L’OREAL CASE STUDY

SUMMARY

RADHIKA KHAITAN
MARKETING
SEM – 1
MBA EWP – 2020
Amity University – Manesar Campus
 Founded in 1909
L’Oreal coupled innovation and speed to market with expansion of its
geographic and consumer base.

Aimed to Sell
“Science of Beauty in a Jar”

Key
Launching new innovative predicts
on a regular basis was key.

Skin Care Market Share

A leading player in beauty and skin
care market with 19.5 Euro of 2010
sales. (Half outside of Europe)

% of Revenue on R&D in
2010
L’Oreal : 3.5%
P&G : 2.7%
Revlon : 1.7%
 1907 1957 1988
EUGENE SCHUELLER FRANCOIS DALLE LINDSAY OWEN-JONES

Developed Aureole, a Initiating the concept of Focused on 5 core business

hair-color formula. selling beauty through (Hair color & care, Skin
Formulated and several channels. care, Cosmetics and
manufactured his own hair Perception of “Parisian Fragrances)
dye product, sell to beauty as being “The firm had to promote
Parisian hairdresser. expensive and out of its national brands to the
reach” rest of the world”
Employees Countries
66,000 130

Units Sold
Factories
38 5.7
Billions
 Maybelline acquisition
L’Oreal acquired Maybelline in 1996

Other acquisitions
Chilean company Unisa
German company Jade
US company Soft Sheen & Carson products co. & many more

Targeting Men’s
In 1999 L’Oreal started targeting men’s
Organisation 1. Cosmetics
2. The Body Shop
3. Dermatology
Company is organised in three groups

Operational Divisions
Consumer Product Division: Garnier, L’oreal, Mayblline, Soft Sheen/Carson.
Luxury Products Division: International brands selectively distributed.
Professional Products Division: Special hair care products for professional hair
dressers.
Active Cosmetics Department: Specific distribution through pharmacies and
speciality health & beauty outlets
 OPERATIONAL DIVISIONS (BRANDS)

Professional Luxury Products Consumer Active Cosmetics

products Division Division Product Division Department
L'Oréal Technique Lancôme L'Oréal Paris Vichy
L'Oréal Professionnel Yves Saint Laurent Beauté Ombrelle La Roche-Posay
Kérastase Giorgio Armani Beauty Garnier Skinceuticals
Kéraskin Esthetics Kiehl's Maybelline Roger&Gallet
Matrix Essentials Biotherm NYX Cosmetics Sanoflore
Mizani Cacharel SoftSheen-Carson Dermablend
PureOlogy Research Diesel Carol's Daughter AcneFree
Redken Viktor & Rolf Créateurs de Beauté Ambi
Shu Uemura Art of Ralph Lauren Fragrances Essie CeraVe
Hair Shu Uemura Magic
Carol's Daughter Clarisonic Niely Cosméticos
Carita Guy Laroche Colorama
Essie Paloma Picasso
Decléor Urban Decay
Botanicals Fresh Care Maison Margiela
Yue Sai
Helena Rubinstein
IT Cosmetics
House 99
Atelier Cologne
Proenza Schouler
 Created “Geocosmetics” to study beauty trends around world
and deliver the best products for that region.

L’Oreal Institute for ethnic

hair & skin research, Chicago

Research Centre, Pudong – 300

12 evaluation centre around
products developed only for Chinese
world
consumer

Local Consumer Understanding

Focused on carting to diverse population
 By 1991 Maybelline
Maybelline was in became L’Oreal’s
70 countries passport to
sales grew by 93% conquest of new
from 1996 to 2002 emerging markets.

Improving
products

Boosted ad
Modernize
spending by
the
30% to $70
advertising.
Marketing million

Strategy
Brought Moved
back headquarter
Maybelline to New York
slogan

MAYBELLINE
Maybelline had lost focus, losing brand equity
& struggle to keep up the rest of the market.
L’OREAL ACQUIRED MAYBELLINE IN 1996 FOR $768 MILLION
Brand
Diversity
L’Oreal developed
brands in the low, mid
and high-ends with
strict brand policy.
High end mass range products sold
through department stores.

Higher end mass range through retail

outlets with placement restriction, shelf
space & display.

Low end brands available in all mass

channel retail outlets.

MASSTIGE
High quality products at an affordable price to fill the price
gap
Regionally Focussed Rollout
“2008; A key focus of his
group would be to
accelerate the geographic
rollout of its brand in new
high-growth markets by
tailoring product
performance and price to
local needs.”
- L’Oreal president of
consumer products
L’Oreal did not use the
direct sales approach but
hired personal beauty
advisers at department
stores.
“The more market develops the less relevant direct sales will be”
L’Oreal invested in: By 2008 4,000 luxury salons
1. Strong Ad campaigns adapted RedKen in Latin
on the internet America
2. Women’s magazines
to drive word to In 2009 within 3 month of
mouth launch of Inoa in EU 36,000
3. Have consumers salon adopted it.
generated demand for
salon’s products 3,500 trainings provided to
80,000 hair dressers.
RedKen (1990s)
Innovated a different kind of marketing approach. A highly
successful American premium brand.
L’Oreal aimed to attract a bigger
customer base in US & emerging markets

Diverse Customer Base Managing transition

Aging population Swelled $4.56 Billion in
Ethnic groups worldwide advertising
Aspiring customers in the east spending in 2009
Emerging Markets Largest and fastest growing
Growing interest in health & advertiser of China in 2009
beauty care among Men all over with $576.8 million
the world

In 2007 company
invested 2% of its ad
budget on online
initiatives

Company’s Ad Budget
75% for TV
20% for Print
5% for Billboards Telling the story
 L’Oreal used A-list celebrity endorsers in highly successful as campaigns
to push products to wide range of age brackets, ethnicities and genders.

“L’Oreal associates itself with tap into all ages, race and sexes & the
portfolio leaves no stone unturned.”

• Patrick Dempsey & Gerard Dutler – The face of L’Oreal

Paris Men’s Expert Line
The Cannes Film Festival – L’Oreal Makeup
ENDORSMENTS
In 2011
Sarah Jessica Parker – Garnier Nutrise
L’Oreal Eva Longoria, Diane Keaton, Scarlett Johansson,
launched a Beyonce Konwles, Kate Moss – YSL Praisienne
Cannes-
inspired line
of makeup,
L’Or.

FAME BY ASSOCIATION
Brandstorm is a unique business
completion for students to unleash
their creativity and apply ground
breaking ideas to one of L’Oreals
international brands as distribution
channels. Since 1992 brandstorm has
given more then 70000 students
worldwide the possibility to work on Brandstorm 2010
real life challenges and be coached by The challenge in 2010 was for
top L’Oreal executives. students teams to come up with a
beauty-product range for men’s
brand diesel.
Brandstorm: in 2011
The challenge involved designing
a new advertising concept to
attract men to professional
43,000 students
Salons.
258 Universities
43 Countries

MARKETING AS RECRUITING
L’OREAL BRANDSTORM
Virtual personalised
Stylist Hanna’s Avatar
Hanna user her customised avatar
and the power LTE to easily and
conveniently make fashion and
beauty choices , share looks via
social networks and video consult
in real-time with experts.
User Generated Website
Garnier Fructis launched a user
generated website that had the
ability for the users to upload
their own samples of how they
styled their hair using Garnier
Frucits products.

L’Oreal grassroot campaign help more than 4,000

salons build Facebook pages for business

L’Oreal offered instructional videos and training and

advertising credits to the salons.

Print to Digital
“The big revolution is digital and it is a great revolution. Because it changed the way
we communicate about our brand”
L’Oreal Destination Beauty
YouTube channel launched in year 2010 contained how to
videos filmed by beauty bloggers who provided hair and makeup
tips.

Destination beauty allowed viewers at home and establish sense

of community.
By Year – 2020
Reaching the next billion customers
L’Oreal is focused to double its base to 2 billion people
and increase its share of sales from emerging markets
from 20% to 50% during that time.
THANKS