CONSUMER BEHAVIOR | SYNDICATE 13

LUPITA THANAYA - 29114322

ANNISA MULIASARI - 29114342

MELATI P. PUTRI - 29114355

DEA ANANDYA - 29114469

CASE ANALYSIS

GLOBAL BRAND, LOCAL KNOWLEDGE

Founded in 1909, L'Oreal coupled innovation and

speed to market with expansion of

its geographic and consumer base.

Leading player in the beauty and skin-care market.

€19.5 billion of 2010 sales

(half outside of Europe)

“Launching new innovative products on a regular basis

was key”

“Science of beauty in a jar”

3,5%

2,7%

1,7%

% of Revenue on R&D in 2010

1907EUGENE SCHUELLER

Developed Aureole, a hair-color formula.

Formulated and manufactured his own hair-dye product, sell to Parisian

hairdresser.

1957FRANCOIS DALLE

Initiating the concept of selling beauty through

several channels. Perception of “Parisian beauty as being expensive and out of reach”

1988LINDSAY OWEN-JONES

Focused on 5 core business (hair color & care, skin care, cosmetics, and fragrances).

“The firm had to promote its national

brands to the rest of the world.”

What is L’Oreal doing?

How are they executing this strategy?

What are the trade-off of this strategy?

66.000employees

130countries

130countries

38factories

5.7 billionunits

hair-coloring hair-styling fragrances

cosmetics skincare

department stores

retail stores

duty-free stores

internet

Direct marketing to professional

acquisition

add more

1966 USA

CHILE

GERMAN

U N I S A

J A D E

2000

CHINA

USA

CHINA

2003

2004

1999Men Product

Top skin-care brand in China

Makeup and skin-care brand

manufacturing plant

Pune, IndiaSecured L’Oreal’s Asia presence

Ethnic hair-care marketers

LOCAL CUSTOMER UNDERSTANDING

GEOCOSMETICScreated to understand consumers at local level

Study the beauty trends around the world and deliver the best product for that region.

“People on different continents have their

own specific needs, habits, dreams, and

desires – so one product, or even one

formula, does not fit all”

“L'Oreal developed brands in the low-, mid-, and high-ends which every brand has their own

brand policy.”

MASSTIGE“Prestige for the masses”

Luxury or premium products

Price points that filled the gap between mid-market and super-premium products

Maybelline had lost focus, losing brand equity,struggle to keep up with the rest of the market.

L'Oreal acquired Maybellinein 1996 for $768 million

“Maybe she’s born with it

Maybe it’s Maybelline”

MARKETING STRATEGY

Improving products (Fast-dry Nail)

Moving the headquarter to New York

Boosted ad spending by 30% to $70 million

Brought back Maybelline’s slogan

Modernize the advertisement

Video of Christy Turlington

70Was in

Countries by 1991

93%Sales grew

From 1996 to 2002

REGIONALLY FOCUSED 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’s President of Consumer Products.

L’Oreal did not use the direct-sales approach hired personal beauty

advisers at Department Stores

“The more the market develops, the less relevant

direct sales will be.”

L’Oreal Invested in :1. Strong Ad Campaign

on the internet2. Women’s magazines

drive word of mouth3. Have consumers generate demand for salons’ products

Redken (1990s) :Innovated a different

kind of marketing approach.

A highly successful American Premium

brand.

TELLING THE STORY

Diverse Customer Base Aging population in the West Ethnic groups Aspiring customers in the East Emerging Markets Growing interest in health &

beauty care among Men all over the world.

Managing Transition Swelled $4.56 Billion in

worldwide advertising spending in 2009

0

2

4

6

8

10

12

L'Oreal P&G Unilever

2005

2006

2007

2008

2009

Total Global Ad Spending (in $ Millions)– Based on Exhibit 5

Company’s Ad Budget : 75% for Television 20% for Print 5% for Billboards

2007, Company spend 2% of its ad

budget on Online Initiatives

2010, L’Oreal resumed investments after focusing on cost cutting

L’Oreal aimed to attract a bigger customer base in US &

Emerging Markets

L’Oreal was one of China’s largest & fastest growing advertisers.Spent > 10% of its 2009 media

spend in China.

75,4132,5

196,5

333,3

576,8

0

100

200

300

400

500

600

700

2005 2006 2007 2008 2009

Total Ad Spending in China (in $ Millions)– Based on Exhibit 6

Fame by Association

“L’Oreal used A-list Celebrity

endorsers in highly successful ad campaigns to push products

to a wide range of age brackets, ethnicities, and

genders.”

ENDORSEMENTSSarah Jessica Parker – Garnier Nutrisse

Eva Longoria, Diane Keaton, Scarlett Johansson, Beyonce Knowles

Kate Moss – YSL ParisiennePatrick Dempsey & Gerard Butler – the face of

L’Oreal Paris Men’s Expert LineThe Cannes Film Festival – L’Oreal Makeup

“L’Oreal associates itself with brand ambassadors who tap into all ages, race, and sexes, and the

portfolio leaves no stone unturned.”

2011, L’Oreal launched a Cannes-inspired line of

makeup, L’Or.

Fame by Association

Fame by Association

The challenge in 2010 was for student teams to come up with a beauty-product range for men’s

brand Diesel.

In 2011, the challenge involved designing a new advertising

concept to attract men to professional salons.

L’Oreal Brandstorm

43.000 students 285 universities 43 countries

Marketing as Recruiting:

from print TO DIGITAL“The big revolution is digital, and it is a great revolution. Because it changed completely the way we communicate

about our brand.”

Garnier Fructis launched a user-generated website that had the ability for the users to upload their own samples of how

they styled their hairusing Garnier Fructis products.

User-Generated Website

Digital Marketing Innovation: Virtual Personal Stylist

The Facebook pages included a customizable tab that

displayed products and how-to videos

L’oreal Grassroot Campaign

Help more than 4000 salons build Facebook pages

for business

L’Oreal offered instructional videos, and training and advertising credits to the

salons

L’Oreal Destination Beauty

Contained how-to videos filmed by Beauty Bloggers who provided hair

and makeup tips.

Destination Beauty allowed L’Oreal to engage viewers at home and establish sense of community.

Used established web personality to pitch product, like Michelle Phan

Double it’s customers base to 2 billion people, and increase it’s shares of sales from emerging markets from 30% to 50% during that time

Year 2020“Reaching the Next Billion Customers”

thank

you!