Lahore School of Economics

L’OREAL

Q- Review L’OREAL’s brand portfolio. What role have local and global marketing,
smart acquisitions, and R&D played in growing those brands?

A- L’Oreal built its portfolio mainly by purchasing local beauty companies all over the
world, revamping them with strategic direction, and expanding the brand into new areas
through its powerful marketing arm. They purchased and merged into different
companies mentioned in the case study, the example of U.S companies Soft Sheen
Products in 1998 and Carson Products in 2000. Now Soft Sheen-Carson is new market
leader in the ethnic hair care industry due to its deep portfolio of brands and products.
The company spends 3.5 percent of annual sales on R&D on researching and innovating
products that meet local needs of each region. This means understanding unique beauty
sroutines and needs of different cultures, climates, traditions and physiologies which
plays important role to its success. They listen to and observe consumers across the globe
to gather a deep understanding of their beauty needs. Evidently their target marketing
(hitting the right audience with the right product and message at the right place), their
smart brand acquisitions and R&D are the factors crucial to its global success.

Q- What are the keys to successful local product launches like Maybelline’s
Wondercurl in Japan?
A- After Researching in Japan they found out the problem of Asian women’s eyes which
are usually short and straight. So they launched a product named Maybelline’s
Wondercurl formulated to curl eyelashes, which became Japan’s number one selling
mascara. And they continued to research the market and developed nail polish, blush, and
other cosmetics. Research and innovative products are the keys to success that meet the
local needs of each region. So they research on the unique beauty routines and needs of
different cultures, climates and traditions and as a result make the innovative products.
Q- What’s next for L’Oreal on a global level? Who are its biggest competitors? If
you were CEO, how would you sustain the company’s global leadership?
A- On a global level they are expecting that their company’s future lies in emerging areas
such as Asia, Africa and Latin America. So they are setting up research center in those
emerging areas and working aggressively on understanding customer’s needs and wants.
L’Oreal’s biggest competitors are Body shop and MAC, which are also leading the
markets (especially European market) with its vast products lines, quality products etc
which are alluring more and more customers. If I was a CEO of L’Oreal, I would
definitely focus on R&D and on its innovative products; enhance its products qualities
with low price ranges as compare to Body shop and MAC. And to sustain the company’s
global leadership it’s really very important to target the right audience with right product
and message at the right place which is crucial to its global success.