marketing strategy - l'oreal
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NETHERLANDS MARKETING STRATEGY
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• Garnier currently offers one product in the Dutch market...
• How can Garnier successfully grow market presence without negatively impacting L’Oréal’s current market share?
L’Oréal’s Objective in the Netherlands is to increase Garnier’s brand presence
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• Increase brand awareness for the Garnierfamily brands
• Minimize cannibalization from the introduction of Garnier products
• Meet the needs of the Dutch market
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L’Oréal’s Decision Criteria
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• Short-run strategy (0-12 months)
• Launch Garnier Synergie skin care products
• Increase L’Oréal Recital’s distribution
• Long-term strategy (12-36 months)
• Develop improved products for L’Oréal and Garnier
• Wait and see with Synergie anti-aging skin care line
We recommend L’Oreal develop its products to better suit the market’s needs
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Market analysis
Company analysis
Recommendation
Implementation
Risk Mitigation
Expected Results
Conclusion
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A high per capital income and growing number of women in the workplace makes the Netherlands an attractive market
Fastest growing population: Age 25 or older segment
Increasing number of Dutch women working
29% labor force participation for women (and growing)
4th in per capita income but 6th
in per capita spending on cosmetics and toiletries
Price conscious
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Accurate colour results are a major value driver for Dutch women
Volume growing at an annual rate of 15%46% of Dutch Women used hair colorant (up from 27%)Brand loyalPreference for lighter shadesPermanent colorant (73%)Semi-permanent colorants
Grew from 12% to 27%Fashion drivenDemand for warmer shades
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Dutch women care about natural ingredients in their cosmetics and skin care products
2nd-largest sector of Dutch cosmeticsVolume growth: 12%Sales growth: 16%2.5 million Dutch women aged 15 to 65 use skin care products Consumers are brand loyal:
Performance mattersLoyalty increases with age
Products heavily advertised and sold on the basis of brand image
Market share determined by share of voice
Increased interest in natural products
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Market analysis
Company analysis
Recommendation
Implementation
Risk Mitigation
Expected Results
Conclusion
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Current International Position shows a strong standing for both L’Oreal and Garnier
Largest cosmetics manufacturer worldwide
Subsidiaries in over 100 countries
$6.8 billion in sales (+12%)
$417 million in profits (+14%)
Sales breakdown:
France: 24%
Rest of Europe: 42%
L’OREALIndependent operation
Belle Couleur
Permanent hair color
Successful in France for over two decades
Market leader
Synergie
Skin care products
Successfully launched in France
GARNIER
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Garnier’s Current Position in Netherlands suggests low brand awareness
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Garnier
L’Oréal
Operates under same division as L’OréalCurrently manages one brand in the sun screen categoryMinimal brand presence
Brand is well perceived by Dutch consumersPlénitude: A mid-market, high quality skin care productRecital: A high-end, high quality hair colouring product
Recital is losing market share due to aggressive distribution strategy, private-label brands and salon services
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Market analysis
Company analysisProduct lines
Recommendation
Implementation
Risk Mitigation
Expected Results
Conclusion
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L’Oréal Recital’s declining market share can explained by an increasingly competitive market
Strengths
Weaknesses
Current market leader with one-third of the market
No clear positioning statementMarket share decreasing over the past two yearsNo semi-permanent formulation
To protect current market share, L’Oréal should develop a semi-permanent formula for Recital to meet market demands
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Avoiding cannibalizing by introducing a new product: L’Oréal Plénitude
Strengths
Weaknesses
Reputation for high qualityAnti-aging line appeals to older demographic
Unclear differentiationThreat of cannibalization from Synergie
To differentiate Plénitude from Synergie, L’Oréal should emphasize its anti-aging benefits to women 35 years and older
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Strengths
Weaknesses
Only product with a strong positioning statementPositioning statement resonates with Dutch women
Current colours are too dark for Dutch womenPositioning statement is not consistent with resultsBuying intentions decreased after use
Belle Couleur is unable to meet market needs; Garnier should delay its launch until product improvements are made
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Garnier Belle Couleur must be reformulated to meet the needs of the target market
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Strengths
Weaknesses
Buying intentions increased after useDifferent positioning from Plénitude
Dutch market is very competitiveNeed to maintain share of voice to maintain market share
Garnier should launch Synergie skincare without anti-aging line and emphasize natural ingredients that are scientifically proven
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Garnier Synergie offers its target market a unique value proposition
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Market analysis
Company analysis
Recommendation
Implementation
Risk Mitigation
Expected Results
Conclusion
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Launch Belle Couleur
Launch Synergie
Launch Both Launch Neither
Increase Garnier’sbrand awareness
Minimizes threat of cannibalization
Meets Dutch market needs
L’Oréal’s Decision Criteria
… Launch Synergie only
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Market analysis
Company analysis
RecommendationPositioning
Implementation
Risk Mitigation
Expected Results
Conclusion
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Synergie will be positioned as high-performance, high-value skin care products for women aged 20-35
Synergie is a worry-free, natural skincare line for young women who care about
healthy skin.
Reliable Natural Smart Choice
High Value High Performance Understated
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Synergie and Plénitude will be positioned as high value for women 20 to 35 years old
Price
HighLow
PerformanceHigh
Low
Ponds
Nivea Visage
Yves Rocher
Ellen BetrixSynergie
Plénitude
Dr. vd Hoog Oil of Olaz
Upper End
Lower End
Middle/ Value
Dead End
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Synergie and Plénitude will be differentiated on the basis of ingredients and demographics
Anti-Aging
Science
Ponds
Nivea Visage
Yves Rocher
Ellen Betrix
Synergie
Plénitude
Dr. vd Hoog
Oil of Olaz
Science-Mature
Natural-Youth
Science-Youth
Natural-Mature
General Purpose
Nature
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Garnier will target the value-conscious segment with Synergie
Target consumer profile:Aged 20-35Recently graduated university and started workingHas tried multiple skin care brands with mixed results (not brand loyal)Looking for brand to use with consistent resultsValue and performance conscious but not brand focusedThinks natural ingredients are better for skinUnfamiliar with technical product descriptions and terms
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Synergie PositioningSynergie is a worry-free, natural
skincare line for young women who care about healthy skin.
Dutch Consumer Needs
Growing consumer segment that is value conscious and cares about natural ingredients
Competitive Landscape
No direct competitor in high-value segment
Company Capabilities
“Alliance of science and nature” – natural products that don’t sacrifice performance
The positioning is aligned with capabilities, consumer needs and the competitive landscape
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Market analysis
Company analysis
Recommendation
Implementation
Risk Mitigation
Expected Results
Conclusion
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Low
PerformanceHigh
Low
Synergie
Plenitude
Dr. vd Hoog
Oil of Olaz
Middle/ Value
Product Line Price
Dr. vd Hoog 10-11.95
Synergie (Garnier) 9.95-16.95
Oil of Olaz 12
Plénitude (L’Oréal) 10.95-19.95Price
Price the Synergie line in the mid-range to appeal to its value-conscious target market
Synergie should be priced below Plénitude to target younger demographic
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0-2 months 2-4 months
Prepare Customize literature
Train new hires
Create a beauty buzzEducate target
marketSell bundling option
to retailers
4-12 months
Launch time!Free product trials
Advertisements
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Launching Synergie will require a high level of coordination between sales teams and distributors
1 2 3
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Increase sales force
Training period of two months
Define sales incentives
Distribution strategy:Leverage current distribution network
Grocery stores and chain drug stores in densely populated urban areas
Incentivize retailers with L’Oréal-Garnier bundling option
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1Prepare for Synergie launch
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Secure optimal shelf space
Place near Plénitude
Find the face of Synergie
Dutch celebrity spokeswoman
Educate about benefits of natural ingredients
PR efforts with women`s magazines and local TV stations
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2Create a beauty buzz
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Free product samples
Mass mailing to select neighbourhoods
Local charity events
Product demonstrations
Shopping malls located near distribution outlets
Outdoor advertising
Public transit, bus shelters, shopping malls
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3Launch time!
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Market analysis
Company analysis
Recommendation
Implementation
Risk Mitigation
Expected Results
Conclusion
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Cannibalization of Plénitude sales
Position Plénitude and Synergie for different target marketsEven with some cannibalization, overall L’Oréal-Garniermarket share will still increase
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risk mitigation
Highly competitive skin
care market
First-mover advantage in high-quality, high-value natural segment – gain share before others can enterEmphasis on natural positioning for Synergie –increase reluctance to switch due to possible allergic reaction
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Declining market share for Recital
Develop a clear positioning statement and build on position as current market leaderIntroduce semi-permanent formulation to meet market demands
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risk mitigation
Lost opportunity for mid-range
hair colour
Still no competitors in the mid-range hair colour marketReformulate Belle Couleur to increase chance of successful launch in future
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Market analysis
Company analysis
Recommendation
Implementation
Risk Mitigation
Expected Results
Conclusion
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Expected Results
Dutch skin care market:
2.5 million consumers
56 million guilders
10% market share for L’Oréal-Garnier = 5.6 million guilders
Plénitude 5%
Synergie 5%
Skin Care Hair Colour
… Increase in L’Oréal-Garnier market share and profits
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32 million guilders in revenue 2 million in profits
Permanent hair colour market:
1.7 million consumers
88 million guilders
30% market share for Recital = 26 million guilders
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• Profitability
• Revenue
• Sales volume
• Market share
Direct Metrics
• Retailer penetration
• Retail and wholesale margins
• Market share versus share of voice
• Brand awareness and consumer purchase intention
Indirect Metrics
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Metrics for Success… Indirect metrics drive top- and bottom-line results
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THANK YOU