[ftu - marketing class shift 4-6 tuesdaty] group 12 - loreal
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PROFESSOR: Mark Runge
GROUP 12
Tran Thi Hong Diep Nguyen Thuy Ha
Hoang Phuong Hang Le Thanh Huyen
Luong Dinh Long Nguyen Thanh Ngoc
Pham Thi Hong Nhung Nguyen Thi Ha Phuong
GROUP 12
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Introduction:
1. Purpose of the presentation
2. the business scope, geographic
establishments, and background information
ofLoreal
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INTRODUCTION
1
To introduce one of the leaders in the beauty market,the worlds largest cosmetics & beauty company
2
To learn about the application of marketing intopractice
3 To understand how marketing strategies make the
companys success
PURPOSE OF PRESENTATION
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1909 1956
The first
steps,constructing a
model
1957 - 1983
On the road
to the GrandLoreal
1984 - 2000
Become
number 1 inthe beautyindustry
2001 - now
Diversity of
beautyworldwide
INTRODUCTION
HISTORY
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27 InternationalBrands130 countries
Initially Holland, Austria &Italy
Later US, Russia& far East
Now present worldwide,major drugstores,
supermarkets, beauty outlets &
even direct mails
INTRODUCTION
DISTRIBUTION
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Principles
Passion Innovation
Entrepreneurial spirit
Open-mindedness
Quest for Excellence
Responsibility
Missions
Beauty for all, a beauty for each
Observe local customs of beauty
Providing access to cosmeticproducts
To accelerate the localization ofour expertise
INTRODUCTION
PRINCIPLES & MISSIONS
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About 67,662 employees
worldwide.
Legendary advertising:
Because Im worth
it
INTRODUCTION
HUMAN RESOURCES & ADVERTISING SLOGAN
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BEAUTYFOR ALL
Beauty is alanguage
Beauty is acommitment
Beauty is ascience
Beauty isuniversal
INTRODUCTION
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BRANDS
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AWARDS & RECOGNITION
INTRODUCTION
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Environmental analysis:1. ECONOMIC ENVIRONMENT
2. LEGAL & POLITICAL ENVIRONMENT
3. SOCIAL & CULTURAL ENVIRONMENT
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Business-cycle
Boom
Recession
Depression
Cricis
ECONOMIC ENVIRONMENT
GLOBAL SCOPE
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ECONOMIC ENVIRONMENT
The world GDP felt
sharply, which reduced
the purchasing
powers
custommers.
L Oreals average
annual growth rate
in 2008 was nearly3%and it decreased to 1%in 2009. ( Source:
LOral estimate).
Example: Crisis in 2008 - 2009
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L'Oreal need
adapt to:
All the differenteconomic
environmentsand problems in
all countries itoperates in.
The level ofeconomic
developmentof the
country/area.
Changes in
majoreconomicvariables:income, cost
of living ,interest rate,
currencyexchange
rates, cost ofcapital...
ECONOMIC ENVIRONMENT
REGIONAL SCOPE
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Example: China
ECONOMIC ENVIRONMENT
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VARIOUS GOVERNMENTS RULES
POLITICAL & LEGAL ENVIRONMENT
Foreign trade policy:instability of tradepolicies governing imports of different
industrialized products between Argentina and
various Latin American countries.
Procedures for product registration
delays product launches.
The company tr ies to b ecome al l iances w ith
go vernmental bureaucracy regu lat ing
admin istrat ive procedures
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Strict product safety standards
a decline in the dermatology branch led
by its Galderma brand due to new
legislations governing drugs.
LOreals methodologies forevaluating the safety and efficacy of
ingredients and finished products,
product evaluation and claim
substantiation are recognized by theinternational scientific community.
LEGAL & POLITICAL ENVIRONMENT
INCREASING LEGISLATION OF BUSSINESS
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Culture impacts on marketing
strategy
People in different countriescarry out theirskin care
routine different from eachother
SOCIAL & CULTURAL ENVIRONMENT
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L'Oral has built its
innovation strategy
around getting to know
and listening to different
groups of people
worldwide.
The Research
divisionis widely opento the world, with its
evaluation centers
based on every
continent.
SOCIAL & CULTURAL ENVIRONMENT
ADAPTION
ow many m nutes oes a nese woman evote to er morn ng eauty rout ne
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They have to ask such questions as:
SOCIAL & CULTURAL ENVIRONMENT
y g yHow do people wash their hair in Bangkok?
How many brush strokes does a Japanese woman or a French woman use to apply mascara?These beauty rituals, repeated thousands of times, are inherently cultural. Passed on by tradition, influenced by climate and by local livin
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Case in focus : Brazil
Brazilian women likepurchasing from door-to-door salespeople.
LOreal will not be usingthe door-to-door salesapproach
attempting to makeBrazilian women justforget about part of theirculture.
A cosmetics brand willprobably not be incentiveenough to changetraditions in Brazil.
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GLOBAL marketing entry and cooperative strategies:
Loreal international marketing entry and cooperativestrategies
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GLOBAL OR NOTHING
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GLOBAL OR NOTHING
Traditional strong holds :
LOreal Paris and Europeanscountries
In the late 1930, by launching the firstsunscreen, LOreal earned a reputationas a European leader in hair-coloringand body-care products. From then on,European continent has still been the
base and the major market of LOreal,majorly Paris, England, Germany, andthe Italy
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GLOBAL OR NOTHING
Few relationships with local middlemendistributors .
American hair salon were unfamiliarwith LOral brands and their quality
-> resisted selling LOral products
French prestige, which had been helpfulin selling perfumes, was less useful inselling hair-coloring products in the U.S.market.
Coming to USA after WWII, LOreal
met some challenges:
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New consumers
GLOBAL OR NOTHING
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Emerging markets: Asia, Africa, Latin America
OPPORTUNITIES
Dramatic
economic
growths
Booming
population
Growing middle
class
Consumerism
Greater access to
information
thanks to Internet
GLOBAL OR NOTHING
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GLOBAL OR NOTHING
The cultural distance and
physiological differences makethese markets are extremelydifferent than any other Westernmarkets LOral had ever enteredbefore.
Eg: diifferent types of skin
GLOBAL OR NOTHING
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LOreal in Kenya
LOreal in Latin American
LOreal in India
GLOBAL OR NOTHING
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GLOBAL MARKETING PROGRAM
GLOBALMARKETING
PROGRAM
Standardized
global
marketing
Adapted
global
marketing
Products
Promotion
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GLOBAL MARKETING PROGRAM
- Launching its successful brands allaround the world (Maybelline, The
Body Shop, Loreal Paris...)
- Launching various technical training
centers (in India, France, America,
China, Japan...)
=> Marketing programs in all over the
world are focused on their core
strength : Research and
Innovation
STANDARDIZE GLOBAL MARKETING
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GLOBAL MARKETING PROGRAM
ADAPTED GLOABAL MARKETING
Different strategies for different markets
Asian
Sustainablestrategy,
diversification ofbrand, selling goodquality products ata cheaper rates...
European
Most related to thegrowth of the
people mentally,not only for beauty
purpose
North America
Brand extensions,frequent
advertismenta andpromotion...
African, Orientand Pacific
Region
Launchingtechnical training
centers, cheapprices...
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PRODUCT
1Straightproduct
extension
2
Productadaptation
3
ProductInvention
GLOBAL MARKETING PROGRAM
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GLOBAL MARKETING PROGRAM
In India, hair care is one of
the foremost beauty routines.
=> A source of inspiration
for the2 in 1 formula
Shampoo and Hair Oildeveloped by Garnier.
PRODUCT ADAPTION
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GLOBAL MARKETING PROGRAM
PRODUCT ADAPTION
In Brazil, more than half ofthe women have long hair,very curly, dry and dull.
L'Oral launchedElsveTotal Reparao
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Chinese consumersjudge the effectiveness
of a lip balm by the
sensation on their lipsbut also by the visual
results.
launch BabyLips
GLOBAL MARKETING PROGRAM
PRODUCT INVENTION
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GLOBAL MARKETING PROGRAM
Observing shiny skin ofChinese men
the creation ofGarnierMen Sweat & OilControl
PRODUCT INVENTION
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GLOBAL MARKETING PROGRAM
European women care about self esteem
LOreal created the programs like Beauty withheart for helping the people made helpless by illness orany kind of negative life experiences
PROMOTION
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GLOBAL MARKETING PROGRAM
PROMOTION
In US and Canada,people follow thepromotions and due towhich the demands of
the products increases
LOreal uses the
strategy offrequentadvertisements and
promotions
COOPERATIVE STRATEGIES
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COOPERATIVE STRATEGIES
RELATIONSHIP
Suppliers
Partners
COOPERATIVE STRATEGIES
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COOPERATIVE STRATEGIES
LONG-TERM RELATIONSHIP WITH SUPPLIERS
There is no doubt that we have paved the way for LOreals sustainable
development and innovations with the full dedications and supports from our
suppliers.
committed to remaining loyal to both local andinternational suppliers
based on dialogue and joint efforts -seeks not only to help its suppliers meet its expectations but
to contribute to their growth, through opportunities for
innovation and competitiveness
hold events and meetings every year in a
regular exchange platform for its suppliers to discuss programsto help strengthen the cooperation and to help the suppliers
improve
COOPERATIVE STRATEGY
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COOPERATIVE STRATEGY
Worldwide Suppliers Day
LOreal s Buy & Care Program
COOPERATIVE STRATEGY
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COOPERATIVE STRATEGY
PARTNERSHIP
LOral establishes joint ventures withcompanies in other industries.
COOPERATIVE STRATEGY
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COOPERATIVE STRATEGY
In PR channel, Loreal cooperate with celebrities in manyfamous events
PR CHANNEL
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COOPERATIVE STRATEGY
The company also take part in many communityandcharityactivities
PR CHANNEL
COOPERATIVE STRATEGY
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COOPERATIVE STRATEGY
MERGER AND ACQUISITON
As the competition intensifies, Owen-
Jones is likely to continue making
acquisitionsEnter the Chinese
market by
acquiring the
Chinese brand
Mininurse in
December 2003.
Acquire the
Chinese make-up
and skincare
brand Yue-Sai on
26th January
2004.
confirms our
determination to
step up the pace
of our growth on
this strategic
market
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Consumer product decision & PRICING STRATEGIES:
1. Pricing Strategy chosen by loreal
2. factors affecting the marketing pricing strategies ofLoreal
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Pricingstrategy
Value-based
Cost
based
Competition -
based
New -product
Product- mix
PRICING STRATEGY
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VALUE- BASED PRICING
R&DResearch
2,980 researchers
PRICING STRATEGY
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R&D
Research
3% of revenue
PRICING STRATEGY
VALUE- BASED PRICING
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Example: Satisfy women at all age
For 20s
For 50s
For 40sFor 30s
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COST-BASED PRICING
Professional
products
Consumer
productsLuxury products Active
comestics
PRICING STRATEGY
For 20s
C G S G
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PRICING STRATEGY
54%
16%
21%9%
Operating Income
Consumer Products
Professional
Products
Luxury Products
Active Cosmetics
COST-BASED PRICING
4 Divisions
suit the needs
of all people ofall economic
status
COST BASED PRICING
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Professional Prpductss 6 - 18
Consumer Products 3 - 14
Luxury Products5 times higher than consumer products
COST-BASED PRICING
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COMPETITION-BASED PRICING
PRICING STRATEGY
LOreal plans to
release lower price
products with the
slogan: A price for
everyone
sales promotionhaving a wide
assortment with
varying range ofproducts for
premium and themiddle class
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PRICING STRATEGY
PRODUCT-MIX PRICING LOreal Paris products
range from 11 to 18
The Garnier range retails for
slightly less than LOrealParis, Garnier Essentialrange which would retail at
about 5.
In this way, the company willhave skin care that range
from 5 to 250
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NEW PRODUCT PRICING
PRICING STRATEGY
Innovativenew productsadded to the
existing productportfolio of the
company to
penetrate themarket
deeply andquickly
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PRODUCT-MIX PRICING
4,99
14 - 21
PRICING STRATEGY
LOreal has produced
pricing optionalproducts by proving a
variety of products withthe same functions at
different quality.
Additionally, within each
main product line, LOreal
also produces some
accessories
FACTORS AFFECTING PRICING STRATEGY
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FACTORS AFFECTING PRICING STRATEGY
- Good research and innovation
- Developed activities in the field of
cosmetics as well as in the
dermatological and pharmaceutical
fields.
- Well invested advertising strategy
- Decentralized organizational
structure
- Low profit margin- Weak coordination and the control
of the activities and image in the
worldwide market
INTERNAL FACTORS
STRENGTH
WEAKNESS
FACTORS AFFECTING PRICING STRATEGY
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- The growing demand for beauty
- Growing market.
- Greater market share enables them to
have the top of the line products.
- Growing competition
- Economic downturn- Changing spending habits of consumer
and the economic crunch
FACTORS AFFECTING PRICING STRATEGY
EXTERNAL FACTORS
THREATS
OPPORTUNITIES
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CONCLUSION:Summary and recommendations FOR
LOREAL
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CONCLUSION
SECRET OF SUCCESS
Aggressiveresearch
Shrewdmarketing
Skill in
managing a
large stable
of brands
1st globalcosmetic
manufacturer
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Focus on
the
emerging
markets
Latin-America
(Brazil and Mexico)
Asia (China and
India).
Mainly-
targeted
market
urban middle class mass market
segment.
CONCLUSION
PLAN FOR FUTURE GROWTH
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Competitors who appear sooner
in these markets: P & G, Unilever,
Revlon...
Short-term effect on profitability
in order to make greater presence
in the new markets.
CONCLUSION
CHALLENGES
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1
take advantage of its achievements and its strength in
research and innovations.
2 be careful in choosing the market target for
particular brands and products.
3
the countrys culture has to be taken intoconsideration in the marketing process.
CONCLUSION
RECOMMENDATIONS
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