Case Study Study Loreal A Global Marketing Strategy Marketing Essay Case study L’Oreal: A global marketing strategy Introduction L’Oreal is a good example of how global branding strategy can be used to generate new growth opportunities when all other companies were not going great guns .In the late 90’s and early 2000’s when the Asian and Latin American American economies were wer e shay and doing poorly !and numerous international brands struggled! L’Oreal surged ahead. "ow did it happen# $he answer lies in their beautifully framed mission statement as it elaborates their understanding of the maretability of their product and the need of mareting it globally %&At L’O'(AL! L’O'(AL! we belie)e that e)eryone aspires to beauty. Our mission is to help men and women around the world reali*e that aspiration! and express their indi)idual personalities to the full. $his is what gi)es meaning and )alue to our business! and to the woring li)es of our employees. +e are proud of our wor.,-ource/ L’Oreal L’Oreal website! www. loreal.com In 2001 !the 34.49 billion L’Oreal group was the most successful cosmetics brand .According to the business wee interbrand interbr and sur)ey conducted condu cted in august 2005 L’Oreal was raned 59th . L’Oreal L’Oreal sold maeup! perfume! and sincare and hair products to both women and men in approximately 310 countries .the L’Oreal group reported its 34th consecuti)e year of double digit growth in 6ecember 2005. ince 3949! L’Oreal’s sales had grown at a compounded annual rate of 327 to 3.8 billion. As usiness +ee: +ee: has reported! repor ted! &L’Oreal &L’Oreal has de)eloped a winning formula/ a growing portfolio of international brands that has transformed the ;rench company into the
ones himself. Lindsey Owen >ones has been the ?@O of L’Oreal for nearly two decades now and under his leadership L’Oreal L’Oreal has really fine tuned its global branding strategy. Interestingly some press reports tell us that he has been seen roaming around streets in foreign marets to understand the new and existing trends. And without any doubts his interesting wor style seems to wor wonders. As an analyst tells us about the impact of its branding br anding strategy! LBOreal is the only real global leader in e)ery segment of the industry. +hether +hether it was selling Italian elegance! =ew Cor Cor street smarts! or ;rench beauty through its brands! LBOreal had reached rea ched out to a wide range of customers across incomes and cultures.,. Owen >ones says:/ &+e ha)e this great strategy bac in the head office of how we are going to do it worldwide. ut when you go out and loo at what is happening! is there a big gap between your proDections and the reality of what you see and hear# It is so important to ha)e a world
)ision because otherwise decentrali*ed consumer goods companies with many brands can fracture into as many little parts if somebody isn’t pulling it bac the other way the whole time with a central )ision., $his really explains why he prefers roaming in the streets for his strategy maing rather than sitting in the boardroom. And e)en better this seems to be supported by data as well/
Table I L’Oreal: Summarized ro!it and Loss Account -;igures in million euros 2008 2004 2009 ales 38!0EF 38!152 38!58F Gross Hrofit 2!49E 2!844 2!859 =et profit 2!428 2!821 2!184 =et Hrofit argin -Hercent 3E.1
31.1 35.81
"Source: L’Oreal #ebsite$ ###% loreal%com& $his data seems to be fine but if we consider the o)erall global presence as well this becomes impressi)e! at least that’s what this table shows us/
Table II L’Oreal: Geogra'(ic Segment In!ormation -ales for 2009 illion @uros 7of maret share +estern @urope 8!0F8 20.8 =orth America F!402 31.4 outhern America 3!3F4 30.1 Africa !orient! pacific 920 32.4
Source: "L’Oreal #ebsite$ ###% loreal%com&
"a)ing said all that its Juiet e)ident that the global branding strategy of L’Oreal has paid huge di)idends to the company o)erall .In order to understand this splendid growth story we need to see how exactly L’Oreal applied their strategy to the countries that were entirely distinct as far as the lifestyle! spending pattern and culture is concerned .L’Oreal was started in ;rance! has a good brand )alue in the united states of America! is reaping good di)idends from India and has a remarable presence in >apan . $hese are different complex societies with different needs! so how exactly L’Oreal managed to be eJually successful in all these places# $his Juestion needs some fact finding to be done on the basis of country specific products and strategies adopted by the cosmetics conglomerate .$hat’s what exactly we will try doing in the next section of this case study.
L’Oreal in India :#ooing t(e great Indian middle class ))))))))))))))))))))))))))))))))))))))) @)en before we choose a product to see how that was made a part of the great Indian middle class dream! looing at some facts and figure would really pro)e to be good insight. KIn India! EE7 of shampoo sold is in 8.1ml sachets. ;our billion are sold each year K
"Source: L’Oreal$ *ielsen& $hese facts are self explanatory about the nature of Indian maret and it’s clearly stating that the strategy used in <A or any other @uropean countries is not going to wor in India. India is an emerging economy with most of the population below F1 years of age and a huge aspiring middle class. Interestingly e)en after the success story of India Inc. Apparently it’s still a country that is )ery much community oriented .$he great Indian middle class is aspiring but still has the community dri)en cultural )alues intact.
L’Oreal has taen this fact )ery much into consideration while preparing the mareting strategy for India. A )ery good example would be the launch of garnier fructis shampoo in India. $he concept was to rely on idea rather than relying on ad)ertising a brand .$he idea of getting fi)e times stronger hair was the central point that created the hype! through &word of mouth, or networ mareting .Initially it was positioned as product for young and teenagers .once the product was established in the maret it tried to change or rather increase the target base by shifting gears. In a recent ad)ertisement of garnier hair color a daughter is shown ad)ising her mother to try the garnier product and explaining the benefits .Again it relies on the concept of idea getting spread by &word of mouth, to another customer segment. $his is the best example of mareting in a closed community dri)en society. $here is one more remarable thing about this entire campaign the catch line &tae care,. It shifts the focus from the product to the core )alue of Indian society &caring about others, and the entire ad)ertisement becomes more of a good ad)ice rather than publicity.
L’Oreal in c(ina: Taming t(e dragon ))))))))))))))))))))))))))))) ?hina is the world’s most populated country in the world and that maes it )ery clear that it has the potential of being the biggest consumer maret. $hese days ?hinese women are spending on an a)erage 30 to 317 of their income on cosmetics products! an urban ?hinese lady would use 2.2 cosmetics products on an a)erage e)ery morning. @)idently most of them want to be fashionable and the L’Oreal punch line &if you want to be fashionable! Dust choose aybelline,! really seems to wor. odels shout &this brand comes from America! it’s )ery trendy,. aybelline is the product line for the masses and L’Oreal really uses the tendency of masses to loo towards the <A .that’s why the aybelline products are displayed against the bacdrop of shiny syline of new Cor city ?hinese women prefer sincare and beauty products. According to a research by L’Oreal in china women are concerned about the radiance of their sin and prefer sin nourishing lotions that protect their sin from sinNdrying winters.
L’Oreal in Euro'e : +,ou are #ort( it'ead more/ http/PPwww.uessays.comPessaysPmaretingPcaseNstudyNlorealNaNglobalNmaretingN strategyNmaretingNessay.phpQix**2R+=;Ef00
