CASE STUDYL OREAL GLOBAL BRAND, LOCAL KNOWLEDGE

Presented by:
Syed Hassan Ahmed Naqvi - 14135
Sarmad Tahir Butt - 18557
Asra Nasir - 21306
Sadia Nasir - 23584
Muhammad Arbab - 23721
 Founded in 1909.
 Expanded the market of its geographic and consumer base.
 Company believed launching new innovative product on a regular base is the key.
 In 2010, Spent 3.5% revenue on Research and Development
 Outspent Competitors on R& D = P&G – 2.7% Revenue on R& D & Revlon – 1.7% Revenue on R& D
 Revlon – “ Hope in a Jar”
 L'Oréal – “Science of Beauty in a Jar”
 L'Oréal – Market Leader in Beauty & Skin Care
 Sales = € 19.5 Billion ( Half Outside Europe) in 2010
 Pushing the boundaries of science and beauty
 Aspiration for billions of men and women
 The best cosmetic in terms of quality, efficacy & safety.
 Offering product with their needs, culture & expectations.
 23 Global brands – 130 Countries - 66,600 employees.
 38 factories – 5,7 Billion Units Produced in 2010.
 Offered Hair Coloring, Hair Styling Product, Cosmetics, Skin Care Product and Fragrances.
 Variety of Distribution Channel:
- Department Stores
- Retail Location
- Duty Free Shops
- Internet
- Direct Marketing
 SELLING THE SCIENCE OF BEAUTY AROUND THE
WORLD
 Started with innovation by developing a hair color formula known as “Aureole”.
 Initially sold to Parisian hairdressers.
 After 1957, initiated the concept of selling beauty through several channels that corresponded to consumer’s
psychographic and psychological profiles through analyzing purchase power.
 Due to this international Reach got damaged.
 Parisians beauty product was expensive and out of reach.
 SELLING THE SCIENCE OF BEAUTY AROUND THE
WORLD
 CEO – 1998 – Lindasy Owen Jones
 Focused on 5 Core Businesses:
- Hair Color
- Hair Care
- Skin Care
- Color Cosmetics
- Fragrances
 The Firm Decided to Promote its national brands to the rest of the World:
- Accepted Local Brands
- Placed their Brands everywhere
 1996- L'Oréal Acquired Maybelline in USA, Unisa in Chilean and Jade, a German company.
 L'Oréal became the leading producer of makeup in 1996
 SELLING THE SCIENCE OF BEAUTY AROUND THE
WORLD
 In Late 1990’s:

L’Oreal Maybelline
Fastest Growing Brand Fastest Growing Brand
Supremely Elegant High Quality
High Priced Luxury Brand Low Priced Value Brand
 Historically aimed at women
 1999 - Began targeting men
 2000 – Introduced L’Oreal Feria and Casting Color Spa for men.
 Same year acquired two hair-care marketers in USA for African Americans:
 Soft Sheen Products & Carsons Product Co. – 60 Countries – Made Sale of $ 200 million.
 2003 – Acquired Mininurse, a top skin brand in China.
 Strengthen High End and Middle Range cosmetics in China
 2004 – Acquired Yue-Sai in China, a skin care brand
 New Manufacturing Plant in India secured Asia for L'Oréal's market.
 ORGANIZATION
 Organized itself into 3 major groups: Cosmetics, Body Shop and Dermatology Branch.
 2010 – Cosmetics generated 93% of Company’s revenue.
 Operations further broke into 04 Divisions:
 Consumer Product Division: Brands like Garnier, Maybelline, 7 Soft Sheen Carsons – Distributed through mass market
channels – generated over half of company’s cosmetics revenue.
 Luxury Product Division: Distributed through perfumeries, department stores and duty free shops.
 Professional Product Division: Hair Care Products for Professional Hair Dressers – Sold exclusively through Hair Salon.
 Active Cosmetic Department: Products for selective distribution through pharmacies and health and beauty outlets.
 Separate Marketing Team for Each Division – to insure brand integrity.
 Regional Teams – Responsible for Brand Positioning
 Particular type of Customer – Particular Distribution Channel.
 “Our managers around the world know that they can’t play with the position of the brands. We don’t play with the boxes.
The Trick is to do innovative things inside each box.” – L'Oréal CEO Jean-Paul Agon.
 MARKETING OF L’OREAL

Local Consumer Understanding

 Focused on diverse populations.
 Developed teams enriched by their cultural diversity.
 Portfolio of international brands present in different distribution channels.
 Researches grasping the world’s complexity.
 Exploration of new scientific and technological territories.
 Knowledge of Different Cultures and Rituals helped invent products for the future.
 Adapting global product to local markets by developing local innovations. Garnier Men developed in India in 2009 and
rolled out in Asia.
Researches
 3100 research employees – 18 research centers + 12 evaluation centers
 Research Fields – Chemistry Biology, Medicine, Physics and Toxicology.
 Created Geocosmetics to study beauty trends around the world.
 2003- L'Oréal Institute for Ethnic Hair and Skin Research in Chicago.
 2005- Research Centre in Pudong, China – to study the behavior of Chinese Skin and Care.
 Studied the behavior and reactions to L'Oréal Products.
 Aimed to Achieve Actionable Consumer Research.
 2010- Developed around 300 Cosmetic and Hair Products designed specifically for Chinese
People.
 MARKETING OF L’OREAL

Brand Diversity
 In order to cover a wide range of consumers and channels, L’Oreal developed brands in the low, mid and high ends.
 Portfolio covered price and distribution channels.
 Strict brand Policy – Did not allow the brand to be sold outside specific channels.
 Premium Brands - Yves Saint Laurent and Lancome – Sold in Department Stores.
 High End Mass range Product – L'Oréal Paris – Sold Through Retail Outlets but with restrictions on product placement, shelf
place and displays to maintain its higher end feels.
 Low level Brand – Garnier – available in nearly all mass-channel retail outlets. It was considered as a growth engine to
expand lower income emerging markets.
 L'Oréal was comfortable selling Garnier in Kiosks.
 Masstige Category – Combination of mass and prestigious – Luxury and Premium Products, Price points filling the gap b/w
mid market and super-premium products. E.g. L'Oréal Paris, generated 50% of Company's total sale in W.Europe and 20% in
the USA.
 Lancome was the best Premium Brand , held 5% global beauty market.
 Genifique –Youth activating Concentrate- revived Lancome in 2009.
 Gene Activity and Brings your skin back to the protein level of younger skin.
 LOREAL MARKETING EXCELLENCE

Maybelline New York

► Acquired in 1996 for $158 million, when lost its focus & brand equity.
► Tagline: Maybe she's born with it. Maybe its Maybelline!
► Major overhaul in its operation, branding & advertising.
► Ad spend increased by 30% to $70 million.
► Modernized approach to advertising & was targeted to working women class who
were in need of speedy makeup.
► Maybelline released a new makeup collection that featured bright colours, its largest
colour collection in 10 years, called Miami Chill.
► Used its technological innovations to address this demand.
► It went to 70 countries & sales grew 93% from 1996 to 2002.
► Maybelline has become L'Oréal's passport to the conquest of new, emerging markets.
 LOREAL MARKETING EXCELLENCE

Redken
► Redken launched in Latin America in 1990's and was in 13 Latin American countries by 2008.
► Education program aimed at top hairdressers with product tailored to Latin Americans.
► Sales growth of 20% from 2005-2008.
► By 2008, over 4000 luxury salons adopted Redken in Latin America.
 LOREAL MARKETING EXCELLENCE

Inova
 Launch of INOA in western Europe - 2009.
 Training sessions provided to 80,000 hairdressers.
 Result: 36000 salons adopted INOA in just 3 months!
 To back that- Strong Ad campaign on internet & women magazines.
 LOREAL MARKETING EXCELLENCE

Fame by association
► L'Oréal often used A-list celebrity endorsers in highly successful ad campaigns to push products
to wide range of age brackets, ethnicities, and genders.

SARAH JESSICA SCARLET EVA GERARD BUTLER PATRICK

JOHANSSON LONGORIA DEMPSEY
 LOREAL MARKETING EXCELLENCE

Other association
► Major sponsor of Cannes film festival
► Also sponsored the festival's dinner & after party which benefitted AmFar
(American foundation for AIDS research)
► Film & TV placement
MARKETING AS RECRUITING

L'Oréal brand storm

► Marketing as recruiting. (Launched in 1992)
► Contest for students of marketing major
► 43,000 STUDENTS 285 UNIVERSITIES 43 COUNTRIES
► In 2011 contest was to design an Ad concept to attract men to professional salons.
► Contest helps L'Oréal to identify new talents.
SMART SPENDING

PRINT DIGITAL

Ad spending shifting towards internet

 SMART SPENDING

Example

User could upload their hair style. It also had ‘How to’ videos
SMART SPENDING

Digital marketing innovation, 3D scanning booth for natural applying skin

care products
 SMART SPENDING

L'Oréal Grassroots campaign

► Help 4000 salons to build Facebook pages for their business.
► L'Oréal offered instructional videos, and training and advertising credits, to the salons.
► Build a customizable tab that displayed products and how to videos for beauty product
applications.
SMART SPENDING

Example
► In 2010, L'Oréal launched its youtube channel, “Destination Beauty”
► Destination Beauty allowed L'Oréal to engage viewers at home and established a sense of
community.
► Web personalities to pitch products. E.g. Michelle Phan
Year 2020
“Reaching the Next Billion Customers”

NEXT BILLION CUSTOMERS

‘double its customer base to 2 billion people, and increase its shares of
sales from emerging markets from 30% to 50% during that time’