case study loreal : global brand local knowledge
TRANSCRIPT
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
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
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
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.
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.
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
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”