PROJECT REPORT ON

“ MARKETING MANAGEMENT OF L'OREAL”

A Project submitted to
University of Mumbai for partial completion of the degree of
Bachelor of Management Studies
Under the Facutly of Management

SUBMITED BY:
SHIFA USMANGANI DERAIYA

PROJECT GUIDE:
PROF. DIVYA BHAGAT

DNYAN BHARTI SOCIETY | BMS

Vadkun Road Dahanu 401602 Dist.Palghar

T.Y.B.M.S
(2022-23)

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 Certificate

This is to certify that Miss Shifa Deraiya has worked and duly completed her/his Project Work for the
degree of Bachelor of Management Studies under the Faculty of Commerce in the subject of Miss Divya
Bhagat Maam and her project is entitled “ Marketing Management of L'oreal” under my supervision.

I further certify that the entire work has been done by the learner under my guidance and that no part of it
has been submitted previously for any Degree or Diploma of any University.
It is her his own work and facts reported by her personal findings and investigations.

Seal of the
College

Name and Signature of Guiding Teacher

Date of submission:

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 Declaration

I the undersigned Miss Shifa Deraiya here by declare that the work embodied in this project work titled
“Marketing Management of L'oreal” forms my own contribution to the research work carried out under the
guidance of Miss Divya Bhagat Maam is a result of my own research work and has not been previously
submitted to any other University for any other Degree/ Diploma to this or any other University.

Wherever reference has been made to previous works of others, it has been clearly indicated as such and
included in the bibliography.

I, here by further declare that all information of this document has been obtained and presented in
accordance with academic rules and ethical conduct.

Name and Signature of the learner

Certified by
Name and signature of the Guiding Teacher

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 Acknowledgement

To list who all have helped me is difficult because they are so numerous and the depth is so enormous.

I would like to acknowledge the following as being idealistic channels and fresh dimensions in the
completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do this project.

I would like to thank my Principal, Miss Deepa Tanna Maam for providing the necessary facilities required
for completion of this project.

I would also like to express my sincere gratitude towards my project guide Miss Divya Bhagat Maam whose
guidance and care made the project successful.

I would like to thank my College Library, for having provided various reference books and magazines
related to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped me in the completion of
the project especially my Parents and Peers who supported me throughout my project.

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 Executive Summary

L'oreal is the market leader in cosmetics. It is one of the most known brand for quality products. They
manufacture all type of cosmetics and for men also they have products. L'oreal's product portfolio is very
wide as they have luxurious products, active products, consumer products etc. The brand ambassadors of
L'oreal are chosen from every country be the face for L'oreal. Their tagline "Because you're worth it" is
being very famous. Supply chain managemnet of L'oreal is wide as they have their consumers worlwide they
have to keep updating their SCM according to the prospective and target market.

L'oreal is collaborated with Modiface to make their product more customised and making use of technology
is the greatest advantage of L'oreal. Their innovative products like L'oreal's clay shampoo encourages the
customers to remain loyal to the customers. L'oreal focuses on teenagers to adult group of customers.

This project contains customer's preference as well as the different factors that affects the consumer buying
decision on the L'oreal products such as L'oreal shampoo, garnier products, makeup. Face etc. along with the
awareness present about the L'oreal company in the market

This study includes responses of consumers in choosing the different product line and the awareness abbout
the company and the analysis has been done on the same. The findings relates to the marketing strategies of
the product and how it caters to the consumers needs.

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 INDEX
SR NAME OF THE TOPIC PAGE
NO. NO.
1. Introduction. 7
1.1 Introduction to the company. 7-9
1.2 History of L'Oréal. 10 - 11
1.3 L'Oréal in India. 11 - 12
1.4 L'Oréal Mission. 13
1.5 L'Oréal Vission. 14
1.6 L'Oréal Brand Ambassador’s. 15 - 16
1.7 L'Oréal Products. 17 - 19
1.8 Future Expansion 20 - 23
2. Research Methodology 24
2.1 Objective of the study. 24 - 25
2.2 Limitations of the study. 25
2.3 Purpose of the study. 26
2.4 Research Hypothesis. 27
2.5 Marketing Mix of L'Oréal 28 - 37
2.6 Supply Chain Management of L'Oréal 38 - 42
2.7 STP Modle of L'Oréal 43 - 51
3. Literature Review 52
3.1 L'Oréal Master Multiculturalism. 52 - 57
3.2 L'Oréal Technology Incubator: Creating the Future of Beauty 58 - 60
3.3 L'Oréal Expands Virtual Try-on Service . 61 - 62
4. Data Analysis, Interpretation and Presentation. 63 - 77
4.1 SWOT Analysis 78 - 82
4.2 PESTLE Analysis 83 - 89
5. Conclusion 90 - 91
6. Annexure 92 - 94
7. References 95
8. Biblography 96

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 Chapter 1

Introduction

1.1 Introduction to the company

L'Oréal is a French personal care company headquartered in Clichy, Hauts-de-Seine with a registered
office in Paris. L'Oréal international is a group of companies with its branches and subsidiary companies
scattered across the globe. L'Oréal is the world's biggest cosmetics and beauty products company.
L'Oréal specializes in the development, manufacturing and marketing process of hair care, hair color,
skin care, perfumes and fragrances, makeup and styling tools for consumer and professional market.
Some L'Oréal products are also based on dermatological and pharmaceutical fields.

This company operates in 130 countries all over Asia, America, East and West Europe through 25
international brands and achieved a global market share of 15.8%. Its brands include well-known names
as Lancôme, Maybelline, Garnier. Redken and Matrix. In terms of its sales figure and market presence
globally, L'Oréal as a corporation is tremendously huge.

The company is known for its involvement in research and development - it spent 3 percent of sales on
cosmetology and dermatology research in 2000 and owns a 19.5 percent stake in the pharmaceutical
firm Sanofi-Synthélabo. As of 2020, Françoise Bettencourt Meyers is the majority owner of the
company with a 33.14% stake, after the death of her mother, Liliane Bettencourt, in September 2017.
The company is ranked 8th in the list of most admired companies and is considered to be one of the first
French cosmetic companies in accordance to an American magazine

L'Oréal's story begins in turn-of-the-

century Paris, at a time when women of
the demimonde dyed their hair, their
choice restricted to fiery red or coal
black. In 1907, Eugène Schueller, a
young French chemist of German
descent, began to concoct the first
synthetic hair dyes, using a blend of
harmless chemical compounds.

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The dyes are an outstanding breakthrough at the time, providing a subtle range of colours in contrast to other
methods on the market, which use henna or mineral salts but produce a bright, somewhat artificial look. In
1909, Schueller developed a hair dye formula called Orcale. Schueller formulated and manufactured his own
products, which he then decided to sell to Parisian hairdressers.

On 31 July 1919. Schueller registered his company, the Société Française de Teintures Inoffensives pour
Cheveux (Safe Hair Dye Company of France). This move made him focus and concentrate on researching,
starting for his investment to achieve the beauty for consumers and to look forward with the name L'Oréal.
The guiding principles of this company, which eventually became L'Oréal, were research and innovation in
the field of beauty. With this, Schueller forged the first link in what is still the DNA of L'Oréal research and
innovation in the service of beauty. In 1920, the company employed three chemists. By 1950, the team was
100 strong; by 1984 was 1,000 and is nearly 82.000 today.

L'Oréal currently markets over 500 brands and thousands of individual products in all sectors of the beauty
business: hair colour, permanents. hair styling. body and skin care, cleansers, makeup and fragrance.
Acquisitions are a fundamental part of L’Oréal’s strategy

Since it was founded over a century ago, L’Oréal has carried out targeted acquisitions to build a global
flotilla of iconic and complementary brands. Our portfolio – the richest and most diverse in the beauty
industry – drives the Group’s long-term growth. L Oreal has acquired 34 companies, including 6 in the last 5
years. A total of 11 acquisitions came from private equity firms. It has also divested 2 assets.

L Oreal’s largest acquisition to date was in 2014, when it acquired Herbal Magic for $843M. It’s largest
disclosed sale occurred in 2017, when it sold The Body Shop International to Natura Cosméticos
SA for $1.1B. L Oreal has acquired in 8 different US states, and 10 countries. The Company’s most targeted
sectors include consumer products (82%) and healthcare services (7%).

Join Mergr and gain access to L Oreal’s M&A summary, the M&A summaries of companies just like it, as

well as recent M&A activity in the consumer products sector. Since it was founded, over a century ago,
L’Oréal has built a palette of iconic and complementary brands through targeted acquisitions. This portfolio
of global brands—the richest and most diverse in the beauty industry—drives the Group’s long-term
growth. Learn how acquisitions bolster the L’Oréal brand portfolio to ensure future organic growth. Every
big company has humble beginning. L’Oréal is one of them. L’Oréal started with hair dye called Auréoleits
created by its founder Eugène Schueller in 1907. Before settling on the name L’Oréal, the company was
registered as the Société Française de Teintures Inoffensives pour Cheveux (Safe Hair Dye Company of
France).

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The creation of L’Oréal happened in 1925 when Schueller unveiled a hair-lightening product that created
golden tints and gave an even more natural look to blond hair called L’Oréal d’Or. 14 years after the
creation, the company officially changed its name to L’Oréal.

In 2010, the company posted 61% increase of sales in Indonesia. Two years after the surge, L’Oréal set up
the largest factory in Jababeka Industrial Park located in Cikarang, Indonesia, with a total investment of
$100 million.

Throughout the years, the company has acquired many subsidiaries from independent beauty companies,
research facilities to consumer goods company like Nestlé. L'Oréal finalised the acquisition of major
Chinese beauty brand Magic Holdings for $840 million.

L'Oreal had sealed a deal worth $4.18 billion to buy back 8% of its shares from Nestlé. Nestle's shares in
L'Oreal reduced from 29.4% to 23.29% while the Bettencourt-Meyers family's shares increased from 30.6%
to 33.2%.

On 20 February, Shiseido sold two of its brands, Carita and Decléor, to L'Oréal for $312.93 million. On 18
June, L'Oréal agreed to acquire NYX Cosmetics for an undisclosed price. L'Oréal also acquired Carol's
Daughter. L'Oréal announced a brand-new beauty and fragrance partnership with Valentino.

L'Oréal announced that it had acquired Modiface and all of La Roche-Posay parent company, Societe des
thermes de la Roche-Posay. The year 2019 was the L'Oréal's best year for sales growth since 2007.

The company owns 36 brands and continues to acquire some of the world's leading beauty brands.

Maybelline New York, Garnier, NYX Professional Makeup, CeraVe, and Redken are some of L'Oréal's top
acquisitions.

Since the company's founding, L'Oréal has focused on targeted acquisitions designed to compliment and
increase the scope of its original product offerings; in 2018, the company acquired La Roche-Posay,
Modiface, and Giorgio Armani Beauty.

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1.2 History of L'Oréal -

For more than a century. L'Oréal has been involved in the adventure of beauty. The small company
founded by Eugène Schueller has become one of the top cosmetic groups in the world. The highlights of the
L'Oréal adventure are mentioned below:

1909-1956: The first steps

Eugene Schueller, a young French chemist, created a hair dye formula called Oréale Schueller formulated
and manufactured his own products, which he then decided to sell to Parisian hairdressers. Schueller goes on
to create the company that will later become L'Oréal, the Société Française de Teintures In offensives pour
Cheveux (Safe Hair Dye Company of France), on 30th July 1909

1910 – Eugene Schueller succeeds in convincing Paris hair

stylist to use his dyes.

By 1920- Its product were available in total 17 countries

1925- Schueller continues to innovate in the beauty industry

1939 - L’Oréal gets its name

1954 - - L’Oréal advances further into the field of skin care by

signing technical agreements with Society hygiene
Dermatology de Vichy.

1957-1983: On the road to Grand L'Oréal

Schueller died in 1957 and Francois Dalle took over as chairman and CEO at 39 years of age. A, a skincare

1963- Company was listed in paris stock exchange which gives access to new financial resources .

1975 - Vichy introduces Equalia, a skincare product that maintain exactly the right ph level of our skin

1983 – A new range of family shampoo made from plant based ingredient was launched.

1984-2010: Becoming Number One in the beauty industry

Under the leadership of this highly unconventional director, the group undergo a radical and profound
transformation .

1994- It becomes the 1st international cosmetic group to which the Indian government grants the status of
wholly-owned subsidiary .

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2001- L’Oréal acquired biomedical an american brand of professional corrective cosmetic product based on
non invasive acts (peeling, post-cosmetic care etc) sold by dermatologist .

2010- L’Oréal celebrates its centenary

1.3 - L’Oréal in India:

L'Oréal, the world's leading beauty company has been present in India as a wholly owned subsidiary of
L’Oréal since 1994. The company has positioned itself as a transformative beauty leader that upgrades the
consumers' beauty regimes with more sophisticated, safe, qualitative and efficacious innovations. L'Oréal is
the fastest growing beauty company in India with an annual average of +30.2% and representation in
750,000 points of sale. The group is the third leading operator in the Indian Cosmetics market with an 8%
market share in the urban areas of nearly €198 million in 2011.

L'Oréal India's strong commitment to their 2020 road map includes a tangible assurance to pursue
sustainable growth in parallel with sustainable development. Today L'Oréal India is present in all
distribution channels with 14 brands, available in mass market channels (L'Oréal Paris, Garnier, Maybelline
New-York, NYX Professional Makeup), in hair and beauty salons (L'Oréal Professional, Matrix, Kérastase,
Cheryl's Cosmoceuticals, Decleor); and in selective distribution (Kiehl's, Yves Saint Laurent, Giorgio
Armani, Ralph Lauren and Diesel), L'Oréal India employs over 1,600 people across four regional offices,
including at its two manufacturing facilities in Chakan (Pune) and in Baddi (Himachal Pradesh), Its
Research and Innovation facility and at the headquarters in Mumbai.

L'Oréal's rapid success in India can be explained by its ability to adapt to the demands of a market
where cosmetic routines and purchases are firmly anchored in tradition. Due to the different standards of
living in India, there is a wide range of packaging options and therefore prices. For instance, Garnier Fructis
shampoos are available in sachets costing Rs. 1.5. These low prices are possible due to local production and
raw materials supply, in particular with the Pune plant that supplies the subcontinent with nearly 85% of its
needs. Furthermore, L'Oréal took a decisive step when it decided to set up a research and innovation centre
with evaluation and formulation laboratories in Mumbai.

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 In India, L'Oréal has pre-empted about 50% of the professional hair care market with three of its
brands: L'Oréal Professional, Kérastase and Matrix, and has firmly established itself locally by opening
dedicated training centers to produce a new generation of modern hairdressers who start up upscale salons.
But the L'Oréal group's real strength in this field is from the Matrix brand which was specially developed for
the lowest-carning salons.

Matrix is more than just a product to sell, it organizes an entire support programme for its retailers
which include salon surveys, sales representatives and training staff recruitments, as well as quarterly
performance reports and training centre creation and management. Owing to this policy, Matrix reached
nearly 26,681 salons and 38,419 hairdressers in 2011.

L'Oréal seized the opportunity to meet the needs of India's demanding clientele by offering Indian
women products that are modern and innovative yet specific to their existing beauty habits. Several essential
products from the Indian beauty culture have inspired L'Oréal's range. The importance of hair care in India
was behind the Garnier launch of 2-in-1 shampoo (shampoo + hair oil), specially designed according to the
tradition of oiled hair. Similarly.

Garnier Color Naturals coloration was

introduced as a modern alternative to
traditional coloration with henna. The top-
selling Colossal Kajal from Maybelline
New York was inspired by women's use of
traditional kajal to line their eyes.
Premium mass brand L'Oréal Paris
satisfied Indian women's strong desire for
healthy, smooth and glossy hair by
offering Total Repair 5 shampoo which
addressed the 5 topmost hair concerns of the
Indian consumer.

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1.4 L'Oréal’s Mission

For more than a century, L'Oréal has devoted their energy and competencies solely to one business:
beauty. It is a business rich in meaning, as it enables all individuals to express their personalities, gain self-
confidence and open up to others.

Beauty is a language.

L'Oréal has set itself the mission of offering all women and men worldwide the best of cosmetics
innovation in terms of quality, efficacy and safety, by meeting the infinite diversity of beauty needs and
desires all over the world.

Beauty is universal.

Since its creation by a researcher, the group has been pushing back the frontiers of knowledge. Its
unique Research arm enables it to continually explore new territories and invent the products of the future,
while drawing inspiration from beauty rituals the world over.

Beauty is a science.

Providing access to products that enhance well-being, mobilizing its innovative strength to
preserve the beauty of the planet and supporting local communities. These are exacting challenges, which
are a source of inspiration and creativity for L'Oréal.

Beauty is a commitment.

By drawing on the diversity of its teams, and the richness and the complementarity of its brand
portfolio, L'Oréal has made the universalization of beauty its project for the years to come.

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1.5 L’Oréal’s Vission

BEAUTY FOR ALL, BEAUTY FOR EACH INDIVIDUAL At L'Oréal, 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 women and men to use L'Oréal's products means reaching
out to extremely diverse populations with a vision of universalizing beauty. In the company's view, to
universalize does not mean to impose uniformity, but on the contrary, to be inspired by diversity to innovate.

OBSERVE LOCAL BEAUTY CUSTOMS

At the heart of this project, Research and Innovation reinvents itself to create cosmetics products adapted to
the immense diversity of the world. In each region of the globe, they have set up Research platforms, true
centers of expertise, designed with tailor-made beauty in mind. These research poles invent new products
that can become worldwide successes. This is a real turning point in the way we think about Innovation.

FACILITATING ACCESS TO COSMETICS PRODUCTS

In a market undergoing substantial transformations, L'Oréal takes steps forward each year to make the best
in beauty available to everyone. With a portfolio of 32 international brands and an organizational structure
based on distribution channels, they have the ambition to meet the needs of every consumer according to his
or her habits and lifestyle. 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

To win over another one billion consumers around the world is an ambitious project that motivates all
their teams. An economic but also human adventure, which requires the rapid deployment of their forces and
an accelerated transformation of the company in every field. including Research, manufacturing, marketing,
sales, human relations and administrative team. This major project is also an opportunity for innovation and
progress to build the L'Oréal of tomorrow.

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1.6 L’Oréal’s Brand Ambassador’s:

An icon of French beauty all over the world, L’Oréal Paris represents beauty in all its diverse
forms. We believe that there is no ‘one size fits all’ vision; beauty is universally unique. The famous L'Oréal
Paris “Dream Team” is made up of ambassadors from all origins and backgrounds, including icons from the
film, fashion and music industries. These exceptional women are the brand’s international spokespeople,
reflecting the diversity of our customers – whatever their age, whatever their origin. Each in her unique way,
upholds and empowers a particular female strength, inspiring others to fulfil their talents every day through
their commitment to causes that echo our values of feminism, inclusivity, equal rights and sustainability.
L'Oréal Paris has a group of ambassadors, artists, actresses, and activists referred to as the L’Oréal Paris
"Dream Team".

Louise Bourgoin

Cindy Bruna

Camila Cabello

Viola Davis

Celine Dion

Jaha Dukureh hey take

Elle Fanning

Jane Fonda

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Luma Grothe

Amber Heard

Soo Joo

Liya Kebede

Aja Naomi King

Doutzen Kroes

Katherine Langford

Gong Li

Eva Longoria

Andie Macdowell

Helen Mirren

Aishwarya Rai

Duckie Thot

As the first woman at the head of L’Oréal Paris, it’s an honor to uphold the brand’s commitment to
women’s empowerment. I’m not only managing a beauty brand of innovations and services, I’m leading a
transformative brand for women who create change… Because, we are all worth it.
-Delphine Viguier-Hovasse
Global Brand President, L'Oréal Paris

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1.7 L’Oréal Products

L’Oréal has so many different product ranges that can be used by professionals, and various
groups of customers in daily life. Following are the different products that Loreal owns: - Professional
products: -

These include the users at hair salons which provide their customers with a wide range of products to use for
business purposes. Usually, these products are sold in mass-market retail channels.

 L’Oréal Technique
 L'Oréal Professional, including ARTec and Innate
 Kérastase (created by L’Oréal in 1964)
 Keraskin Esthetics, created by L’Oréal in 2007 and specializing in skin care.
 Matrix Essentials, founded by Arnie Miller in 1980 and acquired by L’Oréal in 2000
 Mizani, founded in 1991 and bought by L’Oréal in 2001
 Pureology Research, founded in 2001 and acquired by L’Oréal in 2007
 Redken 5th Avenue NYC, founded by Paula Kent and Jheri Redding in 1960 and acquired by L'Oreal
in 1993
 Shu Uemura Art of Hair
 Carol's Daughter
 Carita
 Essic, founded in 1981 and acquired by L’Oréal in 2010
 Decleor
 Botanicals Fresh Care
 Cheryl's Cosmoceuticals

L’Oréal Luxe:

These include luxury items which are offered to the customers at selective retail outlets, i.e.,
departmental stores, perfumeries, luxury stores, the Group's own boutiques and travelling destinations.
Lancôme, Yves Saint Laurent Beaute, Giorgio Armani Beauty, Kiehl's, Biotherm, Cacharel, Diesel, Viktor
& Rolf, Ralph Lauren Fragrances, Shu Uemura, Clarisonic, Guy Laroche. Paloma Picasso, Urban Decay.
Maison Margiela, Yue Sai, Helena Rubinstein, IT Cosmetics, House 99, Atelier Cologne, Proenza Schouler.

Consumer products:

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 These are High-technology products at competitive prices. Generally, these products are used and sold
in hair salons. Usually end users or consumers are focused and thus marketed through retailing channels.
L'Oréal Paris, Color&Co. Ombrelle, Garnier. Maybelline. NYX Cosmetics. SoftSheen-Carson, Carol's
Daughter. Créateurs de Beauté, Essie. Magic, Niely. Colorama.

Active cosmetics: -

Cosmetics supported by dermatologists and pharmacists may be defined as active products. The
consumers who seek skin treatment usually are the main focus of this product range. Generally, these
skincare products are available in pharmacies and special sections of drugstone.

At L'Oréal Consumers Products, our mission is to democratize the best of beauty, and for us, beauty has to
be sustainable.

We embrace and enhance emerging trends to create the most relevant and sustainable beauty products and
experiences, making them accessible to each and everyone all around the world, thanks to the diversity of
our brands and their communities.
       
Our Division holds the world’s #1 beauty brand with L’Oréal Paris *, the #1 makeup brand with
Maybelline New York*,  the #1 natural brand with Garnier, as well as NYX Professional Make Up. We
democratize the best of accessible and quality beauty in skincare, makeup, hair care and hair color.

Beyond our four iconic global brands, we have a unique brand portfolio including among others Essie,
Stylenanda 3CE, La Provençale Bio...

Committed to offer the best of sustainable beauty

At L’Oréal Consumer Products, our teams are actively engaged to champion sustainable beauty, reduce
plastic consumption and fight climate change, yielding tangible benefits for our society, by embedding
sustainable practices along our value chain to tackle all our impacts on the planet.
In line with L’Oréal’s global commitments for the Planet, we focus on eco-designing quality, safe and
18
sustainable formulas and packaging. We are transforming our operations to reduce our environmental
impacts all along our value chain. We develop inclusive business relationships with our suppliers to allow
more people to access employment thanks to our solidarity sourcing program. Beyond all, we are working
towards empowering our consumers to make sustainable beauty consumption choices by disclosing the
impact of our products. L’Oréal has set itself the mission of offering all women and men worldwide the best
of cosmetics innovation in terms of quality, efficacy and safety. Here's a look at the Group’s latest stories.
Because we understand that beauty expectations and needs vary, we have built the richest portfolio of
diverse and complementary brands. We want to be able to offer all around the world a perfect choice of
brands for all types of consumer needs and desires and for all beauty dreams.

Our brands are from all cultural origins. A perfect blend between European, American, Chinese, Japanese,
Korean, Brazilian, Indian and African brands. We have created the world's most multi-cultural brand
collection, and it remains unique in the industry.

We offer a large choice of products at a wide range of prices, across all categories: skincare, make-up,
haircare, hair color, fragrances and others, including hygiene. Our brands are constantly being reinvented
so that we are always perfectly attuned to consumer preferences. We keep enriching this collection year
after year to embrace new segments and geographies and to respond to new consumer demands.

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1.8 Future Expansion
L’Oréal unveils its next generation of bold sustainability targets for 2030
2021 was the first year of implementation of L’Oréal for the Future, the Group’s sustainability
programme for 2030.
L’Oréal’s second
sustainability programme,
L’Oréal for the Future, was
launched in 2020. Encouraged
by the tangible results of the
previous programme, the
Group has set its sights higher
and pledged to respect planetary boundaries—what the planet can withstand, as defined by environmental
science. Seven groups of internal experts coordinated independent studies and worked with outside partners
and civil society to define the Group’s transformation strategy leading up to 2030. The strategy is based on
quantifiable goals to minimise the impact of Group activities on the climate, water, biodiversity and natural
resources, while helping to meet some of the most urgent social and environmental challenges facing the
world. L’Oréal is committed to reporting regularly on its progress against each goal, with clear and
transparent indicators.

L’Oréal launches today its new sustainability program “L’Oréal for the future”, laying down the Group’s
latest set of ambitions for 2030. In the context of growing environmental and social challenges, L’Oréal is
accelerating its transformation towards a model respecting planetary boundaries and reinforcing its
commitments to both sustainability and inclusion:

 Transforming L’Oréal’s business to respect the planet’s limits:

- By 2025, all of L’Oréal’s sites will have achieved carbon neutrality by improving energy efficiency and
using 100% renewable energy;

- By 2030, 100% of the plastics used in L’Oréal’s products’ packaging will be either from recycled or bio-
based sources;

- By 2030, L’Oréal will reduce by 50% per finished product, compared to 2016, its entire greenhouse gas
emissions.

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  Contributing to solving the world’s challenges by supporting urgent social and environmental needs,
through an unprecedented plan launched in May 2020:

L’Oréal is allocating €150 million to address urgent social and environmental issues.

In order to empower its consumers to make more sustainable choices, L’Oréal has developed a Product
Environmental & Social Impact Labelling mechanism, scaling from A to E, endorsed by independent
scientific experts and verified by an independent auditor, which will be progressively deployed for all brands
and categories.

“L’Oréal’s sustainable revolution is entering a new era. The challenges the planet is facing are
unprecedented, and it is essential to accelerate our efforts to preserve a safe operating space for humanity.
We do so in our own business operations and in our contribution to the society at large. We know that the
biggest challenges remain to come and L’Oréal will stay faithful to its ambition: operate within the limits of
the planet”, said Jean-Paul Agon, Chairman and CEO of L’Oréal.

Transforming L’Oréal’s business to respect “planetary boundaries”

“Planetary boundaries” are limits, which, if crossed, will compromise the Earth’s capacity as a habitat for
human development. Respecting a safe operating space for humanity must be a priority in the decades to
come, as scientists unanimously agree, which is why L’Oréal aims to transition to a way of operating its
entire business within the limits of the planet.

Therefore, the Group has defined new quantifiable targets for 2030, to fight climate change as supported by
the “Science Based Targets” initiative, but is also going one-step further by addressing three other major
environmental issues: preservation of biodiversity, sustainable water management and circular use of
resources. To ensure its business is respectful of a resource-limited planet, and fair for the communities it
works with, L’Oréal will not only continue to reduce its direct environmental impacts, but also reduce the
impacts of its entire activity including those of its suppliers and consumers.

“Over the past decade, we have profoundly transformed our company, putting sustainability at the very core
of our business model. With our new commitments, we are entering a new phase of acceleration of that
transformation: going beyond our direct environmental impact, helping consumers to make more sustainable

21
choices, as well as generating positive social and environmental contribution. As an industry leader, we
consider that it is our role to contribute to building an inclusive and sustainable society”, said Alexandra
Palt, L’Oréal Chief Corporate Responsibility Officer.

A concrete example of what L’Oréal wants to achieve: by 2025, all of the Group’s manufacturing,
administrative and research sites will reach carbon neutrality by improving energy efficiency and using
100% renewable energy. Through this commitment, L’Oréal wishes to contribute to the energy transition in
countries where it operates.

Empowering L’Oréal’s consumers for sustainable consumption choices

L’Oréal considers that embarking its business ecosystem (clients, suppliers and consumers) is part of its
responsibility.

To help its 1.5 billion consumers make more sustainable choices, L’Oréal has developed a Product
Environmental & Social Impact Labelling mechanism. The labelling will include a score on a scale from A
to E, with an “A” product considered as “best in class” in terms of environmental impacts. The method was
endorsed by independent scientific experts and data have been verified by Bureau Veritas Certification, an
independent auditor. The labels and scores will be accessible on products’ web pages. The first brand to
implement the new methodology as of 2020 is Garnier for its hair care products, third beauty brand
worldwide and leader of the market in France. This labelling will progressively be extended to other
countries, L’Oréal’s brands and product categories.

Contributing to solving the world’s challenges by supporting urgent social and environmental needs, through
an unprecedented plan launched in May 2020:

L’Oréal announced in May 2020 that it will allocate €150 million to address urgent social and environmental
issues:

 L’Oréal is engaging €100 million into impact investing, in order to act upon key environmental
challenges. €50 million will be used to finance damaged natural marine and forest ecosystems
22
 restoration projects through a fund called the L’Oréal Fund for Nature Regeneration, to be operated
by Mirova, an affiliate of Natixis Investment Managers, dedicated to impact investing. Another €50
million will be directed to financing projects linked to the circular economy.

 To help vulnerable women, L’Oréal is also creating a €50 million charitable endowment fund. It will
support field organizations and local charities in their efforts to fight poverty, help women achieve
social and professional integration, provide emergency assistance to refugee and disabled women,
prevent violence against women, and support victims. About L’Oréal’s sustainability commitments:
we are not starting from scratch Very early on, L’Oréal became aware of the need to respond to
environmental challenges. As an industrial company, it decided that tackling the environmental
impact of its plants and distribution centers was the most obvious first step, and a necessary one, to
begin its transformation process. This first phase is nearly completed.

 Since 2005, the Group has reduced the CO2 emissions of its plants and distribution centers by 78%
in absolute terms, exceeding its initial target of 60% by 2020, while production volume increased by
37% over the same period.

 At the end of 2019, L’Oréal had 35 carbon neutral sites (meaning they use 100% renewable energy),
including 14 factories. In 2013, L’Oréal decided to address the core of its activity: the development
of beauty products, its global sustainability programme Sharing Beauty With All, announcing
tangible sustainability goals towards 2020. At its core laid an innovative tool known as SPOT (for
Sustainable Product Optimization Tool), made to assess and improve the environmental and social
performance of products across all brands. Sustainability is now fully integrated into the design
process of the Group’s new products, from the earliest stages.

 85% of products created or renovated in 2019 had an improved environmental and social profile. 
By end of 2019, L’Oréal has helped 90,635 people from disadvantaged communities find
employment through the solidarity purchasing and inclusion programs.  L’Oréal is the only
company in the world to have achieved an “A” score in all three CDP rankings - climate protection,
water management, forest preservation - for 4 years in a row.y + Link to L4TF booklet. "

23
 Chapter 2.

Research methodology.

This chapter describes the methodology of the study. The project is based on information. Collected
from primary sources. After the details study, an attempt has been made to the present comprehensive
analysis of compensation. Of L’Oréal products consumed by the people. Data has been used to cover various
aspects like consumption, consumer preference and customer satisfaction regarding L’Oréal brands.

Method of data collection:

The data which is collected for the purpose of study is divided into 2 Bases:

Primary source:

Primary data is the data which is new And we use the primary source to collect the primary data. the primary
data comprises information survey of ‘Customer preference’ of L’Oréal products. The data would be
collected directly from the respondent with the help of questionnaire.

Secondary source:

The secondary data which is already in existence is known as secondary data. Secondary source includes
websites, various papers and magazines published from time to time. Historical documents and other sources
of published information. The study is a cross sectional study because the data when collected at a single
point of time. For the purpose of present study, related sample of population was selected on the basis of
convenience.

Data source:

Secondary data is collected from the Internet reference from library. Few data would be taken from the
websites, various papers and magazines.

Sample design:

It includes size of the sample and the technique that we used for selecting the different item from the sample.
A sample design is definite plan for obtaining a sample for a given population.

Sample type:

24
Some people often like to have a. Product with good fragrance, quality and affordable price. So the Project
had been used to cover various aspects like consumption, consumer preference and customer satisfaction
regarding L’Oréal products.

Sample size:

The samples of 50 people are taken on the basis of their convenience and preferences. The actual consumer
was contact on the basis of random samples. For the purpose of present study or related sample of population
was selected on the basis of convenience.

Statistical tools to be used:

This work I carried out through self-administrated questionnaires. The questions included were open ended,
dichotomous and offered multiple choices.

2.1OBJECTIVES OF THE STUDY

 To study the Business Model of L’Oréal.

 To study Loreal’s Supply Chain Management.
 To Study consumer attitude towards L’Oréal.
 To study Loreal’s marketing strategy.
 To study L’Oréal’s major competitors.

2.2LIMITATIONS OF THE STUDY

 Research is limited to the Indian Customers.

 Some respondents have biased opinions.
 Lack of any interaction with any official from L’Oréal.
 Sample size is very small as compared to the customers of L’Oréal
 Not everyone is a customer of Loreal

25
 2.3. PURPOSE OF STUDY

L’Oréal is one of the world's largest cosmetics companies. It is one of the world's largest
distribution groups. L’Oréal is a one of leading cosmetic company which produces world famous brands.
The company is making regular changes like acquisition policy, building new research centres in most
developed countries. By using technology, they are making collaboration with stakeholders.

L’Oréal is known as the world's leading cosmetics organization which has a portfolio that consists of many
worlds’ dominant beauty products. Company sales are almost 80% done from outside France, with action in
every key region. It is the only Cosmetics Company which has distribution, almost 140 countries. L’Oréal
strategy of diversity and trading of its workforce is one of the assets. Companies employ groups of people
from different backgrounds which leads to improved creativity and innovation. Development and
preparation can play vital part of life at L’Oréal each year approximately 100 employees attend industry-
specific and leadership development training and conferences at L’Oréal management development centres
in Tokyo, Paris and New York.

L’Oréal’s acquisition strategy- aspirant on integrating recognized and well-known brands.

Examples of unbeaten acquisitions are Carson Inc which measured as the 3rd largest provider of adult
women's hair relaxer in America. The acquisition of body shops is the British natural based cosmetics
retailer with about 2,290 stores throughout worldwide. Company is making more attractive to the green
consumer those strives no doubt after look both their environment and body.

Despite this, the organization is going through continual changes, both in terms of consumer
demand and costs; therefore, a detailed strategic analysis need to be conducted, to look at the broader forces
that are upon the industry and identifying ways in which the company can then use it's own strengths and
opportunities to establish even stronger position within the cosmetic industry. By focusing on what it does
best, namely using an efficient supply chain, this will enable to beat its competitors to the market and to
produce new products, on regular intervals, thus allowing the company to gain a competitive advantage in
the race which is emerging among these cosmetic brands.

This project aims at understanding the marketing practices, consumer attitude and supply chain
practices followed by the largest cosmetic manufacturing and distributing company L'oreal It takes into
consideration the profile of the company and the characteristics of the cosmetics industry and on what
factors does it's future growth depends upon. Then the report concentrates on the various key factors of
success of L’Oréal. This study analyses L’Oréal’s internal and external environment and public perception to
make recommendations for improving performance against competitors such as MAC and LAKME.
FIRSTLY. L’Oréal is assessed in terms of SWOT & PESTLE analysis. Marketing mix analysis, Porter's

26
Five Forces. Then logistics and supply chain management. Finally, it focuses on the competitive advantage
that L’Oréal has over its competitors.

2.4 RESEARCH HYPOTHESIS

The null hypothesis (H0) is a hypothesis which researchers tries to disprove, reject or nullify. The “null”
often refers to the common view of something, while the alternative hypothesis (H1) is what the researcher
really thinks is the case of a phenomenon.

HO - Brand Ambassador of L’Oréal doesn't play a major role in buying decisions of customers.

HI- Brand Ambassador of L’Oréal plays a major role in buying decisions of customers.

HO - L’Oréal is an expensive brand and they charge high prices on their products.

H1- L’Oréal is not an expensive brand and they charge normal prices on their products.

HO - The first thing that comes into the minds of the customers when they buy the L’Oréal product is not the
quality.

H1 -The first thing that comes into the minds of the customers when they buy the L’Oréal product is the
quality.

Hypothesis can be used to assure the assumption that is stated by the researcher and he/she can accordingly
prove their research and based on that can get the conclusion.

It can be understood that hypothesis is necessary to prove that assumptions and one can give suggestions and
recommendations.

2.5 Marketing Mix

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28
L’Oréal finds itself in the situation  of  the  most  prosperous  hallmark  as  it  serves  as  the  basis  for 
identifying  opportunities  in  order  to  satisfy  the  unaccomplished  customer  needs  and  requirements.  In
addition to it, L’Oréal is cognizant of its own capabilities and  the  environment  in  which  it  is  operating. 

L’Oréal Group aspires to bring to reality the urge for men and women to look beautiful and aesthetic with
time.  This mission has always been of prime significance in for the company. As far as the marketing
investments are considered, although 90 percent of the investments are accounted for by the investment in
brand contacts, until now there hasn’t been any tool which allows the managers to identify, a consumer
perspective, the most efficacious set of contacts in which to invest. 

However, L’Oréal Group has described a tool which empowers the brand owners and marketers to identify
and select the crucial contacts which are relevant for a particular brand.  Moreover, in order to integrate
across these key contact points, L’Oreal delivers brand experience through a relevant and pertinent set of
consumer brand which encounters at a  minimum  cost,  but  with  maximal  impact.
  Moreover,  it  focuses  on  the  metrics  which  can  be  used  to  inform  a  variety  of  significant 
decisions  in  the  context  of  managing  brand  contacts.

The  essential  marketing  principles  make  it  accessible  for  any  business  to  survive  in  the  market  in 
an  efficacious  way  as  it  encourages  the  businessmen  to  apply  them  to  aspects  of  their  daily  lives 
as  well  (Jobber,  2007). In  context  of  the  first  element  of  its  marketing  process, it  is  the  company’s 
distinct  expertise  of  beauty  that  exists  for  the  reason  that  it  believes  in  beauty  which  is  all  the 
more  unique  and  diversified  that  any  other  Industry.

Beauty has  always  played  a  significant  role  in  people’s  lives, and  the  directors  of  L’Oreal Group 
believe  that  by  enhancing  the  well  being,  the  satisfaction  as  well  as  the  self-esteem of people, they 
can  assist  them  in  possessing  a  better  and  a happier  living  (Wharton, 2005).  When  it  comes  to 
marketing  the  beauty,  the  process  is  quite  distinct.

Unlike  other  fast  growing  businesses  like  that  of  food,  detergents,  paper  products,  etc.,  beauty doe
not grow fast. It  is  not  about  just  responding  to  the  consumer’s  needs. However,  it  is  about 
transforming  dreams  in  to  reality. 

It invents satisfactions,  emotions,  pleasures  and  ultimately  moments  are  reasons  for  happiness. For
L’Oreal, marketing is critical as it is difficult to develop brands which have a strong emotional connection

29
with consumers. The marketing at  L’Oreal  is  a  unique  combination of intelligence  as  well  as  emotion, 
reasoning  and  emotion, as well as details and visions.

The  consumers  are  clever  and  they  always  recognize  the  quality  and  superior  performance.
Innovation  is  absolutely  critical  and  as  a  result,  L’Oreal  had  to  have  the  best  research  and 
development  to  win  the  battle  of  technology. The company’s  port-folio of  brands  reflects  several 
fundamental  ideologies  which  define  the  L’Oreal  strategy.

Brands  are  organized  by  distribution  channels,  which  are  absolutely  exclusive to each  distribution 
channel, for example, professional products to hair  salons, consumer  product  brands to retail  stores 
including  drug  stores  and  food  stores, luxury  products  brands chiefly to specialty  stores  and 
department  stores  and  cosmetic brands to  dispensing  dermatologists and  pharmacies.

At  the  brand  strategies  of  product  launches as well as their  marketing  are conceived to be truly global.
The  brand  strategy  is  absolutely  similar  everywhere  in  the  world  for  it  is  a 
rule. Moreover, the products are designed to be global. The  key  to  marketing  strategy  of  L’Oreal  is  the 
real  secret  weapon  of  the  group,  which  are  its  employees.

These  are  the  most  important  assets  of  the  company  as  they  are  individual  talents  of  their  teams.
Where  most  of  the  competitors  of  L’Oreal  believe  in  the  importance  of  the  organization  and 
process, the L’Oreal Group  believes  in  the  enhancement  of  its  employees  as  well  as  their  talents. It
possesses  all  forms  of  talents  for  all  forms  of  disciplines,  i.e.  finance,  sales,  manufacturing, and
chiefly marketing.

Having  the  best  talent  in  its  team,  it  is  natural  and  obvious  for  the  group  to  become  the  most 
successful  cosmetic  brand  across  the  globe.

The marketing mix refers to a concept of a business’s core model, which is traditionally focused upon the
product, place, pricing, and promotion. It is described as a collection of marketing techniques that a
company uses to achieve its marketing objectives in a target market.

It thus comprehensively covers the business and marketing strategies surrounding a business. Let’s dive
deeper into L’Oréal’s marketing mix.

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The term "marketing mix" is a foundation model for businesses, historically centered around product, price,
place, and promotion (also known as the "4 Ps"). The marketing mix has been defined as the "set of
marketing tools that the firm uses to pursue its marketing objectives in the target market" Thus the marketing
mix refers to four broad levels of marketing decision, namely: product, price, place, and promotion.

Marketing practice has been occurring for millennia, but marketing theory emerged in the early twentieth
century. The contemporary marketing mix, or the 4 Ps, which has become the dominant framework for
marketing management decisions, was first published in 1960. In services marketing, an extended marketing
mix is used, typically comprising 7 Ps. made up of the original 4 Ps extended by process, people, and
physical evidence Occasionally service marketers will refer to 8 Ps, comprising these 7 Ps plus performance.

In the 1990s, the model of 4 Cs was introduced as a more customer-driven replacement of the 4 Ps. There
are two theories based on 4 Cs: Lauterborn's 4 Cs (consumer, cost. convenience, and communication), and
Shimizu's 4 Cs (commodity, cost, channel, and communication). Given the valuation of customers towards
potential product attributes (in any category, e.. product, promotion, etc.) and the attributes of the products
sold by other companies, the problem of selecting the attributes of a product to maximize the number of
customers preferring it is a computationally intractable problem.

Product

In marketing strategy, product is not viewed as a tangible product, but the source of value to be delivered to
the customers. Value to the customers of L’Oréal Cosmetics can be delivered in numerous ways such as –
financing plans to purchase the products, installation and repair services, point of sale equity, physical
product , convenience of availability , pricing and pre purchase education provided by sales staff, word of
mouth references, quality assuring brand name etc.

These numerous ways to understand

product concept provide marketing
managers of L’Oréal Cosmetics an
opportunity to differentiate its overall value
proposition from that of the competitors.
L’Oréal has a portfolio endowed with
international standard of brands covering a
wide range of products while satisfying the
needs of every customer present in any part of the world. All its products pass the international standards of
testing. The company deals in activities related to cosmetics, skin care, hair color, make-up, sun protection,
hair care and perfumes. In India, L’Oréal operates through four different divisions that are as follows:

Active cosmetics include brands like Vichy, Inneov and Sonaflore

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Luxury products include brands like Diesel, Ralph Lauren and YSL...

Professional products include brands like Technique. Matrix Essentials, Mizani and Kerastase

Consumer products (personal care) include brands like Ombrelle, Maybelline, Essie, Garnier, Magic and
Colorama.

Some of the consumer favorite products of the brand are eyeliner, mascara, eye shadow and primers for
eyes, primer, powder, foundation concealer and blush for face lip liner. lip gloss, lip balm and lip color for
lips, nail polish and remover for nails, hair colors in various shades for hair. Shampoo, conditioner for hair
care, moisturizers, cleansers, loners for skin care and hair spray, serum for hair styling are also used. L’Oréal
also has a kid's line of products. All the products are available in different product sizes and different price
ranges. L’Oréal is also planning to penetrate the Ayurvedic and herbal industry in the Indian cosmetic
section. They are having ongoing loss with some of the companies like VLCC and Biotique

Identification of Opportunity – Market research and customer research is done to identify the needs of the
customers that L’Oréal Cosmetics can cater to with its present and acquired resources.

Design and Testing – Product is designed based on the value proposition that customers are seeking and one
that L’Oréal Cosmetics can deliver. The key consideration regarding product design and testing are –
customer value proposition, regulatory requirements, L’Oréal Cosmetics skills and resources, opportunities
for differentiated positioning, and profitability.

L’Oréal Cosmetics Product Launch – It includes decision regarding pricing, communication strategy,
distribution channel management, and building infrastructure to provide post purchase services.

Product Life Cycle Management of L’Oréal Cosmetics products – Once the product is launched the
company needs to manage the life cycle of the product through its various stages such as – introduction,
growth phase, cash cow stage, and finally decline stage.

There are three major product line planning decisions that L’Oréal Cosmetics can take – Product
Line Breadth decision, Product Line Length decision, and Product Line Depth decisions. Some of the
considerations that marketing managers at company name need to take while making product line decisions
are –

1. How the new product brand launch will impact the overall brand equity of the L’Oréal Cosmetics present
brands and products. For example, often launching a no frill product may end up impacting the image of the
company as an innovator in the field. This is one of the reasons why Apple stopped selling its plastic phones
as it negatively impacted the image of the company as a deliverer of superior hardware products.
32
2. Does the product launch or product extension launch satisfy potential customer needs and wants in a way
that can deliver profits to the firm.

3. Will the product will be viewed completely different from the existing products of the firm and how much
is the risk of cannibalization of the present brands by a new brand.

Place

L’Oréal has development and research

centers in six places worldwide like
Japan, France US and China and its
products are available in one hundred and
thirty countries of the world. The various
products are found in various outlets like
perfumeries, hair salons, super markets,
pharmacies, beauty outlets and even
through direct mail. Besides this, the
brand has its own website and has tie-ups
with other shopping sites on the internet.

Place or Distribution Channel is a set of processes through which L’Oréal Cosmetics delivers its products to
the customers. Distribution & Marketing channels fulfil various purposes such as – providing product quality
assurance, easy availability of the products to end consumers , providing extensive product assortment using
product line – breadth, length, and depth, enabling product customization options at the point of sales,
logistics, after sales services and installation services, providing customers information about the
products ,and reducing purchase lot size thus enabling opportunities for individual customers to buy
products.

With all the needed product information, the consumers can make purchases from any part of the world. In
these changing times the internet has become one of the most important outlets for successful purchasing
and buying. L’Oréal’s operations in India are on an ever-growing path as the awareness of the beauty
products has resulted in the brands growth and popularity. Its operations in India are through its fully owned
subsidiary "L’Oréal India".

The company has set up a manufacturing plant in the city Pune in Maharashtra, India. Most of the products
are imported from abroad and the rest are manufactured in this plant. The successful growth of the brand in
India is credited to the efficient supply channels and distribution policies. In one of its kind distribution
strategies L’Oréal has appointed skillfully trained hairdressers that work in their own salons and outlets by
providing professional services to the consumers. This includes various treatments and product awareness
33
campaigns that help in creating a new consumer base. This has led to a number of L’Oréal salons in India,
where consumers come for professional and efficient treatment and these salons are for both the gender men
and women.

Price

Pricing is a highly complex activity and we will cover only a very limited aspect of what goes into pricing
decisions. To a large extend pricing depends upon the other 3Ps of marketing – product, place and
promotion. Conceptually perceived value is the maximum price a customer is willing to pay for L'oreal
Cosmetics product in the given competitive context.

Cost Base Pricing

Under cost-based pricing strategy – L’Oréal Cosmetics can work out what it takes to produce the product
and put a markup based on profit it wants earn. In a highly competitive strategy with dynamic pricing the
strategy may not be feasible. For example, Uber running losses in billions can provide lower prices and
sustain compare to individual taxi service provider who is not backed by private equity and long-term
strategy.

Value Base Pricing

Value Base Pricing is a pricing strategy which is based on customer perception of value. It inculcates put the
number on both tangible and intangible benefits with a clear understanding of elasticity of demand and
competitive pressures.

Market Penetration Pricing

L’Oréal Cosmetics can employ this pricing strategy where it launch a new product either at loss or at very
low margin to get a foothold in the segment.

Market Skimming Pricing

For certain well-established brands, L’Oréal Cosmetics can increase the prices as customers can pay higher
price.

Good Value Pricing

Offering right mix of product features, quality, and service combination at fair price. For example offering a
limited frill option - customers can have initial product experience at an accessible price. GoPro use this
strategy extensively.

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Competition Based Pricing

The pricing strategy is based on the competition in the market. Under this strategy L'oreal Cosmetics focus is
to match the prices of the competitors and focus on reducing the cost of operations to increase profitability.

Pricing Recommendation

Based on the evidences at hand – we can choose the following pricing strategy
High Brand Awareness – The brand of L'oreal Cosmetics is well respected in the market so it can fetch a
slight premium over the other competitive brands.
Innovative Product – With advanced features the product is perceived as innovative in the current market
context. A slight premium price will not only emphasize the features of the products but also stops other
players entering into the present segment. A high premium price may attract new entrants and thus lower the
profitability.

The biggest revenue earner for L’Oréal in India is the products related to the consumer division. The urban
consumer is not as price conscious as was portrayed earlier. For premium products, the consumers are ready
to dole out premium prices. As many of the L’Oréal products belong to the high qualitative product group,
the company had to maintain a premium pricing policy for those products. The company has decided to
maintain its value-added pricing policies for all its products. Some of the brands under L’Oréal have
products that cater to the middle-class section of the society and the pricing policy for these products is
reasonable so that the consumers can easily afford them.

Sometimes, in order to penetrate a new section of the market, the company has offered discounts and
schemes especially on introductory products. This leads to the minimization of prices and leads to an
increase in sales figure resulting in further revenues. In order to strike a reasonable balance between its
products and prices the company has taken steps to increase its Stock Keeping Units, as this will help in
creating a balance over the pricing policies

Promotion

Promotion Mix or Integrated Marketing Communication strategy is a mix of various promotion tools that are
at disposal of L’Oréal Cosmetics. They are – Advertising, Sales Promotion, Personal Selling, Public
Relations, and Direct Marketing.

L’Oréal has an advertising slogan that has always defined the brand. The first slogan was "Because I’m
Worth it". This was later replaced by "Because you're Worth it" and in the year 2009, this was again changed
to "Because we're Worth it". The changing times along with the mindset and concept can be seen in the

35
changing slogans. The shift to the letter "we" was to denote the consumer involvement in all the brand
products.

L’Oréal Cosmetics can use all these five communication tools to persuasively communicate to customer –
existence of the product, price of the product, differentiating features of the product, places where people can
buy the products, and finally how consumers can effectively use the products or services.

L’Oréal is a truly international brand and hence its advertisements are at a premium level. Attractive and
well-known models of international caliber are part of its promotions. In India, the advertising campaigns are
operated through local methods as well as through global methods to appeal to a wide range of consumers.
The advertisement agency recruited is "McCann Erickson". Former Miss World" Aishwarya Rai Bacchan"
has been its brand ambassador and international face and presently the actor "Sonam Kapoor" has been in
the L’Oréal advertisements. The ad campaigns are in numerous television channels, radio, fashion
magazines, hoardings and neon signs

Free products as samples are provided with other products or at salons to market the new items. Sometimes
discounts are offered on some products to increase the sales figures and to promote the products. In many
cases, surveys for customer satisfaction are carried out amongst the people who have used these products.
The results are then published as part of the promotions. For some of the L'Oreal brands the company has
adopted a "viral marketing strategy" under which the brand and its products are marketed through marketing
messages. The use of the internet has opened new doors for every brand and in every field be it marketing or
promoting

People

The 2020 plan to cross a billion-consumer base target is possible in reality by encouraging the people who
work in L'Oreal (Joia, 2000). L'Oreal committed £155,000 for female scientists' shows how it is aligning
business goals with the CSR agenda. It has 68% women employees, and its internal research using Bio-
engineering 'Organovo' to print 3D human skin by end of 2015 (Who we are, 2015).

Physical environment
36
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 eco friendly products. It has a strict policy of forest
certification of its packaging, which allows it to certify 99.85 of cardboard used for product boxes.

The landmark L'Oreal shoppers Pulse' in Hungary and India also have the entire EU dotted with rest of the
world is a sign of growing distinctness of the brand distribution (Sako, 2012). Though there are third party
retailers who are stocking and endorsing the brand L'Oreal majority of it is being sold through salons.

Process

L’Oréal has chosen a unique strategy: Universalization. It means globalization that captures, understands
and respects differences. Differences in desires, needs and traditions. To offer tailor-made beauty, and
meet the aspirations of consumers in every part of the world. L’Oréal is driven by this vision of the world.

That means also creating and producing cosmetics at a local level, so that our formulations are perfectly
adapted to the needs of our consumers, wherever they live. To achieve that, we have developed a
worldwide network of Research & Innovation and marketing hubs, one for each of our strategic markets:
the United States, Japan, Brazil, China, India and South Africa. To complement their work in
development, L’Oréal also has a global industrial presence, so that these innovations can be brought to
market quickly and efficiently.

The process of L’Oréal marketing has evolved with salons endorsing its products, retailers stocking it and
now online retailers are selling it (Tournois, 2013), 94% of the R & D process is now shifted towards non
humans and non-animals tested before L'Oreal launches in the market. Packaging process has evolved to
environmentally friendly materials.

To ensure its development, L’Oréal relies on global R&I, a unique portfolio of brands organized around
four Divisions, and integrated industrial production, supported by a set of corporate functions:
Administration & Finance, Digital, HR, Communications and Corporate Responsibility.  

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 2.6 Supply Chain Management

L’Oréal’s operations are highly complex – with business across 140 countries, 150+ distribution centers, 42
factories, 34 brands, and 8 distribution channels (including hair salons, mass-market retailers, department
stores, drugstores, e-commence, etc.)L’Oréal’s growth strategy requires a commitment to new product
innovation (up to 50% of products refresh annually focused on new and emerging markets, expansion across
e-commerce channels, and widened diversity of distribution.

Beyond inventory management, L’Oréal has felt the significant operational impact of e-commerce and
“change in order profiles” says Erik Rodriguez, director of supply chain for L’Oréal Americas. “The sheer
volume of orders has increased, but the lines per order has decreased. Additionally, there’s pressure from our
retail customers to reduce our lead times and improve our delivery times because they are running leaner
inventories”.
To meet the needs of the dynamic market, L’Oréal leverages automation like robotics and slotting software
to mechanize their distribution centers globally[8]. By implementing these new solutions, L’Oréal has stayed
competitive in order fulfillment speed, reduced labor cost, continuous quality improvement, and meeting the
surges during demand peaks. Now, what’s ahead for L’Oréal supply chain innovation?

These unique challenges, present L’Oréal’s supply chain leaders with the need for great agility and
adaptability to serve their ever-evolving customers worldwide. Leading industry transformation, L’Oréal has
invested in cutting-edge technology solutions and supply chain automation.The supply chain of L’Oréal is the
core feature which looks after the efficient running of the entire business production and processes. Supply

chain is divided into two parts one is the efficiency and the other looks after quality control.

Supply chain is the core of the company sales since it is responsible to make the deliveries to the depot,
distributer and ultimately the shops. To ensure the supply chain is well maintained L’Oréal management has
weekly meetings and software to record our forecast, orders placed by distributors (primary sales) and
ultimately the orders delivered to the distributor.

MSO is in direct contact with the brand team. He is responsible for required production and also informs

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organizations about lag or delays in production and all logistics involved and other things related to

production.

Forecast is based on a trend line that is predicted out of exponential sales trend graph and marketing impact
added on.

Demand planning is carried out for a period of 5 years at L’Oréal

Promotional Value Selling is where L’Oréal managers sit together with the planning team and set targets to
achieve in terms of sales and production after advertising and marketing campaigns
Base Line is the bottom line target of sales which can be achieved without any effort in marketing. This is what
the brand will achieve in terms of sale at all costs

In this phase the team forecasts the demands with the supply in order to procure the material required for the
manufacturing of the soap bars. The supply plan is derived from the demand plan.
Material Requirement Plan is the procurement plan in which vendors and suppliers are identified and the
material is procured. The details of procurement are established and are further shared with the budget control

The L’Oréal Luxembourg supply chain with its staff of over 1500 across the globe plays a double role. It
first guarantees proper deployment of the division's brands, in other words. it ensures that the same product
is available at the same time everywhere around the world. Next it must give consumers a luxury experience:
this experience involves exceptional products of course, but also exceptional shopping moments where the
point of sale is a theatre that showcases its products, advice, merchandising. testers, samples, etc. In fact,
perfect control of point-of-sale execution is the ultimate purpose of the supply chain.

This demand for quality and perfection must be sought at the best cost, optimizing use of the company's
assets, industrial investment, stocks and customer credit. It is backed by sales forecasts and revenue building
on each of our markets in close collaboration with the division's business departments and retail clients. At
the other end of the chain, it is backed by the suitability of our industrial resources to actual sales flows, the
same being applicable to our suppliers. It requires information sharing at each link in the chain and its
updating as sales evolve in order to build a worldwide supply and demand equation.

According to Jamie and Pascaline, one of the secrets behind L'Oréal's award-winning supply chain is our
Supply Chain Network. This global network of distribution centers and transportation lanes is what makes
sure the right products are delivered at the right time. with as little impact on the environment as possible.

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Needless to say, it's no small feat. "We're talking about over 150 distribution centers, delivering more than 7
billion products each year to half a million delivery points across the world." Jamie says.

Customers come first

Because the Supply Chain Network is the last step in our supply chain, it can have a big impact on our
customers buying experiences. "Our strategy comes from our consumer-centric mindset, as we offer
customized products and services to ever more distribution channels." Pascaline says. "This means it's really
important that we deliver products fast, make the most of automation, and never compromise on quality."

To tackle these challenges, we've got loads of innovative projects in the works, such as super cool high-
speed automation, an Operational Excellence programme to make quality even better while cutting down on
waste, and a brand-new Warehouse Management System that'll help take our distribution centers
digitalization to new levels.

What's more, our e-commerce is growing, which gives us a fantastic chance to offer our customers exciting
new options that can make a regular order even more special, such as engraved lipsticks and unique gift
wrapping.

However, it's not enough for us that our products are delivered efficiently—they need to be delivered
sustainably, too. In 2018, we hit a huge milestone by achieving 37 Carbon Neutral sites, including 19
distribution centers, and reached -77% CO2 emissions in

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factories and distribution centers compared to 2005. Naturally, we've got even more ambitions sustainability
objectives on the way, too.

"We're shifting a lot of our transportation from road to rail, and working with our partners to develop more
environmentally-friendly last-mile delivery solutions using electric vehicles, for example," Pascaline says.
"We've also made loads of progress in reusing cardboard waste as void-fill in our shipping boxes to replace
plastic."

For these initiatives to do the trick, we've all got to be on the same page. a tall order when we've got 8
distribution channels in 140 countries. "The only way we can continue to evolve and stay ahead of the curve
is to ensure that, without exception, all of our worldwide teams realise what's at stake. They also need a
common approach to deployment, and to truly understand their leadership roles," Jamie says.

Happily, thanks to our recent Worldwide Supply Chain Network Days, it's easier than ever to keep everyone
clued up. This first-ever conference was more than just four days of fun in Sumy Singapore it helped to
speed up our supply chain success by making sure that every country gets the most out of our innovations
and best practices. "We held workshops. innovation pitch sessions and extemal keynote speaker sessions. To
learn more, we also visited the sites and innovation centers of our global warehousing and transportation
partners," Jamie says.

For the 5th year in a row, L’Oréal is recognized by Gartner as a leading company in Supply Chain
for its agility, digital transformation and performance in sustainability.  L’Oréal was awarded the 9th
position in the Gartner Top 25 worldwide Supply Chain ranking, an industry standard, climbing 11 spots
since 2016.

Every spring, Gartner, the leading research and advisory company for Supply Chains around the world,
issues the Supply Chain Top 25: the preeminent ranking of supply chain leaders. Amongst the Supply
Chains being ranked are Johnson & Johnson, Schneider Electric, Alibaba, Nike, and Adidas.* The
evaluation of the 300 companies in the running is based on 3 major themes:  Resilience & Agility, Data &

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Technology, and Sustainability. From its achievements to its vision and strategy for transformation,
L’Oréal’s Supply Chain distinguished itself in each of these categories.

“We are very proud of this renewed recognition that encourages us to go further and to continue accelerating
our Supply Chain’s transformation. The achievements that were presented and the transformation strategy
are all made possible thanks to the strong commitment and incredible drive of our teams.” - Francisco
Garcia Fornaro, Chief Supply Chain Officer at L’Oréal
L’Oréal should use scarcity to their advantage! If L’Oréal approached each product line as a test-and-learn
model, for instance, launching only twenty thousand units of the exclusive Gigi Hadid Maybelline Mascara
in USA Target stores; they could predict sales forecasts by region, consumer target, color palette, etc. before
launching globally. This fast-fashion apparel business model applied to the beauty industry means less
inventory, more collections, and greater flexibility to react to the changing tastes of fashion consumers.

 L’Oréal should improve their direct-to-consumer sales channel! Today, L’Oréal across its 34 brands, relies
on the majority of sales to come from department stores, mass-market retailers, and drugstores. L’Oréal’s
predominant e-commerce strategy has been sending consumers from their websites to Amazon.com,
Walmart.com, or Target.com to purchase online – but as a result L’Oréal forfeits control of the consumer
experience, potential of higher margin, and strategic data analytics. L’Oréal should make strides for a best-
in-class e-commerce and omnichannel user experience, driving direct online sales for a stronger customer
relationship and better data insights.

L’Oréal should build localized, entrepreneurial capabilities! The simple fact is Chinese beauty consumers
demand something very different than Americans. L’Oréal must react to regional differences in consumer
preferences, while using the same foundational supply chain capabilities. I believe, segmented innovation
and regional agility must be at the core of L’Oréal’s organizational culture. Therefore, L’Oréal must build a
supply chain for smaller production runs, quicker leadtimes, and more volatile demand cycles for localized
market needs.

I believe the giant beauty conglomerate L’Oréal is losing certain share to the small premium personal care
brands boosted by digitization, such as Dollar Shave Club. To regain its share, as you wrote, L’Oréal must
put consumer at the center of its supply chain strategy. Meanwhile, they must continue to invest on
innovation and R&D. They must invest on building eCommerce as well – benefits include hugely valuable
consumer data and higher margin. All these investments might hurt bottom-line in the short term, but it will
bring sustainable growth in the long term, which L’Oréal must be able to convince its shareholders, bring
them on board and ask for their patience. But this will be challenging undoubtedly.

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 2.7 STP Model

Market Segmentation
We cannot trust a conversation on beauty brands if it does not reference L’Oréal. The company has been a
trendsetter in the industry and a trusted beauty partner of millions. More than a century-long history of
worldwide success proves that their understanding of customer needs is on another level. Their diverse
portfolio, alongside flexible marketing strategy and target segmentation, has taken them as far as today.
L’Oréal owes its success to a complex of factors. We will discuss their superior segmentation strategy and
analyze the company from different dimensions. Let’s discover L’Oréal’s formula of success together!

L’Oréal forms segmentation strategy by rebounding from customer needs Product development of every
great company begins with their customers. Every product is an answer to a user need. Consequently,
companies must perfectly adjust to fit the solution and address the specific needs of customers. By analyzing
this commercial, we will form a better image of the targeted segment of L’Oréal.

The commercial features famous American actress Eva Longoria. The main idea of the commercial is the
problem of straight hair that mess up very quickly. The famous actress talks about her worries, which all
women share.

This is a little, but the advertisers do a smart trick. L’Oréal wants to emphasize that regardless of fame or
success, women face similar issues with beauty.

Eva’s lines “You know the drill” accent the commonality of such problems. L’Oréal did a great job in
gathering their customers around a beauty problem that worries them all. This idea captures the attention of
many customers who seek a solution.

Besides the emotional part, L’Oréal has a trusted reputation as a global brand. They offer a product with a
guaranteed solution, and this combines with the attractive personality of Eva.

Additionally, L’Oréal uses the authority and influential name of Eva as a powerful weapon of attraction. To
elaborate, if a star trusts L’Oréal as the best solution for straight hair then it is the real deal. L’Oréal utilizes
appeal to authority to increase the effect of advertisement on viewers.

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The company utilized a combination of different techniques to achieve their desired results. By analyzing
this commercial, we can conclude that L’Oréal targets the segment of the Fulfillers.

Who are the Fulfillers?

Lifestyle and Values: Representatives of this segment construct their life around their business and career.
Every component of their life has the effect of their career on it. Fulfillers have a constant drive to climb up
the career ladder. This mostly affects the life decisions and sacrifices they have to make.

Additionally, they like taking risks and challenges. They look at risks as new potential opportunities and
chances to experience growth. Their families have to adapt their priorities and approach them with
sympathy.

They might miss some family events because of their career. Additionally, they seek recognition for their
success and achievements in their field.

Fulfillers like to go out to cafes, bars, or dancing places to hang out with their friends. They like eating out
more than cooking for themselves or eating at home. That is mostly because they do not have the time for
cooking.

Being modern and following trends is typical for them. They like going out for the weekends to balance
active relaxation with their saturated week life. Travelling 2-3 times in a year is normal because they are
interested in exploring foreign cultures.

Fulfillers like using a wide variety of brands. The main preferred brands are the premium ones, and they do
not save money on quality. They are willing to pay more for it, and most do not consider the price. They are
mostly among the early adopters of new brands and products. Shopping is a leisure activity and improves
their mood.

Fulfillers tend to make quick decisions about buying because they have fewer things to worry about. This
explains the increased possibility of impulse buying. Fulfillers like trying out new brands, but would still
purchase the ones that they like.

As you might have already guessed, they mostly like luxury brands. Because they like sports and a healthy
lifestyle, they purchase a lot of sporting equipment as well. Geographic segmentation is dividing the overall
market based on different geographic units such as – countries, continents, zip codes, states, trading blocks,

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cities, and neighborhoods. Geographic segmentation is highly efficient for L'Oreal in the international
markets because the prospective customers have different culture, preferences, and administrative systems.

Secondly, if the cost of transportation is critical cost in the value proposition delivery then it is prudent to do
geographic segmentation as the costs of serving customers in different locations will be completely different.
Demographic segmentation is dividing the mass market into smaller segments and groups based on gender,
income, occupation, age, life cycle stage, ethnicity, religion, and generation. As the products of L'Oreal
provide a superior value proposition, it should segment the customers based on two main demographic
criteria – income of the prospective customer and life cycle stage. One of the most widely used demographic
segmentation frameworks in United States by various marketers is – PRIZM.

PRIZM® is the geo-demographic segmentation system that combines geographic data with various
demographic, consumer behaviors, and other data to help marketers identify, understand and reach their
customers and prospects. PRIZM classifies every U.S. household—assembled by zip code—into 66
demographically and behaviorally distinct segments. In the marketing world, lifestyle oriented interests,
activities, and opinion, are categorized under psychographic variables.

L'Oreal can use psychographic segmentation to divide the potential buyers into different segments based on
– personality characteristics, buying patterns, consumption opinion, opinion on social issues, leisure
activities, hobbies, and many other dimensions. Psychographic segmentations are effective because people in
the same demography can have different psychographic characteristics based on individual life experiences
and growing up environment.
One of the most widely used consumer behavior frameworks to do consumer psychographic analysis is –

VALS - A widely used segmentation method that classifies America’s adult population into eight distinctive
subgroups: innovators, Thinkers, Achievers, Experiencers, Believers, Strivers, Makers, and Survivors.
Behavioral segmentation divides buyers into groups based on their - attitudes, product knowledge, product
uses, and other responses to a product. Many marketing experts believe that behavior variables are a good
starting point to build consumer segments. For example for any service – Freemium model is a far more
effective segmentation strategy than geographic, demographic, or psychographic. The behavior segmentation
can help the organization to focus on key features, and provide the consumers with features that they are
more likely to use. Continuous engagement leads higher customer satisfaction rates and high net promoter
score.

A lot of consumers have similar want, needs, and buying behavior even though they are located in different
countries, cultures, and political systems. L'Oreal can use the principle of cross market segmentation –
defining and targeting same type of consumers in different markets, strategy in this scenario.

45
L'Oreal marketing team shouldn’t confine itself to one segmentation strategy. In fact should strive to
inculcate numerous features to better define and identify the target groups and segments.

Target Market

After identification of various consumer segments within the marketplace, L'Oreal needs to target a specific
market. The choice of target market is dependent on ten critical factors –

Segment structural attractiveness - Presence of core infrastructure to market successfully to the target
market.

Regulatory and other entry barriers - Are there any regulatory and technological barriers that L'Oreal will
face if it decides to enter the market.

Organization’s mission, vision, and the consumer segment fit – Is the targeting consistant with the vision,
mission, ethos, values and strategic fit of the L'Oreal.

Financial resources to target a specific segment – Does the organization has marketing capabilities,
operational skills, and financial resources to target a specific segment of consumers.

Product Life Cycle stage – It is highly relevant in the international scenario where the product life cycle is at
different stages based on social, economic, regulatory, and political reasons. L'Oreal needs to find out at
what stage of the product life cycle the target segment is.

Competition in the target segment – What is the level of competition in the target segment. If the
competition is fierce then there is less likelihood of sustainable margins in long term.

Organizational technical capabilities to cater to a specific consumer segment in the Personal & Household
Prods. industry

The financial return potential of the target market – L'Oreal needs to decide whether the segment it is
planning to target can be financially lucrative.

Organization’s comparative strengths and weaknesses to market successfully to the target market.
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Presence of appropriate collaborators to market successfully to the target market – Is there sufficient
infrastructure available to target certain customer segment. For example everyone knows that there is an
environment conscious segment in automobile industry who can pay premium prices for electric vehicles,
but none of the major auto players successfully able to target that segment because there was no
collaborators ecosystem. Tesla became successful by building that ecosystem.

The L’Oréal target market includes consumers who are looking for a particular scent that makes them feel
more attractive. And so, this market segment includes people who may not necessarily be interested in the
cosmetic properties of the product, but instead, they’re after the scent and how it makes them feel about
themselves.

#1 Consumers who would like to relax and pamper themselves

Many people buy cosmetics just to relax and pamper themselves. Makeup is a way for them to take time out
for their own pleasure, and the act of applying it can be calming and soothing for many.

So, consumers may buy L’Oréal products for the simple reason that it makes them feel good. It’s a way to
relax and escape from the everyday stressors of life. And for these people, the cosmetic properties of the
product are secondary to the way it makes them feel.

In fact, people who want to relax and pamper themselves are an important segment of the beauty market.

#2 Consumers who would like to express their individuality

Many people use makeup to make a statement about how they feel or what they think. It’s a way of
expressing their individuality and showing the world that they’re different from everyone else.

Many use cosmetics as a form of self-expression – they want to use products that make them feel pretty or
attractive, or that reflect their personality. Some use cosmetics to create a certain image or persona that they

want others to see. For instance, someone may use a L’Oréal product because they want to look like a movie
star or a model. Or they may use it to create an alter ego that is completely different from their everyday self.

#3 Consumers who will use cosmetics under peer pressure

Peer pressure is often a strong motivator for people to use cosmetics, especially among young people. If all
their friends are using a certain product, they may feel like they need to use it too in order to fit in.

This is especially true for teenagers and young adults who are still trying to figure out their identity and who
they want to be in the world. By using cosmetics, they’re able to experiment with different looks and images
until they find one that feels right for them.
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So, the peer pressure to conform can be a strong driver of sales for cosmetic companies like L’Oréal.

#4 Consumers who buy L’Oréal as a status symbol

Just like looking good and attractive is important to people, so is having the latest and greatest products. For
some people, using a particular brand of cosmetics is a way to show others that they have money and can
afford the best.

So, these consumers may buy L’Oréal products because it’s a status symbol. They want to be seen as
someone who can afford to buy the best and most popular products on the market.

This is especially true for luxury brands like L’Oréal. These brands come with a high price tag, but for some
people, it’s worth it because it shows that they’re successful and can afford the best of the best.

#5. Consumers who use makeup to hide skin defects

Some consumers like to use makeup to cover up skin defects or blemishes. This may be because they’re self-
conscious about their appearance or because they want to create a certain image that they feel is more
attractive.

Sometimes, for unfortunate reasons, people can have a skin defect. This could be because of an accident, a
medical condition, or simply because they were born with it. Whatever the reason, these people may use
makeup and cosmetics to conceal and minimize their skin defects.

L’Oréal provides a wide range of products that can help these consumers cover up their skin defects and feel
more confident about their appearance. A part of this market also includes those interested in natural skin
care products. Especially, people who have skin problems and want to use makeup to cover them may look
for natural ingredients to avoid any skin irritation.

The L’Oréal target market is diverse, and there are many different reasons why people buy L’Oréal products.
The primary reason is naturally to look better. Closely related is the need to smell good and feel attractive.

Consumers also buy cosmetic products from L’Oréal to relax and pamper themselves as well as to express
their individuality. Peer pressure can play a big role in which brand of cosmetics someone purchases. This
too leads to some consumers trying out a product from L’Oréal.

Some consumers will also buy L’Oréal as a status symbol. It makes them feel good about themselves. And
finally, consumers who use makeup to hide skin defects are also a segment of the L’Oréal target market.
Differentiation is essential in modern marketplace because of the ease with which organizations can either
develop new products or source them from third party suppliers who are working with other big brands. One

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of the biggest examples of it is the growing emergence of private labels in the retail industry. Retailers find it
extremely easy to get products manufactured from the suppliers in various industry, this helps them in
sourcing products at lower prices and make them competitive against major brands which have to spend a
huge amount of resources on promotion and marketing of the produc

Market Positioning

Brand positioning and value proposition positioning are critical to marketplace success in today’s
competitive marketplace. L'Oreal needs to position its product in such a way that it creates a – distinct
image, provides a specific identity / reference point of the product and services in the customer’s mind.
Brand positioning and product differentiation have become increasingly critical because of the driving down
of production costs in the Personal & Household Prods. industry and the direct access to consumers using e-
commerce and other online retailing strategies.

Factors determining the Positioning choices of L'Oreal are –

Margins in the Personal & Household Prods. industry – If the positioning strategy is aimed at a segment that
can’t deliver desired financial returns in long run then L'Oreal should avoid positioning the products for
features.

Marketing Resources with competitors – If L'Oreal competitors have huge financial resources to deploy for
marketing, then L'Oreal will face stiff competition.

Ability to defend a differentiation and positioning – Can L'Oreal defends the differentiation it seeks to
project. If L'Oreal can’t defend the new product / services positioning then it will be left to fend off
competitive threats from new entrants.

Strategic fit of L'Oreal – As L'Oreal already have numerous products and services, the new products and
services need to fit into the strategic fit of the already prevalent value chain delivery model.

Competition ability to imitate & replicate – If the competitors can replicate / imitate the products and
services easily then L'Oreal will face strong challenges to defend its marketing positioning.

Corporate image of L'Oreal – Positioning of new products should be consistent with the brand image and
core competency of the L'Oreal. As L'Oreal is a -best value for money -player in the Personal & Household
Prods. industry, it should position its product slightly higher than the market prices.

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Threats of direct competition and competitors' response – If the competitors’ response is predicted to be
strong then company shouldn’t strive for a positioning where competitors can easily counter attack the
marketing strategy and marketing mix of the organization.

Relevance of positioning to the customers – Is the positioning relevant to the customers. For example
Blackberry tried to position itself as a provider of high end corporate security. Most consumers didn’t buy
into that positioning because most were not using their phones for corporate purposes.

Consumer ecosystem – If the positioning of the product is not consistent with the consumer ecosystem then
consumers won’t accept the product or service.

Marketing resources with the firm – Does the firm have enough marketing capabilities and financial
resources to position the product in the desired segment.

Market Positioning refers to the ability to influence consumer perception regarding a brand or product

relative to competitors. The objective of market positioning is to establish the image or identity of a brand or
product so that consumers perceive it in a certain way.

Throughout its history, L’Oréal was always standing for beauty and self-care. From the very beginning, the
company becomes known for its innovative products, and to this day it stays true to its initial values. The
product range of L’Oréal is very extensive and diverse. The brand made sure to have something suitable for
every person and make beauty and self-care more accessible. 

L’Oréal uses a mix of traditional and unconventional marketing to promote the brand and its products. You
can probably recall watching an ad by L’Oréal on TV. The bright and engaging commercials of this brand
are quite popular and very often they feature renowned artists, models, etc. Also, you can meet L’Oréal ads
in printed media, on billboards, etc.

Together with this, Loreal successfully uses its social media pages to promote the brand and to communicate
with the customers. The brand uses social media pages to present its achievements, innovations, and keep
connected with the customers.

Besides, L’Oréal presents new, interesting, and engaging campaigns all the time. They attract more attention
to the brand and as a result, maintain its strength and popularity. Also, the brand is actively engaged in
sponsorships and takes part in different initiatives. All these steps are used to promote the brand, strengthen
brand image, and increase its value.

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The company strives to make cosmetics and self-care products available to everyone around the world. The
main problem that L’Oréal wants to solve is providing safety, quality, and excellence in all its products. It
wants to give consumers a means and opportunity to take care of themselves.

The brand is deeply passionate and driven to create and continuously improve a variety of products suitable
for different people. They want not only to improve the existing products but also to invent new ones for
consumers and the market. L’Oréal strives to become the best in the market with the quality and diversity of
its products.

L’Oréal continuously works to improve its ecological and social impact. The brand does all the mentioned
steps not only related to their products but also takes part in different initiatives to help our planet and create
a better future for all.

When it comes to social approval, L’Oréal uses various strategies. Like many companies nowadays, L’Oréal
has also adopted sustainable management and presents itself as a responsible brand. The brand thinks that
its excellence should be visible not only in its products but also to the impact that it has on the environment
and the society. The Company operates globally in four strategic business units (SBU) namely Consumer
goods, L’Oréal Luxe, Professional Products, and Active Cosmetics.

The professional product division generated revenue of $4007 million with negative growth rate 0f 1.4 %
corresponding to the 2016 year. While consumer products, L’Oréal Luxe and Active cosmetics business
segments contributed revenue of $14494 million 10132 million, and $2870 million with a growth rate of 1%,
100.6% and 11,9% corresponding to 2016 respectively.

L’Oréal group has been ranked 133nd in the Forbes list of Top multinational performers and 379 th in the
Fortune 500 magazine list. The company has been continuously been in Fortune 500 list for 23 years. The
company has been valued at $107.5 billion on the basis of Market Capitalization method (as of May 2017).

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 3 LITERATURE REVIEW

3.1 L’Oréal Masters Multiculturalism

Harvard Business Review
By Hae-Jung Hong and Yves Doz
From June 2013 issue

At the heart of every global business lies a tension that is never fully resolved: Achieving economies of
scale and scope demands some uniformity and integration of activities across markets. However, serving
regional and national markets requires the adaptation of products, services, and business models to local
conditions. As US and European companies increasingly look for customers in emerging economies, both
the advantages of global scale and the need for local differentiation will only increase.

It's easy to get the balance wrong. Some offerings may feel like commodities think refrigerators and
washing machines-yet there are often important variations in the way people use them. An Italian washing
machine, for instance, has to be made to rather different specs than a Swedish one. Others, such as
restaurants and cafes, come across as intrinsically local, yet global formulas and brands do succeed think
Benihana, Wagamama, and Starbucks.

The tension between global integration and local responsiveness is especially high when product
development and marketing require complex knowledge. This kind of knowledge usually tacit and
collective, revealed only in action and interaction is often the mainspring of a company's competitive
advantage. The trouble is that tacit knowledge functions best within national boundaries, where workers
share a language and cultural and institutional norms and can draw on strong interpersonal networks.
Without close, face-to-face interaction between knowledge creators and users, an understanding of how bits

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of information fit together may be lost and the knowledge may become unusable. Further, when tacit
knowledge must cross borders, it is often reduced to information that moves easily (words and numbers, for
instance) but may then fall prey to local misinterpretations that are difficult to detect from afar.

At the heart of every global business lies a tension that is never fully resolved: Achieving economies of scale
and scope demands some uniformity and integration of activities across markets. However, serving regional
and national markets requires the adaptation of products, services, and business models to local conditions.
As U.S. and European companies increasingly look for customers in emerging economies, both the
advantages of global scale and the need for local differentiation will only increase.

It's easy to get the balance wrong. Some offerings may feel like commodities think refrigerators and
washing machines-yet there are often important variations in the way people use them. An Italian washing
machine, for instance. has to be made to rather different specs than a Swedish one. Others, such as
restaurants and cafés, come across as intrinsically local, yet global formulas and brands do succeed-think
Benihana, Wagamama, and Starbucks.

The tension between global integration and local responsiveness is especially high when product
development and marketing require complex knowledge. This kind of knowledge usually tacit and
collective, revealed only in action and interaction is often the mainspring of a company's competitive
advantage. The trouble is that tacit knowledge functions best within national boundaries, where workers
share a language and cultural and institutional norms and can draw on strong interpersonal networks.
Without close. face-to-face interaction between knowledge creators and users, an understanding of how bits
of information fit together may be lost and the knowledge may become unusable. Further, when tacit
knowledge must cross borders. it is often reduced to information that moves easily (words and numbers, for
instance) but may then fall prey to local misinterpretations that are difficult to detect from afar.

The French cosmetics giant L’Oréal exemplifies this global-local tension. It has built a portfolio of brands
from many cultures French, of course (L’Oréal Paris, Gamier, Lancôme), but also American (Maybelline.
Kiehl's, Soft Sheen-Carson), British (The Body Shop). Italian (Giorgio Armani), and Japanese (Shu
Umemura). The company now has offices in more than 130 countries, and in 2012 over half its sales came
from new markets outside Europe and North America, mostly in emerging economies, up from only a third
as recently as 2009.

In 2012, sales grew in the Asia Pacific region by 18.4% and in Africa and the Middle East by 17.6%,
without significant acquisitions. Despite the financial crises in Europe and North America, L'oreal has been

53
growing and gaining market share, mostly at the expense of its competitors. It is the uncontested world
leader in skin care, makeup, and hair color and a close second to P&G in hair care worldwide. Since 2004
L’Oréal’s revenue has increased by half and its profits have almost doubled, with an increase in net profits of
17.6% in 2012 alone.

Yet this remarkable global success was built largely by a management team strongly rooted in its home
culture. Traditionally employees became part of management over many years. weaving a dense network of
relationships through which knowledge about products, cultures, and how to work together was internalized.
Since its inception, more than a century ago, L’Oréal has had only five CEOs (including the founder), all but
one with long tenures and all promoted from within. Only a few foreigners have become senior executives.
Lindsay Owen-Jones, who was CEO from 1988 to 2006, was one of them. Although an Englishman, he was
described by members of L’Oréal’s founding family as Françoise dans lame ("French in his soul"). For
decades. L’Oréal recruited few senior executives from outside. After several years the exceptions took pains
to explain that they had worked for L’Oréal for a long time and prided themselves on their perfect French.

The Advantages of Multiculturalism

A person rooted in more than one culture is usually able to spot and reconcile differences in
understanding and communication, serving as a buffer both within teams and more broadly in the
organization. In addition, he or she will probably be more open to adapting to multiple mind-sets and
communication modes; it's well known that people find it easier to learn new languages if they have grown
up speaking more than one. These skills equip L’Oréal’s multiculturalism to play five critical roles.

Recognizing new-product opportunities.

L’Oréal Paris finds that multiculturalism is better placed than others to draw analogies among
cultural groups. According to a director who worked with multiculturalism for five years. "Their background
is a kind of master class in holding more than one idea at the same time. They think as if they were French,
American, or Chinese, and all of these together at once."

This very flexible perspective can lead to unexpected opportunities for product innovation. For
instance, a French-Irish-Cambodian manager working on skin care noticed that many tinted face creams in
Asia had a lifting effect, which imunizes winkles. In Europe. creams tended to be either tinted (and
considered as makeup) or lifting (and considered as skin care). Drawing on his knowledge of Asian beauty
trends and their increasing popularity in Europe, he and his team developed a tinted cream with lifting
effects for the French market, which proved to be a success.
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Although people rooted in one culture can also uncover such opportunities, multiculturalism is more likely
to do so and to do so faster because they have been dealing with cultural complexities since childhood. As an
Indian-American-French manager in a team that launched a men's skin care line in Southeast Asia explained,
"I am able to do this because I have a stock of references in different languages: English. Hindi, and French.
I read books in three different languages, meet people from different countries. eat food from different
countries, and so on. I cannot think about things in one way."

Preventing losses in translation.

Even when there's a common syntax or language, as in mathematical and chemical formulas, cross-
cultural semantic differences can cause confusion. What the person initiating a communication means is not
necessarily what the person receiving the communication hears. The problem thus shifts to who interprets
what, and how accurately a critical issue in the design of new products.

For instance, a French manager's product test failed because he asked a German colleague in the laboratory
to translate the characterization of some hair features. Through conversations with an English-French-
German manager, the French manager discovered that there had been a gap between what he meant and
what the German heard. It was a nuanced difference: The words were the same, but their meaning was not.
He had to run the test again, at significant cost. Since then, the multicultural manager who spotted the
difference has been called on frequently to decode communications between headquarters and the German
office.

Integrating outsiders.

Teams staffed with people who are not multicultural find it hard to assimilate newcomers with
different behaviors and modes of communication, particularly when the team has developed its own norms
or its members belong predominantly to one culture. Given the intensity of a team's internal interactions,
incumbent team members can quickly resort to stereotypes about a newcomer, and the situation can become
toxic. The presence of a multicultural member can help prevent this dynamic from taking hold.

Consider the experience of a Hong Kong-British-French director: "After a new person joined my team from
the Shanghai office, a member complained that she was 'very rude.' I said. Let's give her more time to adjust.
Maybe she's not being rude and that's just how she expresses herself. Why don't you also try to adapt to her?
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When I went to Shanghai, I had a meeting with my new team member and found she was not being rude.
The way she expressed herself was direct, without bad intention. I didn't tell her about the complaints but
gave some advice on how to better work with people whose cultures are different. When I returned to HQ. I
told my group about my experience with the new member. Things became much better."

If a newcomer is disruptive because of personal style or personality, there may be little anyone can do. But
if the issue originates in cultural differences, which it often does. multiculturalism can help integrate the
outsider. They can perform this function because they are adept at moving from one mode of interaction to
another. They grew up doing so-switching from one parent to another, or from school to home.

Mediating with bosses.

The role of cultural buffer is important at L'oreal Paris, especially for reducing the potential for
conflicts between the multicultural product-development teams and the people they report to, who are, for
the most part, French. Here's how a multicultural manager explained one aspect of his role as team leader:
"My French boss never starts meetings on time. So whenever we have a meeting planned with him, we can
get frustrated if we are not flexible. If I am running behind myself, I make sure to tell my team members in
advance why I am behind and ask them for their next availability. Conflicts may still exist in my team, but
we handle them more tolerantly."

Bridging differences between subsidiaries and headquarters.

Multicultural managers have frequently defused acrimonious communications between a subsidiary

and L’Oréal Paris. For example, on a project to develop an organic shampoo for the European market, the
product development team in Paris asked the Indian unit to find a rare local plant that would provide a key
ingredient. The Indians told the team that they would "do their best" but sat on the request. As the team's
Indian-American-French leader told us, "Eventually the Indian manager said. 'We need confirmation that
this ingredient can really please consumers."

Since the late 1990s. L’Oréal Paris has placed executives from mixed cultural backgrounds in its most
critical activity: new-product development.

L’Oréal Paris generally has about 40 product development teams, each working on a different concept. A
team consists of three or four people, two of whom may be multicultural. For example, in a team we spoke
with that is working on women's hair-care products for Latin America, a Lebanese-Spanish-American

56
manager was in charge of hair color while a French-Irish-Cambodian was in charge of hair care. They shared
an office so that they could exchange ideas

Developing a new product takes at least a year of knowledge exchanges among the product development
team, regional subsidiaries, and functional units in France, such as R&D. In addition to interacting with their
peers, who may come from different cultures, team managers must discuss their work with top management,
formally and informally, as it progresses.

Once a new-product concept is ready, the team presents it at Réunion International, the consumer products
division's annual event, held at the Paris headquarters. The teams pitch their launch action plans to regional
directors from around the globe, who come looking for ideas that might be ready to hit the market in one or
two years.

The multicultural managers are drawn from three pools. The most seasoned come from the company's
international subsidiaries and have at least five years of experience in sales and marketing. A few are
recruited from other global companies. The third and youngest group consists of graduates of leading
international business schools. The recruits undergo a 12-month training program in Paris, New York.
Singapore, or Rio, followed by management development programs at Cedep, an executive education
consortium in France.

After spending two or three years in global product development at headquarters, the more experienced
managers usually return to their home regious as directors, responsible for managing a brand or function.
Most of those recruited from business schools remain for another few years in product development at
headquarters. After this second tour they, too, usually go to a regional office at the director level, though
some remain in Paris. Their promotion prospects, like those of all employees, depend on performance.

An increasing number of multiculturalism are starting to find their way into senior management in the
company a sign of the success of the approach. Among the people we met, one Hong Kong British French
project manager (recruited at headquarters) was subsequently promoted to lead the team developing all facial
products for the East Asian market, and an Indian-American-French project manager (recruited from the
Indian subsidiary) moved to another division with a significant promotion.

In sum-and there is an important message here for other multinational companies-L’Oréal matures a pool of
multicultural managers. placing them at the center of knowledge-based interactions among brands, regions,
and functions. Let's look at what these young men and women offer the company in return.

57
 3.2 L’Oréal’s Technology Incubator: Creating the Future of Beauty

By Victoria Gomelsky March 30, 2017 (New York Times)

As global vice president for L’Oréal’s Technology Incubator, a 26-person team that operates like a start-up
within one of the world's largest cosmetics companies, Mr. Balooch partners with academics and
entrepreneurs to make products on the forefront of the $438 billion global beauty industry

"Everything starts with this pillar in my mind of where beauty and technology meet," Mr. Balooch said
while touring the New Jersey facility that houses the incubator's first lab, founded in 2012. (San Francisco,
Paris and Tokyo are home to additional labs.)

Since the incubator opened. Mr. Balooch has overseen the development of five products- a mix of wearables,
objects and apps that further his vision of a future in which cosmetics are connected, customized and
designed to meet each consumer's needs.

Take his team's latest invention: the Kérastase Hair Coach Powered by Withing’s. Introduced in early
January at the International Consumer Electronics Show in Las Vegas, the sleek silver hairbrush the product
of a three-way partnership of the incubator, the smart technology maker Withing’s and Kérastase, L’Oréal’s
luxury hair-care brand is described as the world's first smart brush.

"More than 50 percent of Google searches today in beauty are about hair." Mr. Balooch explained.
58
The device aims to banish bad hair days by offering technical insights into the state of the user's locks, plus
personalized advice on how best to care for them.

Scheduled to go on sale this year for less than $200, the brush contains a conductivity sensor that knows
whether hair is wet or dry: an accelerometer and gyroscope to measure the speed and force of brush strokes,
a microphone that captures auditory data; and Bluetooth and Wi-Fi connectivity to upload all that
information to an app, which uses an algorithm to analyze the statistics and detect breakage. And oh yeah,
the bristles feet pretty good, too.

"It was very important for us to make a high-end device that, taking all the technology and sophisticated
aspects away, is the best brush you'll ever see," said Cédric Hutchings, chief executive of Withing’s and vice
president for digital health at Nokia, which developed the hardware Mr. Balooch said the brush uses a
combination of synthetic fibers "that mimic $200 to $300 brushes on the market."

The Kerastase Hair Coach Powered by Withing’s is a smart brush with its own app. The product is
scheduled to go on sale later this year.

It's a category he knows well. In 2007, after earning a doctorate in biomaterials from the University of
California, San Francisco, and following postdoctoral studies in cell biomechanics at Stanford, he took a job
with L’Oréal in Chicago, where he was challenged to "understand the physics of hair," he said. "I would take
hairs of ethnic descent and I would test relaxers on them, shampoos, conditioners, then I would break the
hairs on a machine," he said. Mr. Balooch's work impressed the L’Oréal brass, who in 2008 asked him to
join the company's research and innovation team, and build relationships with start-ups and universities.

When the incubator was formed five years ago, he was "the right man for the job," said Mr. Balooch's
manager, Stephan Habif, senior vice president for L’Oréal’s research and innovation arm in the Americas.
"This is L’Oréal we believe in entrepreneurship."

That may explain why the incubator is staffed by men and women who share Mr. Balooch's academia-meets-
Silicon Valley background.

"I hand-chose everybody more for their souls than their resumes," Mr. Balooch explained.

"If you put a UX designer, a physicist, a biologist and a micro-engineer all together in a room, the tension
between their ideas creates really cool things."

59
Makeup Genius, the incubator's first project, proved him right. Introduced in May 2014. the virtual makeup
app relies on augmented reality technology, in which graphics are superimposed onto real-world imagery, to
let users try on various shades of L'oreal cosmetics before buying.

From an aggregate to a brand network: a study of the brand portfolio at L'Oreal Claude Chailan

International University of Monaco, Monaco

Journal of Marketing Management Vol. 26, Nos. 1-2, February 2010

Our exploratory study, founded on a series of interviews with some of L’Oréal’s principal leaders, analyses
the way in which L’Oréal developed its brand portfolio and authenticates the existence of a link between
brand portfolio and sustainable competitive advantage. Three characteristic stages of the creation of the
brand portfolio at L’Oréal have been identified: (a) aggregation of brands over time, (b) the rationalization of
this set of brands, and finally (c) the competitive conceptualization of a development model founded on the
brand portfolio.

This process led to the development of key competencies issued from company history and experience. A
brand portfolio must be considered as the combination of these competencies, along with the set of brands
owned by the company.

L’Oréal empirically developed and then formalized a unique model. founded on the association of
competences born out of its own learning process and from its history with a group of brands that are
complementary between themselves. At L’Oréal, a brand portfolio is a strategic-level tool that surpasses the
contradictory pattem between 'internal' and 'external' needs.

The brand portfolio can bring together differing needs and reconcile those needs over the long term. Its
dynamic dimension allows for sales and profits development from methodically eliminating brands or by
integrating new ones (Kumar, 2003). As such, the brand relationship is not just hierarchical and static but
dynamic and evolving.

Thus, this ensures that the organization of brands is being viewed and managed just as proactively as other
assets (Petromilli & Morrison, 2002). The brand portfolio lets L’Oréal achieve a coherent management of
brand ensembles, and allows the company to have not just a superior marker impact but clarity in its product

60
offers, synergies, which also creates a lever effect (Aaker & Joachimsthaler, 2000). Thus, the company can
permanently achieve a level of performance higher than that.

3.3 -L’Oréal Expands Virtual Try-on Service by

By Sara Castellanos
THE WALL STREET JOURNAL DEC.19.2019

L'Oréal SA is expanding its use of augmented reality and artificial intelligence, after virtual try-on services
over the past year prompted customers to buy more makeup and hair color products, said Lubomira Rochet,
the French cosmetic company's chief digital officer.

The company's U.S. subsidiary rolled out a service this week that lets shoppers use their phone's camera to
simulate various hair-color shades from L'Oréal products Garnier Nutrisse and Garnier Olio using
augmented reality technology.

Using the Google Lens image-recognition mobile app, made by Google Inc., shoppers can point their phone
cameras at the hair-color boxes to activate the virtual try-on service. The application identifies the product
and color and then activates the virtual try-on service. powered by technology from Modi Face, a company
that L'Oréal acquired in 2018 for an undisclosed amount.
Customers can use the feature anywhere the two Garnier products are sold, but 500 participating Walmart
Inc. stores will have signs near the products demonstrating how the virtual try-on service can be used.

As Hatch and Schultz (2003) have observed, it is difficult to maintain credible product differentiation as
businesses face imitation, homogenisation of products and services and fragmentation of traditional market
segments. They argued that, in this era of globalisation, differentiation requires positioning the whole
corporation, where the values and emotions symbolised by the organisation become key elements of
differentiation strategies, and the organisation itself moves center stage.

61
From the past recent years, concern over Corporate-level marketing is gaining much magnitude. Balmer and
Greyser (2003) have attempted to provide an understanding of Corporate-level marketing. According to the
authors, a move towards corporate level concerns is evinced by several ascendant areas of marketing such as
relationship marketing, services marketing, international marketing, marketing for non-profits, integrated
marketing communications, corporate public relations and, more acutely, in relation to corporate and to
services branding.

It is imperative to note that the “corporate-level” concerns strategic management and the CEO and the board
of directors should be familiar with the scope and significance of this nascent area (Balmer and Greyser
2003,

As said by Boyd et al. (1998), the traditional 4 Ps, the controllable elements of a marketing program are the
product, price, promotion and place. Decisions about each element should be consistent and integrated with
decisions concerning the other three (Boyd et al. 1998, p.19). The latter is the conventional marketing mix of
a product. For Corporate level marketing, another set of marketing mix will be used. According to Balmer
and Greyser (2003), there are three differences between the marketing mix and the corporate-level marketing
mix: The elements are broader than the traditional “4Ps” of the marketing mix. The elements of the
traditional mix require a radical reconfiguration. The third is that the mix elements have distinct disciplinary
traditions. They also transcend the traditional organisational boundaries.

Initially in 1998, Balmer attempted at articulating the traditional marketing mix to ten elements as depicted
in Exhibit 1 and described in Exhibit 2 (Balmer 1998, p.963-996). However, it has been argued that it is
difficult to operationalise and to recall the ten elements of the new marketing mix, when compared to the 4Ps
(Balmer and Greyser 2003).

Knox et al. (2000) have claimed that the branding of product is not enough in contemporary competition. In
other words, to ensure competitiveness and survival in the long term, firms have to go beyond branding only
the products. Corporate branding allows the firm to come into play, involving the identity of the company
(Ind 1997). The basic concern is to integrate corporate activities into a coherent and consistent strategic
framework which presents the company’s functional and emotional values with a promised experience, i.e.
the brand promise (de Chernatony 2002).

De Charnatony and Harris (2000) note that consumers are not the only stakeholders whose perception
matter. They argue that employees of the organisation are influential contributors to the building and
maintenance of an appealing corporate brand. As the corporation itself is in center stage as the brand,
employees are pushed into an active mode. Their values, attitudes, professional and cultural identities
become visible (Morsing and Kristensen 2001).

62
It follows that corporate branding is not only the concern of customers and management, but also different
stakeholders. As mentioned above, one of the key elements of the corporate-level marketing is people – the
employees of the organisation. As claimed by Harris and de Charnatony (2001), employees are essential to
build relationships with all the stakeholders as well as contributing to the meaning of the brand.

63
 4. Data Analysis, Interpretation and Presentation

1 Please select your age group

1%

10%

18-21

22-29
53%
30-39
3
6 Above 40
%

Interpretation
In the above pie chart the circle repersent the whole age group which uses the loreal products.53% of teens
then comes the 22-29 range people with 36% . The 10% of area is covered by 30-39 age group people .
There are only 1% of people above 40.

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2. Gender

28%

Male
Female

73%

Interpretation
As shown in the pie chart 73% of the respondants of this survey were Female ,while 27% were Male.

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3. Are you familiar with  L'Oréal Brand?

6%

12%

Yes

No

May be

82%

Interpretation
The 82% of people are familiar with the loreal brand . The rest 12% and 6% of respondant are not familiar
according to the survey.

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4 How often do you buy L'Oréal products? 

14%

12%
43% Weekly

Monthly

Every few week

1-2 times a year

31%

Interpretation
The above diagram represents the buying period of customers. 14% of people buy loreal products
weekly.The monthly buyers are 12%. Every few weeks 31% of people consumes the product. Rest 43%
purchase the product 1 to 2 times in a year.

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5 How long you have been using  L'Oréal product ?

15%

Recently
49%
More then 1 years

2 years and above

36%

Interpretation
From the survey conducted, we see that a majority of respondents i.e. 49% are using since 2 years and above
they can be justify as loyal customers. 36% of people have been using more then 1 year . The recently
purchasing consumers are 15%.

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6 Name of the product you are, using ?

12%

10%

Hair care

Skin care

Cosmetics
19% 60%
All products

Interpretation
From the survey conducted we can assume that the majority of people i.e. 60% use haircare products
from Loreal.19% of respondents use skin care whereas 11% use all products. Cosmetics are used by
only 10% of people.

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7  What made you to purchase the product ?

8%

27%

Value for money

Quality

Review's

10% Word-of-mouth
recommendation
56%

Interpretation

As shown in pie chart 56% of customer purchase loreal products because of the quality.The reason of
purchase of 27% is word-of-mouth recommendation.While 9% of people purchase due to its review’s.Value
for money is the main reason of purchase for 8% of respondents.

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8  Are you satisfied with the  L'Oréal products ?

4%

Yes

No

96%

Interpretation
96% of respondents are satisfied with the products rest 4% are not satisfied.

71
9  Do you trust  L'Oréal brand ?

2%

Yes
No

98%

Interpretation
According to the survey conducted 98% of respondent trust loreal brand whereas 2% don’t trust.

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10   What do you think of  L'Oréal products packaging ?

38% 37%

Good

Very Good

Excellent

26%

Interpretation
As shown in the above pie chart. There is a tie between good and excellent. 37% of respondants think the
packaging of product is good as well as excellent . The option of Very good have 26% marking.

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74
11. Where do you often see the advertisements of L'Oréal products ?

15%
19%

Shopping malls
Social media
Departmental stores
12% Salons

54%

Interpretation
As per the survey conducted, 54% of the respondants, which is the highest majority, viewed
L'Oréal advertisements on social media. 19% viewed advertisements salons while 15% came across
shopping malls advertisements. Only 12% of the respondents saw L'Oréal advertisements on the
departmental stores.

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12 Give rating on a scale from 1 to 10 

24%
1

4
50%
5

26% 9

10

Interpretation
As shown in the above pie chart 50% of respondent have rated 10. While 26% of people have rated 9. 8 was
rated by 24% of respondents.

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13 How do you prefered shopping L'Oréal products ?

25%

38%

Online

Shopping malls

Departmental
stores

37%

Interpretation
As shown in the above pie chart 38% of consumer like to purchase physically from departmental stores. 37%
of customers buy from shopping malls while 25% prefer shopping online.

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14 Would you prefer using L'Oréal products again?

3%

Yes
No

97%

Interpretation
The above pie chart justifies that 97% consumers will prefer buying L'Oréal products again rest 3% are not
interested.

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15 Did you feel comfortable shopping with L'Oréal?

1%

Yes

No

99%

Interpretation
As shown in the pie chart 99% consumer feel comfortable shopping with L'Oréal which indicates a positive
sign.

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 4.1 SWOT Analysis

 S.W.O.T. is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. A SWOT
analysis (Dell swot) is an organized list of your business’s greatest strengths, weaknesses,
opportunities, and threats.
 Existing businesses can use a SWOT analysis, at any time, to assess a changing environment and
respond proactively. In fact, I recommend conducting a strategy review meeting at least once a year
that begins with a SWOT analysis.
 New businesses should use a SWOT analysis as a part of their planning process. There is no “one
size fits all” plan for your business, and thinking about your new business in terms of its unique
“SWOTs” will put you on the right track right away, and save you from a lot of headaches later on.

The SWOT analysis framework involves analysing the strengths as “S” and weaknesses as “W” of the
L’Oréal’s internal factors, and the opportunities as “O” and threats as “T” of its external factors of
performance.

Through this analysis, the weaknesses and strengths within L’Oréal can correspond to the opportunities
and threats in the business environment so that effective strategies can be developed. It follows from this,
therefore, that an organization can derive an effective strategy by taking advantage of its opportunities by
using its strengths and neutralize its threats by minimizing the impact of its weaknesses.

Moreover, SWOT analysis can be applied to both a whole company as well as a specific project within a
company to identify new company strategies and appraise project feasibility. Here is you’ll understand
the SWOT Analysis for the L’Oréal Paris cosmetic company.

Strengths

The ongoing success of the L’Oréal Group is without if not for the ingenuity of the concept of their vision as
a team. L’Oréal Chairman and CEO Lindsay Owen-Jones consider passion as the key to the well-renowned
accomplishment of the said Company.

The primary strength of the Company is the continuing research and innovation in the interest of
beauty which assures that L’Oréal Cosmetics offers the best to their consumers.

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Their dedication to their continuous research makes them the leader in the growing cosmetics industry
despite the competition in the market. The strength of the L’Oréal Groups is the developed activities in the
field of cosmetics as well as in the dermatological and pharmaceutical fields to put more concentration in
their particular activities.

The cosmetics activities of L’Oréal divide into five groups. First is the Consumer Product Division which
encompasses all the brands distributed through mass-market channels, ensuring that L’Oréal quality is
available to the maximum number of consumers. The Luxury Products Division includes the prestigious
international brands selectively distributed through perfumeries, department stores, and duty-free shops.

Professional Strengths of L’Oréal:

The Professional Products Division offers specific hair care products for use by professional hairdressers and
products sold exclusively through hair salons. The Active Cosmetics Department creates and markets
products for selective distribution through pharmacies and specialist health and beauty outlets. The L’Oréal
Group’s dermatological activities are linked with Galderma; which is basically a dermatological firm that
contributes to the innovation of L’Oréal Group’s products.

The pharmaceutical activities of L’Oréal also handle by Sanofi-Aventis. These divisions and subdivisions
ensure the quality that the L’Oréal Group offers to its customers. To further add to the enumerated strengths
of the company; L’Oréal’s advertising strategy also plays a major part in its growth. Through adapting to the
culture of their target market as the main tool of their advertisement; the Company brought L’Oréal products
within reach of other women from different parts of the world.

1. LOREAL is one of the highest selling cosmetic brands in the world.

2. LOREAL offers more than 25 brands in the international market.

3. It has been able to record $ Billions of revenues during the year

4. LOREAL has one of the finest and best R&D facilities in the industry which are helping to roll out new
products according to the requirements of the customers.

5. It has well defined business areas of cosmetics, dermatology as well as Pharmaceuticals. This allows the
company to distinctively focus on each activity in order to maintain quality.

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Weaknesses

Perhaps one of the weaknesses that a big company faces is the decentralized organizational structure. This is
also part of the difficulties that L’Oréal is facing. Due to the many subdivisions of the Company, there is
also the difficulty in the control of L’Oréal. This slows down the production of the Company because of the
need for giving reference to the other Board members and directors of the Company. L’Oréal will also have
difficulty in finding out what division is accountable for the possible pitfalls of the Company. Another
weakness that L’Oréal faces is its profit.

The profit margin of L’Oréal is comparably low than that of the other smaller rivals. While L’Oréal projects
a certain rise in digits as their profit, the result does not usually meet the expectations. Perhaps, this is also
due to the high-end advertising and marketing as well as the width of the Company. Finally, the coordination
and the control of the activities; and, the image in the worldwide market also view as a weakness on the part
of L’Oréal. Due to its worldwide marketing strategy, there are also dissimilarities brought about in the
campaign of L’Oréal products as to what image they are to project.

1. LOREAL is a decentralized company with many subdivisions working as strategic business units
however, due to this, the overall control of the managerial activities has become difficult to exercise.

2. The overall profit margin earned by the company is considered as smaller as compared to other smaller
players in the market mainly due to the fact that the company engages itself into extensive advertising.

3. The advertising campaigns of the company are different in each market therefore consumers often find it
difficult to ascertain what actually the message of the company which it wishes to communicate to the
customers.

4. LOREAL largely operates into the EU and US region with little presence in other parts of the world. Due
to the current crisis in those regions, LOREAL may be finding it difficult to meet its sales targets because of
reduced consumer spending.

It seems there’s a new hair care line debuting every day now. More products for straight hair, curly hair,
blondes, and specific ethnicities are vying for attention. Although these are all just segments in the hair care
industry, it is affecting L’oreal. Even though the company may not be worrying about these new names,
they’re still competing with other big companies. Like Sunsilk and Head and Shoulders.

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Opportunities

The L’Oréal Company concentrates on cosmetic products that enhance women of all ages. The growing
demand for beauty products allows L’Oréal to focus on their field of specialization, particularly on
hairstyling and color, skincare, cosmetics, and perfumeries. Being the leading cosmetic brand gives them the
edge for their well-known image.

The opportunity also emanates from their growing market that ranges from the affluent, the aging, and also
the masses of the developed countries. Another opportunity that L’Oréal must take advantage of is its greater
market share; Because of the numerous patents registered by the Company. This enables them to have the
top-of-the-line products only to their name; and, therefore would lead customers only to them for they could
not find any of the said cosmetics in other brands.

1 LOREAL has a very little presence in emerging markets such as India, Russin, Brazil as well as other
smaller economies. Through local partnerships, it can make successful entry into such economies to extend
its market share.

2. Most of the products are for young men and women with very little emphasis being placed on developing
cosmetic products for children.

LOREAL can very well capture the children market by rolling out products for them

L’oreal can easily move into newer spaces in the beauty industry, like the personal care sector. People are
always looking for the newest, best product for their body. The likelihood of that changing any time soon is
basically zero percent. L’oreal can branch out into developing economies and countries where saturation
isn’t as prevalent. They have the means and the brand recognition to achieve this.

New products for niche consumers. This is where L’oreal should put more emphasis. Although L’oreal does
have a focus on curly hair and darker skin tones, they’re competing against companies who only work in
these niches. Since L’oreal is in nearly every sector of the cosmetic and beauty world, some people are less
inclined to work with them. Mostly because L’oreal provides products for everyone rather than one specific
demographic. This can mean the company isn’t “focused”. But L’oreal has the means to change customer
minds. Eco-friendly shoppers want products that are both helpful for their body, but not taxing on the
environment. Other customers are looking for specific products that are sulfate, paraben, and silicone-free.
The demand for natural and organic products is high right now. L’oreal should put even more focus here.

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Threats

A threat to the L’Oréal group is also the growing competition within the field of cosmetic brands. Due to the
ongoing addition to the field of cosmetics; there is still the danger that other brands could surpass the profit
of L’Oréal. Another threat to the Company is the economic downturn that is quite evident in other countries.
Such could thus hurt the possibility of higher profit for the company. Most products of L’Oréal are within
the reach of the citizens of developed countries; But, L’Oréal may have problems reaching out even to the
average people from underdeveloped countries.

Also, a threat to the L’Oréal Group is the spending habits of the consumer; and, the economic crunch that
most countries are experiencing as of present. While the L’Oréal Group may be producing the best of its
line; people may find that their products are not of their basic needs and would skip buying L’Oréal
products. However, with the growth of the market, the damage could be far from taking place.

1. Animal testing is one of the most emerging threats faced by the industry at large as growing number of
ethical consumers are demanding the banning of animal testing

2. Competition is emerging from relatively smaller players which particularly target different niches of the
market. Due to their size and typical marketing strategies, they are posing a serious threat to LOREAL.

The cosmetic industry moves quickly. One day, people are falling over themselves about a new conditioner.
It gets endless five-star reviews and endorsements. Then the next day, a newer product comes out. It’s now
in the spotlight and the conditioner is long forgotten. Keeping up with such demand can be taxing.

Especially when the competition is chomping to move ahead, even if they have to use small marketing
tactics to get it. L’oreal has countless products. And the profits are divided into these different segments. But
if something happens to the economy, the company will have a problem. Let’s be honest: the economy isn’t
always steady. It depends on several factors. Although one country can be flourishing, another may be
quickly on the decline. If L’oreal does business in declining economies, it will affect cash flow.

It’s not as if cosmetic and beauty products are a necessity. So if people don’t have extra cash to spend on the
products, they won’t.

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 4.2 PESTLE Analysis

L’Oréal PESTLE Analysis 2021:

When it comes to make-up, there
hardly might be someone who does
not know about L’Oréal. One of the
most widely recognized and used
brands; L’Oréal has gained a cult
following for cosmetics
lovers however they also are known
to provide amazing varieties of hair
colour, haircare, skincare, sun
protection, and perfumes.

The largest cosmetics brand in the

world, L’Oréal originated from Paris, France in 1909, an impressive 111 years ago! The headquarters of the
brand is in Clichy, Hauts-de-Seine. The brand is actually based on the creation of a simple hair dye formula
by Eugène Paul Louis Schueller. This hair dye allowed Schueller to grow the brand into the giant she is
today.

Jean-Paul Agon serves as the CEO and chairman with Françoise Bettencourt Meyers and Paul Buckle as the
vice presidents of the board of directors. Up till 2019, it was reported that they have about 88,000 employees
worldwide. You already know what the brand is, so let’s analyses it from a business perspective. Up ahead is
the L’Oréal PESTLE Analysis.

Contents

 Political Factors
 Economic Factors
 Socio-Cultural Factors
 Technological Factors
 Legal Factors
 Environmental Factors
 L’Oréal PESTLE Analysis: Conclusion

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Political Factors

L'Oréal is a leading cosmetic brand in the world having a global presence. The rules and policies of the
government of the countries in which L'Oréal is working has huge impact on its functioning. European union
changed its regulations governing medicines led to the decline in its dermatology products. Moreover, there
is a clear policy regarding the advertising that the company has to follow. It cannot mislead the consumers
by over exaggerating the benefits and functions of the product. Also, there are safety standard set by various
governments which it has to follow.

L'Oréal is not allowed to test its products on animals. In many Arab countries due to the conservative nature
of people it cannot advertise its products openly. Even many Arab countries see the western products
negatively and doesn’t allow it in its countries. This affected the company’s ambition to have presence in all
the countries.

Any company which makes the conscious decision of going global in its operations and availability should
be open to the huge possibility of being affected by world politics and usually in negative ways. L’Oréal has
to be extremely cautious of the policies, rules, and regulations according to the different countries they have
business in. The European Union has a huge impact on the brand; they have a set of very strict rules and
regulations to which cosmetic brands must adhere in order to remain functional.

Moreover, they have to fall strictly on the requirement of not including any harmful ingredients in their
products. It is also a bit challenging for brands like L’Oréal to run business in the Middle East and other
conservative countries because of the culture clash. The advertisements which work in the West showing
women in various forms of attire that are frowned upon in the East often lead to problems.

People these days are becoming more and more aware of political events and have lightning-quick access to
information on the internet. People choose to support brands whose values synchronize to their own more so
now than they did in the past. One such example is when L’Oréal had to let go of one of their spokespersons
Ameena Khan in 2018 when people found old “anti-Israel” tweets from her, otherwise many of the
customers would have left the brand.

Economic Factors

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.
86
Once again, global brands are severely affected by global conditions including the economy. Countries with
low or fluctuating economies are always a constant challenge.

Just like all other businesses, L’Oréal too was impacted by the Covid-19 pandemic. Though they did lose
some money during the first half of 2020; their exceptional performance and dedication allowed them to
enjoy a growth of 4.8% in the second half despite buying patterns having changed significantly during the
crises.

A very big contributor to the success of the brand during such challenging times is its immaculate online
presence. E-commerce has done wonders for them thanks to their effective use of various online platforms.
Sales went up a whopping 62% via these online channels for the brand as a whole.

They have a huge chance to grow further in developing countries such as India and China but unfortunately
due to the growing tensions in terms of trade wars between the Chinese and American governments, L’Oréal
will have to work very hard on being a big deal in China. Naturally, their best interests lie with the USA.

Socio-Cultural Factors

Today’s 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. Today’s
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.
L’Oréal has performed its CSR activities over the years but the recent most example is of how they made
and distributed millions of units of sanitizers and lotions to be donated to the front-line workers.

In terms of opportunity here, now is the best time to be a cosmetics brand. L’Oréal caters to hundreds and
thousands of consumers all around the world. People these days are more beauty conscious than ever
especially when it comes to their social media platforms. Make-up is the ultimate evergreen fashion trend.

Although L’Oréal now claims to be a vegan brand meaning that their product formulas are free of animal
products however the definition of veganism in brands transcends the ingredients to the testing of new
creations on animals. Though the brand is strictly against animal testing now, they still have to perform
animal tests in countries where it is a legal requirement such as China; this fact always puts the brand in
serious hot water with modern-day consumers who are against animal cruelty.
87
When the brand is as big as L’Oréal, it has to be very careful of what it chooses to promote in terms of
messaging. A transgender model Munroe Bergdorf slammed L’Oréal when they added a post on their social
media in support of the Black Lives Matter movement by claiming that she got sacked by the brand as their
ambassador in 2017 when she chose to publicly address white privilege and cruelty on people of color. She
called out the hypocrisy stating that L’Oréal is just trying to play it safe. The brand has now apologized to
the model for their poor management of the issue and she’s back to working with them.

In 2020, the brand group announced officially to remove words like “whitening” from their range of
products especially in light of the BLM movement that took the USA and the world by storm after George
Floyd’s murder. Consumers did point out that they were late to make this change but some people also
admired the effort.

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 favouring 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.

L’Oréal has been a player in the cosmetics industry for more than a hundred years now and the only way
they made it possible was by introducing and valuing constant innovation in their products. These days, the
focus at L’Oréal is to merge green science with digital technology; they want to offer sustainable and nature-
based solutions innovated with the help of the latest technologies and research.

L’Oréal also offers virtual try-ons for their products before the consumers actually pay. They also offer
customized solutions to individuals who are interested in deep diagnoses.

One of the most remarkable technologies that L’Oréal has managed to conjure up is the “Perso’s Smart
Skincare”. This device literally can conjure up customized skincare, lipstick, and foundation on the spot,
though the make-up feature will be introduced later.

The device is connected to an app through which you can enter your requirements. It gives you options of
explaining the extent of environmental pollution you face, your skin’s condition in terms of pigmentation,
88
wrinkles, fine lines, etc., and the latest trends in skincare to produce the right product for you. In fact, you
can even take a photo of your face and upload it via the app to get an AI assessment of what your skin is
facing and what solutions it needs. Talk about innovation!

This machine is portable, it provides clean application and it even adjusts a night and day time routine. This
is surely a huge leap for L’Oréal in the direction of becoming global leaders in Beauty Tech.

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 loreal. 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.

It must be exciting to be one of the most renowned brands in the world, but it is also extremely taxing. The
biggest problem brands face nowadays is counterfeit. Make-up and skincare counterfeit isn’t a new practice,
nor is it going away any time soon, but it does really hurt the brand’s credibility and even profits when
thousands of sellers in the world create cheap remakes.

In 2018, L’Oréal came to know about their counterfeits being sold in huge quantities on Alibaba. They got
involved with the Chinese authorities to bring this fraud to light. They eventually managed to succeed in
getting the fakes removed but this is just one example. it is impossible to keep a track of every fake product
being produced.

Counterfeit makeup is detrimental for health as well because it contains cheap raw materials which can
really cause harm to the skin.

In 2020 L’Oréal was in court under the accusation of illegally firing an attorney who worked for them
because he refused to indulge in an activity terming it as unethical. He claimed L’Oréal asked him to do
certain things which would not be right. Nothing concrete was proven here and the brand effectively denied
all of these allegations.

89
According to Britain’s 2015 Modern Slavery Act, major business brands are required to release information
every year on their efforts of eradicating any form of slavery in their supply chains. In 2017 it was reported
that L’Oréal was one of the brands that did not bat an eye on the dangers of slavery in India especially
because they were being exposed to raw mica which is an important ingredient in cosmetics.

They did release a statement claiming to be very against all forms of forced labor in third world countries.
They claimed to make continuous efforts into the ethical extraction of mica from Indian mines.

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 eco-friendly products.

It has a strict policy of forest certification of its packaging, which allows it to certify 99.85 of cardboard
used for product boxes. L'Oréal is also a member of carbon disclosure project with the objective to reduce its
emission of greenhouse gases. On the Climate Disclosure Leadership Index, L'Oréal has been given the
ranking ‘A’.

The company has decided to achieve zero-deforestation by 2020 and started sourcing all its palm oil
derivatives from sources certified by Roundtable on Sustainable Palm oil. Environmental is a big goal for the
brand to constantly achieve. By the end of the previous year of 2020, they have successfully reduced their
CO2 emissions by a whopping 81% in comparison to what their plants and factories produced back in 2005.

L’Oréal further propels this dedication by maintaining a constant dialogue with all of the brand’s
stakeholders so as to coherently work on sustainable solutions for the environment. The research process is
in the works for coming up with ways to reduce their overall impact by the year 2030 as a part of their 10-
year sustainability plan.

Despite their constant efforts, in 2019 it was noticed that L’Oréal’s website did not have much detail on their
use of certain toxins such as parabens, triclosan, and phthalates which are banned by the EU because they
are bad for health but they also pollute the environment. So the brand really ought to get on working up a
proper policy for full transparency on their use of toxins.

L’Oréal also plans to increase its use of sustainable packaging. They aim that all of their plastic packages
will either be biodegradable, recyclable, or refillable by 2025.
90
L’Oréal PESTLE Analysis: Conclusion

So by reading through this PESTLE Analysis for L’Oréal, the cosmetics and skincare giant, you now have
an idea of where the brand currently stands in terms of business.

A brand as prestigious as L’Oréal, with such a rich history behind it, truly is inspiring especially because
they managed to lead the market for over 100 years. It really boggles your mind to think they’ve made a
century.

The brand although in no way is under even the slightest suspicion of extinction, they still have to work on
correcting a few wrongs, the most important of which is completely eliminating animal testing. That will
never be brushed under the rug. They also need to be very cautious of the contributing people in their supply
chain so as to eliminate all sorts of slavery. They should develop a concrete policy on their use of toxins as
well.

You will never be able to view a company in a full 360-degree perspective until you focus on understanding
the various macro-economic factors that affect it. These factors play a very big role in shaping up the
company’s overall performance. A PEST Analysis will help you not only in the identification but a thorough
explanation of all of these factors.

PESTLE is simply an acronym for political, economic, socio-cultural, technological, legal, and

environmental analysis, which helps one in understanding where a company stands in depth.

Hence,  it  is  necessary  for  L’Oréal  to  keep  up  with  the  rules  and  regulations  of  the  government,  in 
terms  of  producing  safe  products  which  do  not  contain  any  harmful  substances.  For the economic
wellness,  it  is  required  for  L’Oréal  to  adapt  all  the  economic  changes  and  transformations  of  all 
the  countries  it  operates  in.  moreover,  it  requires  to  maintain  its  social  status  in  the  society. 
However,  it  has  maintained  it  efficaciously  so  far, 
but there is never a stoppage to anything. It should keep  to  its 
socialization with world brands as well as people for the  reason  that  it  would  help  it  in  maintaining  its 
brand  value  as  well  as  its  status  in  the  global  market.

Lastly, technology being one of the most impeccable factors in today’s marketing world, L’Oréal should 
make  use  of  the  most  of  it.Technology  would  allow  for products and services to be of a better 
standard of quality.The more the company uses it, the more it offers consumers and businesses more innovat
ive products as well as services. Accessibility to products on internet, telephonic services etc.are some of
the  basic  implements  which  can  add  on  to  the  efficaciousness  of  the  company.
91
92
 Conclusion Suggestions and Findings

The success of Brand L'Oréal lies in the fact that the company succeeded in reaching out to the customers of
different countries of the world, across different income ranges and cultural patterns, giving them the
appropriate product they are worthy of. The area of expertise of L'Oréal being that it succeeded almost in
every country that it entered. The strategies of L'Oréal was varied enough to help it and stop itself from
restricting itself in a single country.

L'Oreal sold its product on the basis of customer demand and country want rather than keeping the product
identical across the globe. It built ample number of brands or mammoth brands entrenched to the restricted
culture and which appealed to a variety of segment of the universal market instead of generalising the brand
and edible in innumerable culture. L'Oréal went on to being a local product in every international market.
The brand extension of L'Oréal also came in the same sector or the same segment of market. L'Oréal
believed in growing its expertise in the segment it is conscious of rather than going into a completely new
sector of market.

L'Oréal had built a dozen or so mega brands rooted in the local culture and appealing to different segments
of the global market. Instead of homogenizing the various brands and making them palatable in myriad
cultures. Owen-Jones decided to embody their (the brands') country of origin, turning what many marketing
gurus considered a narrowing factor into a marketing virtue.

L'Oréal Group aims at offering beauty product innovation to 1 billion new women and men with regards to
their diversity; therefore the purpose of the report is to critically analyse L'Oréal Group's current marketing
and determine how it is going to support it

The analysis shows that a clear positioning and differentiation, improved publicity, obeying with relevant
laws, and growing further through market penetration could further strengthen the brand's multiple cus-
tomer segmentation Additionally, despite the criticism, L'Oréal significantly emphasises on digital market-
ing through its official website, social media, email marketing, and mobile marketing. Yet, extra develop-
ment of the mobile applications could be suggested.

In terms of branding, the Group's brands possess different values and elements, yet all together build a strong
corporate brand equity, which could be fur ther boosted by the overall experience and brand extension.
Moreover, based on the analysis to improve the current relationship marketing strategies, L'Oreal might
consider engaging customers to be part of an exclusive programme or to register through its official website,
however the Group might be required to remove some in-company rules and integrate CRM software
training to gain even more advantages Additionally, a coherent centralised relationship strategy programme
could be recommended

93
Overall, based on the conducted analysis of its current marketing, it could be concluded that there are
various aspects supporting L'Oréal's aim, however there is room for improvement in order to attract 1 billion

The additional investment would also channel funds into advertisement in the American market. E-
commerce is also another avenue in which L'oreal could exploit the market demand for cosmetics. L'oreal
could spend more of its resources on developing a sophisticated online store. There are impediments to this
due to the ever-changing nature of its inventory. L'oreal also needs to diversify its stock geographically to a
greater extent so that shopper traffic is increased and cannibalization of its other stores does not occur. Even
though L'oreal's business model is not the most cost-effective model possible in the global cosmetics
industry, a change of it is not recommended as it would impede other competitive advantages. Instead it
would be recommended to invest in constant innovation of its production techniques to make them more cost
effective. L'orealshould also be wary of its competitors springing into the market and their strategy. This is
because, as L'oreal's business model and success has become mcreasingly popular that there might be
chances that there would be rival firms that might enter with an identical business model and products.

L'oreal would have challenges in meeting its fast timings for the delivery of new products into its stores if
the expansion of products occurs at a fast pace, so the growth rate has to be carefully planned so that it can
be supported Unique approach of advertising and marketing within the business model of L'oreal adds an
additional factor to their success. A minimum of total income is spent on marketing and advertising. This
amount is significantly less than the competitors of L'oreal who are spending more than 3-4% of their total
revenues on advertising and marketing. In this age of communication and teclmology it is very hard to run a
business without marketing and interaction with existing or potential customers. At the moment L'oreal is
more focusing on the development of its products for the children's use which is also a good strategy but it
cannot be replaced with a well organized professional marketing campaign which can bring thousands of
customers towards the products these days. In conclusion. L'oreal still has room to exploit its competitive
advantage further by the above-mentioned recommendations.

94
 Annexure

Questionnaire

1 Please slect your age group

a 18-21
b 22-29
c 30-39
d Above 40

2 Gender
a Male
b Female

3 Are you familiar with L'Oreal brand

a Yes
b No
c Maybe

4 How often do you buy L'Oreal products

a Weekly
b Monthly
c Every few months
d 1-2 times a year

5 How long you have been using L'Oreal products

a Recently
b More then 1 year
c 2 years and above

95
6 Name of the products you are using
a Hair care
b Skin care
c Cosmetics
d All products

7 What made you to purchase the products

a Value for money
b Quality
c Review’s
d Purchase yourself

8 Are you satisfied with the L'Oreal products

a Yes
b No

9 Do you trust L'Oreal brand

a Yes
b No

10 What do you think of L'Oreal products packaging

a Good
b Very good
c Excellent

11 Where do you often see the advertisements of L'Oreal products

a Shopping malls
b Social media
c Departmental stores
d Salons

96
12 Give rating on the scale from 1 to 10
a1
b2
c3
d4
e5
f6
g7
h8
i9
j 10

13 How do you preffered shopping products

a Online
b Shopping malls
c Departmental stores

14 Would you prefer using L'Oreal products again

a Yes
b No

15 Did you feel comfortable shopping with L'Oreal

a Yes
b No

97
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 Biblography

Websites

 www.loreal.com
 www.marketing91.com
 www.mbaskool.com
 www.researchgate.net
 www.lorcal-finance.com
 https://en.m.wikipedia.org
 http://www.scribd.com

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