Annexure-V- Cover Page for Academic Tasks

Course Code: MKT 509 Course Title : Consumer Behaviour

Course Instructor: Dr. Prashant Chauhan

Academic Task No.: 03 Academic Task Title: Assignment

Date of Allotment: 5th April 2020 Date of submission: 28 th April 2020

Student’s Roll no: RQ5E64B54 Student’s Reg. no: 11909565

Evaluation Parameters:

Learning Outcomes: Internal and External Influence as well as consumer buying decision theories.

Declaration:

I declare that this Assignment is our individual work. I have not copied it from any other student’s
work or from any other source except where due acknowledgement is made explicitly in the text,
nor has any part been written for me by any other person.

Student signature:
Evaluator’s comments (For Instructor’s use only)

General Observations Suggestions for Improvement Best part of assignment

Evaluator’s Signature and Date:

Marks Obtained: Max. Marks: ………………

 INTRODUCTION

Consumer behavior is the study of whether, when, how and where people are purchasing a
commodity or not. It combines elements from economics psychology, sociology, and social
anthropology. It seeks to explain the process of purchaser decision making both individually and
in groups. It examines individual market characteristics such as demographics and behavioral
factors in an effort to understand people's wants. It also tries to access influence on the consumer
from groups such as family, friends, reference groups, and society in general.

The analysis of customer behavior is focused on consumer purchasing behavior with the
customer playing the user, payer and buyer's three distinct positions. Relationship marketing is a
power tool for the study of consumer behavior, as it has a strong interest in rediscovering the true
essence of marketing by reaffirming the value of the client or buyer. Customer satisfaction,
customer relationship management, personalization, configuration and one-to-one marketing are
now of greater significance. Public function can be divided into the public choice and the role of
welfare.

ABOUT THE BRAND

L'Oréal Paris is a truly multinational brand of beauty with various brands of international repute.
For the most part, the word "L'Oréal" is instantly evocative of the signature slogan of the brand,
"Because I'm Worth It."— The idea behind the iconic promotional campaign for the 1973 launch
of the Superior Preference ® hair color. Today, it reflects the essence of the entire brand of
L'Oréal Paris, a spirit in which I am a participant is about helping every woman embrace her
unique beauty while reinforcing her innate sense of self-worth.

Being the world's largest beauty brand, L'Oréal Paris has a special dedication to technology,
science and creativity and offers ground-breaking, high-quality products for women, men and
children of all ages and ethnic backgrounds. L'Oréal Paris is notably dedicated to celebrating the
diversity of beauty – the company’s broad range of spokespeople include Andie MacDowell, Eva
Longoria, Doutzen Kroes and Liya Kebede.
The L'Oréal Paris brand encompasses the five major beauty categories – hair color, hair care,
hair style, skin care and cosmetics – and includes such well-known brands as Superior
Preference®, Excellence and Couleur Experte® hair colors; EverPure, EverStrong, EverSleek,
EverCreme and EverStyle hair care; Advanced Hairstyle, Elnett and Studio Line hair style
products, and skin care brands including Revitalift®, Youth Code, Age Perfect®, Men Expert,
Sublime Sun, Pure-Clay and Pure-Sugar products and L'Oréal Paris Cosmetics, including Colour
Riche®, True Match™ , Infallible, Studio Secrets™ Professional collections, Voluminous®,
Double Extend®, Telescopic® mascaras, among many others.

The beauty industry has always been on a rapid move either it being the consumers or the
competitors whereby on stake lies millions of dollars to be griped on by the producers of the
beauty products. L’Oreal being the world’s largest beauty firm employing around 50,000
employees worldwide and revenues worth 17.47 billion dollars in 2009. L’Oreal has created an
international brand portfolio for consumers with wide range of incomes and tastes in 140
countries and we know that L’Oreal has certainly occupied a unique position in the fast pace
global beauty environment. The road to success was difficult as a lot of barriers had to be
overcome and L’Oreal manage to that as well as winning the hearts of millions of consumers and
therefore being the King in the Industry.
ANALYSIS OF INTERNAL INFLUENCES

Perception

L'Oreal operates with a distinctive strategic vision and business approach, both geared towards
the increasingly increasing global demand for personal care, whereby its core values have always
been based on honesty, accountability and respect for people and the environment, thus further
pleasing and inspiring consumers and thus allowing them to become a pioneer in corporate
consumer accountability. 

Learning

Training is a lifelong activity. We truly believe in your ability to learn from your network, your
friends, your project manager, your new challenges. Meanwhile, developing at L'Oréal means
you will always be promoting your imagination and sharpening your intuitions to tackle the
challenges of our cross-cultural beauty business. The goal of the learning teams is precisely to
inspire the learning spirit by creating this environment, respecting the diversity of learning
cultures.

Memory

The needs and desires of customers have been redefined by the need to protect the skin from
toxins and stress, and issues such as acne, along with a need for a more holistic approach to skin
care, integrating beauty and wellbeing, body and mind. This has resulted in two trends in skin
care; on the one hand, customers want highly effective products that manage skin health in a
healthy and convenient manner , whether it be medical or natural. On the other hand, they are
also looking for immediate and sensorial results, a feeling of connecting with their inner selves.

Motives

L'Oreal's priorities and ambitions have always made them impressive in the rest of the industry,
as it has always based its approach on achieving internal development, which has been primarily
driven by acquisition ideas, whether strategic or tactical, that have clearly contributed to the
overall growth of the company.
Personality

As a result, L'Oreal had a specific matrix structure that resulted in efficient coordination around
the entire enterprise as well as the advancement of innovative business strategies and new
product concepts. The matrix structure strengthened communication with the rest of the
organization's departments as well as on shared technology, and allowed knowledge to pass
easily and provide input. 

Employees and Attitudes

This has been a significant influence on the performance of the companies as all workers and
personalities are regarded as assets in the business and as a result stronger working relationships
have been built by most of the workers trusting relationships with their employers.

Emotions

L'Oréal Paris' motto is 'Because you’re worth it.' Got a stronger excuse to buy a product? Not
only how they value ourselves, this slogan gives customers a positive feeling, it also enhances
their self-confidence, because they are worth it.
Decision making

Decision-making tends to be decentralized within the organization, allowing for quicker

decisions. Quick and agile risk-taking decision-making has led them to implore new business
opportunities.

Research and Development

 In 2008, L'Oreal only spent about ‚ almost 581 billion as per (L'Oreal.com) to encourage
sustainable innovation and to make goods healthier for customers.

ANALYSIS OF EXTERNAL INFLUNCES

Demographics

 Demographic changes have a significant effect on the goods of a business with the recent
developments in aging in the western hemisphere, aspiring customers in emerging markets and
other factors, but L'Oreal reacted better than its rivals to these developments and as a justification
for this being the only cosmetic brand present in any distribution channel.

Culture

L'Oreal was founded on strong principles that influenced culture and guided the organization
throughout the company's life, stressing consumer loyalty as product health and quality are
always paramount and thus becoming the leading beauty company. L’Oreal culture tends to
cover all aspects of beauty for all consumers. The customer oriented culture has thus allowed
L’Oreal to distinguish itself from competitors like P&G.

Competition

Rivals such as Procter & Gamble (P&G), Estee Lauder and Unilever have always had intense,
cut-throat rivalry in the industry and, as Corbett (2004) put it, rivalry is the best in organizations
and it definitely did so with L'Oreal taking the most opportunities and capturing the hearts of
customers with fresh and creative products.
Political

Government rules and regulations always come into the picture and tend to change bringing
about a lot of changes and as well as in the 1970s when the French government wanted to control
Frances top companies and because of this Gesparal was formed as holding company otherwise
L'Oreal could have added problems because sometimes state-run companies lack inefficiency as
well as innovation. Since L'Oreal is a globalized company law, regulations, legislation and
corporate practices vary in various countries, and L'Oreal faces the problem of having to comply
with specific policy regulations so that it is helpful to the organization

Customer Tastes and Preferences

Customers are seen as continually shifting before they find one product that they like and
become royal and the same happens in the beauty industry where customers jockey between
brands but have seen all these products built by L'Oreal that meet the increasing demand for
natural beauty in this decade and literally outsmarting its rivals.

Social Influences

With the latest trends and urban flairs shifting around fashion plays a key role as well as the
problem of only celebrities being used in advertisements and thus can not appeal to an average
woman in society continues to raise her serious question.

Economic

Cosmetics are generally regarded as a luxury commodity even during times of a depressed
economy L'Oreal may face the question of lack of market demand and so seek to look at other
countries' plans and policies to try to lift the country out of recession.

Technological

Company operates in a rapid development environment and so L'Oreal needs to keep up with the
change or its market share may be lost. Advancements in technical methods have allowed
companies to minimize product obsolescence and advancements in manufacturing methods have
resulted in products with longer life spans.eg the creation of the express finish fast dry nail
enamel really became popular having huge amounts of sale everywhere

Globalization

Many of the external factors have been the major driving force as it has enabled the spread of
production, communication, and technology.

ANALYSIS OF CONSUMER DECISION MAKING

PROBLEM RECOGNITION

Recognition of a problem starts when a client is aware of an issue or need. Human beings are
known to be the clients of one business or another in any step of life. And they have needs and
expectations that must be met at each level. Such conditions can include those low or high. The
first phase in customer purchasing behavior starts when the client knows that he or she needs or
wants something.
INFORMATION SEARCH

When a company discovers an issue, the next step is to have appropriate information to resolve
the problem. The degree to which knowledge is obtained depends on the level of participation of
the consumer in the purchase. The primary source of knowledge that affects the purchasing
behavior of the customer is-advertising, friends, media, ads, and experience.

As celebrities and runway models started to flaunt ombre beauty, L'Oréal Paris quickly turned to
Search and saw a significant increase in terms of search for the famous trend. Even the leading
beauty company discovered that customers lacked an easy way to achieve the look at home.
L'Oréal Paris nimbly responded to this insight by developing and launching the world's first DIY
ombre solution. L'Oréal Paris now uses Search insights to understand the latest consumer beauty
trends, and to reach and engage its audience for ombre and beyond.

 Priorities- At the moment of inspiration L'Oréal Paris needs to create brand awareness
and be there for the customers. This strives to cater to a wide variety of buyers, and to be
the top beauty destination.Approach- Understanding the audience: L'Oréal Paris uses
Search insights to understand beauty trends and develop products and messaging to meet
consumer needs.
 Market- L'Oréal Paris advertises during the purchasing process toward advertised,
category and affinity search queries to meet diverse customer needs.
 Engaging the customer- L'Oréal Paris delivers branded content such as its creative beauty
app, hairstyle.com, to fulfill the needs of customers at the right time.
 Results- Search insights developed as an important resource for trend finding and trend
monitoring. Rejuvenated the category of home hair color: 50 percent of customers at
Feria Ombré were new to the segment, most under the average age of the traditional hair
color customer. L'Oréal Paris offers leading makeup, skin care, hair care, styling and hair
color products to women and men worldwide. Its products and ambassadors embody a
beauty ideal summed up by its legendary signature: "Because you're worth it."
 L'Oréal Paris Uses Search to Create Brand Loyalty- L'Oréal Paris has increased
investment in digital marketing over recent years, while also rethinking the ways it uses
digital resources like Search. Though Search is historically seen as a means of moving
leads and sales online, it's far more for L'Oréal Paris. It offers a way to communicate with
people at the moments in their lives that matter, enabling the brand to place itself as an
creative platform for beauty. Specifically, Search plays three roles for L'Oréal Paris:
(1) it provides unique consumer insights,
(2) it reaches a vast, interested audience and
(3) it engages that audience with the content they're most interested in, when it matters
most.
 Reaching the interested market-Quest also provides access to a wide and active market
for L'Oréal Paris. If someone is learning how to achieve a specific look, or figuring out
where to buy a product from L'Oréal Paris, the brand wants to be part of the discussion.
In particular, L'Oréal Paris has gone beyond product keywords, bidding against a set of
terms representing all stages of the consumer journey. These various keywords are then
met with relevant messages which drive customers to custom content. For example, the
company advertises against affinity searches to target consumers who are interested in
beauty-related topics but may not be aware of how L'Oréal Paris can help them, such as
"how do I do ombre hair myself." These searchers are then taken to pages with additional
information on the subject and how they can achieve the look — positioning the brand on
their path as a trusted partner.
  Engaging interested audiences for Ombré and beyond- L'Oréal Paris offers important,
valuable brand content to people looking for Ombré, whenever they want to. But there, it
has not stopped; The brand has gone one step further in building a whole website focused
on how people are searching — by hairstyle. Julie says, "We introduced our first styling
line this year. We've gained a very fascinating insight as we studied the styling category:
customers don't search by mousse, bun or ponytail. Instead they are on a different stage.
They're searching for 'wedding hair,' 'beach hair,' 'date hair,' and so on.' Through that
experience, L'Oréal Paris has created a whole website, hairstyle.com, dedicated to
offering inspiration and guidance on occasion for hairstyles. "We're very happy to make
her feel inspired to build the look she needs with her own budget, at home, anywhere she
wants,". • "It's just about maintaining that trust in our brand that we're going to bring our
solutions every time. That's the relationship we've built in her, and we need to make sure
we're using all the resources we can to keep on delivering on that pledge."
 A perfect future ahead- L'Oréal Paris still places Quest at the heart of its brand marketing
today. It offers perspectives that encourage new releases, reach an engaged audience and
deliver engaging brand content exactly when the consumer needs it to be.

Evaluation of alternatives and selection

The next step in the customer decision process is an evaluation of the alternatives. The
Consumers should consider the alternatives in this point. They should compare and explain what
they know best about alternative products and brands. Purchase decision A customer can move
through the first decision phase after making a decision whether or not to buy as it plans and
intends to buy a particular brand or product.

 BEAUTY FOR ALL, BEAUTY FOR EACH INDIVIDUAL- At L'Oréal, we are

convinced that there is no single and unique model of beauty, but an infinite diversity of
forms of beauty, linked to periods, cultures, history and personalities ... To draw ever
greater numbers of men and women to use our products means reaching out to extremely
diverse populations with a vision of universalizing beauty. In our view, to universalise
does not mean to impose uniformity, but on the contrary, to be inspired by diversity to
innovate.
  OBSERVE LOCAL BEAUTY CUSTOMS- Our Science and Creativity is at the core of
this mission to reinvent itself and develop beauty products tailored to the world's
enormous diversity. We've set up research platforms in every region of the globe, true
centers of expertise, built with tailor-made beauty in mind. These poles of research invent
new products that can become successes worldwide. This is a real turning point in the
way we think about Innovation.
 FACILITATING ACCESS TO COSMETICS PRODUCTS- In a industry that is
experiencing major changes, each year L'Oréal takes action to make the best of beauty
accessible to all. With a portfolio of 32 international brands and a distribution channel-
based organizational structure, we have the opportunity to fulfill each consumer's needs
according to their lifestyle and habits. In its own way, L’Oréal is thus pushing back
boundaries and taking up the challenge of increasingly accessible innovation.
 TO ACCELERATE THE REGIONALISATION OF OUR EXPERTISE- It's an
ambitious mission that motivates all our teams to win over another one billion customers
around the world. An economic but also human adventure that involves the rapid
deployment of our strengths and the company's accelerated transformation in all fields,
including science, production, marketing, finance, human relations and administrative
teams. This major project is also an opportunity for innovation and progress to
build the L’Oréal of tomorrow.

Purchase and post purchase processes

L'Oreal dint has a genuinely popular, affordable brand with a global potential that it could start
selling to the rest of the world and that posed a issue, so we're going to discuss how successful
L'Oreal was in its response to globalization.

And so L'Oreal set out to provide a product portfolio that was attractively priced proposal not
only to fill the void in any region, but also to go all over the world and in all new markets.

Marketing was going to be a key part of the globalization process and so L'Oreal has started to
identify areas for improvement and nothing more important in marketing than informing your
customers about your products and services as per Lee and Johnson (2005) and so L'Oreal has
started to spend huge sums on advertising. For example, after the purchase of Maybelline, which
had a few issues in which consumers viewed Maybelline as something their mothers wear,
L'Oreal clearly applied its experience and technologies to enhance Maybelline's products, its
promotion, investing about $70 million on advertisement and changing the product name.
According to White (2007), a tagline plays an significant selling function in a campaign and thus
L'Oreal has changed the tagline to 'because you're worth it' and it gives L'Oreal the passport to
reach many more markets since the adjustments to the acquisition. As a result, L'Oreal built a
reputation among US products for quality and was able to sell goods at a higher price than its
competent company.

L'Oreal started to provide a well-oriented organizational structure, marketing plan and culture for
the rapidly rising global demand for personal care. The marketing campaigns for L'Oreal have
also been popular as they used high-profile celebrities in their ad campaigns and have thus been
able to boost the global brand.

According to Yang (2005), selection of a suitable distribution channel is very important due to
the association created between the channel image and that of the brand. And so L'Oreal
strengthened their channels of distribution because they would reach more customers than ever
before and hence the idea of selling beauty through Several distribution channels were tracked
very closely as they corresponded to economic and psychographic rates. Thus, it was possible to
establish a clear presence in each distribution channel of each division.

Consolidation is an effective strategic strategy in the beauty industry and for L'Oreal to become a
leader it will have to be the leader in the American beauty industry and hence acquisition was an
internal growth strategy that will allow L'Oreal to increase its product range and revenues as it is
big in the States That you're big worldwide and then over the years L'Oreal went on to purchase
all of the major names on the American market and to be a pioneer and applied its magic touches
on all of them so as to become a global leader the big companies L'Oreal purchased in the USA
were Redken and as a result of buying Redken it gave them the opportunity to do Implementing
the strategy of acquiring US brands to complement European brands, Maybelline's acquisition
also allowed L'Oreal to gain 17 percent of the US$ 2.3 billion share of the mass cosmetics
industry. Frensch (2007) said that acquisitions aimed at expanding product lines are more likely
to contribute to synergies, and that swat was exactly happening as L'Oreal was able to rapidly
reduce production costs. Besides that, the acquisition of the top two U.S. ethnic hair care
manufacturers Soft Sheen and Carson helped L'Oreal to acquire 20 percent of the fragmented
market for ethnic haircare. Another big response was the Kiehls and Matrix acquisition. Matrix
was the leading US hair care brand in the professional market, while the acquisition of Kiehls
appeared to improve L'Oreal's speciality role store high end segment of the business where
L’Oreal had not been an important player. Helena Rubinstein and Ralph Lauren Fragrances and
Cosmair have also helped them to fill in the product portfolio. And that Lancôme and Garnier
also played a significant role in the cycle of globalization as revenues from Europe came from
Lancôme and Garnier, which were acquired in 1964.

In order for a company to prevail on the market, it is necessary to maintain an edge over rivals as
well as a customer orientation for manufacturing organizations according to Prasad (2009) and
for this reason L'Oreal had a strong commitment to research and development that many still
consider to be the most distinctive values and advantage over its rivals. In 2003, L'Oreal invested
$600 million in the year allowing them to eventually reduce product costs and produce new
products such as the Garnier Fructis Shampoo. And that L'Oreal has an worldwide patent
portfolio of more than 20,000.

L'Oreal definitely had a lot of tactics under their sleeves they decided to rebrand many of the
items that didn't perform well and the rebranding led to improved revenue and consumer growth,
for example. Rebranding Maybelline New York has risen 93 per cent in revenue In addition to
dropping a few brands, but mostly because L'Oreal bought new brands and successfully
established those brands. Helena was reintroduced on the market as a drug with a higher scaling,
leading to higher sales.

After recognizing the competition L'Oreal continued to set up foreign brand management teams
to create new products and to establish market positions and strategies. Technology has been
incorporated as an benefit and L'Oreal has begun to set up online stores so that consumers can
buy any product that is convenient to them at any time.
According to Griffiths (2008), who said that each organization must be a good corporate citizen,
so L'Oreal has taken a positive approach to corporate social responsibility and one of its
acquisitions, i.e. Kiehl's mission was very CSR-oriented, making profit in improving the quality
of the community it is committed to. As a result of 2004's major acquisition, L'Oreal enjoyed its
19th consecutive year of double-digit growth and also registered more than 18 global brands that
helped reinforce consumer brand loyalties.

AREAS OF IMPROVEMENT IN L’OREAL’S RESPONSE

L'Oreal being the pioneer in the cosmetics industry is still at risk of competition and so a few
aspects are still to be addressed in order to remain ahead of the competition aspects of change.

Strong competition from major rivals like Proctor and Gamble (P&G) and Revlon will still
launch an assault and thus L'Oreal always needs to be continuously creative in order to retain its
market share and realizing that L'Oreal invests approximately $600 million in research and
development, as in the case of companies such as Toyota, while it invests an average of 1 million
in another industry. Likewise, in order to offer better goods and services to its customers, Proctor
& Gamble is said to spend about $5 million a day in research and development according to
(www.pg.com), according to which P&G claims that one of their key factors for success is the
sums they have invested on R&D leading to innovation and that, at the end of the day, the market
share will increase for L’Oreal to still be a leader in the years to come it will have to invest
heavily in Research and development so as to become more and more innovative than its rivals
and simply stay ahead of the competition.

Improvements in areas such as Customer Relationship Management are important because,

according to Sayer & Bruce (2007), who said that consumers are constantly evolving and that
such trends must be closely monitored, so if L'Oreal wishes to sustain its high success in the
beauty industry, one way to do so would be to improve its customer awareness through better
and more productive work efficient company- wide customer relationship management (CRM)
management. Therefore, they will certainly need to become more customer-focused because
customer switching will sabotage as competition increases business growth. CRM can be
accomplished in various ways in L'Oreal, the business would have to recognize divisions that
already have an ideal customer base and expertise can be gained until it has a fully integrated
CRM program Collected from different channels and segments based on values and behaviors,
this will result in end-to-end processes from consumer analysis and segmentation to creation,
execution and measurement of marketing campaign success.

Production costs can still be reduced by L'Oreal as a result of the advantages it receives from
economies of scale as we are told in the event it was able to manufacture mascaras for 20cents in
its big Little Rock plant and thus areas of production can still be strengthened and therefore the
benefit passed on to the customers who would happily embrace it.

Let's not forget the danger faced by the environment as a result of the hazardous chemicals
components used in manufacturing and other fields, i.e. harmful goods that might soon present a
big issue, not to suggest that L'Oreal is not doing anything about the matter in question, but if
L'Oreal might promote recycling policies, minimize their energy consumption, use green
electricity and definitely promote recycling policies reduce the use of volatile solvants so as to
have an environmental policy that drives towards innovation.

L'Oreal should also develop a new business strategy that would give them a better competitive
advantage over Estee Lauder, P&G, perhaps by segmenting and catering to a wide range of
ethnic groups and thus try to implement a differentiation strategy and be successful.

One field that also needs to be closely patched is its marketing strategy for males, as research
indicates that people are becoming increasingly obsessed with their appearance and skin care and
that it is an opportunity for L'Oreal to grab on before its rivals do.
 CONCLUSION

In these days, understanding consumer behaviour is the key success for every marketing strategy
in order to create and transfer product values to customers as well as maintain consumer's values
in return. Especially in the high competitive cosmetic market, this point of consumer studying
becomes more and more important to the survivor of businesses. Through the analysis we can
see how LO’real company has considered the importance of cultural, social and psychological
factors that affect consumer behaviour and successfully applied these knowledge to their
traditional and contemporary marketing strategies. The report was concerned about effects of
personal factors on consumer behaviour in marketing plan and accompanied examples from
cosmetic companies to strengthen the importance of buyer's behaviour in cosmetic marketing
planning. L’Oreal have been in the beauty industry for a hundred years and their reach to the
peak of the mountain was slow and steady and very thoughtful as to be the global leader in the
beauty industry problems are bound to show up from time to time and L’Oreal have been able to
take the pressures faced from competition and globalisation aspects and tried to make the best
out of them so as to be the King in the beauty industry but even though the journey does not end
over here for L’Oreal as there still lies areas of improvement in the organisation so as to remain
the King for the years to come.
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https://www.ukessays.com/essays/marketing/consumer-behaviour-within-loreal-marketing-
essay.php

https://www.ukessays.com/essays/marketing/consumer-behaviour-within-loreal-marketing-
essay.php

http://study-aids.co.uk/dissertation-blog/consumer-behavior-decision-making-loreal/