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BECAUSE YO’RE WORTH IT

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CONTENT

PARTICULARS PAGE No.

COMPANY OVERVIEW 3

MARKET ENVIORNMENT 5

MARKET SEGMENTATION 8

TARGETING, POSITIONING 10

MARKETING MIX 12

SWOT ANALYSIS 25

RECOMMENDATIONS 28

REFERENCES 30
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COMPANY OVERVIEW

L’Oreal was founded in the year 1909 by Eugene Schueller, a French chemist who
developed an innovative hair color formula. The company’s name came from Oréale, a
formula for hair dye that was developed by him. Today, the L’Oreal Group is the world's
largest cosmetics and Beauty Company.

L’Oreal Headquarter is in the Paris suburb of Clichy, France. From hair coloring products,
L’Oreal soon developed beauty and cleansing products. It continues to innovate and now
has more than 500 different brands as well as a thousand more of different products
catering to the business of beauty – from hair styling formulations to hair perming
solutions, skin and body care, fragrance, makeup and cleansers. L'Oreal is active in the
dermatological and pharmaceutical fields, however Cosmetics is the key revenue generator.

L’Oreal famous advertising slogan is "Because I’m worth it". It has recently been replaced
by "Because you're worth it". Its portfolio of brands includes the cosmetics range of
L'Oreal Paris and Maybelline, NYX, shampoo range Garnier, luxury products such as
Lancome and active cosmetics such as Vichy. Its closest global competitor in the premium
make-up segment is Revlon.

Cosmetic industry brings profit to economy that is why it plays one of the important roles.
There are 5 major types of beauty products like perfumes and fragrances, decorative
cosmetics, skin care, hair care and toiletries. There are 4 main countries such as France,
Switzerland, the United States and Italy which sell abroad cosmetics and fragrances. United
States of America is the first leading cosmetics market in the world. However, the most
cosmetic firms locate in Germany and France.

As far Indian market is concerned, the beauty and the wellness sector in India are on a
boom. As of 2018, India’s beauty and personal care market stood at ₹97,100 crore. Of this,
colored cosmetics is estimated at ₹8,000 crore, while skincare is estimated at ₹12,500
crore, according to data from research firm Euro monitor. Colored cosmetics are expected
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to grow at an annual average growth rate of 17.4% through 2022, and skincare is estimated
to grow at 10.4%. Thus, overall, the market for beauty and personal care products will
grow at 10% during the same period. L’Oreal started its operations in India in 1994 i.e.
thirteen years ago. The share of the Indian market to L'Oreal's turnover of 15.8 billion is
small, but is growing. It operates in India through its wholly owned subsidiary “L’Oreal
India”. It has four divisions — consumer products, professional products, active cosmetics
and luxury products. The biggest contributor to its revenue in India is the consumer
products division led by its strongest brand in terms of sales - Garnier.

Globally, L’Oreal has built a sizeable business through acquisitions, including popular
brands such as The Body Shop, Vichy, Kiehl’s, Shu Uemura, IT cosmetics, Maybelline, NYX
and Urban Decay, its India business is still small compared to fast moving consumer goods
(FMCG) like HUL.

Over the year, L’Oreal India has discovered the behavior of the Indian consumers and has
realized that the Indian consumer is not as price conscious as it is portrayed. The brand is
more expensive than the average FMCG products offered by HUL, Godrej etc., but offers a
true value for money. The company’s growth in India can be attributed to its innovation of
new products, supply chain management, systems and structure.

L’Oreal being the world’s second largest cosmetics major is planning to foray into the Rs
1,000-crore Indian herbal and ayurvedic cosmetics industry. In India, L’Oreal made its first
acquisition in 2013 with the purchase of Mumbai-based skin care brand Cheryl’s
Cosmeceuticals. The group is taking the acquisition route to enter this niche sector. L’Oreal
has thus identified India as one of its top five growing businesses globally. The company
has invested more than $1000 million in research & developments and has filed 498
patents in the year 2017.
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MARKET ENVIORNMENT
L’Oreal is the world’s largest beauty firm employing around 50,000 employees worldwide
and revenues worth 30.08 Billion Dollars in 2019. L’Oreal has created an international
brand portfolio for consumers with wide range of incomes and tastes in 140 countries and
has certainly occupied a unique position in the fast pace global beauty environment.

VISION STATEMENT OF L’ORÉAL :

“Because you’re worth it”

MISSION STATEMENT OF L’ORÉAL :

“At L’Oréal we believe that everyone aspire beauty. Our mission is to help men and women
realize their aspiration, and express their individual personalities to the full. This is what
gives meaning and value to our business, and to the working lives of our employee.”

GOALS AND OBJECTIVES:

L’Oreal goals and objectives are always focused on achieving internal growth which was
largely influenced by the ideas of acquisitions either it being strategic or tactical it has
clearly lead to the overall growth of the business.

L’OREAL GLOBAL MARKETING STRATEGY:

L’Oreal mainly focuses on the young women who are prone towards the beauty and ready
to spend to achieve desired hair and skin. There are various operations pursued in various
countries shows its multicultural attitude, that is, there are around 42 factories around the
world, 46 billion units are manufactured and around 95 percent of the factories are ISO
14001- certified.

L’Oreal being one of the largest cosmetic company in the world, it has to develop its
products in a particular country as per their taste and preferences. The total worth of the
company is increasing at the rate of 11% CAGR in 2018 which was huge and among the
most successful cosmetics company around the world.
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Cultural difference has highly influenced many strategic decision of the L’Oreal like
advertisement, product designing and packaging and similarly the education level of the
society made the promotions, products and packaging more complicated. There are many
other social influences which are listed as consumer attitude with respect to risk taking,
family organization, religion, material gain and various other factors which also contributes
to the cultural influence of the company like L’Oreal.

L’OREAL’S ENTRY IN INDIAN MARKET:

L’Oreal entered in Indian market in the year 1991 through a distributor. Following the lead
of Hindustan Unilever, it launched its first product, a shampoo called the Garnier Ultra
Doux. Lately, it was established as L’Oreal India under the L’Oreal group. Today it ranks
second in the global cosmetics group in India.

L’Oreal’s approach is more aggressive compared with its competitors. The most recent step
of the L’Oreal group is the new high-tech industrial unit in Pune. It manufactures many
types of hair care, hair color and skin care products to meet up the growing demand. It is
one of the first plants to implement L’Oreal’s newest GHP (Good Hygiene Practices). The
executives of L’Oreal thought that the combination of small cost and natural ingredients
would be a good match for the Indian market.

The company launched its professional products division and targeted on the largely
unstructured hairdressing industry and sells its salon brand such as Kerastase, L’Oreal
Professional and Matrix. There are various kinds of customers which are located in various
location of the country so mainly luxury products are sold in the India’s cosmopolitan cities
such as Mumbai, Delhi and Bangalore instead of them there is a tough competition which
can be seen in the segment of the small customers whether accessories, cosmetics and
fragrances. There are many cultures in India which provide us better opportunities which
can be seen in the cities like Ahmadabad and Aurangabad that are lacking in luxury
products but the development is too fast which is the main target of the companies like
L’Oreal. L’Oreal is targeting $ 1 billion in revenues from India by 2020
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Revenue of the leading 20 beauty manufacturers worldwide in

2019 (in billion U.S. dollars)
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MARKET SEGMENTATION

L’Oreal is able to market their products all over the world. The beauty giant's market
segment is primarily women although each brand within their portfolio is segmented even
further. L’Oreal markets their products to professionals and non-professionals through
department stores to drugstores and boutiques. L’Oreal’s consumer beauty products which
are sold through drugstores market, segment their products by age and to women seeking
lower priced goods.
L’Oreal brands are global, consumers can find their brands and products in 130
countries. L’Oreal has segmented the market based on the Psychographic and
Demographic factors that meet the needs of the particular country where their products
are available.

1. PSYCHOGRAPHIC SEGMENTATION: L’Oreal segmented India into different groups

based on their thinking and behavior from the older, more conservative Indians who
held conservative values of thriftiness more strongly and stubbornly, and the
younger more impressionable generations who had developed a very different and
westernized view on spending and culture.
2. DEMOGRAPHIC SEGMENTATION: It is the key to success for L'Oreal cosmetic
brands and products. They have segmented the market based on below factors:
a. INCOME GROUP: In India, L'Oreal's top consumer brand Maybelline NYX, price
their products according to the usual income of people. L’Oreal LUXE is for upper
middle and upper-class customers who wear beauty as their identification.
Garnier, Matrix was for middle-class customers.
b. GEOGRAPHICAL LOCATION: The shades, colors of cosmetics are based on
society like urban, semi-urban, metropolitan etc. and uses variety of elements in
their advertisements that appeal to the women in that particular area. Also, they
introduced small sachet to attract more consumer in tier 2 and tier 3 cities.
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c. AGE: L’Oreal cosmetics provide products to their customers for different ages
and on the reasonable price. It showed an increased interest in capturing the
market share of the younger Indians who use more cosmetics and give
importance to beauty. Eg: Maybelline New-York with Ali Bhatt in advertisement.
Later, middle aged and working professional became their main target.
d. GENDER: L’Oreal first segmented the population into the different sexes as they
thought their products’ “combination of low price and natural ingredients would
fit India’s market, where women use plants and herbs as part of their beauty
culture”. Their product specifically catered to the women of India, though later it
discusses how it should carve a niche market for itself in the Men’s sector as well
by introducing L’Oreal Men expert products.
e. CULTURAL: L'Oreal has a way of conveying the “allure of different cultures”
through its products and brands. “Whether it's selling Italian elegance, New York
Street smarts, or French beauty through its brands, L'Oreal is reaching out to
more people across a bigger range of incomes and cultures than just about any
other beauty-products company in the world.”
f. BENEFITS SEGMENTATION: L’Oreal further segmented the market on a
benefits basis when it introduced Excellence Crème. It promised superior
products (hair colour) with additional benefits to consumers (extra protection to
hair).
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TARGETING AND POSITIONING

L’Oreal targets the young affluent middle class females, especially those with graying hair
who has the purchasing power that masses lacked and also a modernized mentality that
made these people more receptive to purchasing L’Oreal’s’ more luxurious and expensive
products. While retaining their core values of thriftiness, the young middle class were also
seen more willing to spend on luxuries product that gave additional benefits than the other
normal hair or personal care brands.

Previously there were no product that solved women’s hair graying problems, L’Oreal
introduced Excellence: Crème that promised additional benefits apart from just dying of
hair. It did not damage hair like henna or ammonia but even promised to strengthen it. The
young middle class fit into this segment well because unlike their older predecessors, who
did not mind using products that damaged their hair as long as they were cheap due to
monetary problems, these women were more educated and concerned for the need to have
healthy beautiful hair, as well as more equipped with the purchasing power to do so. Cheap
harmful products would not appeal to them as much as high quality L’Oreal products which
justified their higher price with higher benefits.

L’Oreal has not given up on targeting the lower income masses due to increasing demand
especially from the rural area than the urban sector, and as of 2008 only 29% of India lived
in urban areas. Thus it has introduced new products like ‘Color Naturals’ which be used
multiple times and cost only $3.10, translating into increased value for the masses. Though
initially what they thought is difficult to capture the masses’ market, later formed too large
a proportion of the total market share to be ignored. Thus, L’Oreal made effort in capturing
the masses market share and introduced various products in this sector.

‘Excellence Crème’ was marketed as a ‘luxury purchase’ and a ‘high-end niche’ product,
positioning itself as higher quality and made of extensively developed ingredients with
additional benefits. One of the most innovative and pricey products in Europe then, it was
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also gentler on the hair than local products such as henna or ammonia. L’Oreal hired Ms
World Aishwariya Rai in an advertisement to show that beautiful women use L’Oreal, thus
positioning itself as not just a basic shampoo, but one that made women beautiful. This
promise of beauty and benefits positioned L’Oreal higher in the market compared to the
home brands which positioned themselves as cheap, value-for-money products which only
served the most basic of functions of hair cleaning.

In terms of how L’Oreal differs from other brands, it employs a “more for more” marketing
concept while home brands used a “less for less” concept. Home brands sought to sell the
most basic shampoos with the lowest quality ingredients in order to offer the lowest prices,
while L’Oreal justified their high prices by using high quality ingredients. While home
brands used such a concept to attract the lower-income masses that only needed bare
necessities, L’Oreal’s strategy targeted the more affluent that were more educated and had
more disposable income to splurge on luxury items if they justified their price.

There was also a difference in how they captured loyalty. Home brands aimed to garner
loyalty of existing users through brand familiarity as repeated use by generations of
Indians would bring about feelings of trust and dependability. This attracted thrifty
housewives who wanted the cheapest products, which translated into loyalty and
substantial profits when their children grew up and also continued to use the same brands.
L’Oreal however could not and did not try to establish brand familiarity in such a short
time as it was very new in the market. It thus attempted to capture the loyalty of a new
segment of the market by promising better quality products to the rising middle class,
hoping they would realise L’Oreal’s higher price and better quality justified a move away
from home brands to a new found loyalty in L’Oreal.
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L’OREAL MARKETING MIX

L’Oreal operates in India through four main divisions: consumer products, professional
products, active cosmetics and luxury products. The biggest contributor to its revenue in
India is the consumer products division led by its strongest brand in terms of sales —
Garnier. Some of the companies who provides L’Oreal with competition in India are as
follows-

 Hindustan Unilever
 Himalaya
 Emami

Product in the Marketing mix of L’Oreal

L’Oreal has wide range of product portfolio with international standard that satisfy
the needs of every customer present in any part of the world. 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. In India, L’Oreal
operates through four different divisions that are as follows
 Consumer products (personal care) include brands like Ombrelle, Maybelline, Essie,
Garnier, Magic and Colorama.
 Professional products include brands like Technique, Matrix Essentials, Mizani and
Kerastase.
 Luxury products include brands like Diesel, Ralph Lauren and YSL.
 Active cosmetics include brands like Vichy, Inneov and Sonaflore.
 The Body Shop - Under these product divisions L’Oreal have products like eye-liner,
mascara, eye shadow, nail polish, nail polish remover, lipstick, lip-liner, lip gloss,
cleanser, foundation, concealer, blush for face, hair color in various shades, hair
care, shampoos, conditioner, toners, hair spray and serum.
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Consumer Products

Garnier fructice L’Oreal Paris Maybelline

Professional Products

L’Oreal Professional Kerastase Matrix Keraskin

Luxury Product

Giorgio Armani Diesel Lancome Ralph Laurel Keihl’s

Active Cosmetics

La Roche-Posay Vichy
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All the above products are produced and innovated based on customer preferences and
needs. These are available in different sizes and price ranges. L'Oréal products are properly
tested as per international testing standards without harming any animals in the process.

L’Oreal also has a kid’s line of products like Shampoos. All the products are available in
different product sizes and different price ranges. L’Oreal 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.

L’Oreal follows below marketing strategy for its products:

LINE EXTENSION: L’Oreal has been experimenting with their products a lot and they
spend a lot on R&D, they have done a huge line extension in their product line up. Garnier
itself has five different variants in its hair care segment (Shampoo), named as Fructis,
Fructis Oil Repair, Fructis Blonde, Fructis Men & Fructis Wave Definition. Similarly L’Oreal
Paris has six variants, named as Elvive, Elseve Absolute repair Shampoo, Elseve Vitamin
Shampoo, Elseve Renuitrition, Vive Pro Thickening & Vive Pro Nutri Gloss. Similarly, there
are many more variants of other brands too.

BRAND EXTENTION: L'Oreal expanded its brand architecture by acquiring Maybelline

brand in 1996, which was a very successful transaction. L’Oreal is very aggressive in
building the brand architecture by acquiring other influential brands.

PRODUCT DIFFERENTIATION: L'Oreal brings some innovative product differentiation in

each of the product line introduced.

PACKAGING: L’Oréal develops concrete solutions for more effective and responsible
packaging, with a focus on: protecting consumer health and biodiversity; choosing
materials with the smallest possible environmental impact (origin, weight, recyclability);
only including essential elements and choosing optimal dimensions; and optimising
packaging for recycling. To achieve this goal, the Group adopts the ‘3Rs’ rule starting from
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the design stage: respect the environment, reduce the amount of resources needed, and
replace traditional materials in favor of alternatives that are recyclable and biodegradable.

The operational packaging teams of

L’Oreal are responsible for the technical
design of packaging components. They
develop the technical drawings and
requirements needed to establish the
specifications intended for suppliers. They
manage product approval. Lastly they
draw up, validate and publish the
specifications of the finished goods and its
components. The development teams
coordinate all the departments (sourcing
centre, international marketing, plants, Research and Innovation, etc.) involved in
launching new packaging to ensure compliance with timelines.
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Place in the Marketing mix of L’Oreal

L’Oreal’s success in the cosmetic industry is not only due to high quality products,
but also due to the marketing efforts to make sure their various brands have a
strong market presence. L’Oreal’s operations are highly complex – with business
across 130 countries, 150+ distribution centers, 42 factories, 34 brands, and 8
distribution channels (including hair salons, mass-market retailers, department
stores, drugstores, e-commence, etc.). L’Oreal’s growth strategy requires a
commitment to new product innovation (up to 50% of products refresh annually
focused on new and emerging markets, expansion across e-commerce channels, and
widened diversity of distribution. These unique challenges, present L’Oreal’s supply
chain leaders with the need for great agility and adaptability to serve their ever-
evolving customers worldwide. Leading industry transformation, L’Oreal has
invested in cutting-edge technology solutions and supply chain automation.

Each of their products are available at department stores, retail outlets, pharmacies,
salons, cosmetics stores and own brand boutiques. Besides this, the brand has its
own website and has tie-ups with other shopping sites on internet.
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To meet the needs of the

dynamic market, L’Oreal also
leverages automation like
robotics and slotting software to
mechanize their distribution
centers globally. By
implementing these new
solutions, L’Oreal has stayed
competitive in order fulfillment
speed, reduced labor cost,
continuous quality improvement, and meeting the surges during demand peaks.

As the brand loyalty of L’Oreal is very high and hence L’Oreal follows a pull strategy.
Customers of L’Oreal go directly to the outlets and buy the products. With all the
needed product information, the consumers can make purchases from any part of
the world.

The company has set up a manufacturing plant in the city Pune, Maharashtra and
Bidd, Himachal Pradesh in 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. In one of
its kind distribution strategy, L’Oreal 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’Oreal
salons in India, where consumers come for professional and efficient treatment and
these salons are for both the gender men and women.
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DISTRIBUTION CHANNEL: -

Manufacturer Wholesaler Retailer Consumer

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Price in the Marketing mix of L’Oreal

The biggest revenue earner for L’Oreal in India is the products related to consumer
division. L’Oreal realized that the urban consumer is not as price conscious as was
portrayed earlier. For premium products, the consumers are ready to pay premium prices.
As many of the L’Oreal 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.

L’Oreal has tried to WOO aam admi by dual pricing strategy. Some of the brands under
L’Oreal 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.
Considering the company has set up its manufacturing facilities in Pune, Maharashtra and
Bidd, Himachal Pradesh, India o been sub-contracting its products, it has been easier for it
to control its prices in the Indian
market.

Sometimes, in order to penetrate a new

section of the market, the company has
offered discounts and schemes
especially on introductory products
(penetration strategy). 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.
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Promotion in the Marketing mix of L’Oreal

L’Oreal 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”. 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.

L’Oreal 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.
Some of the promotion channels adopted by L’Oreal are:

ADVERTISEMENT: L’Oreal started its advertising campaign in the late 1920 via posters
and other such mediums. It first time appeared onscreen in 1950s in movies. In today’s
date L’Oreal got celebrity of all ages to promote their product. The strategy that L’Oreal
used here is to use local celebrities to whom the common man relate to rather than having
just one celebrity to promote their product globally. In India, 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’Oreal advertisements. L’Oreal-
branded products and the company's Garnier line generally feature a pale model and focus
on the ingredients in the product, using take- action language like "YES to fairer and
younger looking skin" or "Against inside cell damages." The ad campaigns are in numerous
television channels, radio, fashion magazines, hoardings and neon signs.

PRINT MEDIA: In a media-driven culture obsessed with Bollywood, urban consumers are
very demanding and image is everything. They read glossy magazines such as Vogue,
Femina etc. L’Oreal advertises their product and talk about the beauty of Cinestar which
attracts the attention of consumer.

FREE PRODUCT SAMPLES/DISCOUNTS: Since 'Free' happens to be the most powerful

word in a marketer's vocabulary, free samples are provided with other products at salons
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to market the new items and attract customer attention. Sometimes discounts are offered
on some products to increase the sales figures and to promote the products.

CONTEST: - L’Oreal launches several contest to directly connect with its consumer. Some of
the contest by L”oreal in past
were - L’Oreal’s Who’s Worth
it to you? contest was
launched wherein participants
can nominate a special
woman in their life and tell us
why they think she’s worth it.
The winner of this contest
were felicitated during Femina
Women’s Award

WeddingSutra Contest - To participate in

this contest, one has to purchase L’Oreal
product worth 2500/- from L’Oreal Paris
counter during the period starting from
1st February 2020 and 31st March 2020
and the winner will be selected via draw
and they will be rewarded Free Makeup
Service by a Makeup artist.
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POINT OF PURCHASE DISPLAY: - L’Oreal apart

from its own outlet puts its product in display at
various places. We have seen L’Oreal stalls in malls,
various unisex saloons, VLC outlets etc. This kind of
display allows the consumer to see the product and
enquire about the same.

RELYING ON INTERNATIONAL AD CAMPAIGNS: -

Increasing its ad spend for the launch of its new
products, L'Oreal has been relying more on its
international campaigns to make an impact in the
Indian market.

OTHER PROMOTION STRATEGY: - The cosmetics

giant is using hairdressing schools to stimulate
demand for products many Indians saw as an alien
extravagance. Since it opened its first academy in
Bombay in 2006, 73 hairdressers have graduated. The six-month course turns out
professionals capable of working as a junior in one of the select but growing number of
international-standard salons in India’s big cities.
L’Oréal’s distribution network also plays a vital
role. Over the past decade the company has trained
more than 30,000 hairdressers in India in the use
of its products. And it has helped to establish about
300 salons in the past five years. The theory is
simple: If there is no natural demand for your
goods, stimulate it.
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E-COMMERCE, THE GAME

CHANGER: The digital and
e-commerce revolution is
bringing an awareness of
global beauty brands and
trends among youngsters
due to mobile penetration.
E-commerce is the No. 1
growth driver for L’Oreal
India. L’Oreal products are
easily available on online
shopping site such as
Amazon, Alibaba Nykaa etc.
This has helped brands win new consumers beyond the metropolitan cities and towns.
Consumers in these towns now have access to beauty products that are not available
through traditional physical retail distribution.

Some of the other innovations used in promoting L’Oreal products worldwide are:

MAKEUP.COM: publishes great articles and social media posts - A quick look at
L’Oreal’s Makeup.com reveals beauty tips, tricks and products that can empower women to
reach their ideal level of beauty. Its articles have easy-to-follow step-by-step tutorials
accompanied by detailed pictures and videos.
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2. MY UV SKIN PATCH: L’Oreal La Roche Posay released My UV Patch—a sticker that can
measure UV exposure and connect with a Smartphone, to remind users to wear sunscreen.

3. L’ORÉAL MAKEUP GENIUS – It

enabled customers to virtually try on
L’Oreal products. L’Oreal created the
1st virtual makeup tester app—
Makeup Genius. The app enables
women to try various makeup look in
real-time with the use of 300+ L’Oreal
products.

4. PARTNERED WITH MARVEL TO CREATE A BRANDED ISSUE OF CAPTAIN AMERICA:

L’Oreal’s skincare brand Kiel first forayed into anti-aging skin treatment for men. To appeal
to its males, the brand partnered with Marvel Comic’s to create a branded issue of Captain
America. The comic was released alongside Kiehl’s “Heavy Lifting” moisturizer.
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SWOT ANALYSIS

STRENGTHS

STRONG R&D CAPABILITY - there are continuous R&D

experiments going on at L’Oreal to ensure the safety of
their consumers and also introduce new product and
bring innovation in existing products.

FANTASTIC PRODUCT AND BRAND PORTFOLIO – The

product lines within the brands of L’Oreal are all premium products. Where Garnier is
focused towards stronger hair and personal care, Maybellin is focused towards
beautification. And both of them are excellent names in what they do.

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 diehard fans of L’Oreal
Paris, Maybelline, Garnier, L’Oreal
Luxe brands, Body shops and the
various other brands of L’Oreal.

STRONG INTEGRATED MARKETING COMMUNICATIONS – Each brand in the portfolio of

L’Oreal is known for its integrated marketing communications. Not only are these brands
famous for their marketing campaigns, but they are very good in their point of purchase
marketing as well.

WIDESPREAD DISTRIBUTION – 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.
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NATURAL AND ORGANIC IN NATURE – Since 1987, L’Oreal has stopped animal testing
completely. It is 100% natural and organic in nature and hence the choice of animal lovers.

WEAKNESSES

TOO MANY SUB DIVISIONS - The firm is known to be slow and bulky in nature because of
the various sub divisions it has.

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’Oreal are a bit
lower as compared to competitors.

OPPORTUNITIES

MARKET POTENTIAL – The market potential of personal care and beauty items is only
going to increase. Under developed economies are developing and becoming
newer markets. Exploring these newer markets will give better sales down the line to
L’Oreal 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.

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’Oreal 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’Oreal 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. But
it needs to be revived in that direction.
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THREATS
DYNAMIC NATURE OF COSMETICS INDUSTRY – With constant updation being demanded
in the cosmetics industry, keeping up with the times is ultimately very difficult. It is not
possible to keep everyone happy at once. Plus, the competition is ever growing. As a result,
the dynamic nature of the cosmetics industry keeps the brand on its toe.

CASH CRUNCH – A brand like L’Oreal 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.
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RECOMMENDATION

1. L’Oreal should more actively participate in fashion events as it will increase the
Market presence of the brand.

2. L’Oreal focuses more on Word of mouth publicity and it believes in Pull Marketing,
strategy, hence it should focus more on making the consumers use the product for
the first time. If a consumer uses the product, there is a high probability of them
using it again.

3. L’Oreal should focus more on including natural products in their product portfolio.
In India Organic and Ayurvedic products are emerging as a new market with great
opportunity to grow. Thus, L’Oreal with existing Brand name can easily penetrate in
new product market and create its presence.

4. L’Oreal’s target customers are middle class and educated people (mostly working
and youngsters). L’Oreal has already captured most of the market where they can
tap their target audience; however once where they can approach would be the
corporate offices. They can put up a stall of L’Oreal in the office premises of different
corporate, allowing the employees to check new products and buy the one they
want to.

5. L’Oreal should carefully analyze market portfolios and design customer desired
products
 29

6. While the annual disposable income for women has experienced a significant 35%
growth, the men have experienced an even more substantial and surprising growth
of 65%.
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REFERENCES

1. http://lorealsboudoir.blogspot.com/2011/11/ch-8-segmenting-and-targeting-
markets.html

2. https://www.loreal-finance.com/en/annual-report-2018/worldwide-advances-2-
3/india-country-beauty-dreams-2-3-2/

3. https://www.marketing91.com/swot-analysis-loreal-2/

4. https://www.marketingweek.com/loreal-is-embracing-new-marketing-codes/

5. https://www.livemint.com/companies/news/l-or-al-eyeing-acquisitions-in-india-s-
cosmetics-market-1554762765084.html

6. https://www.loreal-finance.com/en/annual-report-2017/cosmetics-market

7. https://www.thehindubusinessline.com/companies/loreal-woos-aam-aadmi-with-
dual-pricing-strategy/article20466014.ece#

8. https://www.mbaskool.com/marketing-mix/products/16732-loreal.html

9. https://www.referralcandy.com/blog/loreal-marketing-strategy/

10. https://www.statista.com/statistics/243871/revenue-of-the-leading-10-beauty-
manufacturers-worldwide/