Independent University, Bangladesh

SUBMITTED TO
Name- Zakia Binte Jamal
Senior Lecturer, Marketing Department
Independent University Bangladesh
Course- MKT_470
Section- 01
SUBMITTED BY
NAME ID
Md Rahik Redwan 1911109
Musharrat Anjum 1930302
Md.Sajeed Hyder 1810371
Khondoker Imran Tanjim 1821649
Mehrab Hossain 1920199
Fahim Ishtiaque 1921131
1. L’Oréal Company Overview (overall) 

L'Oréal is the world's second-largest maker of cosmetics. It was founded in 1909 by French
chemist Eugene Schuler. It is headquartered in Clichy, Hauts-de-Seine, and represents more
than 500 companies from around the world. L'Oréal is a worldwide cosmetics giant that caters
to both sexes. The business offers skincare, haircare, cosmetics, perfumes, and hygiene items
across all four channels.

The cosmetics industry is dominated by L'Oréal, the world's largest cosmetics manufacturer. It
achieved worldwide sales of EUR 19.5 billion in 2010. During that year, it crossed the El
billion mark for the first time in China. It was the tenth year in a row of double-digit growth,
and it came after an 11.1% gain from the prior year. For L'Oréal, this meant that China became
its third-largest market, after only the United States and France (Vs. its seventh-largest in
2008). Over the next decade, L'Oréal plans to increase its global client base by one billion, with
a significant portion of that growth coming from China.

L'Oréal is the leading luxury skin care and cosmetics firm in China, and the second largest
overall behind Procter & Gamble. Almost all of its major brands are sold in China, with the
exception of Body Shop due to the country's requirement that all cosmetics be subjected to
animal testing. Lancôme and Maybelline New York are only two of its five best-selling brands.
Brands like Lancôme, Bioherm, and Helena Rubenstein are within the purview of the Luxury
Produce Division. Khel's, Shu Umemura, and Giorgio Armani. The Consumer Product
Division is in charge of brands like L'Oréal Paris. Garnier, and Maybelline New York are two
examples. Alternate communities Try several skin care products or brands designed for use in
high-end hair salons. Most of L'Oréal's mass and professional brands are produced at its
facilities in Suzhou and Yichang, as well as at its Shanghai-based Research and Innovation
Centre. All other high-end labels are still imported from overseas, Yue Sai excepted.

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2. Strategies (Global Big Strategies-merger/acquisition)

Yue-Sai introduced L'Oréal to China in 1992. Yue Sai Kan initially targeted Asian women.
L'Oréal acquisition Yue Sai because it was designed for Asian women's beauty and skincare.
L'Oréal acquisition Yue-sai in 2004.

The acquisition fit the company's "beauty for everyone" mission. Mininurse was purchased
and licensed in China.

L'Oréal made Yue Sai a Chinese cosmetic brand after acquiring it. They introduced
Ganoderma mushroom extract in 2007. Traditional medicine enhanced inner beauty. Yue
Sai's most popular product.

L'Oréal promoted their modern Chinese woman image with Chinese models in a large TV
and print campaign. Yue Sai targeted modern Chinese women with lifestyle slogans like "I
control my future in my hands and look forward to every day with confidence." Yue Sai's
prices rose above L'Oréal Paris to match the new positioning.

To slow Yue Sai, his competitors dropped their pricing. Slowdown Yue Sai's business new
foreign luxury brands entered China.

L'Oréal's new CSO wants to be number one, but he discovered they don't know enough about
Chinese skin. Loreal buys 100 to learn more about Chinese skin. They succeeded.

They still struggle to compete in chains and face tremendous competition. Company realizes
repositioning after assessing situation. maintain its new lifestyle brand for powerful, modern
Chinese women. Be a Chinese luxury icon. Try a new or cheaper value proposition. This
strategy make Chinese market success.

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3. Chinese Cosmetic Market (Competitive Analysis)

A country with approximately 1.3 billion people and one of the world's oldest civilizations is
China. Rapid expansion of the country's economy It has had the world's second-largest GDP
since the late 1970s and plans to pass the United States in the next decades. Rising disposable
income among Chinese consumers resulted in a demand for higher-end, more technically
advanced cosmetics across a variety of categories.

Olay, manufactured by Procter & Gamble, entered the mainland Chinese cosmetics and
skincare market in 1989. After Shiseido introduced Shiseido in 1991, L'Oréal followed in
1997 with L'Oréal Paris, and Unilever introduced Hazeltine in 1998. Estée Lauder didn't join
the fray until 2002. They provided marketing know-how, financial backing, and innovative
R&D, and they introduced numerous high-end brands and products. They replaced inferior
regional brands sold by the best department retailers.

In 2010, the largest global cosmetics and skincare companies were P&G, LOreal, Shiseido,
Unilever, and Amway. They took a hit from nearby businesses and held a relatively small
share of the €18 billion industry. Rapid expansion and widespread distribution of fimas suci
such Shanghai Jahja and Jala, which are available everywhere from high-end department
shops to corner drugstores, provide a formidable challenge.

Before the arrival of global corporations in China, upscale cosmetics were only available at
department stores. Brands all across the world lease retail space from department stores in
exchange for a commission on sales. They can hire their own in-house team of beauty
consultants and run an entire sub-store under their direction.

There aren't many alternatives to department stores for beauty brands like L'Oréal Paris,
Maybelline, and Olay, so they maintain counters there. In 2010, the total retail space of over
4,000 Chinese department stores was a maximum of 6,000 square meters. There are now
three major channels of customs distribution: Class-1 stores offering Lancôme, Chanel, and
Dior were restricted to just the largest cities.

Anhui Province's capital, Hefei, was home to just a single "class-2" shopping mall. The
second route was beauty supply stores like Watsons and Mannings. Some of their smaller
locations exclusively sell Vichy products, while the larger ones have brand-specific sales
associates.

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The third option was thousands of mom-and-pop shops selling cosmetics and personal care
products sans the likes of L'Oréal Paris or Olay. There were more than a half a billion
Chinese internet users. Traditional media chains are not popular among today's youth. They
primarily interact via online social media platforms for communication.

In 1992, Yue Sai introduced the idea of beauty products and services in China. It also created
a market for non-stereotypical Neuners; for example, males in China were more receptive to
skincare products than their counterparts in Europe and the United States.

Seventy percent of L'Oréal Paris Men Expert sales occurred in China. It was found that
European, American, Japanese, and Korea women were more attracted to women who used
colored cosmetics, whereas Chinese women were less so. Only about 10–15% of China's
beauty offerings were cosmetics. Cosmetics were seen as shallow, unnecessary, and even
harmful by Chinese women.

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Current Campaign of the company in China (in 2022)

The McCann Beauty Team also selected everyday women to feature in the campaign, with the
accompanying copy sharing the real thoughts of these women on self-worth, thereby delivering a
powerful and authentic voice.

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1. What are the pros and cons of a lifestyle positioning compared to a more concrete
positioning on functional benefits?

A brand that positions their products as lifestyle rather than functional has pros and cons. One
of the biggest benefits is that your consumer base is more likely to be brand loyal because the
firm is appealing directly to the consumer's identity, which can make the brand a de facto
extension of how they express themselves. A negative is that to sustain that level of brand
loyalty, they must constantly innovate along with the trends and preferences that match that
consumer's lifestyle, which can shorten the brand or product's lifespan. Unless a big industry
upheaval forces a product switch, functional benefits are not at risk. For instance, horses had
long been useful, but Ford's Model altered the personal transportation business.

Lifestyle positioning has another benefit: consumers who buy a brand to promote their
lifestyle are less price sensitive than those who buy it for its utilitarian benefits. The lifestyle
positioning strategy's drawback is that fewer consumers fit this group. However, if a brand
emphasizes a product's practical benefits, especially those used everyday by most people, it
can attract a wider audience of consumers and balance the cheaper pricing with higher sales
volume.

In this case, a drawback to lifestyle positioning for Yue Sai is that the brand has been diluted
over the years and has no concrete position because the various owners of the company have
tried so many different strategies that it would be difficult to establish Yue Sai as China's top
cosmetics brand. With proper marketing and distribution. Yue Sai should promote its
functional benefits and broaden its market by reminding consumers that it was the first
Chinese brand of its sort for Chinese women.

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2. Are today’s Chinese consumers ready for Chinese luxury brands? How might this
change over time? How does this depend on the product category?

"Chinese shoppers demanded higher-end things," Case said. China's middle class is growing,
and with it comes a growing demand for higher-end goods, such as designer handbags,
clothing, makeup, and even luxury bath products. Consumers in China favor sulfate- and
cone-free shampoo for its emotional (brand) and added-value benefits more than its practical
ones.

Luxury goods in China are still associated with Western labels like Chanel, Lancôme, and La
Mer, all of which enjoy devoted fan groups. Acceptance of Chinese high-end labels is
inevitable, in my opinion.

First, the status of Chinese businesses has improved. To bring back the styles of the 1920s
and 1930s in China, Shanghai Tang was established in 1997. Shanghai Tang has spent the
last two decades expanding into major metropolitan areas throughout the globe.

Second, as China's economy develops, government authorities there are working to boost
"smart manufacturing" there. To encourage more creative thinking, Xiaomi established its
first international R&D center in Bangalore.

Thirdly, the international success of Chinese IT giants like Haier, Huawei, and Lenovo has
made Chinese consumers more proud of their country. Chinese consumers will have the
knowledge they need to select brands that best meet their wants and identities in the face of
irresistible temptation to western brands.

For product categories, the trend will start firm conventional apparel and electronics into
personal lifestyle products like skincare and cosmetics, which have stricter safety and
performance requirements. Yue Sais was moved from consumer to luxury segment by
management. This may be too soon for Chinese consumers who still view Chinese brands as
affordable and functional.

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3. What is brand heritage? How can the conflict between a respective brand’s heritage
and staying relevant for new generations of consumers be resolved?

A company's brand heritage is the reputation it has built up over time. Yue-Sai was the first
big cosmetics and skin care company to realize that Chinese people needed products that
were made just for them. Madam Yue Sai found that the standards of beauty in China were
different from those in other cultures. This made her want to build a good history for the
brand, which helped Yue Sai grow in its early years and become the best luxury cosmetics
company in China by 1998.

Sometimes, a brand's history can hurt its long-term prospects if it starts to clash with how
new generations of consumers see the brand and what they expect from it. At first, the
Chinese liked Yue Sai a lot because it was the first Chinese brand to enter the cosmetics and
skin care market, which was dominated by Western brands. But this history has hurt Yue
Sai's brand value among younger Chinese people who don't like old brands anymore. To find
a way to honor the brand's history while still making it appealing to customers today.

Businesses like Yue Sai that are aiming to win over the market's younger sergeants need to
think of interesting methods to elaborate on their brands' histories if they want to succeed. To
accomplish this, Yue Sai can use the marketing mix to its advantage. Investing aggressively
in R&D and deploying technologies is one option for catering to and shaping the preferences
of the younger generation. The transition away from print advertising is illustrated by the rise
of e-commerce among Chinese youth via WeChat and Sina Weibo (China's equivalent of
Twitter).

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https://campaignbriefasia.com/2022/05/10/loreal-paris-neiwai-launch-it-takes-boldness-to-be-
nude-campaign-via-mccann-shanghai/

https://daoinsights.com/works/loreal-china-tackles-biodiversity-with-make-up-for-the-planet-
campaign/

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