying for new products.

Fantastic product and brand portfolio – The product lines within the brands of L’Oréal are
all one ace after the other. Where Garnier is focused towards stronger hair and personal care,
Maybelline is focused towards beautification. And both of them are excellent names in what
they do. L’Oréal has ensured that each brand, as it is established, keeps the focus on its core
strength which contributes to the strengths in the SWOT analysis of L’Oréal.

High quality of products – A brand image is established only after the consumer purchases
the brand and is happy with the quality of the products and then repurchases the same brand
again and again. There are die-hard fans of L’Oréal Paris, Maybelline, Garnier, L’Oréal Luxe
brands, Body shops and the various other brands of L’Oréal. As long as it is a L’Oréal brand,
you can be rest assured that the quality will be amazing and it will be tried and tested.

48

Strong integrated marketing communications – Each brand in the portfolio of L’Oréal is

known for its integrated marketing communications. Not only are these brands famous for
their above-the-line marketing campaigns, but they are very good in their point of purchase
marketing as well. Their excellent advertising campaigns provide high brand visibility.
L’Oréal group is also known for being represented by top female and male celebrities as
ambassadors.
Really good stars in the brand portfolio – Maybelline, Garnier and L’Oréal Paris are three
Stars (and can also be counted as cash cows) in the brand portfolio of L’Oréal. These brands
contribute a lot to the bottom line of L’Oréal and help the other brands in surviving and
thriving. With the profit from these brands, L’Oréal is able to invest and get further growth in
its other products and brands.

Widespread Distribution – There are over 38 factories with over 5 billion units
manufacturing annually. Because the brand is present in 130 countries, there is widespread
distribution leading to economies of scale and the sharing of fixed expenses like warehouses,
factories and others. Thus, the costing of the products is also controlled. It also ensures
maximum reach of the products.

Natural and Organic in nature – One place where the costing of the brand takes a hit but
where the brand itself blossoms is its decision to be completely Natural and Organic in
nature. Since 1987, L’Oréal has stopped animal testing completely. It is 100% natural and
organic in nature and hence the choice of animal lovers.

49

WEAKNESSES IN THE SWOT ANALYSIS OF L’ORÉAL

Too many sub divisions – Handling such a large operation is always fraught with problems
and issues and it is a similar case in L’Oréal. The firm is known to be slow and bulky in
nature because of the various sub divisions it has. Employee management is also a problem in
L’Oréal as the firm has close to 60,000 employees. Thus, human capital expenditure is huge.
Hair care is a degrowing segment – Garnier is one brand which is suffering the brunt of
competition because it is in the hair care segment where there is lot of competition from both
– HUL and P&G.  Sunsilk is from HUL and Head and shoulders from P&G, both very strong
in the hair care segment.

Profit margins are lower – Higher investments in R&D, organic processes as well as the
massive expenses of distribution means that the profit margins of L’Oréal are a bit lower as
compared to competitors. However, although this has been a weakness, the R&D has also
made L’Oréal one of the top brands in the beauty segment so this weakness has to be taken
with a pinch of salt.

Already-present established cosmetic brands – In the United States, the Group has seen a
decrease in sales due to tough competition from market leaders in cosmetics segment.
Presence of other established brands in the cosmetics segment means difficult to increase
market share.

Differences in ad campaigns – Due to the company’s multinational marketing strategy,

there have been instances of conflicting ideas in the promotion and advertising campaign of
the products as to what image they are to project.

50

OPPORTUNITIES IN THE SWOT ANALYSIS OF L’ORÉAL

Market potential – The market potential of personal care and beauty items is only going to
increase. The world is an oyster and here and there under developed economies are
developing and becoming newer markets. Exploring these newer markets will give better
sales down the line to L’Oréal then staying in the same saturated markets.
Product mix expansion – Expanding the product lines as well as introducing new products
in the product mix will result in the complete product mix expansion – something which will
be the target of L’Oréal management as well.

Demand for organic cosmetics – As PETA and other animal right activists are becoming
active, the demand for organic cosmetics is on the rise. This demand is a positive sign for the
likes of L’Oréal which have used organic method of R&D since start.

Revival of Body shop – Body shop is going through a slump and has not really picked up as
a retail outlet. The potential is yet to be explored. By investing in rejuvenating the brand,
L’Oréal can make the Body shop the go to destination for people who love to deck
themselves up. It can become a one stop shop for everything related to your body.

Achieving greater market share - A major opportunity that lies with the L’Oréal is that it
has registered around 400 patents last year, which will provide the company with greater
market share. Many acquisitions have provided it with the opportunity to enter into new
markets that too in lower cost.

51

THREATS IN THE SWOT ANALYSIS OF L’ORÉAL

Dynamic nature of cosmetics industry – With constant upgradation being demanded in the
cosmetics industry, keeping up with the times is ultimately very difficult. You cannot keep
everyone happy at once and that seems to be the conundrum. Plus, the competition is not
going to keep quiet and they keep coming up with smart tactics of their own. As a result, the
dynamic nature of the cosmetics industry keeps the brand on its t
Cash crunch – A brand like L’Oréal which has so many sub brands has to divide the cash it
earns into many different segments. As a result, if the economy slumps then it faces a huge
problem. Economy problems are always existing in one country or another, as a result of
which, cash inflow from that country stops. This causes problems in the overall cash flow and
working capital management becomes difficult. However, the economy as a whole is poor
including the European countries as well as Asian countries. This has caused a cash crunch
for the company and danger looms if the economy slumps.

Increasing competition from FMCG companies – Companies like Procter & Gamble and
Unilever pose threats to L’Oréal and they capture more and more market share through their
penetration pricing and many promotional discounts. For example its major rival is Procter &
Gamble and Unilever which are battling for $231 billion market of cosmetics. Most of
L’Oréal’s products are premium priced and cannot compete with them in the market.

52

CORPORATE SOCIAL RESPONSIBILITY

The L’Oréal Foundation is committed to social causes based on the two fields of expertise,
science and beauty.

BEAUTY FOR A BETTER LIFE - The Beauty For A Better Life programme provides high
quality training opportunities in different beauty professions to vulnerable groups in order to
help them feel better and do better. In India, L’Oréal established the Beauty For A Better Life
- Beautiful Beginnings programme in 2009. The programme partnered with LabourNet and
Sambhav Foundation, an organisation specialising in vocational training to provide skill
training in beauty and hair care to participants. Over time, the participants build upon their
learnings in a professional set-up which gives them the opportunity and confidence to and
employment in beauty salons or start their own enterprises. Thus far, 4,000+ participants have
been trained, many of whom have been placed in the industry or have started their own home
grown beauty salon or services.

FOR YOUNG WOMEN IN SCIENCE - L’Oréal India strongly believes that science is the
source of progress, and the contribution of women is vital to its future. That is why they have
initiated the L’Oréal India For Young Women in Science (FYWIS) Scholarship Programme.
The L’Oréal India Scholarships For Young Women in Science

53

Programme is an extension of the international L’ORÉAL UNESCO FOR WOMEN IN

SCIENCE partnership. By providing the financial assistance to pursue scientific education,
this scholarship reinforces the vocation of women in scientific disciplines. The programme
was instituted in 2003 and has empowered over 300 young women from economically
disadvantaged backgrounds to pursue their higher education in any scientific field from a
recognised college or university in India. A scholarship of 250,000 is granted to each of the
promising young women and covers their college fees.

SHARING BEAUTY WITH ALL - Sharing Beauty With All is a commitment in four areas:
1. Innovating sustainably - By 2020, we will innovate so that 100% of products have an
environmental or social benefit. 2. Producing sustainably - By 2020, we will reduce our
environmental footprint by 60 % whilst bringing beauty to one billion new consumers. 3.
Living sustainably - By 2020, we will empower every L’Oréal consumer to make
sustainable consumption choices while enhancing the beauty of the planet. 4. Developing
sustainably - Employees: By 2020, L'Oréal employees will have access to health care, social
protection and training, wherever they are in the world. Suppliers: By 2020, 100% of our
strategic suppliers will be participating in our supplier sustainability program. Communities:
By 2020, we will enable more than 100,000 people from underprivileged communities,
equivalent to the size of our global workforce, to access work. Sharing Beauty With All is our
global sustainability commitment, is an ambitious and universal project for a better society, in
which L’Oréal takes up a new stance in relation to its consumers, to citizens and
communities.

CITIZEN DAY - L’Oréal is mobilising its employees for Citizen Day, a day-long
volunteering event reflecting its conviction that everyone has a role to play. Every year since
2010, L’Oréal employees have devoted an entire working day to offering their skills and
energy to several hundred non-profits in social and environmental areas. Examples of
endeavours have included cleaning up natural sites, running well-being workshops for people
in vulnerable situations, repainting centres that welcome elderly or disadvantaged people, or
helping job seekers draft a resume. More employees have joined the initiative every year for
the last seven years. In 2016, L’Oréal Citizen Day supported 515 non-profits in 70 countries,
with some 28,000 participants volunteering.

53

EMPLOYMENT PRACTICES

L’Oréal creates products for people from all walks of life around the globe. To ensure that the
products meet the needs of every form of beauty in every culture, the team members must be
as diverse and inclusive as the world itself.

To achieve that goal, they foster workplaces where all people of every ethnicity, social
background, religion, gender, age or disability feel welcomed and valued. An atmosphere
where everyone can thrive and grow means the business will thrive and grow throughout the
world. In all their diversity, within the company and in local communities on every continent,
people matter at L’Oréal.
L’Oréal has made strides toward Diversity & Inclusion and they are recognized for their
achievements. Progress is still to be made and their objectives are threefold:
- Ensure gender equality on every level
- Include more people with disabilities on our teams
- Empower people of every social, economic and multicultural origins
Since 2017, L'Oréal India’s Little Steps program has provided pregnancy support for
employees who are expecting a baby or planning for parenthood. Working in partnership with
United HealthCare “CareNine”, customizable support includes consultations with a life
coach, gynaecologist, dietician, fitness expert, and case coordinator.

PEOPLE MATTER at L’Oréal

 More Women among the Top People
L’Oréal has long been a leader in gender equality. Worldwide, as of 2018, women account
for 69% of our workforce, 47% of our management committee members, 31% of our
Executive Committee members and 54% of our key positions.

L’Oréal is certified by EDGE (Economic Dividends for Gender Equality) and GEEIS
(Gender Equality European and International Standard) in 29 countries. These two
independent organizations conduct in-depth, rigorous audits of current staff and hiring
policies.

55

Equileap, a non-profit organization and the first global database to rank 3,000 publically
listed companies on gender equality, ranked L’Oréal the top gender-balanced company in
Europe in 2018. Among other distinctions, the United Nations granted L’Oréal the CEO
Leadership Award for Gender Equality and the Group is included among the Bloomberg
2018 Gender-Equality Index which highlights companies that have made strong
commitments to gender equality.

 Welcoming People of every Social, Economic and Multicultural Origins

As a global enterprise, L’Oréal is inherently multi-cultural. Since they provide beauty
products for people from every background and every continent, diversity within the
company is not only fair, it is good business.
Designing and marketing products for the international market is done better when team
members themselves come from a wide range of ethnic and social groups. Studies have also
proven that the more diverse the team, the more effective the decisions they make: The
greater the variety of viewpoints the greater the chances for success. We see evidence of it
every day.

L’Oréal was a founding member of the first Diversity Charter in France in 2004. Since then
they have signed and helped create similar charters in 15 countries. In 2018, they were
recognized by Thomson Reuters as one of the Top 10 in the world for Diversity & Inclusion
from a list of over 7,000 companies.

 Enabling Disabled People

People with disabilities bring unique experiences and ideas to the table. Like every sort of
diversity, different types of capacities and points of view enhance our mission. L’Oréal
values people for their personal qualities, their skills and their contributions.

By the end of 2018, L’Oréal employed 1,177 people with disabilities. They are endeavouring
to attract greater numbers of differently-abled people. Keeping in mind that 71% of
disabilities are invisible, their offices around the world are instituting awareness programs to
ensure that our workplaces are welcoming to disabled people and adapted to their needs.
They hope such efforts will encourage them to seek positions with L’Oréal and to stay with
them.

56

OBJECTIVE OF THE RESEARCH

As I have detailed, L’Oréal given the change in market structure and globalization impact has
adopted in the best way, to ride the tide of competition and to stand ahead in the race for the
number spot in the cosmetic and beauty industry. When we observe with the present time,
products and merchandise of L’Oréal brand can be found in every corner of the globe, and in
almost every retail outlets. Its brand is so famous that even most of the saloons across the
world prefer L’Oréal hair colorant than any other products. This is interesting indeed to
observe, given that the company started from the humble background.
The objective of my research is to understand how a global company like L’Oréal markets
itself. As a marketing student, I would like to study how L’Oréal brings about awareness and
brand visibility among the general public and how they employ differentiation strategies
among the various segments through various distribution channels. To learn about the various
marketing tools and how to reach target audiences across various countries by focusing on
customer centered strategy and product diversification strategy and catering to diverse
market. The overall objective of my research is to study how all the marketing tools are used
by one of the world’s largest cosmetics companies.

57

DATA ANALYSIS & INTERPRETATION

 >40 <18
17% 17%
32%

24-40
14%

68%

18-24
52%

Female
<18 18-24 24-40Male
>40
1) Gender

Interpretation:

As shown in the above figure, 68% of the respondents of this survey were Female, while 32%
were male.

58

2) Age group
 Fragrances
6%

Skincare Cosmetics
11% 21%

Haircare
61%

Cosmetics Haircare Skincare Fragrances

Interpretation:

According to the survey, majority of the respondents were from the age group 18-24. There
were equal percentage of respondents from age groups – below 18 and above 40 – which was
17 %. The percentage of respondents from age group 24-40 was 14 %.

59

3) Which L’Oréal products do you use?

Interpretation:
 No
6%

Yes
94%

Yes No
From the survey conducted, we see that a majority of respondents, i.e. 61%, use haircare
products from L’Oréal. 21% of the respondents use cosmetics whereas 11% use skincare.
Fragrances are used by only 7% of the respondents.

60

4) Are you satisfied with the quality of L’Oréal products?

Interpretation:

According to the survey, maximum respondents, i.e. 94%, are satisfied with the quality of
L’Oréal products. Barely 6% of the respondents are not satisfied the quality of L’Oréal
products.
 61

5) What is the main reason for your purchase of L’Oréal products?

33%

18%

20%

29%

Endorsements by celebrities Wide product range

Easy availability Word-of-mouth recommendations

Interpretation:

As shown in the above pie chart, 32.7% of the respondents purchase L’Oréal products
because of word-of-mouth recommendations. The reason of purchase of 28.6% is availability,
while 20.4% of the respondents purchase L’Oréal products due to their wide product range.
Endorsement by celebrities is the main reason of purchase for 18.4% of the respondents.

62

6) How much do you

agree with the
statement – ‘L’Oréal
products provide value for money’?

Interpretation:

According to the survey, 34% of the respondents were neutral about the statement. 36% of
the respondents agreed with the statement while 24% strongly agreed. On the contrary, 4% of
 16%

the
8%

56%

20%

Television Magazines & Newspapers Internet

Hoardings & Outdoor advertisements

respondents disagreed with the statement and 2% strongly disagreed.

63

7) Where do you often see advertisements of L’Oréal products?

Interpretation:

As per the survey conducted, 56% of the respondents, which is the highest majority, viewed
L’Oréal advertisements on television. 20% viewed advertisements in magazines &
newspapers while 16% came across hoardings and outdoor advertisements. Only 8% of the
respondents saw L’Oréal advertisements on the Internet.
 29%

14%

57%

Departmental stores or shopping malls 64

General stores or convenience stores
Salons 8) W
h
ere would you go to buy L’Oréal products?

Interpretation:

As shown in the above pie chart, 57% of the respondents would go to Departmental stores or
shopping malls to purchase L’Oréal products. General stores or convenience stores would be
the place of purchase for 29% of the respondents while 14% would buy from salons.

65

9) If you had to choose a competititor’s product over L’Oréal, which competitior brand
would it be?
 18%

27%
12% 78%

22%
3%

40%

Lakme Revlon
Reasonable prices Eco-friendly packaging Better quality
More innovation others

Interpretation:

In the above pie chart, we can see that when asked to choose a competitor’s brand, 78% of
the respondents chose Lakme while only 22% chose Revlon.

66

10) What improvements would you like to see in L’Oréal products?

Interpretation:
 24%
20%

6%

50%

repositioned their brand with more male inclusivity

improved the quality of the products
offered additional discounts
promoted their products more often

According to the survey, 40% of the respondents would like to see products with reasonable
prices while 27% request more innovation in the products. 18% of the respondents demand
better quality of products and 12% would like to see eco-friendly packaging of L;Oreal
products. The remaining 2% that chose others mentioned ‘ammonia and sulphate free hair
products’ and ‘elimination of the fake market of L’Oréal’.

67

11) Would you be more likely to purchase L’Oréal products if they..?

Interpretation:

As per the survey conducted, 50 % of the respondents would be more likely to purchase
L’Oréal products if they offered additional discounts. If L’Oréal improved the quality of the
 14%

56%
30%

Strongly disagree Disagree Neutral

Agree Strongly agree
products, 24% of the respondents would be more likely to purchase them. 20% of the
respondents would be more likely to purchase from L’Oréal if they repositioned their brand
with more male inclusivity while only 6% would be more likely if they offered additional
discounts.

68

12) The mission statement of L’Oréal is ‘offering all women and men worldwide the best of
cosmetics innovation in terms of quality, efficacy and safety’. Do you agree or disagree
that L’Oréal products are in line with their mission?

Interpretation:

As shown in the above pie chart, none of the respondents disagree or strongly disagree that
L’Oréal products are in line with their mission. A majority of 56% of the respondents are
neutral about this statement, while 30% of the respondents agree and 14% strongly agree that
L’Oréal products are in line with their mission.
 69

13) How likely are you to

recommend L’Oréal products to family and
friends?

Interpretation:

As per the survey conducted, 46% of the respondents rated 4 i.e. likely to recommend while
26% rated 5 i.e. extremely likely to recommend. 18% of the respondents rated 3 which
represents neutral about the question. 10% of the respondents rated 2 which represents
somewhat
Not likely likely
at all to recommend. Extremely likely
 70

CONCLUSION

The success of Brand L’Oréal lies in the fact that the company succeeded in reaching out to
the customers of different countries of the world, across different income ranges and cultural
patterns, giving them the appropriate product they are worthy of. The area of expertise of
L’Oréal being that it succeeded almost in every country that it entered. The strategies of
L’Oréal was varied enough to help it and stop itself from restricting itself in a single country.
L’Oréal sold its product on the basis of customer demand and country want rather than
keeping the product identical across the globe. It built ample number of brands or mammoth
brands entrenched to the restricted culture and which appealed to a variety of segment of the
universal market instead of generalising the brand and edible in innumerable culture. L’Oréal
went on to being a local product in every international market. The brand extension of
L’Oréal also came in the same sector or the same segment of market. L’Oréal believed in
growing its expertise in the segment it is conscious of rather than going into a completely
new sector of market.

L’Oréal had built a dozen or so mega brands rooted in the local culture and appealing to
different segments of the global market. Instead of homogenizing the various brands and
making them palatable in myriad cultures, Owen-Jones decided to embody their (the brands’)
country of origin, turning what many marketing gurus considered a narrowing factor into a
marketing virtue.
71
 72

BIBLIOGRAPHY

Websites

 www.loreal.com
 www.marketing91.com
 www.mbaskool.com
 www.researchgate.net
 www.loreal-finance.com
 73

ANNEXURE

QUESTIONNAIRE

1) Gender
a. Female
b. Male

2) Age Group
a. < 18
b. 18 – 24
c. 24 – 40
d. > 40

3) Which L’Oréal products do you use?

a. Cosmetics
b. Haircare
c. Skincare
d. Fragrances

4) Are you satisfied with the quality of L’Oréal products?

a. Yes
b. No
5) What is the main reason for your purchase of L’Oréal products?
a. Endorsements by celebrities
b. Wide product range
c. Easy availability
d. Word-of-mouth recommendations

74

6) How much do you agree with the statement – ‘L’Oréal products provide value for
money’?
Strongly disagree 1 2 3 4 5 Strongly agree

7) Where do you often see advertisements of L’Oréal products?

a. Television
b. Magazines & Newspapers
c. Internet
d. Hoardings & Outdoor advertisements

8) Where would you go to buy L’Oréal products?

a. Departmental stores or shopping malls
b. Convenience stores or general stores
c. Salons

9) If you had to choose a competitor’s product over L’Oréal, which competitor brand would
it be?
a. Revlon
b. Lakme

10) What improvements would you like to see in L’Oréal products?

a. Reasonable prices
b. Eco-friendly packaging
c. Better quality
d. More innovation
e. Others (if others, specify ______)

11) Would you be more likely to purchase L’Oréal products if they…?

a. Repositioned their brand with more male inclusivity
b. Improved the quality of the products
c. Offered additional discounts
d. Promoted their products more often

75

12) The mission statement of L’Oréal is ‘offering all women and men worldwide the best of
cosmetics innovation in terms of quality, efficacy and safety.’ Do you agree that L’Oréal
products are in line with their mission?
a. Strongly disagree
b. Disagree
c. Neutral
d. Agree
e. Strongly agree

13) How likely are you to recommend L’Oréal products to family and friends?
Strongly disagree 1 2 3 4 5 Strongly agree
76