INDUSTRIAL EXPOSURE

A STUDY OF
COSMETIC INDUSTRY

MAYBELLINE
In partial fulfilment of the requirement for the award of degree of

Bachelors of Business Administration (BBA)

Submitted By: SACHIN GAUR

Under the Guidance of:MR.

SHAKTI SHARMA
BBA (4th Semester)

BHARATI VIDYAPEETH

INSTITUTE OF MANAGEMENT & RESEARCH, NEW DELHI

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 DECLARATION

This is to certify that I have completed a project titled A STUDY OF

COSMETIC INDUSTRY“ Maybelline New York” under the guidance of Mr.
Shakti sharma in the partial fulfilment of the requirement for the award of
Bachelors of Business Administration of Bharati Vidyapeeth University, New
Delhi. This is the original piece of work and I have not submitted it earlier
elsewhere.

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 PREFACE

It is designed in such a way that student can grasp maximum knowledge and can
get practical exposure to the corporate world in minimum possible time.
Business schools of today realize the importance of practical knowledge over the
theoretical base. The research report is necessary as it provides an opportunity
to the researcher in understanding the industry with special emphasis on the
development of skills in analyzing and interpreting practical problems through
the application of management theories and techniques. It is a new platform of
learning through practical experiences.

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 ACKNOWLEDGEMENT

This project is a result of dedicated efforts. It gives us immense pleasure to

prepare this project report on A STUDY OF COSMETIC
INDUSTRY“MAYBELLINE
“MAYBELLINE NEW YORK”.We YORK”. are thankful to “ Mr.Deshmukh
“ Sir as under his guidance and support its possible for Us to carry out this
project,, We would also like to thank at same priority to Our project guide “ MR.
Shakti sharma ”, for consultative help and constructive suggestions on the
matter of this project. We would like to thanks our parents and colleagues who
have helped us in making this project a successful one.

SACHIN GAUR

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CONTENTS

Chapter 1: Introduction to Company

1. Nature of Business

2. Type & ownership Pattern

3. Organizational Structure

4. Production Layout

5. Organisational Policies

Chapter 2: Industrial Analysis

1. Industry Overview – (Growth rate of Industry, Contribution to GDP)

2. Current Issues (From Newspaper, Journals –For Company and Industry)

3. Key Competitors

4. Environmental Scanning –Political environment, Economic environment, Socio-Cultural

Environment, technological environment, environmental issues (Green environment) and
Legal environment.

5. Porters five forces model of competition –Michael Porter

Chapter 3: Marketing Strategies

1. Products of Company

2. 4 Ps (Product: Price, Place & Promotion)

3. STP (Segmentation, Targeting and Positioning)

4. Distribution Channels

5. Promotion Strategies

Chapter 4: Financial Analysis

1. Sources of Finance

2. Ratio Analysis –Any 5

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3. Net Profit/ Balance sheet (from annual report) -Analyse

Chapter 5: Key Learning’s from the Company and

Recommendations
1. Performance Analysis of the Company

2. Reasons for the expansion/contraction/diversification of Company

3. Comment on Organizational Leadership

4. Market share/growth rate of Company

5. SWOT Analysis of the Company

Chapter 6: Findings

Chapter 7: Conclusions and Suggestions

Bibliography

Chapter - 1

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Introduction to Company

Nature of business / History

The Maybelline Company was created by a 19-year-old entrepreneur named Tom
Lyle Williams in 1915. Williams noticed his older sister Mabel applying a mixture
of Vaseline and coal dust to her eyelashes to give them a darker, fuller look. He
adapted it with a chemistry set and produced a product sold locally called lash-in-
brow-line. Williams renamed his eye beautifier Maybelline, in honor of his sister
Mabel, who gave him the idea. In 1917 the company produced Maybelline
Cake Mascara, "the first modern eye cosmetic for everyday use" and Ultra Lash in the
1960s, which was the first mass-market automatic.

In 1967, the company was sold by Williams to Plough, Inc. (now Schering-Plough)
in Memphis, Tennessee. The entire cosmetic production facility was moved
from Chicago to Memphis over one week-end. In 1975 the company moved its
factory to Little Rock, Arkansas, where it is still located. In 1990, Schering-
Plough sold Maybelline to a New York investment firm, Wasserstein Perella &
Co. Maybelline Operational Headquarters remained in Memphis until being sold in
1996, when headquarters moved to New York City. The makeup factory moved
to Brooklyn in 2000.

Maybelline received a boost when the company hired Lynda Carter as the company's
beauty fashion coordinator after her television series ended; she also appeared in
several of its television and print advertisements. Josie Maran, Miranda Kerr, Sarah
Michelle Gellar, Melina Kanakaredes, Zhang Ziyi, Siti Nurhaliza, Fasha
Sandha, Sheetal Mallar, Julia Stegner, Jessica White and Kristin Davis have endorsed
Maybelline products. The current faces of Maybelline are Adriana Lima, Christy
Turlington, Erin Wasson, Kemp Muhl, Emily DiDonato, Jourdan Dunn, Marloes
Horst, Lisalla Montenegro, Gigi Hadid and Shu Pei.

In 1991, the company adopted its advertising slogan “(Maybe she's born with it.)
Maybe it's Maybelline.”  Which is still used today? The company was acquired
by L'Oréal in 1996. Acquiring Maybelline gave L'Oréal access to mass markets in
cosmetics.

Maybelline has released several new products, including 'Eye Studio' collection for
eye products, 'Fit Me' collection for foundation/facial products, and new 'Color
Sensational' shades for lips. Currently, Maybelline is the Official Makeup Sponsor
of Mercedes-Benz Fashion Week. Their long-running marketing.

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Maybelline

The rise of Maybelline from a small mail-order firm to a global cosmetics

business is impressive. Despite the fact that the company is now called
Maybelline New York, its early fortunes, like those of Max Factor and the
Westmore Brothers, were tied with the growing motion picture business in
California.

Tom Lyle Williams

Known by those close to him as Tom Lyle, the founder of Maybelline was
entrepreneurial, hard working, prepared to take advice and loyal to friends and family.
His good looks and ability to get on with people were undoubtedly of great assistance.
In 1912, aged 16, he moved from Morganfield, Illinois to Chicago and got a job with
Montgomery Ward, a long running mail-order catalogue business. After
experimenting on his own with a variety of mail-order ventures he left Montgomery
Ward in 1914 to concentrate on his own business. By then he had already met and
started a long-term relationship with Emery Shaver [1903-1964] who joined him in
the venture. The following year he wired his sister Mabel to come to Chicago to help
with the business.

Maybell Laboratories

In 1915, Tom Lyle watched his sister Mabel fix her singed eyebrows using a mixture
of Vaseline, ash and coal dust, a trick she apparently got from ‘Photoplay’ magazine.
Seeing an opportunity for a product to sell through his mail-order business he used a
chemistry set to produce a mixture containing petrolatum (Vaseline), carbon black,
cottonseed oil, and safflower oil that he hoped he could sell. Unfortunately, when
Mabel applied it to her lashes it ran into her eyes and stung them badly.

Undaunted, Tom Lyle sought professional advice and commissioned Parke-Davis, a

wholesale drug manufacturer, to make a suitable product for sale. The result was a
scented cream consisting of refined white petrolatum along with several oils to add
sheen. It did not contain any colouring agent but it seemed to ‘brighten the eyes’ He
called the product ‘Lash-Brow-Ine’, selecting the name partly because of its similarity

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with other eyelash and eyebrow products already on the market; a decision that would
result in difficulties later.

Lash-Brow-Ine was to be packed into small aluminium containers and sold through
mail-order in two sizes, at fifty cents and one dollar. Using money he got from his
brother Noel to get this new venture off the ground, Tom Lyle acquired product and
packaging and placed an advertisement for Lash-Brow-Ine in ‘Photoplay’ in 1916. As
cash came in, it was used to place advertisements in other magazines such as the
‘Pictorial Review’, the ‘Deliniator’, and the ‘Saturday Evening Post’ and so the
business grew

Advertising for the Lash-Brow-Ine claimed that it ‘nourished and promoted the
growth of eyelashes and eyebrows’. Tom Lyle was canny enough to suggest that you
needed to use “two to three small boxes before any marked improvement is noted”,
thereby ensuring a number of sales before dissatisfaction might set in. Pamphlet
material that came with the product also suggested it could be used to cure baldness.
Although we would now consider these claims to be untrue, at the time it was
commonly believed that substances like Vaseline, olive oil and lanolin would
stimulate hair growth.

In 1917, again with the assistance of Parke-Davis, Maybell Laboratories began

production and sale of a cake eyelash and eyebrow beautifier. The exact composition
of this product is unknown but it was most likely a sodium stearate based cake
mascara known earlier also as ‘water cosmetique’ or ‘mascaro’.

Like other products of its type the colouring agents were suspended in a base of
sodium stearate soap. The soap and pigments were mixed together, extruded into
strips, stamped and dried. The product was applied by first wetting the cake, then
using a small brush to lift and apply the colouring to the eyebrows and eyelashes.
Early versions could irritate the eye but later versions made with triethanolamine
stearate were non-smarting.

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Above: Maybelline eyelash beautifier packed in a box with a mirror in the lid made
by the Pictorial Paper Package Company of Aurora, Illinois. The brush was made by
the Autograph Brush Company of New York City. The product form is almost
identical to earlier French eye cosmetics.

The new product named ‘Maybelline’ came in two shades, black (containing lamp
black) and brown (containing iron oxides) and was sold for seventy-five cents in a
small box with a picture of the Maybell Girl on the top. The box included a
rectangular cake of product stamped with the name Maybelline, a small bristle brush
and had a mirror attached to the inside of the lid. It was advertised as being an “ideal,
harmless preparation for darkening eyelashes and eyebrows”.

In 1920, Tom Lyle’s decision to use the name Lash-Brow-Ine came back to haunt
him. In that year he lost an appeal over a trademark dispute with Benjamin Ansehl of
St. Louis, Misssouri. The loss meant that the business could no longer use the name
Lash-Brow-Ine and cemented the use of Maybelline in all advertising after that date.

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In 1924 the growing business was relocated to larger headquarters at 5900 North
Ridge Avenue, Chicago. The new headquarters also came with a new business name
as Maybell Laboratories had been renamed as Maybelline in 1923.

The success of Maybelline but was also important to the actresses and the movies they
appeared in.

Both stage and screen had helped promote the use of eye make-up in the 1920s. The
Ballets Russes, who toured the U.S. in 1916 and 1917, demonstrated an exotic
glamour that relied, in Above: The front entrance of the Maybelline Building on
Ridge Avenue in Chicago. The new building owners removed the metal push bar
across the door with the word Maybelline spelled out but did not remove the
Maybelline M above the door.

Growth and development continued for the remainder of the decade. A water-proof
liquid version, applied with a paint brush built into the lid, was introduced in 1925
and Maybelline was promoted, in both its solid and water-proof liquid forms, in black
and brown colours. In 1929 eyebrow pencils and eye shadow were added to the

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product line-up. The eyebrow pencils were also sold in black and brown but the eye
shadows came in blue, black, brown and green, with violet added the following year.

Promotion continued to play an important role in the success of the company with
Maybelline spending over one million dollars on advertising between 1915 and 1929.
A lot of advertising featured actresses including Phyllis Haver, Ethel Clayton, Viola
Dana, and Natalie critical Moorhead. Cross-promotion of this sort was of to part, on
make-up to accentuate their eyes. In the movies, the vamp look used by actresses such
as Theda Bara and Pola Negri created a demand for eye make-up from women who
wanted to look like them. Unfortunately, the vamp look was also associated with
risqué costumes and suggested a certain looseness of character. This led to an
association between eye make-up and immorality, a state of affairs that lasted well
into the 1950s.

Above: One of the original display cards introduced by Harold (Rags) Ragland. The
eye shadow product is missing from the card.

By 1934 the cash flow was strong enough to allow Tom Lyle to start buying up other
mascara businesses as they came on the market, thereby solidifying Maybelline’s
dominance in eye make-up in the American market. The 1930s also saw Maybelline
expand into Canada and Europe. South America was added after the war and other
countries followed giving Maybelline a global reach. At home, although there was
increased competition from the majors, figures indicate that Maybelline still had about
75% of the American mascara market in 1947.

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HISTORY

1915 Maybell Laboratories founded to make Lash-Brow-Ine.

1916 Advertising in Photoplay magazine begins.
1917 First real model used in advertising.
Maybelline cake, eyelash and eyebrow make-up released.
1918 Direct sale and distribution of products begins.
1923 Maybell Laboratories renamed Maybelline.
1924 Maybelline moves to new headquarters at 5900 North Ridge Avenue,
Chicago.
1925 Waterproof Liquid Maybelline eye make-up introduced.
1929 Eyebrow pencils (black and brown) and eyeshadow (blue, black, brown
and green) introduced into the product line.
1930 Violet colour added to eyeshadows.
1931 Maybelline introduces new formulation for cake eyelash darkener.
1932 10-cent mascara created for drug and variety stores.
1933 Harold (Rags) Ragland joins the company.
Maybelline begins to be sold direct to stores outside of the Chicago area.
Mail-order starts to be closed down.
First use of the word mascara in Maybelline advertising.
The mascara manufacturing equipment sold to brother-in-law Tom
Hewes, who establishes the De Luxe Mascara Company to make cake
mascara for Maybelline.
1934 Blue colour added to mascara.
The Maybelline Hour radio show starts on WFNT Chicago.
1936 Cream mascara in a waterproof zipper case released.
1951 Emerald Green mascara introduced.
First television advertising by Maybelline.

1954 Maybelline incorporated.

1955 Antiwrinkle Eye Cream introduced (withdrawn the following year).

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1957 Self sharpening eyebrow and eyeliner pencil introduced.

1958 Magic Mascara with a spiral brush introduced.

1961 Fluid Eye Liner introduced.

1963 Ultra-Lash mascara released, followed soon after by Ultra-Brow, Ultra-

Line, and Ultra-Shadow.

1967 Natural Hair Lashes introduced

Maybelline acquired by Plough.

1971 Great Lash, water-based mascara, is introduced to replace Ultra Lash.

1983 Shine Free Oil Control make-up line featuring non-comedogenic formulas
introduced.

1990 Maybelline acquired by Wasserstein Perella & Co.

1991 “Maybe she’s born with it. Maybe its Maybelline” advertising tagline
created.

1996 Maybelline acquired by L’Oréal USA.

2001 Maybelline becomes Maybelline New York.

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1934 Tom Lyle Williams [1896-1976], the founder of Maybelline.

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The Board of Directors (as of 22/04/2015)

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 Head office of Loreal in NewYork

Img Courtesy: Maybelline.com

A name change

Williams advertised extensively, particularly in film magazines such as ‘Photoplay’.

In 1920, while the court case was running, advertisements were taken out for Lash-
Brow-Ine and Maybelline. In one version the two products are clearly differentiated
by suggesting that Lash-Brow-Ine should be applied at night to ‘nourish and promote
growth’, while Maybelline makes lashes and eyebrows ‘longer, thicker and more
luxuriant’. However, the advertising copy for that year is not consistent and in another
advertisement the two products appear to be equivalent:

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Just a wee touch of the little brush over your eyelashes and eyebrows with Lash-
Brow-Ine and you will find a new beauty in your eyes. For Maybelline instantly
furnishes that delicate touch of darker color so necessary to eyelashes and eyebrows
while they are gently invigorated by the little brush.

(Maybell Laboratories advertisement, 1920)

The lack of consistency in the advertising in 1920 probably reflects the uncertainty
generated by the court case. However, it is clear that Lash-Brow-Ine was not renamed
Maybelline simply because it was hard to say. Williams was probably hoping to
maintain both products on the market as Lash-Brow-Ine had been a good earner and
1920 was not the best time to lose it. The world was in the middle of a post-war
depression that would run through to 1922, so times were tough and, as Maybelline
was more expensive (it sold for 75 cents compared to 50 cents for Lash-Brow-Ine),
there may have been concerns about potential sales. However, the court case forced
Williams’s hand and Lash-Brow-Ine soon disappeared.

In 1923, Maybell Laboratories was renamed Maybelline and concentrated operations

on eye make-up. The business flourished, helped by the continued use of extensive
advertising and Williams’s shrewd use of actresses as role models. A liquid form of
Maybelline was made available and sales of the “solid form” and “waterproof liquid
form” of Maybelline did well, eventually finding their way onto the cosmetics
counters of drug, variety and department stores.

Organizational Structure

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19
20
Production Layout:
In manufacturing engineering, a production
layout refers to a production system where the work stations and equipment are
located along the line of production, as with assembly lines.

Usually, work units are moved along a line (not necessarily a geometric line, but a set
of interconnected work stations) by a conveyor. Work is done in small amounts at
each of the work stations on the line. To use the product layout, the total work to be
performed must be dividable into small tasks that can be assigned to each of the
workstations.

Because the work stations each do small amounts of work, the stations utilize specific
techniques and equipment tailored to the individual job they are assigned. This can
lead to a higher rate of production.

For Maybelline the production line is constructive and as per consumer demand &
brands.

Organisation Policies
Human resource policies

Human resource policies are formal rules and procedures that dictate how certain
matters should be addressed in the workplace, including employee rights and duties.
HR policies are tied to employment law. To avoid non-compliance and penalties from
the government, employers must adhere to HR policies. Employees must play their
part by complying with the human resource policies that relate to them.

Each human resource policy addresses a specific workplace issue and is incorporated
into the company’s policy manual. HR policies are designed to promote
communication and understanding between managers and their subordinates, and to
give employees an overview of the company’s programs. They give employees access
to valuable resources that help foster their professional growth. Without HR policies,
a chaotic work environment could result because there are no set rules to follow.
Employers should develop comprehensive policies from the start instead of waiting
until issues arise to establish them. For a positive work environment and to avoid
disciplinary action from their employers, employees should comply with HR policies.

Employee Promotion Policy

Unclear promotion policies can create conflicts and high turnover rates among
employees who don’t understand why co-workers received a promotion instead of
them. Problems may not end there if vague promotion procedures also appear
discriminatory. Employers can avoid such difficulties by creating a transparent

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promotion policy and consistently applying that policy's standards to each employee
seeking advancement.

An effective promotion policy focuses on advancing employees based on their skills

and performance, not favoritism. Companies risk putting people in jobs they can’t
handle when promotions aren’t based on workers’ abilities. Moreover, employers who
don’t base employee advancement on job performance could face lawsuits if workers
assert that the promotion process is discriminatory. In such cases, workers would have
to show that an employer violated Title VII of the Civil Rights Act. The legislation
prohibits companies from denying job promotions based on workers’ age, gender,
race or other characteristics.

Employee Training and Development Policy

This Employee Training and Development Policy is ready to be tailored to your

company’s needs and should be considered a starting point for setting up your
employment policies. An employee training and development policy may also be
referred to as Staff Training and Development Policy or Employee Development
Policy.

Our Employee Development company policy refers to the company’s learning and

development programs and activities.

In the modern competitive environment, employees need to replenish their knowledge

and acquire new skills to do their jobs better. This will benefit both them and the
company. We want them to feel confident about improving efficiency and
productivity, as well as finding new ways towards personal development and success.

Customer Satisfaction Policy

This procedure covers all aspects of Corporate Communications’ work which affect
the company’s ability to satisfy customer needs and expectations. It applies to all
customers and all staff, including permanent and contract personnel, freelance trainers
and outsourced specialists.

The purpose of this procedure is to ensure that the company provides and maintains
high quality standards of service and satisfaction levels for all our customers,
contractors and staff.

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Chapter-2

Industrial Analysis

Industry Overview
The Maybelline Company was created by a 19-year-old entrepreneur named Tom
Lyle Williams in 1915. Williams noticed his older sister Mabel applying a mixture of
Vaseline and coal dust to her eyelashes to give them a darker, fuller look. He adapted
it with a chemistry set and produced a product sold locally called lash-in-brow-line.
Williams renamed his eye beautifier Maybelline, in honor of his sister Mabel, who
gave him the idea. In 1917 the company produced Maybelline Cake Mascara, "the
first modern eye cosmetic for everyday use" and Ultra Lash in the 1960s, which was
the first mass-market automatic. From a small, family-owned business to the number
one cosmetics company in America, Maybelline New York takes trends from the
catwalk to the sidewalk, empowering women to make a statement, explore new looks,
and flaunt their own creativity and individuality. Inspired by confident, accomplished
women, Maybelline gives you scientifically-advanced formulas, revolutionary
textures and up-to-the-minute, trendsetting shades effortlessly, affordably, beautifully.
In 1991, the company adopted its advertising slogan “(Maybe she's born with it.)
Maybe it's Maybelline.” which is still used today. The company was acquired by
L'Oréal in 1996. Acquiring Maybelline gave L'Oréal access to mass markets in
cosmetics.
Maybe she’s born with it. Maybe it’s Maybelline.

Growth Rate of Company

Like-for-like, i.e. based on a comparable structure and identical exchange rates, the
sales growth of the L'Oréal Group was +4.2%.
The net impact of changes in consolidation was +0.4%. 
Currency fluctuations had a negative impact of -2.8%.
Growth at constant exchange rates was +4.6%. If end of March exchange rates (€1
at $1.1385) are extrapolated up to December 31, the impact of currency fluctuations
would be -3.8% for the whole of 2016.
Based on reported figures, the Group's sales at March 31, 2016 amounted to 6.55
billion euros, an increase of +1.8%.

Company Profile

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Sector: Consumer Staples Industry: Consumer Products Sub-Industry: Household
Products.

Corporate Information
Address: 3030 Jackson Avenue Maybelline Mumbai Office
Address: -
Memphis, TN 38112 2nd Floor, Peninsula
Towers,
United States. Ganpatrao Kadam Marg,
Web URL: www.maybelline.com Lower Parcel, Mumbai 400
013
India.

Parent Company L'Oréal

Category Personal Care brands - Cosmetics

Sector FMCG

Tagline/ Slogan Maybe She's Born With It. Maybe It's Maybelline

USP Large variety of products with competitive costs

KEY COMPETITORS OF MAYBELLINE NEW YORK

Revlon

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As far as cosmetics companies go, Revlon is beyond the reach of anti-wrinkle cream.
Founded in the US during the Great Depression, the chaps behind the brand are said
to be the creators of coloured nail enamel in its modern form. The story goes that
Charles and Joseph Revson were inspired to create a nail polish by the scarlet-lipped,
cigarette-smoking Hollywood actresses of their day (although how this story played
out in black and white puzzles me slightly). What these women clearly needed, they
thought, were red nails to match their red lips. And so Cherries in the Snow was born
- and it is still going strong today.

AVON
The roots of Avon can be traced back to 1886, when struggling door-to-door salesman
David McConnell made the decision to sell perfumes, rather than books to New York
homes. Known in those days as The California Perfume Company, the business
quickly prospered and our founder David H. McConnell, appointed his first General
Agent, Mrs Albee. At a time before women even had the right to vote, Mrs Albee was
instrumental in establishing the unique sales method that continues to be Avon's
hallmark today.I Having been enchanted by the beauty of Stratford upon Avon during
a visit to England, David McConnell was inspired, and in 1939 he chose the name
'Avon' for his growing international company. AVON today is the number 1 direct
selling beauty company in the world and for 125 years has economically empowered
women in over 100 countries.

Avon began its operations in India in September 1996 and has presence across the
country.

The company opened its first Manufacturing Facility in Dehradun in April 2010 and
has state-of-the-art Avon Beauty Zone in 7 cities namely Delhi, Mumbai, Bangalore,
Kolkata, Pune, Chandigarh and Chennai.

The Avon product line includes such recognizable brand names as Avon Color,
ANEW, Solutions, Avon Naturals, Little Black Dress among others. Avon also
markets an extensive line of fashion jewelry & accessories.

Avon stays at the forefront of the beauty marketplace by bringing leading-edge,

technology-based products to women around the world. A global beauty icon, a world
leader in lipsticks, fragrances and anti-aging skin care makes Avon a top global brand.

LAKME
Lakmé is an Indian cosmetics brand which is owned by Hindustan Unilever and run
by CEO Puskharaj Shenai. Having Shraddha Kapoor as the ambassador, it ranked at
number 1 among the cosmetics brands in India.Lakme started as a 100% subsidiary

25
ofTata Oil Mills (Tomco). It was named after the French opera Lakmé, which itself is
the French form of Lakshmi (the goddess of wealth) who is renowned for her beauty.
It was started in 1952 famously, because the Prime Minister Jawaharlal Nehru was
concerned that Indian women were spending precious foreign exchange on beauty
products and personally requested JRD Tata to manufacture them in India. Simone
Tata joined the company as director and went on to become the chairperson. In 1996,
Tata sold off their stakes in Lakmé Lever to HLL, for Rs 200 Crore. (45 million US$).

In the Brand Trust Report 2012, Lakme was ranked 104th among India's most trusted
brands and following the next year it was ranked 71st among India's most trusted
brands. In 2014, Lakme was ranked 36th among India's most trusted brands according
to the Brand Trust Report 2014.The company is the title sponsor for Lakme Fashion
Week (LFW) a bi-annual fashion event which takes place in Mumbai.

ORIFLAME
It is a company, founded in 1967 in Sweden by the brothers Jonas af
Jochnick and Robert af Jochnick, and publicly traded at NASDAQ OMX since 2004.
The company sells personal care, accessories and nutritional products online and
direct.

NEUTROGENA
Neutrogena began its success story in 1930 when founder Emanuel Stolaroff started a
small specialty cosmetic company called Natone. In the early years, Natone was a
supplier to beauty salons usually associated with the glamour of the film industry. By
the 1940's, Natone began manufacturing and distributing cosmetics for the retail
market The respect and credibility earned by Neutrogena Corporation led to its
acquisition by Johnson & Johnson in 1994. As a member of the Johnson & Johnson
Family of Consumer Companies, the makers of Neutrogena ® have the opportunity to
preserve the "Neutrogenic way" while at the same time drawing on the breadth of
Johnson & Johnson resources.

Now, more than ever, consumers equate health with beauty. Neutrogena stands
naturally poised for tremendous future growth and an ever-increasing number of
satisfied customers.

VLCC
Guided by our motto – ‘Transforming Lives’ – the VLCC Group seeks to spark self-
transformation, spread happiness and imbibe every individual with wellness for life.
Founded by Mrs Vandana Luthra in 1989, these three mantras stand tall as the

26
company’s pillars of strength. Till today, they remain the firm foundation of VLCC’s
continuing success story.

VLCC is widely recognized for its weight loss solutions and therapeutic approach to
beauty treatments. We have among the largest scale and breadth of operations within
the beauty and wellness services industry in India, serving consumers across 315
locations in 140 cities and across 11 countries in South Asia, South East Asia, the
GCC Region and East Africa. We operate 187 Wellness Centres in India and 49 in 10
other countries and run VLCC Institutes of Beauty & Nutrition that have grown to
become India’s largest chain of vocational education academies in the beauty and
nutrition training segment with 70 campuses, training nearly 10,000 students annually
and offering courses in multiple disciplines.

We have leveraged our exclusive consumer database, and our insight into evolving
beauty and wellness needs to build and grow a diversified product portfolio in-house,
through our Subsidiary VLCC Personal Care Limited and market over 169 skincare,
haircare, bodycare, functional foods and fortified foods products under the VLCC
Natural Sciences™, SkinMTX™, BelleWave™ and Enavose™ brands, to name a
few, which are not only used as consumables in treatments and therapies at VLCC
Wellness Centres but are also retailed through over 72,000 outlets in India, apart from
retail outlets in 20 countries.

With a staff strength of over 4,000 professionals, including medical doctors,

nutritionists, physiotherapists and cosmetologists, and having served over five million
consumers (including repeat consumers), VLCC is a category leader with the leading
market share and number of company owned outlets in the Indian beauty and wellness
services market.

M.A.C.
MAC Cosmetics (MAC standing for Make-up Art Cosmetics) was founded
in Toronto, Ontario, Canada by Frank Toskan and Frank Angelo in 1984 with the
assistance of chemist Vic Casale. The first U.S MAC store opened in 1991, in New
York. The company's products were initially aimed at professional make-up artists,
but are now sold to consumers worldwide. Nordstrom was the first department store
in the United States to sell MAC products.

Estée Lauder Companies acquired a controlling interest in MAC in 1996, and then

completed their acquisition of the company in 1998. Original founder Frank Angelo
died in 1997 due to complications during surgery.

The brand first appeared in 1985; Frank Toskan became creative director and Frank
Angelo director of marketing.The first store opened in 1991 in Greenwich Village.

27
The company's products were originally intended for makeup professionals, but are
now sold directly to consumers worldwide. Frank Toskan states that he "first
manufactured makeup for models, but then the models wanted this makeup for their
sisters, friends, and so on... ". [4] Today, the brand continues to work with in fashion
show professionals: "From a niche brand [mainly for photo or film], MAC has
become a global brand."

In the 1990s, the brand had over a hundred stores worldwide, earning 200
million francs. The development of the brand internationally, the opening of new
points of sale, and the adaptation of product lines tailored to each continent, left little
time for the founders to create new products. The company Estée Lauder took control
of 51% of shares of MAC Cosmetics in 1994; the two founders retained creative
control, while Estée Lauder managed the business end. The brand opened their first
store in France in 1992 in the Latin Quarter. One of the company founders, Frank
Angelo, died of cardiac arrest during surgery in 1997 at the age of 49. At that time M
· A · C had a revenue of US $250 million, which doubled ten years later. Estée
Lauder Inc. completed the acquisition in 1998, and Frank Toskan decided to sell his
remaining shares shortly thereafter; he left the company he founded at the end of the
same year, 1998.

Today, MAC Cosmetics is one of the top three global makeup brands, with an annual
turnover of over $1 billion, and 500 independent stores, with over thirty stores in
France. All stores are run by professional makeup artists.

The M·A·C AIDS Fund was established in 1994 to support men, women and children
affected by HIV/AIDS globally by addressing the link between poverty and
HIV/AIDS. It has raised over $380 million through the sale of M·A·C’s Viva Glam
Lipstick and Lip gloss, donating 100% of the sale price to fight HIV/AIDS.

Environmental Scanning :
Careful monitoring of an organization's internal and external environments for
detecting early signs of opportunities and threats that may influence its current and
future plans. In comparison, surveillance is confined to a specific objective or a
narrow sector.

Political : There are always political factors affecting the cosmetic industry. The
largest political factors for a global cosmetic company is adapting to different
government leadership styles and political officials in various countries. To avoid any
political issues, Maybelline must abide by set regulations and standards in each
varying market, which is more thoroughly discussed in the legal and regulatory
section. Maybelline also practices self-regulation to avoid further government

28
involvement. Legal and Regulatory There are many legal and regulatory factors that
governments impose on the cosmetic industry. The main legal and regulatory
involvement is through laws setting restrictions and regulations. An example of a
restriction that governments may put on the cosmetic industry is banning certain types
of chemicals, such as Phthalates, which is carcinogenic. This is just one example of a
regulation used to ensure that products are safe and do not contain any harmful
substances. Another legal and regulatory factor that Maybelline must consider is
legislation for advertising. There are strict rules set by Advertising Standards
Authority. Such standards include that advertisements cannot be misleading by over-
exaggerating the function of the product. This is particularly important in the
cosmetics industry, when it is important for the product to look and function as the
consumers expect it to.

Economic : Due to Maybelline innovative culture and advanced technology

customers are willing to spend money on this product. The economic is currently in
good place and economic factors are not heavily influencing the cosmetics market .
people are spending money on Maybelline`s hogh market share .

Socio-culture : The influence of cultural and social variables on consumer behavior is a

cornerstone of marketing. A cursory review of leading consumer behavior textbooks shows
that most begin with an overview of the impact culture has on the behavior of the consumer.
Perhaps no industry offers insight into the impact of society on the individual than the
cosmetics industry. Society dictates what is perceived to be attractive. The whims, desires and
sense of fashion of the consumer require that the cosmetic industry continuously offer
different and more advanced products. This case offers insight into this lucrative and
constantly changing industry. The case begins with the history of cosmetics. As the case
reveals, society influences what is considered attractive. As society changes, so does the
perception of beauty, and the cosmetics industry must respond to these cultural and social
changes. Consumer demographics are a very important piece of the socio cultural
environment. Maybelline’s target market is young women between the ages of 16 and 25.
This encompasses women of all backgrounds, including African American, White, Hispanic,
and Asian. Therefore, Maybelline must make products for each of these groups, use
appropriate marketing techniques, and be aware their differing wants and needs. One way that
Maybelline reaches this diverse target market is to include women of differing ethnicities and
backgrounds in advertisements. When consumers see diverse ads, they are more likely to feel
they are appropriately represented, and often feel more important to the company.

Technological issues: Maybelline has made many technology advances throughout

the brand’s life. The first major technological advancement that Maybelline made was
creating America’s first mascara. In more recent years, Maybelline has made efforts
to use new technology as opportunities to become more ethically responsible. One
such ethical issue addressed with new technology is the testing of products on
animals. Prior to 1989, Maybelline used animal testing to ensure the safety of their
products. More recent technological advancements have allowed Maybelline to start
testing their products on reconstructed skin models and computer modeling. This
advancement took a major step towards eliminating the use of animal testing.

29
Environmental issue: Maybelline RANK 5TH PLACE, The Company does not provide
any information on chemicals they have targeted for elimination. Maybelline publish a safer
chemicals policy to set targets to eliminate chemicals that are endocrine disruptors and/or
carcinogens.

Porter’s five Forces of Competitive Position Analysis 

Analysis 

What is it?

Framework/theory

Porter's Five Forces of Competitive Position Analysis were developed in 1979 by

Michael E Porter of Harvard Business School as a simple framework for assessing
and evaluating the competitive strength and position of a business organisation.

This theory is based on the concept that there are five forces that determine the
competitive intensity and attractiveness of a market. Porter’s five forces help to
identify where power lies in a business situation. This is useful both in understanding
the strength of an organisation’s current competitive position, and the strength of a
position that an organisation may look to move into.

Strategic analysts often use Porter’s five forces to understand whether new products
or services are potentially profitable. By understanding where power lies, the theory
can also be used to identify areas of strength, to improve weaknesses and to avoid
mistakes.

Porter’s five forces of competitive position analysis:

30
The five forces are:

1. Supplier power. An assessment of how easy it is for suppliers to drive up prices.

This is driven by the: number of suppliers of each essential input; uniqueness of their
product or service; relative size and strength of the supplier; and cost of switching
from one supplier to another.

2. Buyer power. An assessment of how easy it is for buyers to drive prices down.
This is driven by the: number of buyers in the market; importance of each individual
buyer to the organisation; and cost to the buyer of switching from one supplier to
another. If a business has just a few powerful buyers, they are often able to dictate
terms.

3. Competitive rivalry. The main driver is the number and capability of competitors
in the market. Many competitors, offering undifferentiated products and services, will
reduce market attractiveness.

31
4. Threat of substitution. Where close substitute products exist in a market, it
increases the likelihood of customers switching to alternatives in response to price
increases. This reduces both the power of suppliers and the attractiveness of the
market.

5. Threat of new entry. Profitable markets attract new entrants, which erodes

profitability. Unless incumbents have strong and durable barriers to entry, for
example, patents, economies of scale, capital requirements or government policies,
then profitability will decline to a competitive rate.

Arguably, regulation, taxation and trade policies make government a sixth force for
many industries.

Chapter-3

32
MAREKETING

Products of Company in India:

Maybelline Lasting Drama Gel eyeliner : This is by far the best gel eyeliner and
best Maybelline product in India and that too at an affordable price .

Image 1.1

Maybelline The Colossal Kajal : It is the

best smudge free kajal in India which is
very highly pigmented. It gets smudgeproof
and stays on the eyes a lot longer. The
retractable lid makes it easy it use and you
don’t have to sharp it when you use it.This
Maybelline product is also one of the best
maybelline product and best selling
Maybelline product in India.

33
 Maybelline ColorShow Glitter Mania Range : Glitter mania range is the most
beautiful range with such great shades like all that glitters, dazzling diva, matinee
mauve etc.

Maybelline Cheeky Glow Blush : These blushes are available in 3 shades and are
very good for the price. They have good pigmentation and blends really gently on the
skin. Before these blushes were launched by Maybelline, there were no really
affordable blushes from the popular ranges of makeup products in India but these
have filled up that void.

34
Maybelline Hyper curl Volume Express Mascara : Maybelline has so many
mascaras and out of all those this one is my favorite for a lot of reasons which are
price, the curled wand applicator and 2 different formulas. Yes, this Maybelline
mascara is available in 2 formulas washable and waterproof.

Maybelline The Colossal liner : This is the new product launch from Maybelline in
their eye liner products. This is pen eyeliner which has a liquid filled in. The felt tip is
very sharp and applied very well.

Maybelline Bold matte Lipsticks : Maybelline Bold Matte lipsticks have got 5
shades which are named as MAT 1, MA 2 etc. They have got light weight finish and
give a good color pay off on the lips.

35
Maybelline Clear Glow BB Cream : Maybelline BB cream is the best Maybelline
Product and this was indeed the first BB cream to be launched in India around 3 years
ago. This is good for all skin types and for oily skin this is slightly greasy in summers
else it is good for a light coverage and sun protection.

Maybelline Super Stay 14HR Lipstick : These Maybelline super stay lipsticks are
launched in load of shades and have all the popular colors like reds, pink shades,
oranges, wine, neutrals etc. They are creamy matte and have got very moisturizing
formula which won’t dry the lips.

36
Maybelline Clear Glow All in One Fairness Compact : This Compact is available
in 2 shades and has a very beautiful packing with a separate place to keep the sponge
applicator. It is a compact pressed powder. This is list of best Maybelline produces as
it is cheap yet effective and has a full mirror inside.. Recently Maybelline has
launched a similar looking compact but that is expensive.

37
Maybelline Total Clean Express Eye and Lip Makeup Remover : This is a
fantastic product. It is packaged in a cute looking bottle and removes the waterproof
and regular eye and lip make up very easily. This is a must have and Maybelline
product in every vanity to remove waterproof makeup.

Here are some classic products of Maybelline :

Images for classic products :

38
 1920 Lash-Brow-Ine with the Maybell Girl
featured prominently on the box and aluminium container.

Maybelline liquid and cake mascara.

39
1926 Actress Viola Dana endosing Maybelline.

1930 Maybelline advertisement for eye shadow (in blue, brown, black and green
shades) and eyebrow pencil (in black and brown shades). Maybelline (cake and
liquid) is now referred to as an eyelash darkener.

40
1933 Maybelline Eyelash Darkener. The advertising copy calls it ‘The perfect
mascara’ an early use by Maybelline of the term forced on them by the Lash Lure
scandal.

1936 Maybelline Cream Mascara and other items attached to redesigned product
cards introduced by Rags Ragland. These would be later replaced with white cards
with the classic Maybelline eye in the corner.

41
1937 Maybelline products in new packaging. Note the more sober tone and the ‘Good
Housekeeping Seal of Approval’. The cream mascara with its zipper bag had been
introduced the previous year.

1937 Maybelline ‘before and after’ advertisement. The model used is not a movie
star.

42
1949 Maybelline Cake Mascara, Cream Mascara, Eyebrow Pencil and Eye Shadow.
The ‘Good Housekeeping Seal of Approval’ has disappeared.

sophisticated and glamourous than that of the the 1930s but the message has
not 1952 Maybelline ‘before and after’ advertisement. The eye make-up is
more severe, altered much in fifteen years.

43
1956 Maybelline Eyeshadow Stick.

1959 Maybelline Magic Mascara. Maybelline’s first automatic mascara and the first
automatic to use a spiral brush.

44
1960 Maybelline Magic Mascara, Solid Mascara and Cream Mascara (each in 4
shades); Self-sharpening Eyebrow Pencil (7 shades); Eyeshadow Stick (6 shades);
Fluid Eye-liner (8 shades); Eyeliner Pencil (8 shades); Eyelash Curler; Brow and Lash
Brush ’n Comb, and Eyebrow Tweezers. Solid and cream mascara was soon to
disappear from the Maybelline range.

1964 Maybelline Ultra Lash Mascara in Velvet Black, Sable Brown and Midnight
Blue. Note the change in the brush shape.

45
1966 Maybelline Ultra Brow, Ultra Shadow, Fluid Eyeliner and Ultra Lash mascara.

1968 Maybelline Eye Make-up.

46
Images for Combo products of Maybelline :

47
 

48
49
50
51
4P's of Maybelline New York

Product : Make-up, Mascara and Eye shadow

Price : Higher price

Placement : Product can be found in major mass- market retailer including drugstores,
discount store, supermarkets and cosmetic specialty stores

 Promotion:
         Pull  strategy: Maybelline New york use a method style online advertising, 
Glamourmagazine.com, Msn.co.uk, MySpace profile,Special promotion
events such as Coupons, Sweepstakes,and Co-marketing

Push strategy: We can found product of maybelline new york in the  drugstores,
discount store, supermarkets and cosmetic specialty stores

STP of Company :
52
 Segment Middle and upper class

Target Group 18-35 year old female at mass market

Positioning Makes you more beautiful with subtle care

Distribution Channel For Company :

Social Media

Mass Market

Retailing Channels

Build up outlet near or at college

Apple & MTV

On-line services plus catalogue

Own website : Web url: www.maybelline.com

Promotion Strategies :
Maybelline India has launched a digital campaign titled #SwipeToSpice to promote
its latest variants of Baby Lips products. The campaign is conceptualised and
executed by digital marketing agency Foxymoron.

The brand is also leveraging Whatsapp to invite entries. The campaign will be
promoted across Facebook, Twitter, YouTube and Instagram.

The brand has also recently roped in Bollywood actor Alia Bhatt as its brand
ambassador.

53
Millions of Maybelline New York Facebook fans were invited to contribute to ‘KISS’
song.

Used Facebook application to source all the ‘kisses’ of the crowd.

Generated curiosity amongst the Maybelline New York fans  to know more about the
Baby Lips KISS song and represented the brand’s bubbly and peppy spirit through the
lyrics of ‘KISS’ song.

Created India’s first and unique social engagement formula, crowd-sourced ‘KISS’
song.

Created more awareness on Twitter platform using hashtags #AliaLovesMNY and

#AliaLovesBabyLip.

Generated more publicity in the online and offline space using a Baby Lips KISS song
music video

Chapter-4

FINANCIAL ANALYSIS

54
Christian Mulliez

Executive Vice-President
Chief Financial Officer

With the help of highly innovative launches, L’Oréal Paris and Maybelline New York
strengthened their position in 2006 in the mass cosmetics market. L’Oréal Paris
appealed to consumers with a taste for colour with the launch of HIP High Intensity
Pigments. This bold new make-up features a patented L’Oréal innovation, which
enables uniform distribution of the colour, thanks to an increase in colour pigments
together with special L’Oréal technology. Amongst the other successes of L’Oréal
Paris are Bare Naturale Mineral Makeup, based on a microrefined mineral powder,
and Color Riche Star Secrets, a limited edition lipstick. Meanwhile, Superstay
Lipcolor from Maybelline New York foreshadows a new generation of long-lasting
lipsticks with a patented formula which lasts 16 hours. Maybelline New York also
launched its Pure collection – gentle cosmetics made using natural ingredients, such
as aloe and camomile. In a rapidly growing market, these innovations enabled L’Oréal
Paris and Maybelline New York to achieve growth rates that outstripped the mass
cosmetics market.

SHARE PRICE

APRIL 12, 2016 AT 09:27 (PARIS)

€152.45-0.97 %

55
SHARE PRICE

APRIL 12, 2016 AT 09:35 (PARIS)

€153.10-0.55 %

SESSION OF 04/12/2016 AT 09:36:47

IN EUROS --/--/-- 04/12/2016 04/12/2016

09:36:47 VAR. / %
Setting price -- 153.15 -0.52 %
CAC 40 4 312.63 4 289.63 -0.53 %
Opening -- 154.30 -
High -- 154.40 -
Low -- 152.25 -
Trading volume -- 39 928 -
SINCE THE BEGINNING OF THE YEAR

2016 LOW HIGH CHANGE SINCE 

(CLOSEPRICE) (CLOSEPRICE) 1/1/2016*
L'Oréal 144.30 160.70 -0.87 %
CAC 40 3 896.71 4 537.63 -7.00 %

* Latest close price / Close price on Dec. 31, 2015

Source SunGard Financial Systems (France) :

This stock price is provided exclusively for information and not for trading purposes.
Before any transaction, please contact your broker. L’Oréal or SunGard Financial
Systems (France) cannot be held responsible for inaccurate, delayed or interrupted
data, regarding the stock price announced on its website.

L’ORÉAL’S SHARE

SHARE PRICE

APRIL 12, 2016 AT 09:36 (PARIS)

€153.15-0.52 %

56
Image Source : loreal-finance.com

Source of finance for Maybelline :

57
There are various sources of finance such as equity, debt, debentures, retained
earnings, term loans, working capital loans, letter of credit, euro issue, venture
funding etc. These sources are useful in different situations. They are classified based
on time period, ownership and control, and their source of generation.

Sources of financing a business are classified based on the time period for which the
money is required. Time period is commonly classified into following three:

Long Term Sources of Finance: Long-term financing means capital requirements for a
period of more than 5 years to 10, 15, and 20 years or maybe more depending on
other factors. Capital expenditures in fixed assets like plant and machinery, land and
building etc of a business are funded using long-term sources of finance. Part of
working capital which permanently stays with the business is also financed with long-
term sources of finance. Long term financing sources can be in form of any of them:

Share Capital or Equity Shares

Preference Capital or Preference Shares

Retained Earnings or Internal Accruals

Debenture / Bonds

Term Loans from Financial Institutes, Government, and Commercial Banks

Venture Funding

Asset Securitization

International Financing by way of Euro Issue, Foreign Currency Loans, ADR, GDR
etc.

Medium Term Sources of Finance: Medium term financing means financing for a
period of 3 to 5 years. Medium term financing is used generally for two reasons. One,
when long-term capital is not available for the time being and second, when deferred
revenue expenditures like advertisements are made which are to be written off over a
period of 3 to 5 years. Medium term financing sources can in the form of one of them:

Preference Capital or Preference Shares

Debenture / Bonds

Medium Term Loans from

Financial Institutes

Government, and

Commercial Banks

58
Lease Finance

Hire Purchase Finance

Short Term Sources of Finance: Short term financing means financing for a period of
less than 1 year. Need for short term finance arises to finance the current assets of a
business like an inventory of raw material and finished goods, debtors, minimum cash
and bank balance etc. Short term financing is also named as working capital
financing. Short term finances are available in the form of:

Trade Credit

Short Term Loans like Working Capital Loans from Commercial Banks

Fixed Deposits for a period of 1 year or less

Advances received from customers

Creditors

Payables

Factoring Services

ACCORDING TO SOURCE OF GENERATION:

Internal Sources: Internal source of capital is the capital which is generated internally
from the business. Internal sources are as follows:

Retained profits

Reduction or controlling of working capital

Sale of assets etc.

The internal source has the same characteristics of owned capital. The best part of the
internal sourcing of capital is that the business grows by itself and does not depend on
outside parties. Disadvantages of both equity capital and debt capital are not present
in this form of financing. Neither ownership is diluted nor fixed obligation /
bankruptcy risk arises.

External Sources: An External source of finance is the capital which is generated from
outside the business. Apart from the internal sources finance, all the sources are
external sources of capital.

A relationship of trust and dialogue with stakeholders

Throughout the year, the financial communications team organises events for
exchanging with individual shareholders, investors and financial analysts to continue

59
to strengthen this relationship of trust. In 2015, the Capital Market Days had a digital
theme, with the group highlighting the competitive advantages of digital media in the
beauty sector, and the opportunities they provide for better connecting with and
serving consumers all over the world. This year the shareholders on the Consultation
Committee helped to optimise the second digital edition of the Annual Report.

The relationship of trust between L’Oréal and all its stakeholders is maintained
through constant vigilance. The group’s financial health depends on closely
monitoring cash flow and making sure that financing is secure. With suppliers and
customers, the relationship of trust is based on professionalism and ethical behaviour
in all exchanges. As for shareholders and investors, the financial communications
team maintains a close relationship with them by welcoming dialogue and providing
fair and transparent information about the group’s activities. The teams work to assist
the Board of Directors and its committees, striving to maintain the highest quality
standards.

2015 was another year of growth in sales, results and profitability. Working closely
with the group’s different entities, the administration, controlling and finance teams
help to build and foster a solid relationship of trust that is essential for L’Oréal’s
sustainable growth. This trust is based on constant vigilance, fairness, transparency,
professionalism and an ethical approach in our relations with all stakeholders. This
year once again, we strongly contributed to the economic and financial management
of L’Oréal’s businesses, the identification of risks and opportunities, and the
optimisation of resource allocation.

Segment analysis of L’Oreal corporation:The L’Oreal Group is French cosmetics

Beauty Company founded in 1909 by Eugéne Schueller. It headquarter is in Clichy,
Hauts deSeine in France. The French cosmetics giant L’Oréal exemplifies this global-
local tension. L’Oreal is first cosmetics group worldwide. It is present in 130
countries and 127 international brands. Its 611 patents registered in 2012. It has five
major brands L’Oreal Luxe, Consumer Professional Product Division, The Body
Shop, Active Cosmetics Division and

Product Division.Luex Division(Parfums et Beauté) Leading brands in this division

are Helena Rubenstein, Lancôme, Cacharel, Biotherm,Guy Laroche, Paloma Picasso,
Lanvin, Ralph Lauren, Giorgio and Armani. This division accounted for +16%
growth in 2012. The Consumer Division(Produits Public) is made up of several
companies, each of which marketed its own brands: L’Oréal Paris (Studio Line,
Plénitude, Elnett,Elvive/Elsève/El’Vital), Maybelline

New York and Jade, Laboratoires Garnier (Belle Color, Ultra Doux, Ambre Solaire,
Neutralia, Fructis), Gemey Paris (Gemey, Kookaï, Club Méditerranée, Naf Naf),
LaScad (Dop, Narta, Fluoryl). This segment accounted for +7.1% growth in 2012 and

60
+5.8% growth added by Haircare and Styling. The Professional Division(Coiffure)
having 25% shares in the market and

world leader in its segment. The leading brands in this division are L’Oréal
Professionnel, Redken, Inné and Kérastase. This segment accounted +10.5% growth
in 2012. The Active Cosmetics Department(Cosmétique Active) This division’s
leading brands are Laboratoires Vichy, La Roche

-Posay and Phas. This segment accounted for also +5.8% growth in 2012. The

Body Shop segment accounted for +12.8 growth in 2012(L’Oreal Annual Report,
2012). In 2010, L’Oréal is the world leader in hair colour, home perms and styling
agent, with market shares of 35.1%, 12.9% and 17% respectively. In salon hair care
products it ranked second, with a world market

share of 13.6%. Market shares in shampoos is 8.4% and L’Oréal is on third ranking
company in the world with 8.2% shares in conditioners. Its position in 2-in-1 products
was not as good, with a 5.2% market share, making it the fourth ranking company in
terms of sales.L’Oreal revenus, net earnings and dividends are shown in Table 1from
2008 to 2012.

L’Oreal’s revenues and net earnings shows increasing trend in the table shown below
while dividend also increases from 1.44% to 2.30% fro 2008 to 2012

(L’Oreal Annual Reports, 2012)

Ratio analysis of L’Oreal as compared to cosmetics industry average shown below, if

we note firstly at liquid ratios there is a slight difference in current ratio

and also in quick ratio so the L’Oreal is less liquid then industry average as we can
see both ratios i.e. current and quick ratio is lower than the industry average. L’Oreal
debt to equity ratio is less than the average firm in

industry which shows good credit policies and it’s less leveraged than the average
firm in the industry. L’Oreal inventory turnover is good and more than the average
firm in the industry which means L’Oreal sales are good and inventory turnover is at
strong position. Company’s EPS ratio is showing good position and a slight difference
between industry average and company’s own ratio, company is paying to its
shareholders as on industry standards so it’s the good sign for investors to invest in
L’Oreal. Its total asset turnover is at average as industry average if we look at
profitability ratios L’Oreal has good profitability as its gross profit margin as well as
net profit margin is more than the industry average it means company sales are good
and operations are cost effective. Its returns on investment (ROI) is higher than the
average firm in the industry which shows good profitability position of the company
and return on equity(ROE) is less than the industry average its mean they are not

61
effectively generating income from their new investments..The return on assets
(ROA) showing that L’Oreal’s management efficiency is increasing yearly. It is
higher than the industry average. The ROA showing that management is more
efficiently using its assets to generate additional earnings.

The financial ratios of L’Oreal are shown in Table 3from 2004 to 2012. So if we look
at liquidity ratios company is less liquid so it should reduce its liabilities and increase
its current assets and in case of quick ratio company should look after its inventory
account but this difference between company’s and industry average ratios is slight
and affordable. Secondly company’s profitability ratios are showing good position as
compared to industry Standards Company is earning good profits. Table 2showing the
comparison of L’Oreal financials within cosmetics industry. In Exhibit1graphical
representation of ratios are shown.

Table.1 : L’Oreal’s financial ratio comparison to industry average for the year 2012

Maybelline Cosmetics Industry

Current ratio 1.29 1.46

Quick ratio 0.96 1.12
Debt to equity 0.30 0.37
Inventory turnover 3.22 3.13
Earnings per share 4.79 4.93
Total assets turnover 0.80 0.80
Gross profit margin 70.67% 70.53%
Net profit margin 12.77% 11.91%
Return on investment 14.83% 12.55%
Return on equity 13.71% 14.65%
Return on assets 9.71% 9.40%

Note. Data for financial ratio comparison with industry from “Morning star”, (n.d.) &
from “investing.com”
62
Dupont System of Financial Analysis:
Dupont System focuses on three critical financial elements of the business capital
structure, operating management and management of assets. It measures the firm
potential growth and profitability.

ROA = NPM * AT

ROE = NPM * TAT * A/E = ROA * A/E

Table 2 :

2015 2014 2013 2012 2011 2010 2009 2008 2007

ROA 9.71 9.08 9.32 7.70 8.51 11.45 8.32 8.26 19.48
ROE 13.71 13.83 15.1 13.19 16.87 19.50 14.1 13.46 13.26

Table 3 : DuPont system analysis of Maybelline :

Maybelline Cosmetics Industry

ROE ( return on Equity ) 13.72% 14.62%
=

NPM ( Net Profit 12.73% 11.91%

Margin )
=
0.76 0.76
TAT ( Total Assets
Turnover )
= 1.41 2.06

A / E ( Assets / Equity )
= 9.71 9.05

ROI ( Return On
Investment )
=

Note. Data for DuPont system analysis from L’Oreal’s annual report, (2015)

63
Interpretation of Balance Sheet:
Analysis shows %age proportion of balance sheet items to the total assets. It shows
L’Oreal increasing trend from 2007 to 2015 in Cash (4.70% to 6.17%) because of the
equity finance and company is timely paying is short term liabilities. There is
increasing trend in noncurrent assets; this is because of their effective operational
capabilities to meet the expected increase in

demand. There is increasing trend from 2008 to 2012 in equity (50.47% to 71%). On
the other side there is decreasing trend from 2007 to 2015 in Current Liabilities (32%
to 21.56%). This because of company more relies on its own investments.

Cash: 6.17%

Non Current Assets: 27%

Current Liabilities: 21.56%

Equity: 71%

Interpretation of Income Statement:

Analysis shows from 2007 to 2015 there is increasing trend in the operating profit
(14.64% to 16%). It means that there is decrease in General and Administrative
expenses and depreciation.

There is increasing trend from 2007 to 2015 in the Net Profit (11% to13%). It because
management is efficiently handles the expenses.

Gross Profit: 71%

Operating Profit: 16%

Net Profit: 13%

Capital structure & Debt Structure:

It is worthwhile to look at the Debt structure of the company because it tells about the
equity and debt proportion in the company. In the case of L’Oreal on the base of Book
Value of the Debt/Equity ratio, company 1.70%. It uses little

debt in its capital structure and it is less than the industry average 2.49%. So there is
less risk in the business and company is also saving from higher interest rates.

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L’Oreal long term debt to equity ratio is 0.41 % less than the industry average 0.79%.
It’s that there is less risk for investor as company more rely on its own investments.

A company's capitalization describes the composition of a company's permanent or

long-term capital, which consists of a combination of debt and equity. A healthy
proportion of equity capital, as opposed to debt capital, in a company's capital
structure is an indication of financial fitness.

Profitability:
Profitability shows the company’s performance and efficiency. The Gross profit
margin of L’Oreal is 71.27% slightly more as compared to the industry average
70.82%. Operating Profit is 16.28% more than industry average 16.14%. The Net
Profit Margin of L’Oreal is 12.89% more than the industry average 12.74%. L’Oreal
shows good profitability I its industry which shows that they are effectively using
their resources

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Efficiency Structure:
L’Oreal Inventory Turnover ratio and Total Assets Turnover is 3.22 and 0.80. as
compared to industry average L’Oreal inventory turnover ratio is more than industry
average however the assets turnover ratio is same as the industry. Industry Inventory
Turnover and Assets Turnover is 3.13 and 0.80 respectively. It means company
efficiently turning its inventory into sales which less their operating cost and they well
managed their liabilities. L’Oreal well managed their assets as compared to industry
which increase their profitability.

Operating Management:
L’Oreal Return on Equity, Assets and Investment ratios are 14.87%, 10.17% and
14.83% respectively. L’Oreal operating position is stable in the industry. The
company performance and management is getting better day by day. Although there is
recession in the overall Cosmetics Industry. But due to Innovation, Research &
Development and effective management L’Oreal sustain its position as market leader.
They are doing more acquisitions for the expansion of their business.

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67
Graphic image for L’Oréal’s worldwide performances

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CHAPTER 5

KEY LEARNINGS FROM THE COMPANY & RECOMMENDATION:

The campaign had received a tremendous response from the online community. The
company received more engagements and involvements from fans and followers on
all major social media networks. Here are the major achievements of this campaign.
The Facebook fan count had reached over 2.1 million.

Earned good response from the YouTube video created for promotional purpose.

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Received almost 2,50,000 views within the 4 days of the launch.

The Twitter hashtag #KissSong was a successful campaign and trended in India.

The company’s Twitter handle@MaybellineIndia had created an impact in the urban

area and trended in Mumbai.

Total followers on Twitter had moved above 4200.

Over 6000 girls had participated in the campaign and contributed to the song with
their kisses.

Values of Company :

Passion , Innovation , Entrepreneurial spirit, Open-mindedness , quest for Excellence ,

Responsibility.

Ethical Principles :

Integrity : because acting with integrity is vital to building and maintaining trust and
good relationships.

Respect : because what we do has an impact on many people’s lives.

Courage :because ethical questions are rarely easy but must be addressed.

Transparency : because we must always be truthful, sincere and be able to justify our
actions and decisions.

Mission :

Is to provide the best in cosmetics innovation to everyone around the world .

Organisational Leadership :
Frédéric Rozé is the President and Chief Executive Officer of L’Oréal USA. L’Oréal
USA's Strategic Committee consists of 14 members.

Michel Brousset was appointed Managing Director, UK & Ireland in August 2013
and is responsible for L’Oréal’s business in the region. L’Oréal employs over 3,800
people and has a portfolio of 29 international brands marketed in the UK and Ireland. 

The founding values and ethical principles of the group are expressed in the daily
operations of all our teams around the world.

The world leader in beauty, L’Oréal is today present in 130 countries. On every
continent, the group creates and develops cosmetic products adapted to the infinite
diversity of its consumers.

Its leadership is founded on the ability of its teams to create innovative products that
combine quality, effectiveness and safety in every branch of cosmetics: hair care,
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coloring, skin care, make-up, perfume. Close to its markets, the group innovates to
respond to the aspirations of consumers, whatever their lifestyle and their beauty
habits.

Market share & Growth Rate :

STRONG SALES INCREASE: +14.1% based on reported figures
VERY POSITIVE CURRENCY IMPACT GROWTH IN ALL DIVISIONS
AND GEOGRAPHIC ZONES

Like-for-like, i.e. based on a comparable structure and identical exchange rates, the
sales growth of the L'Oréal group was +4.0%.
The net impact of changes in consolidation was +1.2%. 
Currency fluctuations had an impact of +8.9%.
Growth at constant exchange rates was +5.2%. If end of March current exchange
rates (€1 at $1.076) are extrapolated up to December 31, the impact of currency
fluctuations would be +9.3% for the whole of 2015.
Based on reported figures, the Group's sales at March 31, 2015 amounted to 6.44
billion euros, an increase of +14.1%.

At the end of March, the Professional Products Division recorded growth of +3.5%
like-for-like and +16.0% based on reported figures.

In the first quarter, the Consumer Products Division posted growth of +1.7% like-for-
like and +11.6% based on reported figures.

At the end of March, the Active Cosmetics Division remains very dynamic, with sales
at +7.6% like-for-like and +10.2% based on reported figures.

Buisness segment for Maybelline :

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72
Graphic for breakdown shareholding structure :

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SWOT Analysis :
STRENGTHS

Pricing Power 

Customers typically rebel against price increases by switching to competing products,

but if a company has pricing power, customers will continue using Maybelline New
York’s products and services. Maybelline New York has the ability to charge
customers higher prices… …"Pricing Power (Maybelline New York)" has a
significant impact, so an analyst should put more weight into it. "Pricing Power

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(Maybelline New York)" will have a long-term positive impact on the this entity,
which adds to its value. "Pricing Power (Maybelline New York)" is an easily
defendable qualitative factor, so competing institutions will have a difficult time
overcoming it.

Innovative Culture 
An innovative culture helps Maybelline New York to produce unique products and
services that meet their customer’s need "Innovative Culture (Maybelline New
York)" has a significant impact, so an analyst should put more weight into
it. "Innovative Culture (Maybelline New York)" will have a long-term positive impact
on the this entity, which adds to its value. This statements will have a short-term
positive impact on this entity, which adds to its value. This qualitative factor will lead
to a decrease in costs. This statement will lead to an increase in profits for this
entity. "Innovative Culture (Maybelline New York)" is an easily defendable
qualitative factor, so competing institutions will have a difficult time overcoming it.

Asset Leverage :Asset leverage allows Maybelline New York to use their best
operatioal assets to expand their business and improve their market share

Cost Advantages : Lower costs lead to higher profits for Mybelline New York. A
low cost leader can undercut rivals on price "Cost Advantages (Maybelline New
York)" has a significant impact, so an analyst should put more weight into it. "Cost
Advantages (Maybelline New York)" will have a long-term positive impact on the
this entity, which adds to its value. This statements will have a short-term positive
impact on this entity, which adds to its value. This qualitative factor will lead to a
decrease in costs. This statement will lead to an increase in profits for this
entity. "Cost Advantages (Maybelline New York)" is an easily defendable qualitative
factor, so competing institutions will have a difficult time overcoming it.

Technology : Superior technology allows Maybelline New York to better meet the

needs of their customers in ways that competitors can’t imitate… …"Technology
(Maybelline New York)" has a significant impact, so an analyst should put more
weight into it. "Technology (Maybelline New York)"will have a long-term
positive impact on the this entity, which adds to its value. This statements will
have a short-term positive impact on this entity, which adds to its value. This
qualitative factor will lead to a decrease in costs. This statement will lead to an
increase in profits for this entity. "Technology (Maybelline New York)" is a
difficult qualitative factor to defend, so competing institutions will have an easy
time overcoming it.

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Customer Loyalty : When given a choice, customers are loyal to Maybelline New
York. Instead of targeting all customers, Maybelline New York only needs to
target new customers in order to grow their business "Customer Loyalty
(Maybelline New York)" has a significant impact, so an analyst should put more
weight into it. "Customer Loyalty (Maybelline New York)" will have a long-term
positive impact on the this entity, which adds to its value. This statements will
have a short-term positive impact on this entity, which adds to its value

Unique Products : Unique products help distinguish Maybelline New York from

competitors. Maybelline New York can charge higher prices for their products,
because consumers can’t get those products elsewhere "Unique Products
(Maybelline New York)" has a significant impact, so an analyst should put more
weight into it.

Brand Name : A strong brand name is a major strength of Maybelline New York.
This gives Maybelline New York the ability to charge higher prices for their
products because consumers place additional value in the brand "Brand Name
(Maybelline New York)" has a significant impact, so an analyst should put more
weight into it

Weaknesses
Work Inefficiencies : An inefficient work environment means that Maybelline New
York’s goods and services are not being utilized properly… 

High Debt Burden : A high debt burden increases the risk that Maybelline New
York goes bankrupt if they make a poor business decision. Increasing risks can
increase Maybelline New York’s debt interest payments

Outdated Technology :A lack of proprietary technology and patents can

hurt Maybelline New York’s ability to compete against rivals

High Staff Turnover :High staff turnover can hurt Maybelline New York’s ability to
compete, because replacing valuable staff is expenses .

Online Presence : The online market is essential for displaying information and
selling products. A weak online presence can result in lost opportunities for

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Maybelline New York… … "Online Presence (Maybelline New York)" has a
significant impact, so an analyst should put more weight into it. "Online Presence
(Maybelline New York)" will have a long-term negative impact on this entity, which
subtracts from the entity's value. This statements will have a short-term negative
impact on this entity, which subtracts from its value. This qualitative factor will lead
to an increase in costs.

Weak Supply Chain : A weak supply chain can delay the arrival of products
to Maybelline New York’s customers. Unnecessary delays can hurt Maybelline
New York over the long run, because customers will cancel orders.  

Tarnished Reputation : A tarnished reputation can hurt Maybelline New York’s

brand in the eyes of a consumer "Tarnished Reputation (Maybelline New
York)"has a significant impact, so an analyst should put more weight into it.

Weak Management : Weak management increases business risks and reduces

profits for Maybelline New York, because they are responsible for the health of
the business

Customer Service :Weak customer service hurts Maybelline New York’s reputation
and causes customers to flee to competitors, who are more respondent

Lack of Scale : A lack of scale means Maybelline New York’s cost per unit of
output is very high. Increasing volume, while maintain quality, would help
reduce those costs

Cost Structure : A weak cost structure means Maybelline New York’s costs are high
in comparison to their competitors

Weak Brand : A weak brand means Maybelline New York can’t charge the same
prices for goods and services as their competitors, because consumers don’t value the
brand… … "Weak Brand (Maybelline New York)" has a significant impact, so an
analyst should put more weight into it. "Weak Brand (Maybelline New York)" will
have a long-term negative impact on this entity, which subtracts from the entity's
value. This statements will have a short-term negative impact on this entity, which
subtracts from its value

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OPPURTUNITIES
Financial Leverage : Leveraging the balance sheet allows Maybelline New York to
quickly expand into other markets and products, especially in fragmented industries

New Services :New services help Maybelline New York to better meet their
customer’s needs. These services can expand Maybelline New York’s business and
diversify their customer base… … "New Services (Maybelline New York)" has a
significant impact, so an analyst should put more weight into it. "New Services
(Maybelline New York)" will have a long-term positive impact on the this entity,
which adds to its value.

Loosening Regulations ;looser regulations allow Maybelline New York to perform

in a way that is most advantages for them and their customers

New Technology : New technology helps Maybelline New York to better meet their
customer’s needs with new and improved products and services. Technology also
builds competitive barriers against rivals

Emerging Markets :Emerging markets are fast growing regions of the world that
enable Maybelline New York to quickly expand

New Products :New products can help Maybelline New York to expand their
business and diversity their customer base

New Markets :New markets allow Maybelline New York to expand their business
and diversify their portfolio of products and services… … "New Markets (Maybelline
New York)" has a significant impact, so an analyst should put more weight into it

International Expansion : International markets offer Maybelline New York new

opportunities to expand the business and increase sales… … "International Expansion
(Maybelline New York)" has a significant impact, so an analyst should put more
weight into it

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THREATS

Bad Economy : A bad economy can hurt Maybelline New York’s business by

decreasing the number of potential customers

Volatile Currencies : Volatile currencies make Maybelline New York’s investments

difficult, because costs and revenues change so rapidly

International Competition :International competitors are numerous and difficult to

combat, because they can have many competitive advantages that give them an
advantage over Maybelline New York

Mature Markets : Mature markets are competitive. In order for Maybelline New

York to grow in a mature market, it has to increase market share, which is difficult
and expensive

Intense Competition : Intense completion can lower Maybelline New York’s

profits, because competitors can entice consumers away with superior products

Government Regulations : Changes to government rules and regulations can

negatively affect Maybelline New York… … "Govt Regulations (Maybelline New
York)" will have a long-term negative impact on this entity, which subtracts from the
entity's value.

Change in Tastes : Consumers can change their tastes very quickly. Maybelline New
York depends on knowing which goods and services consumers want

Political Risk

Politics can increase Maybelline New York’s risk factors, because governments can
quickly change business rules that negatively affect Maybelline New York’s
business… …

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Volatile Costs : Volatile costs mean Maybelline New York has to plan for scenarios
where costs skyrocket. Cautious planning leads to development delays that can
negatively affect Maybelline New York…

Substitute Products : The availability of substitute products hurts Maybelline New

York’s ability to raise prices, because customers can easily switch to another product
or service .

CHAPTER-6
FINDINGS:

The company’s share of voice increased, as did interest in the product, demonstrating
how social media measurement can be leveraged to optimise a campaign. The
qualitative and quantitative outcomes included the following:

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Most of the dealer agreed that customer usually switch to competitors products due to
Supply shortage and lengthen delivery system. Customers mostly switch to Revlon,
Lakme, and elle18 as these companies also offer almost similar shades. So to Some
extent maybelline faces sales loss for other product.

Cent percent dealer’s claims that they are dissatisfy with the product only for shortage
of supply and lengthen delivery process.

The main reason behind increase the market share of maybelline is its high quality
Products, well established customer loyalty, comparative organized structure of
Management, marketing, sales, distribution.

In, 2007 maybelline was the market leader with its 46% market share.

In, 2008 maybelline also possess it leading position and its market share increase to
49%.

Revlon is very much promising because of its better quality, good competitive
Strategies, well market analysis well established communication, frequent dealer visit
Sometime this is more than that of maybelline.

maybelline with in a very short time create more dealers of their own with liberal
credit policies, providing more profit to dealers, providing more discounts facilities
etc.

CHAPTER-7
CONCLUSION AND SUGGESTIONS:

Conclusion:
The study in the preceding pages reveals some important and interesting conclusions.

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 The theoretical portion reveals the conclusion of academic importance and when the
Financial Data of Maybelline has been analyzed, the financial position of
the company is brought to surface. The overall financial position of the company is
quite healthy and over the last years which covered the period of study, the financial
position has improved. The current Ratio, Acid Test Ratio, Debt equity Ratio and
Proprietary Ratio all have improved over the period 2008 to 2009. The credit for this
improvement goes to efficient management, Long term vision of the management,
team spirit among the employs of the company higher level of orders in the hands of
the company, better realization and better overall economic condition of the economy
with increased emphasis of government on expansion and strengthening of economic
infrastructure, it is expected that Maybelline will gain a lot, its financial Ratio will
improve further and so the financial strength of the company.

Suggestion :
 Launch more cost effective products for mass marketing and customer chains.
 Marketers should try to create brand loyalty by special changes in product.
 They should try to generate positive word of mouth by delivering
quality products. Duplicity should be checked as per standards. Proper
attention should be given to make cosmetics free of after effects.
 For the promotion purposes, more attention to be given to general and
cosmetic store
 As media plays an important role. TV and magazines should be
properly exploited Celebrities and beauty consultants should be included in
advertisements for making them more effective.

BIBLIOGRAPHY:

Image source : Assistive platforms on web search

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Finance date & analysis : http://www.loreal-finance.com/eng/annual-
report

History and company review : http://www.maybelline.com, Wikipedia.

Google platforms

References:

http://chemistscorner.com/a-cosmetic-market-overview-for-cosmetic-chemists/

http://www.academia.edu/4600532/LOreal_SWOT_Analysis

http://www.asoetarso.com/loreal/

http://amandeepgilljournal.tumblr.com/page/3

http://www.investinganswers.com/financial-dictionary/ratio-analysis/dupont analysis-
3123

http://adage.com/article/pg-report/l-oreal-proves-tough competitor/97760

http://www.forbes.com/sites/greatspeculations/2011/01/18/loreal-acquire-to-survive/

http://beautyfulbrands.wordpress.com/2011/11/09/key-competitors-of-loreal-paris-
and-nivea/

http://financials.morningstar.com/ratios/r.html?t=or&region=fra

http://www.investing.com/equities/l-oreal-ratios

http://www.bidnessetc.com/business/cosmetics-industry-add-some-flair-to-your-
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http://www.readyratios.com/reference/analysis/vertical_analysis_of_financial_stateme
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http://www.oldschoolvalue.com/blog/accounting/dupont-analysis-model-spreadsheet/

http://www.loreal-finance.com/eng/registration-document-2012

http://www.loreal-finance.com/eng/registration-document-2011

http://www.loreal-finance.com/eng/registration-document-2010

http://www.loreal-finance.com/eng/registration-document-2009

http://www.loreal-finance.com/eng/registration-document-2008

http://www.loreal-finance.com/eng/registration-document-2007

http://www.loreal-finance.com/eng/registration-document-2006

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http://www.loreal-finance.com/eng/registration-document-2005

http://www.wikinvest.com/stock/L'oreal_ (LRLCY)

http://www.academia.edu/4600532/LOreal_SWOT_Analysis.

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