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UNIVERSITY OF MUMBAI PROJECT ON BRANDING OF L’OREAL (MARKETING) MASTER OF COMMERCE (MANAGEMENT) SEMESTER-II 2014-15 In Partial Fulfilment of the Requirement under Semester Based Credit and Grading System for Post Graduates (PG) Programme under Faculty of Commerce SUBMITTED BY KARNA VORA ROLL NO. : 31 PROJECT GUIDE Ms. KHYATI VORA KPB Hinduja College of Commerce, 315 New Charni Road, Mumbai- 400004

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UNIVERSITY OF MUMBAI

PROJECT ONBRANDING OF LOREAL (MARKETING)

MASTER OF COMMERCE (MANAGEMENT)SEMESTER-II2014-15

In Partial Fulfilment of the Requirement under Semester Based Credit and Grading System for Post Graduates (PG)Programme under Faculty of Commerce

SUBMITTED BYKARNA VORAROLL NO. : 31PROJECT GUIDEMs. KHYATI VORA

KPB Hinduja College of Commerce, 315 New Charni Road, Mumbai-400004

CERTIFICATEThis is to certify that Mr. Karna Vora of M.Com Management Semester-II [2014-2015] has successfully completed the project on Branding of LOreal under the guidance of Ms. Khyati Vora.

Project Guide

Course Coordinator

Internal Examiner

External Examiner

Principal

Date: Place: Mumbai

M.Com (Economics of Global Trade and Finance)

SEMESTER-II

BRANDING OF LOREAL

SUBMITTED BYKARNA VORAROLL NO. : 31

ACKNOWLEDGMENTEvery project big or small is successful largely due to the effort of a number of wonderful people who have always given their valuable advice or lent a helping hand. I sincerely appreciate the inspiration; support and guidance of all those people who have been instrumental in making this project a success.With great pleasure I thank Ms. Khyati Vora, Professor of KPB Hinduja College of Commerce for being an inspiration in the completion of this project. I thank her for the invaluable help provided during the completion of this project. I also thank her for providing me guidance and numerous suggestions throughout the entire duration of the project.Last but not the least I place a deep sense of gratitude to my family members and my friends who have been constant source of inspiration during the preparation of this project work.

DECLARATIONI, Mr. Karna Vora of M.Com Management Semester-II (2014-15), hereby declare that I have completed the project on Branding LOreal. The information submitted is true and original to the best of my knowledge.

Karna Vora

(Signature)

TABLE OF CONTENTSCHAPTER1.1INTRODUCTION1.2OBJECTIVES OF THE STUDY1.3RESEARCH METHODOLOGY1.4CHAPTER SCHEMECHAPTER 2REVIEW OF LITERATURE

CHAPTER 1 1.1 INTRODUCTIONBrands are like human beings. They are born, fed and nurtured, made strong and responsible so that they can be faithful friends of the people (customers), form mutually beneficial and satisfying relationships with them and become their companions for life. Such brands, make their parents (organization or corporate) proud of them. The best brands are the ones who help in forming and sustaining strong long term parent-brand-people relationships. These brands form the potential for present growth and future expansion. They help the organizations conquer peaks at the time of booms and stay afloat and swim at times of depression. We come across a number of brands in our daily lives. Our morning starts with using a toothpaste (Colgate, Pepsodent or Close-up), using a bathing soap (Lux, Fairglow or Cinthol) and shampoo (Clinic All Clear or Vatika), wearing clothes ( Allen Solly, Levis or Raymonds), breakfast bread (Britannia or Modern) and butter (Amul) or jam (Kissan), lunch and dinner (Nature Fresh or Pillsbury flour and Safal vegetables), morning and evening tea and coffee (Tetley, Nescafe or Bru), going out in a car (Hyundai Santro, Honda Accord or Mercedes Benz).Talking on the cell phone (Motorola, Nokia, Blackberry or Samsung), watching television in the evening (LG, Sony or Philips) or listening to music (Philips or Apple) etc. But how often do we think of what all a company does to put a positive imprint (fight for a shelf space) in the mind of the customer? Today nearly all the companies are focusing more and more on building strong brands. The concept of brand equity and its management has come to the fore like never before. More and more companies are refocusing on select strong brands.This project is thus a timely stuffy of the importance of brands, what it takes to build them, what benefits do they give to different stakeholders (organization, distributors and customers), how can they be leveraged, what is the impact of modern technology on branding, branding on the web, branding in mergers and acquisitions etc. examples have been given and cases discussed at every suitable point to bring out an application oriented understanding of building and managing brands. 1.2 OBJECTIVES OF THE STUDY Understanding the concepts of Advertising and Branding . To analyze the Branding strategies adopted by LOreal Co. Ltd to woo the consumers into buying their products.

1.3 RESEARCH METHODOLOGYCollection of dataSecondary data:This information is been collected from Secondary source such as Reference Book and e-data.1.4CHAPTER SCHEMEChapter 1:Introduction Chapter 2:Review of Literature

CHAPTER 2: REVIEW OF LITERATUREBrand:A brand is a product, service or concept that is publicly distinguished from other products, services or concepts so that it can be easily communicated and usually marketed. A brand name is the name of the distinctive product, service or concept. Branding is the process of creating and disseminating the brand name. Branding can be applied to the entire corporate identity as well as to individual product and service names.Brands are usually protected from use by others by securing a trademark or service mark from an authorized agency usually a government agency. Before applying for a trademark or service mark, you need to establish that someone else hasn't already obtained one for your name. Although you can do the searching yourself, it is common to hire a law firm that specializes in doing trademark searches and managing the application process, which, in the United States, takes about a year. Once you've learned that no one else is using it, you can begin to use your brand name as a trademark simply by stating it is a trademark (using the " TM " where it first appears in a publication or Web site). After you receive the trademark, you can use the registered (?) symbol after your trademark.Brands are often expressed in the form of logos, graphic representations of the brand. In computers, a recent example of widespread brand application was the "Intel Inside" label provided to manufacturers that use Intel's microchips.A company's brands and the public's awareness of them are often used as a factor in evaluating a company. Corporations sometimes hire market research firms to study public recognition of brand names as well as attitudes toward the brands.Here is the famous advertising copywriter and ad agency founder David Ogilvy's definition of a brand:The intangible sum of a product's attributes: its name, packaging, and price, its history, its reputation, and the way it's advertised.

Brands in the field of marketing, originated in the 19th century with the advent of packaged goods. Industrialization moved the production of many household items, such as soap, from local communities to centralized factories. These factories, generating mass-produced goods, needed to sell their products in a wider market, to a customer base familiar only with local goods. It quickly became apparent that a generic package of soap had difficulty competing with familiar, local products. The packaged goods manufacturers needed to convince the market that the public could place just as much trust in the non-local product.Many brands of that era, such as Uncle Ben's rice and Kellogg's breakfast cereal furnish illustrations of the problem. The manufacturers wanted their products to appear and feel as familiar as the local farmers' produce. From there, with the help of advertising, manufacturers quickly learned to associate other kinds of brand values, such as youthfulness, fun or luxury with their products. This kick started the practice we now know as "branding".We tend to think of branding as a modern day phenomenon. Certainly, during the late 1990s and the early 2000s, branding emerged as a significant area of emphasis not only for companies and their products but also for municipalities, universities, other non-profit organizations and even individuals. Branding became ubiquitous. Many of us also know that Proctor & Gamble and other consumer product companies began branding their products in earnest in the mid-to-late 1800s. But more interesting is how far back in time branding goes. For instance, companies that sold patented medicines and tobacco began branding their products as early as the early 1800s. Around the same time, some fraternities and sororities branded their pledges (literally) during initiation rites as a form of identification and bonding, a practice that has long since been identified as hazing and therefore abandoned.But that is still recent history -- relatively.Between the 1600s & 1800s criminals were branded (again literally) as a form of punishment and identification. For instance, in England, they branded an S on a person's cheek, while in France; they branded a fleur de lis on the shoulder. As repugnant as it may be to us today, slaves were also branded roughly during the same time period to connote ownership. In the 1200s, England required bread makers, goldsmiths and silversmiths to put their marks on goods primarily to insure honesty in measurement. In the Medieval times, printers also used marks as did paper makers (watermarks) and various other craft guilds.But branding goes back even further. As far back as 1300 BC, potter's marks were used on pottery and porcelain in China, Greece, Rome and India. Branding of cattle and livestock go back as far as 2000 BC. And archaeologists have found evidence of advertising among Babylonians dating back to 3000 BC. So, how far back does branding go? At least 5000 years.What is more interesting are underlying needs from which branding originated: to insure honesty, provide quality assurance, identify source or ownership, hold producers responsible, and differentiate, as a form of identification and to create emotional bonding. Interestingly, people value brands for many other same reasons today.Clearly history provides some insight and perspective on modern day branding.

CHAPTER 3: PROFILE OF LOREAL CO. LTD3.1 HistoryTheL'Oral Groupis aFrenchcosmeticsandbeautycompany headquartered inClichy, Hauts-de-Seine, France.It is the world's largest cosmetics company and has a registered office inParis.It has developed activities in the field \of cosmetics concentrating onhair color,skincare,sun protection,make-up,perfumesandhaircare, the company is active in thedermatological,tissue engineeringandpharmaceuticalfields and is the topnanotechnologypatent-holder in theUnited States.In 1909,Eugne Schueller, a youngFrenchchemist, developed a hair dye formula calledAurale. Schueller formulated and manufactured his own products, which he then sold to Parisianhairdressers. On 31 July 1919, Schueller registered his company, the Socit Franaise de Teintures Inoffensives pour Cheveux(Safe Hair Dye Company of France). The guiding principles of the company which eventually became LOral, were research and innovation in the field of beauty. In 1920, the company employed three chemists. By 1950, the teams were 100 strong; that number reached 1,000 by 1984 and is nearly 2,000 today.LOral got its start in the hair-colour business, but the company soon branched out into other cleansing and beauty products. LOral currently markets over 500 brands and many thousands of individual products in all sectors of the beauty business: hair colour, permanents, hair styling, body and skin care, cleansers, makeup and fragrances. The company's products are found in a wide variety of distribution channels, from hair salons and perfumeries to hyper - and supermarkets, health/beauty outlets, pharmacies and direct mail.LOral has six worldwideresearch and developmentcentres: two in France:AulnayandChevilly; one in theU.S.:Clark,New Jersey; one inJapan:Kawasaki,Kanagawa Prefecture; in 2005 one was established inShanghai,China, and one inIndia. A future facility in the US will be inBerkeley Heights, New Jersey.L'Oral's famousadvertising sloganis "Because I'm worth it". In the mid 2000s, this was replaced by "Because you're worth it". In late 2009, the slogan was changed again to "Because we're worth it" following motivation analysis and work into consumer psychology of Dr. Maxim Titorenko. The shift to "we" was made to create stronger consumer involvement in L'Oral philosophy and lifestyle and provide more consumer satisfaction with L'Oral products. L'Oral also owns a Hair and Body products line for kids calledL'Oral Kids, the slogan for which is "Because we're worth it too".

3.2 Mergers & AcquisitionsLOreal is successfully present in 150 countries all over the world. This was made possible by creating a diverse mix of brand portfolio all over the globe and aggressively marketing those brands. The products and the marketing strategies of the company are made in contrast to the culture and lifestyle of a particular nation. Hence, attracting consumers by understanding and making an appeal towards their culture and lifestyle. The cosmetic giant acquires local brands, gives them a makeover and markets them aggressively in the local market giving a new image to the consumers of different nations worldwide. Basically, LOreal follows the strategy of product adaptation, which implies alteration of a product or the image of a product to meet its local needs. LOral purchased Synthlabo in 1973 to pursue its ambitions in the pharmaceutical field. On 17 March 2006, L'Oral purchased cosmetics companyThe Body Shopfor562 million. On 1 July 1999, L'Oreal took over sales and marketing of the brand Maybelline in Japan and gradually introduced innovative products recently developed and launched in the US to the Japanese market. In 1987, during the growth years of the mail order business, L'Oral and3 Suissesfounded Le Club des Crateurs de Beaut for mail-order sales of cosmetic products, with brands including Agns b., Cosmence and Professeur Christine Poelman among others. In March 2008, L'Oral acquired 3 Suisse's stake, taking sole control of the company. In November 2013, L'Oral announced that Le Club des Crateurs de Beaut would cease activity in the first half of 2014. In November 2012, L'Oral inaugurated the largest factory in theJababeka Industrial Park, Cikarang,Indonesia with a total investment of USD$100 million. On 11 February 2014 it was announced that L'Oreal has sealed a deal worth 3.4bn to buy back 8% of its shares from Swiss consumer goods giant Nestle. As a result of the deal, Nestles stake in LOreal will be reduced from 29.4pc to 23.29pc while the Bettencourt Meyers familys stake will increase from 30.6pc to 33.2pc. On 20 February 2014, Shiseido agreed to sell its Carita and Declor brands to LOral for 227.5 million [USD$312.93 million (2014)] On 18 June 2014, L'Oral agreed to acquireNYX Cosmeticsfor an undisclosed price, bolstering its makeup offer in North America where its consumer-products unit has faltered. LOral India has made its first acquisition in the domestic beauty market by taking over the assets of Mumbai-based Cheryls Cosmeceuticals.

3.3 Market of LOreal& its Competencies

On the basis of product usage the cosmetic industry can be divided into four segments: luxury, consumer or mass-market, professional & pharmaceutical. Globally the European cosmetics industry has maintained its position as the leader since 1980s. In 2000, the European cosmetic industry generated almost E50 billion in sales, which was twice the sales volume of Japanese cosmetics industry and one third more than the US cosmetic industry.LOreal has remained the global leader in the industry with a 16.8 per cent market share followed by Estee Lauder with a 10.9 per cent market share and Procter & Gambler with 9.3 per cent market share.Establishes in 1946, in New York, US, Estee Lauder competed with LOreal in the luxury segment with brands like Estee Lauder, Aramis, Clinique, Prescriptives, Origins, M.A.C, Bobbi Brown Essentials, Tommy Hilfiger, Jane, Donne Karan, Avede, La Mer, Stila and Jo Malone. Procter & Gambler, the US based FMCG manufacturer competed with LOreal in the mass market segment with skincare, haircare and bodycare products. Some of P&Gs well known brands include Biactol, Camay, Cover Girl, Ellen Betrix, Infasil, Max Factor (skincare), Herbal Essence, Loving Care, Natural Instincts, Nice n Easy, Pantene Pro-V, Rejoice, Vidal Sassoon, Wash & Go (haircare), Laura Biagiotti, Hugo Boss and Helmut Lang (perfumes). The US based Revlon Inc. also competed with LOreal in the mass market segment with brands like Charlie, Colorsilk, Colorstay, Fire & Ice and Skinlights.Other companies like Avon, Kose, Coty and Shiseido competed globally in the mass market segment. LOreal remained the overall industry leader, as it was the only company that competed in all four segments.

L'Oreal's Market Share of Global Hair Care Market: Hair Care Market Share for L'Oral declined from 24.3% in 2009 to 22% in 2012 before bouncing back to 22.4% in 2013. The company pulled out its Garnier brand from China in a bid to focus exclusively on prestige beauty products in the region. We currently forecast L'Oral's share of the Hair Care market to grow from 22.4% in 2013 to reach 25% by the end of our forecast period. There could be a marginal downside to Trefis price estimate if the market share remains flat at current levels.L'Oreal's Market Share of Global Skin Care Market: L'Oral's Skin Care Market Share expanded steadily from 12.3% in 2009 to 13.9% by 2013. We currently forecast L'Oral's share of the Skin Care market to grow from 13.9% in 2013 to about 16.8% by the end of our forecast period. There could be a 4% downside to our Trefis price estimate if the market share were to remain flat at current levels.3.4 ProductsLOreal successfully maintained its presence in all the four segments of the cosmetic industry with a minor overlapping in customers and outlets, and the unique distribution channel it uses. LOreals diverse mix of brand portfolio is divided into four groups, 4 out of 20 brands are consumer products and are sold through discount and drug stores, there are 13 luxury products which are sold through department and specialty stores, 4 are professional products used in salons, and 4 are pharmaceutical products sold by dermatologist or other specialists.The product division is as follows:1) LOreal LuxeLOral Luxe opens a unique world of beauty its international brands incarnate all the facets of elegance and refinement in three major specializations: skin care, make-up and perfume. LOral Luxe products are available at department stores, cosmetics stores,travel retail, but also own-brand boutiques and dedicatede-commercewebsites.It includes brands such as:- Lancome Giorgia Armani Beauty Yves Saint Laurent Beauty Biotherm Kiehls Ralph Lauren Shu Uemura Chacharal Helena Rubenstein Clarisonic Diesel Victor&Rolf Yue Sai Maison Martin Margiela Urban Decay Guy Laroche Paloma Picasso

2) Active Cosmetic DivisionThe Active Cosmetics Division brands meets a range of different skin care needs from normal to blemish-proned, in healthcare outlets worldwide, including,pharmacies, drugstores, and medi-spas.. Thanks to its highly complementary brands, developed and endorsed by health professionals - dermatologists, pediatricians, cosmetic doctors - the division is the world leader in dermocosmetics.It includes brands such as:- Vichy La Roche Posay SkinCeuticals Inneov Roger&Gallet Sanoflore

3) Consumer Production DivisionThe Consumer Products Division makes the best of cosmetic innovation available to the greatest number of people on every continent. Its brands are distributed inmass retailing channels hypermarkets, supermarkets, drugstores and traditional stores. These brands offer a wide range of coloring products, hair care, makeup and skin care.It includes brands such as:- LOreal Paris Garnier Maybelline New York Softsheen.Carson Essie

4) The Body ShopAll-natural, distinctive and socially engaged: the Body Shop values are more relevant to the 21st century than ever. Its creative and innovative products that really work appeal to consumers worldwide. Available in The Body Shop Brand outlets all over.

5) The Professional Product DivisionThe Professional Products Division distributes its products in salons worldwide. Through its vast array of brands, the division can meet the needs of different hair care salons, for color, shape and styling, shampoos and general hair care needs. A privileged partner of hairdressers, this division offers them products made with the best technologies as well as high-level training, to ensure professional service.It includes brands such as:- LOreal Professionnel Kerastase Redken Matrix Pureology Shu Uemura Art of Hair Mizani EssieCHAPTER 4: BRAND MANAGEMENT4.1 Brand ManagementBrand Management is a communication function that includes analysis & planning on how that brand is positioned in the market, which target public the brand is targeted at & maintaining a desired reputation of the brand. Developing good relationships with target public is essential for Brand Management. Brand Management is nothing but an art of creating & sustaining a brand.Brand Management includes managing the Tangible elements which is the product itself, look, price, the packaging, etc. The Intangible elements are the experience that the consumer takes away from the brand & also the relationship that they have with that brand. A brand manager would oversee all these things.Definition:the process of creating a relationship or a connection between a companys product & emotional perception of the customer for the purpose of generation segregation among competition & building loyalty among customers. Brand Management begins with having a thorough knowledge of the term brand.Following are important concepts of Brand Management:- Definition of Brand Brand Name Brand Attribute Brand Positioning Brand Identity Sources of Brand Identity Brand Image Brand Identity v/s Brand Image Brand Personality Brand Awareness Brand Loyalty Brand Awareness Brand Association Building a Brand Brand Equity Brand Equity & Customer Equity Brand Extension Co-brandingLOreal is considered as an epitome of brand management. In the narrow market of the cosmetic industry, LOreal owns about 20 brands, hence known as the house of brands, and is able to successfully market and sell those brands in the same market. This success is due to the high level of differentiation, clarification and leverage (Prophet.com, 2014). 4.2 Development of Brand EquityBrand EquityBrand Equity is the value and the strength of the Brand that decides its worth. It can also be defined as the differential impact of brand knowledge on consumers response to Brand Marketing. Brand Equity exists as a function of consumer choice in the market place.The concept of Brand Equity comes into existence when consumers make a choice of a product or service. It occurs when the consumer is familiar with the brand and holds some favorable position strong and distinctive brand associations in the memory.Brand Equity can be determined by measuring: Returns to the Share Holders Evaluating the Brand Image Evaluating the brands earning potential in long run. Evaluating the increased volume of sales compared to other brands of same class The price premium charged by the brand over the non-branded products From the prices of the shares that an organization commands in the market OR, an amalgamation of all the above methods.Using the financial perspective, one measures brand equity by determining how much more consumers are willing to pay in direct relation to the brand name. This gives marketers essential insight into the financial value of the brand. When viewing brand equity from this perspective, one must naturally consider overhead, such as costs of advertising.Using the consumer-based perspective entails considering how the attitude strength of consumers is directly influenced by the brand name. This perspective operates under the assumption that the consumer has had extensive experience with the product in question.

The consideration and development of brand equity is vital as its benefits are wide reaching. One can consider brand equity as an asset, as it can increase cash flow via the widening of a companys market share and the allowance of higher pricing policies.

LOreal Brand EquityLOreal has been successful in generating a worldwide Brand Identity only because of the companys powerful and efficient Branding Strategy.LOral has been one of the most reputed brands in the cosmetics field. The brand has made its presence felt in more than 100 countries, thanks to its numerous acquisitions worldwide. With several brands in its kitty, LOral has carved a niche for itself with its unique strategies and stands out from the other cosmetics brands.

4.3 Competitive Advantage of Brand Loyalty

Brand Loyalty is a scenario where the consumer fears purchasing and consuming product from another brand which he does not trust. It is measured through methods like word of mouth, public repetitive buying, price sensitivity, commitment, brand trust, customer satisfaction, etc. The extent to which consumer constantly buys the same brand within a product category. The consumers remain loyal to a specific brand as long as it is available. They do not buy from other suppliers within the product category.

There is a palpable correlation between the efficient branding of a product or service, and the display of brand loyalty in consumer purchasing patterns. In this instance, loyalty is defined as a deeply held commitment to re-buy or re-patronize a preferred product/service consistently in the future, thereby causing repetitive same-brand or same brand-set purchasing, despite situational influences and marketing efforts having the potential to cause switching behavior".

Brand loyalty is a direct consequence of the ability to better satisfy the desires of a customer that main competitors do. It now becomes clear that a modern day marketers principal objective is to build sustainable forms of loyalty between a company and its consumers, instead of focusing solely on the individual sale of products.

Brand Loyalty is the consumer's conscious or unconscious decision, expressed through intention or behaviour, to repurchase a brand continually. It occurs because the consumer perceives that the brand offers the right product features, image, or level of quality at the right price. Consumer behaviour is habitual because habits are safe and familiar. In order to create brand loyalty, advertisers must break consumer habits, help them acquire new habits, and reinforce those habits by reminding consumers of the value of their purchase and encourage them to continue purchasing those products in the future.

CHAPTER 5: BRAND NAME5.1 Features of a Good Brand Name.

While branding any product, the producers should give proper Brand Name to their products. A Brand Name may be good or bad. It may promote sales or may cause decrease in sales volume. It may reinforce reputation, image & goodwill of the producer firm or may spoil. The selection of good Brand Name is not easy. However, the following factors should be kept in mind while selecting Brand Name:

It should be unique / distinctive (for eg. LOreal, Maybelline) It should be extendable. It should be easy to pronounce, identified & memorized. It should give an idea about products qualities & benefits. It should be easily convertible in foreign languages. It should be capable of legal protection & registration. It should suggest product / service category. It should indicate concrete qualities. It should not portray bad / wrong meanings in other category.5.2 Process of Selection

Following is the process of selecting a renowned and successful Brand Name:-

Define the objectives of branding in terms of Six criterion descriptive, suggestive, compound, classical, arbitrary and fanciful. It is essential to recognize the role of brand within the corporate branding strategy and the relation of brand to other brand and products. It is also essential to understand the role of brand within the entire marketing program as well as detailed description of niche market must be considered. Generation of multiple names Any potential source of names can be used; organization, management and employees, current or potential customers, agencies and professional consultants. Screening of names on the basis of branding objectives and marketing considerations so as to have a more synchronized list The brand name must not have connotations, should be easily pronounceable, should meet the legal requirement etc. Gathering more extensive details on each of the finalized names There should be extensive international legal search done. These searches are at times done on a sequential basis because of the expense involved. Conducting consumer research Consumer research is often conducted so as to confirm management expectations as to the remembrance and meaningfulness of the brand names. The features of the product, its price and promotion may be shown to the consumers so that they understand the purpose of the brand name and the manner in which it will be used. Consumers can be shown actual 3-D packages as well as animated advertising on boards. Several samples of consumers must be surveyed depending on the niche market involvement. On the basis of the above steps, management can finalize the Brand Name that maximizes the organizations branding & marketing objectives and then formally register the Brand Name.

CHAPTER 6:POSITIONING / SEGMENTATION / TARGETING6.1 Brand PositioningPositioning can be defined as:-Berkowitz, Kerlin, RudeliusProduct positioning refers to the place an offering occupies in the consumers mind on important attributes relative to competitive offerings.Brand positioning refers to target consumers reason to buy your brand in preference to others.It ensures that all brand activity has a common aim; is guided, directed and delivered by the brand benefits / reasons to buy; and it focusses at all points of contact with the consumer.Brand Positioning must make sure that: Is it unique / distinctive v/s competitors? Is it significant and encouraging to the niche market? Is it appropriate to all major geographic markets & businesses? Is the proportion validated with unique, appropriate and original products? Is it sustainable - can it be delivered constantly across all points of contact with the consumer? Is it helpful for organization to achieve its financial goals? Is it able to support and boost up the organization?It should be remembered that positioning is more a reflection of a product and that it stifles the rich meaning of the brand without taking into account all its potentialities.Positioning applies to the process of emphasizing the brands distinctive and motivating attributes in the light of competition.It is based on the analysis of response to the following four questions.POSITIONING Why? For whom? When? Against whom?Brand Positioning is a medium through which an organization can portray its customers what it wants to achieve for them and what it wants to mean to them. Brand Positioning forms customers view and opinions.6.2 Usefulness of Positioning

As competition intensifies & brands proliferate, consumers tend to differentiate between brands in their own way. Positioning is a conscious attempt on the part of the marketer to accentuate this natural tendency & in the process, impart a distinct identity to his own brand to make it stand out among the competitors. The basis on which this differentiation is achieved reflects consumer preferences or attitudes. The marketer, through his diverse & coordinated actions, tries to influence this process.The concept of positioning is also important in various other aspects of the marketing strategy. Once one is clear about the position one wants, the other marketing decisions like product design, packaging, pricing, method of distribution, etc., become clearer.

6.3 Elements of PositioningEvidence has shown that there are four distinct variables that affect the position of a given product. These are:-1)The product itself2)The company behind it3)The competition

The Product: - How important the product is or what meaning it has for the consumer & how he relates to it. The fact that a product involves better ingredients or processes is a matter of indifference unless this knowledge offers distinct advantages to the consumer.

The Company: - A product comes from a company & every company has its ownhistory. Generally, the stronger the companies profile the better the image of its products. For instance, consumers may perceive a better the image of a product if it comes from a reputed house like Tatas.

The Competition: - Product positioning is invariably done in relation to various competitive offerings. In most cases, the consumers have a tendency to judge a product in comparison to the dominant brand, e.g., all photocopiers are compared with Xerox, all PCs with HCL, toothpastes with Colgate & so on. Leading brand enjoys some edge over others.

The Consumer: - It should be reiterated that positioning is essentially based on consumer perception rather than factual evaluation. Hence, it becomes necessary to examine how the consumer views a product. Here, it becomes necessary to examine how the consumer views a product. Here, the consumers self-perception comes into play along with his cognitive & connotative factors.

6.4 Errors in PositioningThere are various positioning errors, such as:- Under Positioning: This is a scenario in which the customers have a blurred and unclear idea of the Brand. Over Positioning: This is a scenario in which the customers have too limited awareness of the Brand. Confused Positioning: This is a scenario in which the customers have a confused opinion of the Brand. Double Positioning: This is a scenario in which customers do not accept the claims of the Brand.

CHAPTER 7:UNDERSTANDING CONSUMERS AND MARKETS7.1 Understanding Consumer Buying Behavior

Definition

Consumer behavior refers to the mental and emotional process and the observable behavior of consumers during searching, purchasing and post consumption of a product or service

Consumer behavior involves study of how people buy, what they buy, when they buy and why they buy. It blends the elements from psychology, sociology, socio psychology, anthropology and economics. It also tries to assess the influence on the consumer from groups such as family, friends, reference groups and society in general.

Buyer behavior has two aspects: the final purchase activity visible to any observer and the detailed or short decision process that may involve the interplay of a number of complex variables not visible to anyone.

7.2 Factors Affecting Consumer Buying Behavior

Consumer buying behavior is influenced by the major three factors:

1. Social Factors2. Psychological Factors3. Personal Factors.

1. Social Factors

Social factors refer to forces that other people exert and which affect consumers purchase behavior. These social factors can include culture and subculture, roles and family, social class and reference groups.

Example:

By taking into consideration Reference group, these can influence/ affect the consumer buying behavior. Reference group refers to a group with whom an individual identifies herself/ himself and the extent to which that person assumes many values, attitudes or behavior of group members. Reference groups can be family, school or college, work group, club membership, citizenship etc.Reference groups serve as one of the primary agents of consumer socialization and learning and can be influential enough to induce not only socially acceptable consumer behavior but also socially unacceptable and even personal destructive behavior. For example, if fresher student joins a college / university, he/she will meet different people and form a group, in that group there can be behavior patterns of values, for example style of clothing, handsets which most of group member prefer or even destructive behavior such as excessive consumption of alcohol, use of harmful and addictive drugs etc. So, according to how an individual references him / her to that particular reference group, this will influence and change his/her buying behavior.

2. Psychological Factors

These are internal to an individual and generate forces within that influence her/his purchase behavior. The major forces include motives, perception, learning, attitude and personality.

Example:Attitude is an enduring organization of motivational, emotional, perceptual and cognitive processes with respect to some aspect of our environment. Consumers form attitude towards a brand on the basis of their beliefs about the brand. For example, consumers of Sony products might have the belief that the products offered by Sony are durable; this will influence those customers to buy Sony products due to this attitude towards the brand.

3. Personal Factors

These include those aspects that are unique to a person and influence purchase behavior. These factors include demographic factors, lifestyle, and situational factors.

Example:Lifestyle is an indicator of how people live and express themselves on the basis of their activities, interests, and opinions. Lifestyle dimension provide a broader view of people about how they spend their time the importance of things in their surroundings and their beliefs on broad issues associated with life and living and themselves. This is influenced by demographic factors and personality.

7.3 Consumer Buying Decision ProcessConsumer buying decision process is the processes undertaken by consumer in regard to a potential market transaction before, during and after the purchase of a product or service.Consumer decision making process generally involves five stages:

A. Problem Recognition

Purchase decision making process begins when a buyer becomes aware of an unsatisfied need or problem. This is the vital stage in buying decision process, because without recognizing the need or want, an individual would not seek to buy goods or service.

There are several situations that can cause problem recognition, these include: Depletion of stock Dissatisfaction with goods in stock Environmental Changes Change in Financial Situation Marketer Initiated Activities

Its when a person recognizes that she cannot make a call from her mobile phone thats when she recognizes that her phone has been damaged i.e. the phone has hardware problems and needs to be repaired or buying a new piece.

B. Information Search

After the consumer has recognized the need, he / she will try to find the means to solve that need. First he will recall how he used to solve such kind of a problem in the past, this is called nominal decision making. Secondly, a consumer will try to solve the problem by asking a friend or goes to the market to seek advice for which product will best serve his need, this is called limited decision making.

Sources of information include: Personal sources Commercial Sources Public sources Personal experience

C. Alternatives Evaluation

Consumers evaluates criteria refer to various dimension; features, characteristics and benefits that a consumer desires to solve a certain problem. Product features and its benefit is what influence consumer to prefer that particular product. The consumer will decide which product to buy from a set of alternative products depending on each unique feature that the product offers and the benefit he / she can get out of that feature.

D. Purchase Action

This stage involves selection of brand and the retail outlet to purchase such a product.Retail outlet image and its location are important. Consumer usually prefers a nearby retail outlet for minor shopping and they can willingly go to a far away store when they purchase items which are of higher values and which involve higher sensitive purchase decision. After selecting where to buy and what to buy, the consumer completes the final step of transaction by either cash or credit.

E. Post-Purchase Actions

Consumer favorable post-purchase evaluation leads to satisfaction. Satisfaction with the purchase is basically a function of the initial performance level expectation and perceived performance relative to those expectations. Consumer tends to evaluate their wisdom on the purchase of that particular product. This can result to consumer experiencing post purchase dissatisfaction. If the consumers perceived performance level is below expectation and fail to meet satisfaction this will eventually cause dissatisfaction, and so the brand and/ or the outlet will not be considered by the consumer in the future purchases. This might cause the consumer to initiate complaint behavior and spread negative word-of-mouth concerning that particular product.

CONCLUSIONLOreal has reached the top position due to its excellent brand management strategies, locally and globally. The diverse mix of brand portfolio has been able cater the needs of customers of different cultures globally. Its acquisition, global brand management and multi brand strategies have widely been appreciated and looked upon by competitors. L'Oreal aims to boost the self-esteem of their customers. The company fosters itselfas a source of confidence and strength to its customer rather than just a cosmetic company. L'Oreal aims to promote a positive outlook towards the brand among its customers by making sure that the products and services they provide caters to every needs of the customer.

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