1- I- INTRODUCTION

1- History:
History
L’Oreal began in 1909 as the project of a young chemist, Eugene Schueller. After discovering a
formula for hair dye he began manufacturing his own products and selling them on to Parisian
salons. His work evolved into the founding of an organisation, Societe Francaise de Teintures
Inoffensives pour Cheveux (The French Society for safe hair dyes). The societe was based upon
the principles of continuing research and innovation in the field of beauty, principles that are
instantly recognisable in its direct descendent L’Oreal.
https://www.chemistdirect.co.uk/a-brief-history-of-l-oreal

2- Current situation
In a situation marked by the expansion of the Covid-19 pandemic,  L’Oréal’s number one priority
is to ensure the protection of its employees. The Group has also taken a large number of
solidarity measures for its customers and partners, and is providing support to health
authorities.
The first quarter of 2020 has seen a decline in the cosmetics market of around -8%. In these
difficult circumstances, L’Oréal has succeeded in outperforming the market with sales at -4.8%
like-for-like. The L’Oréal Luxe and Professional Products Divisions are the most impacted due to
the closure of perfumeries, department stores and hair salons in many countries. In an
environment that is evolving every day, lockdown measures will clearly continue to have a
significant impact on the consumption of skincare and beauty products, and consequently on
our business in the second quarter.
https://www.loreal-finance.com/eng/news-release/first-quarter-2020-sales

3- Mission
L’Oréal’s mission statement is “offering all women and men worldwide the best of cosmetics
innovation in terms of quality, efficacy, and safety.” The statement shows the various customers
that L’Oréal targets and the characteristics that the corporation ensures are met to ensure its
products give its clients the best results. Some of the features of this mission statement include:
-Improving health
-Exceeding expectations

L’Oréal is more than cosmetics and related products. The rise of the company to prosperity has
been boosted by its diligence and comprehensive understanding of skin health and beauty. This
explains the reason L’Oréal values science in the design and production of all its products to
ensure that they not only meet the minimum standards but are also of the highest values. In
fact, the selection of quality materials, ingredients, and the use of approved production
processes ensure L’Oréal only deals with the best cosmetic products. While doing this, the
organization empowers different groups of people, including women in its foundation L’Oréal
initiative, and other corporate social responsibilities programs.
https://mission-statement.com/loreal/#:~:text=L'Or%C3%A9al's%20mission%20statement
%20is,give%20its%20clients%20the%20best
4-Objectives

II- Situational analysis

1. Market analysis:
A. The Macro Environment :
- Political factors :
L’Oréal is present in 130 countries around the world and such as has different Government
Legislations and Regulations they have to comply with. This Regulations and Legislations can
change at any stage or new ones introduced as result of change of Government or a
Government making reforms.
L’Oréal needs to know each countries regulatory obligations and be part of a network that is
informed of any changes that take place, in regard to:
-Trade agreements
.Import and Export regulations and taxation
.National Employment Laws specifically minimum wages ensuring the charter of human rights is
upheld
.OHS laws
.Environmental Laws specifically the reduction in carbon emission
.Advertising Laws – in the European Union there is the Unfair Commercial Practices which
defines advertising or selling false information as a criminal offence.
.laws or Regulations governing chemicals in cosmetics
eg: the Australian Government-through the National Industrial Chemicals Notification and
Assessment Scheme (NICNAS)-regulates the introduction of cosmetic ingredients and in US it is
governed by the Federal Food, Drug& Cosmetic Act.
https://prezi.com/ypxsksbxdpsu/pest-analysis/

- Economic Factors
L’Oréal is working in a very dynamic environment where it needs to constantly adapt itself
according to the changes. The economic stability and people’s income are a big factor affecting
the sales of the company. Developing countries like china and India which are the two fastest
growing economies of the world presents a great opportunity for the company to expand its
presence there. But recently the global slowdown and trade war between China and USA has
significantly decreased the consumption of goods and services by the people so the L'Oréal and
many companies are facing low demand situations.
https://www.mbaskool.com/pestle-analysis/companies/17957-
loreal.html#:~:text=Technological%20Factors%3A&text=Technology%20has%20a%20huge
%20impact,to%20gain%20the%20market%20share.

- Social Factors
Todays generation love to show off. They love to beautify themselves and share it with world.
This has open up a Pandora of opportunity for L'Oréal. People today doesn’t want to go to salon
for hair spa but want products so that they can spa at home only and L'Oréal is providing such
products to its consumers. Todays generation has become very conscious about the
environment, so it doesn’t purchase that product which has detrimental impact on the
environment. Moreover, due to the pressure of people government has banned the testing of
products on the animal.
https://www.mbaskool.com/pestle-analysis/companies/17957-
loreal.html#:~:text=Technological%20Factors%3A&text=Technology%20has%20a%20huge
%20impact,to%20gain%20the%20market%20share.

-Technological factors:
Technology has a huge impact on the functioning of the company. L'Oréal is always at the front,
when it comes to innovation. It invests a lot money in research and development to develop
state of art products and to gain the market share. New categories are introduced like dermo
cosmetics and cosmeceuticals which focusses on antioxidants and anti-ageing properties.
Through social media people are continuously interacting with its customers and getting
feedback and suggestions of its products. The addition of value-added extras such as with built
in SPF, trends are favoring more natural products incorporating plant-based ingredients. The
L'Oréal company uses a wide variety of ingredients and chemical including emollients,
surfactants, fats and oils, fragrances, cleansing agents, minerals oils and waxes.
https://www.mbaskool.com/pestle-analysis/companies/17957-
loreal.html#:~:text=Technological%20Factors%3A&text=Technology%20has%20a%20huge
%20impact,to%20gain%20the%20market%20share.

-Legal Factors:
L'Oréal was involved in many legal battles with different stakeholders at different point of time.
The company had won a battle against the low cost “smell-like” imitators. Many third party
were selling the product smell like it at a very low price. The European court of justice banned
the imitators to advertise products smell-alike products of L’Oréal. One issue was when lead was
found in its lipsticks. After conducting extensive research that five out of ten most lead
contaminated brands were of L’Oréal. Also, they are found guilty of making false claims about
their product ‘Genifique’. They claim that product will affect the person genes and make it seem
as if he slept an extra 2 hours. They are sued by FDA for making false claims.
https://www.mbaskool.com/pestle-analysis/companies/17957-
loreal.html#:~:text=Technological%20Factors%3A&text=Technology%20has%20a%20huge
%20impact,to%20gain%20the%20market%20share.

-Environmental factors:
The companies nowadays need to be very careful about their products not harming the
environment as people are becoming more and more conscious about the environment. L'Oréal
is making a great leap in sustainability. The us branch of L'Oréal has been named as top
performing global company on sustainability in 2017. The company is focusing on making
ecofriendly produhttps://www.mbaskool.com/pestle-analysis/companies/17957-
loreal.html#:~:text=Technological%20Factors%3A&text=Technology%20has%20a%20huge
%20impact,to%20gain%20the%20market%20share.

C. Target market definition and customer profile

With its different business segments, L'Oréal serves the businesses as well as the retail
individual customers. ... In Retail segment, its targets the young, upper middle income and
upper social class customers in the age group of 20-45 years who believe to buy best cosmetic
products which have no harmful side effects
Their goal is to expand globally and make their products available to everyone, everywhere.
http://wanitaloreal.weebly.com/marketing-analysis.html#:~:text=L'Or%C3%A9al%20targets
%20kids%2C%20teens,Profile%3A%20understanding%20why%20consumers%20buy.

D. The competition
Mac, Maybelline, Dior, Chanel, Urban Decay, Clinique, Lancôme, Estee Lauder, Nivea, Garnier,
Lakme, Yves Saint Laurent, Avon, Neutrogena.

E. The intermediaries

2. Company analysis:
A. Marketing Mix:

1-Product :
.L’Oréal Hair Spa Shampoo
.Results Equivalent to Hair Spa Treatment
.Strong and Healthy Hair- Chemical Free Shampoo

2-Price:
L'Oréal always brings about innovations across their various product divisions thereby
penetrating the market with different price levels. Thus, the pricing strategy in the marketing
mix of L'Oréal is based on premium pricing, competition, geography served and product
demand.
so, . first we will calculate the cost to manufacture of the product
. then we will calculate the cost plus price using accounting approach
. then we will use the price elasticity co-efficient to determine optimal mark-up and from
that we will calculate our mark-up price.
. then we will benchmark our competitors price against our optimal mark-up price to see if
we are pricing more or less than the industry standard.

3-Place
.Double layer channel strategy will be used – distributors and retailers will form the chain.
.Retail Outlets – Reliance Fresh, Big Bazaar, Health & Glow, Newme.
.Salesforce will be used to create a strong ‘Sales Relationship’ with various distributions.
.Various channel issues like – double marginalization, cannibalization etc. will be taken care of.

4-Promotion
 . Advertisements – Television, Radio and print media will be done as part of ‘Brand
Awareness’ campaigns.
. HEM model will be used to measure the efficiency of the ‘Brand Awareness’ campaign
. Digital Marketing – Social Media Marketing. i.e. Blogging, Facebook, YouTube campaign to
create ‘Brand awareness’ in the digital platform
. Sampling and couponing will be done as part of ‘Demand Generation Marketing
https://www.slideshare.net/SoumyadeepChowdhury1/marketing-strategy-loreal-77169325

B. FINANCIAL RESSOURCES :
At the end of 2019, currency fluctuations had a positive impact of +2.1%.
Based on reported figures, the Group’s sales, at 31 December 2019, amounted to 29.87 billion
euros, an increase of +10.9%.
https://www.loreal-finance.com/eng/news-release/2019-annual-results#:~:text=At%20the
%20end%20of%202019,an%20increase%20of%20%2B10.9%25.

C. HUMAN RESOURCES
A Human Resources Manager at L’Oréal earns an average from $58,244 ranging from 92,945.
https://www.glassdoor.com/Salary/L-Or%C3%A9al-Human-Resources-Manager-Salaries-
E3470_D_KO8,31.htm#:~:text=Human%20Resources%20Manager%20salaries%20at,range
%20from%20%2458%2C114%2D%2493%2C680.

III. DIAGNISOS (SWOT ANALYSIS):

1. The marketer should conduct a SWOT Analysis. This refers to an overall evaluation of
the company’s strengths (S), weaknesses (W), opportunities (O), and threats (T).

1.OPPORTUNITIES AND THREATS:

OPPORTUNITIES:
“Opportunities are positive factors or trends in the external environment that the company
may be able to exploit to its advantage. Opportunities refer to those avenues in
the environment that surrounds the business on which it can capitalize to increase its
returns.”
. increasing demand for natural and organic products
.has a strongly established brand identity
. new market potential

Threats :
Threats are negative external factors or trends that may present challenges to performance
. haircare is not a strong segment for L’Oréal
. larger number of subdivisions
.Compared to its competitors. L’Oréal has lower profit margins

2. STRENGHTS AND WEAKNESSES:

STRENGHTS:

“Strengths include internal capabilities, resources, and positive situational factors that may help
the company serve its customers and achieve its objectives.
. Widespread distribution – in over 130 countries
. Offer products with organic and natural ingredients
. Strong marketing channels with successful campaigns to boost its brand recognition

WEAKNESSES:

“Weaknesses include internal limitations and negative situational factors that may interfere with
the company’s performance.
. keeping up with the changing demands of the cosmetics industry (and consumers) is
difficult
. Offers luxury items, which are not going to sell during financial crises or changes in financial
environment.
https://www.slideshare.net/BilalMufti/reenergizing-loreal-paris-elseve-in-the-singapore-hair-
care-market

IV. THE OBJECTIVES:

A. target:
In Retail segment, its targets the young, upper middle income and upper social class customers
in the age group of 20-45 years who believe to buy best cosmetic products which have no
harmful side effects
https://www.marketing91.com/marketing-strategy-of-loreal/#:~:text=In%20Retail%20segment
%2C%20its%20targets,have%20no%20harmful%20side%20effects.