[ftu - marketing class shift 4-6 tuesdaty] group 12 - loreal

7/27/2019 [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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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...


REGIONAL SCOPE


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Example: China



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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.


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:


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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- 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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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



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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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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


PRODUCT INVENTION


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Observing shiny skin ofChinese men

the creation ofGarnierMen Sweat & OilControl

PRODUCT INVENTION


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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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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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RELATIONSHIP

Suppliers

Partners



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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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Worldwide Suppliers Day

LOreal s Buy & Care Program



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PARTNERSHIP

LOral establishes joint ventures withcompanies in other industries.



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In PR channel, Loreal cooperate with celebrities in manyfamous events

PR CHANNEL


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The company also take part in many communityandcharityactivities

PR CHANNEL



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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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- 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



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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


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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[ftu - marketing class shift 4-6 tuesdaty] group 12 - loreal

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