Section B

L'Oral Paris Group 5

Bringing Class to Mass with Plnitude
 In 1990s, Different brands
Founded in 1907 Named after the
Schuellers sold through
by Eugene Aureole
family still owns different
Schueller Process
51% channels

Sales of 53.4 billion Francs

5%
6%
23%
2000 products 6%
France
Rest of Europe
USA & Canada
500 Brand Names Latin America
20%
Asia
Rest of World
150 Countries
40%

Cosmetics had 81% of the

revenues
The US Launch

Plenitude launched in August 1988, starting Atlanta & Dallas

Market share estimated after test launch: 14%

Positioning changed from Delays Signs of Aging to Reduces

Signs of Aging. Lighter texture & less perfume for US market

All varieties launched in one go: 14 SKUs across 3 categories

Major Competitors: Olay, Ponds, Neutrogena, Nivea

Stores were paid to keep all SKUs together as Loreal Plenitude

Skincare Center. The shelf was kept at eye level beside Olay
Increase in Market Share (1990-1995)
Price Comparison: Daily Moisturizer

Price per Ounce

4
3.4
3.5
3 2.607
2.5 2.33

2 1.69
1.5
1 0.74
0.5
0
Daily Moisture

Plenitude Olay Ponds Nivea Neutrogena

Price Comparison: Treatment Moisturizer

Price per Ounce

12
10.25
10

8
5.8
6
4.716
4.22
4 3.27

0
Treatment Moisturizer

Plenitude Olay Ponds Nivea Neutrogena

Price Comparison: Cleanser

Price per ounce

2.5
2.02
2
1.54
1.5
1.22

1
0.59
0.5
0
0
Cleanser

Plenitude Olay Ponds Nivea Neutrogena

Plenitude Financials

Plenitude Sales Forecast

100

80
83.688

60
63.4

40
35.5 38.3 38.3
31.7
20
21.75 20.922 21.75
7.925 13.675 15.85 2.716
0
-12.5
1990 1995 1996
-20 -25.4

-40

Sales Advertising COGS Other Expenses EBIT

Facial Skin Care Market Study
September 1995

A large scale quantitative telephone and mail survey of over 3500 women
age 16-69 who used one or more moisturizers or treatment creams at least
once a week. Plentitude users mostly fell in the last two
categories (54%) as opposed to 36% of Olay.
Division of Consumers into Alpha Hydrox users also heavily fell in this
Different Benefit Segments category (62%).
Unconcerned Perceptual Mapping Exercise:
1. Viewed as a technologically
18% 26% Ingredient
Apathetic
sophisticated brand, closest competitor
22% Price Conscious
being Nivea Visage.
17% Socializers 2. Users of this brand are perceived to be
17%
Stressed Out stylish, sophisticated, glamourous,
belonging to the upper class and like to
Age Focused
spend money on themselves. Other
brands with similar users are Clinique
and Estee Lauder.
 The study also measured brand awareness, trial and experience.
78% of the respondents were aware of Plentitude versus the 96% for Oil
of Olay.
More recognition than Nivea Visage and Alpha Hydrox. Retention ratio
was also better than both at 30.
Mere 23% had ever tried Plentitude versus 77% for Oil of Olay. Trials were
even less than Nivea Visage. Conversion ratio was also lower.
Thus L'Oral's main focus should be on increasing awareness and trials.
Acceptor / Rejector Studies - Plnitude

L'Oral brand name Primary motivator for trial

Motivation for Trial of Plnitude Plnitude as a brand name meant little
Seen as department store quality in mass outlets

Response to Product Formulas Young rejectors found it too heavy or greasy

Uniformly people saw the line as having a large number of

Perception of Plnitude as Full
products
Product Line
For some, that was a plus. Not so for the others.

Response to Plnitude Packaging while generally attractive, seemed overworked to

Packaging some.

Perceived Target Customer Some felt Plnitude was specifically target to older women
Acceptor / Rejector Studies

Word of Mouth
Seen as a staple for
Motivation for Trial Free Sample Loreal brand name
like
Advertisement
Mixed Appreciated
Acceptors saw it as a
Acceptors saw it as for department
Product Satisfaction light formulation
reliable, accessible store quality by
Sources that was reasonably
& reasonably priced some, found too
priced
greasy by others
Seen as the
Older and down-to- I live with the
Brand Imagery traditional,
earth imagery times images
generational brand
Perceptions of the
Plnitude line & Overwhelming
Packaging
Shelf Shopping Study- May 1996
Category Shopping Experience: Brand Image (Major Competitors):
Positive Aspects: Oil of Olay:
Fun
Same old pink glop for years
Find new products
New things come out regularly Thought of as pretty old fashioned
product
Lots of options
One of the best, sophisticated look
Negative Aspects:
Nice Packaging
Overwhelming
Too much stuff Ponds:
Confusing Used by Grandmother, really heavy
Frustrating and greasy
No information on usage and other Been around forever
things
For old ladies, unpleasant to use
Shelf Shopping Study- May 1996
Brand Image: (LOreal) LOreal Product Line Presentation
(Packaging)
French twist, exotic Negative:
Step-up in quality Chaos, Too many words
High degree of Product looks complicated
Too much to understand, confusing
advertisements
Front of the box, looks like the back of
Expensive the box
Dont look at it Positive:
Havent tried Tell you a lot
Good Summary, tells what exactly are
you buying
Helpful, more info than Estee Lauder
Plenitude Plan Observations

Revitalift was performing extremely well and also brought in many new customers and accounted
for more than 20% of the total Plenitude line sales
Current Challenge: To change the products for older women perception and develop a product to
bring in younger customers
The Way Ahead

Opportunities
A special purpose Star product (Revitalift-Eye) along the lines of Revitalift was being
developed for launch
As Olay prepared to enter the treatment segment, L'Oreal could develop its product
line in the daily segment

Challenges
Whether to launch a new product in the treatment line or the daily line
Whether to give Star treatment to the new product or not
Pricing
Packaging
 Solution

Change the value proposition of the Plenitude line

Reduces signs Perfect Skin for

of aging all ages

Bottom Line: Start giving significant focus to the younger lot as well to get customers from all age profiles
under the brand and ensure long term customers
How? Invest in daily products such as moisturizers and cleansers as well apart from the treatment products
Recommendations

L'Oreal should start focusing on the price conscious younger segment as

the volumes can be increased in this segment without much change in
the current value proposition
Rather than giving the Star status to Revitalift-Eye, LOreal should launch
a daily moisturizer for the younger lot along with Revitalift-Eye in the
treatment category (No Star status)
Follow the same price premium strategy for Revitalift-Eye and price the
daily moisturizer slightly higher than the major rival, Oil of Olay to
maintain the better technology edge
The packaging should be more attractive and less wordy. Given that
customers like the pieces of information, the info can be contained in a
leaflet inside the packaging box
THANK YOU!