1

Our team chose to specifically focus on the existing ASEAN product portfolio. Products in the Elsève line are moderately priced to appeal to the

widest array of consumers, yet embody the elegant, high-performance brand image that is the essence of L'Oréal Paris.

COMPANY MISSIONL'Oréal Paris (or “L'Oréal,” or “The Company,”) is devoted to the

mission of bringing affordable luxury to the masses – enabling all

individuals across the world to express their personalities, gain

self-confidence, and enhance their unique beauty. L'Oréal takes

great pride in spearheading advanced technologies in its beauty

business to invent the products of the future.

By providing access to superior products at low prices and encompassing the

beauty of the planet, L'Oréal Paris hopes to convey the iconic tagline “Because

You’re Worth It” to every person, regardless of their background, age, or

gender. Accessibility, diversity, and the commitment to inspire are three pillars

that have guided L'Oréal Paris over the years, and they will continue to do so

in the future as the company expands into emerging markets.

Consumer Products Division

“BEAUTY within reach”

Because Western Europe and North America are

established, mature markets with little room for drastic

growth, L'Oréal is aiming to gain one billion new

consumers by focusing on spreading its global reach1.Hair CareSkincare Cosmetics Hair Styling

L'Oréal PARIS: ASEAN PRODUCT PORTFOLIO

Smooth Intense Total Repair 5 Re-Nutrition Nutri-Gloss Light Fall Repair 3X Color-Vive

Frizz-free, silky

smooth hair

• Silk Protein:

enhances

smoothness and is

thermo-resistant

• Nutrileum:

nourishes weak hair

Weak, limp, damaged

hair looks

replenished, fullness

restored

• Pro-Keratin:

strengthens hair

• Ceramide: restores

smoothness and shine

Revive your shine

• Pearl Protein:

provides brilliant shine

• Citrus: purifies hair

by freeing deposits and

cleaning fibers

• Shine Booster

Technology: boosts

light reflection

Nourish your

roots, make your hair

stronger

• Microcirculation:

applied directly to scalp

• Reduces Hair Fall by

90%

• Restructures hair fiber

Visibly prolonged hair

color

• Color Protect Light

Reflecting System:

nourishes hair and

protects hair fibers

[with UV filter]

• Provides shiny and

radiant hair color

Rediscover incredible

elasticity, bounce and

silky smoothness

with Royal Jelly

• Royal Jelly: natural

ingredient that bathes

hair in

light, nourishing

ingredients

(our focus)

2

ASEAN Region:Indonesia, Malaysia, Philippines,

Singapore, Thailand, Vietnam,

Brunei, Burma, Cambodia, Laos,

& Mumbai, India

The ASEAN market for L'Oréal Paris holds immense potential for the

brand in the upcoming years. Economists are bullish on growth in the

ASEAN region, projecting a 5.8% growth for 2013 compared to 0.2%

growth in the core Euro zone and 2.1% in the United States2.

The ASEAN region has developed as a result of production facilities taking

advantage of the large pool of low-cost, skilled labor. A new crop of white collar jobs are being created as

more production workers move up into management positions. The middle class has expanded drastically over

the past decade and will continue its swift growth in the ASEAN region. Within the next four to ten years, this block

of consumers is expected to grow to more than 150 million3. A growing middle class means more dispensable income in the

hands of consumers, leading to increased demand for more sophisticated products and services. In the case of hair care products, this means more

advanced hair treatments in addition to basic shampoos and conditioners.

ASEAN ECONOMY

SOURCES:1“Industry Report C1934-GL: Global Cosmetics Manufacturing,” IBISWorld, September 2012 | 2IMF October 2012 http://www.imf.org/external/pubs/ft/survey/so/2012/RES100812A.htm3US Commercial Service. Doing Business in Indonesia: 2011 Country Commercial Guide for US Companies

EVOLUTION OF THE HAIRCARE INDUSTRY2005 2012

SOURCE: Euromonitor International Reports for Malaysia, India, Indonesia, Philippines, & Thailand. (2011-2012)

Dying sales of 2 in 1 products:

have consistently decreased in

sales by 10% on average

Colorants are slow but steady:

average growth of 4%; significant

high sales in Indonesia after 2007

Consistent 3%-4% sales in:

Salon Hair Care & Total Shampoo

High but fluctuating in Styling Agents:

high average growth of 7%, but saw a

sharp increase in 2010 to 10% and sudden

decrease the year after to 5%

Stable sales in Hair Loss Treatment:

sales see very flat but consistent average

growth of 5%; slowing in the Philippines

The rise of Conditioners:

sales have been growing around 8%, the

highest among all other hair care products

Perms and Relaxants are slowing:

The Philippines saw drastic sales growth

drops in 2007-2008, Thailand is

steady, but its total average is -1%

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17%

30%18%

35%

Unilever P&G L'Oreal Other

59%

22%

5%14% 50%

29%

3%18%

51%31

%

5%

13%36

%

18%

46%

47% 28%

13%12%

Unilever

P&G

L'Oreal

Other

COMPETITORSCOMPANY market share

BRAND market share

The top 5 players in the ASEAN countries

consistently include Unilever, Proctor &

Gamble, and L'Oréal. Other prevalent

companies include Mandom and Colgate.

We will focus on Unilever and P&G as L'Oréal’s main

competitors because in addition to being top players, both of

these companies have at least two hair care brands that are in the top 10

in terms of favored products across the ASEAN countries.

While L'Oréal as a company remains in the top 5, it usually falls some

place after these two competitors in both company market share and

brand market share. In addition, although Elsève and L'Oréal Studio

are the two L'Oréal brands that have the greatest market

penetration, both of these are not consistently in the top 10 for market

share.

Malaysia Philippines India Thailand Indonesia

(Percentages based upon the top

10 products in each country)

Like P&G, Unilever has some very successful brands

like Sunsilk and Dove, which have up to 19% of brand market share

in select countries. Although they have lower profit margins, their

revenue has been growing at a faster rate than L'Oréal.

However, they have been attempting to significantly cut costs by

revamping their supply chain and eliminating unproductive

advertisement and media. Unilever’s biggest threat today is the

increased competition and the chance of a competitive price

war, especially since all of the companies are cognizant of the threat

of inflation in Southeast Asia.

P&G has publicly stated that they are

changing their strategy to focus on their operations in the

US, China, and Western Europe. Although this focus overlaps pretty

significantly with L'Oréal operations, P&G will most likely not invest

a huge amount into emerging markets. Pantene and Head & Shoulders

are already well-established brands that have up to 17% of brand

market share in some countries. As a result, P&G has had lower

revenue growth and lower profit margins than L'Oréal.

Unilever currently leads these companies in revenue growth,

followed by L'Oréal and then P&G…

Proctor & Gamble

Unilever

L'Oréal has managed to keep its margins much higher than

that of its competitors, especially in gross margins. This

shows that L'Oréal has been able to expand into these

emerging markets more cost efficiently than its

competitors, which puts L'Oréal at a huge operational

advantage. As competition increases, the cost of growth

increases as well. We think that having higher margins and

lower operational costs gives L'Oréal a larger cushion to

invest more in Southeast Asian expansion than its

competitors.

HOWEVER:

competitor POSITIONING

-2%0%2%4%6%8%

10%

2008 2009 2010

UnileverP&GL'OrealOther

COMPANY growth

P&G, Unilever, and L'Oréal have all

slowly been losing market share despite

the increase of sales in Southeast Asia.

The slowdown has largely been caused

by increasing competition.

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STRENGTHS

- Existing high-end brand image with L'OréalStudio Line

- Existing Elsève products already target the major consumer needs in Southeast Asia (Total Repair 5, Nutri Gloss, Smooth Intense, etc.)

- Experience in using celebrity marketing campaigns

- Current global reach/capacity

- Advanced research & marketing capabilities

WEAKNESSES

- Variety of consumer needs (dandruff, damaged hair, dry hair, oily hair, thin hair, etc.) means that L'Oréal needs to provide many different products

- Increasing inventory and decreasing inventory turnover

OPPORTUNITIES

- Growth of conditioner sales in Southeast Asia

- Positive economic conditions and growing middle class

- Growth of concern on HALAL producers

- Increasing importance of natural products

- Globally, L'Oréal has twice the market share as Unilever, so it should be able to claim that spot in the ASEAN market as well

- Strong growth of premium-priced products

- Roll-back from discounts and promotions

THREATS

- Strength of competitors (Unilever, P&G) and the existing number of brands that L'Oréal has available

- Increase of counterfeit goods; both because of their low price cannibalizing L'Oréal sales but also cheap products ruining L'Oréal brand image

- Macroeconomic factors that decrease consumers’ spending

SWOT ANALYSIS SWOTDEEP DIVE

High-End Brand Image:

Market share percentages for L'Oréal Paris’ more sophisticated hair care products (Salon Hair Care & Hair

Care Premium brands) are significantly higher than that of the Normal Hair Care sub-category.

For example, L'Oréal Professional in Salon Hair Care has more than 15x the market share of Elsève in

Normal Hair Care. This shows that the L'Oréal Paris brand connects more strongly with salon usage and

quality.

Opportunity for Mass-market:

Despite higher market share in

Salon/Premium Hair Care, growth

in the Normal Hair Care category

is higher and more stable –

pointing to high potential in mass-

market products, as well.

Compelling Marketing

Strategy:

L'Oréal Paris has a long and

effective history of using celebrity

marketing – to inspire and advance

the beauty standard.

Strong International Presence:

International expansion is moving

rapidly and has been a driving

factor for revenue growth. Due to

L'Oréal’s successes in Asian

expansion, similar products and

marketing strategies have been

efficient in targeting the Southeast

Asian region.

5

A RISING MIDDLE CLASSThe middle class in ASEAN countries are growing at an incredible pace. In Indonesia, for example, the middle class comprises of

approximately 40% of the population – or more than 90 million people. Within the next four to ten years, this block of consumers

is expected to grow to more than 150 million1.

SOURCES:1 US Commercial Service. Doing Business in Indonesia: 2011 Country Commercial Guide for US Companies | 2 Deloitte, “Consumer 2020” Research Report.

The top 20% of the population have purchasing power similar to that of the average citizen of developed countries. Even the next

20% are relatively affluent, holding discretionary income. Moreover, as these economies continue to grow, the number of people

that shift from poverty into the middle class tend to grow faster than the overall economy, which is critical for consumer oriented

companies such as L'Oréal2.

INCREASED PURCHASING POWER

Each of the five countries in the ASEAN zone experiencing the fastest advancement of education showed an average literacy rate

of 93% between 2006 and 2008, according to the Asian Development Bank. Indonesia, Thailand, and Vietnam have all experienced

steady increases in adult literacy rates, averaging at around 95% in the most recent survey by the United Nations

Education, Scientific and Cultural Organization (UNESCO).

As countries become more developed, women are finding greater opportunities to achieve higher education, leading to increased

female labor participation. For example, India is seeing the rise of two-income households, which in turn, has led to increased

demand for the conveniences of modern retailing.

EDUCATION AND GENDER EQUALITY

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UNDERSTANDING THE CONSUMERMEET ANNISA our target consumer in the ASEAN zone, representing young women aged between 15-35.

SHE IS EMPOWERED - just beginning to enjoy the freedom

and purchasing power that comes along with a fast-growing

economy.

SHE IS EDUCATED - most likely completed

secondary school and part of university.

SHE IS AMBITIOUS - women are more inspired than ever to work

their way up the career ladder, to break into a new social class.

Whether she is a student studying hard in high school to get into a

top university, or a young woman starting on the production line in

a factory looking for the next promotion, she is independent and

takes charge, looking to better her life.

SHE IS BUSY - as either a student or young professional, she

works extremely hard and is crunched for time.

SHE IS IMAGE-CONSCOIUS - the modern ASEAN girl

knows the importance of a professional, put-together

appearance in achieving professional success.

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“Which existing haircare product(s) would you push to attract more consumers in the 15-35 age range in the ASEAN zone?

How would you re-launch your product/product range in order to regain impact on your target market?”

CONSIDERATIONSIn pitching the perfect product for the ASEAN zone, we took into consideration the following factors:

GEOGRAPHY GENETICSSoutheast Asia is located in the

warm, humid tropics zone with plenty of

rainfall all year-around. The humid climate

tends to have a harsher effect on thicker

hair – moisture easily relaxes the hair

cuticle layer, penetrating the cortex

layer, causing uneven swelling which

appears as frizz.

South Asian and Indian hair are straight or

slightly wavy, coarse, and thick. Asian hair

is 50% thicker than European hair. The

genetic make-up of Southeast Asian hair, in

combination with the distinctive

climate, makes it crucial for L'Oréal to

bring consumers a product that is well-

equipped to address their distinctive needs.

GROWTHImproving macroeconomic conditions have

resulted in a rapid growth of hair care products

that are particular to ASEAN zone needs. To

complement the dying sales of 2 in 1

products, conditioner sales have especially

risen, growing at around 8%, which is the

highest among all other hair care products.

WHAT ARE ANNISA’S IDEALS? ASEAN consumers place great importance on these qualities when it comes to hair:

There is much room for expansion in the

hair care market in Southeast Asia. In

more saturated markets such as Korea

and China, consumers place relatively

less importance on hair care when

compared to skincare or make-up.

Strength

Healthy scalp

Smoothness and manageability

Shine

Long length

In contrast, in Indonesia, India, and the

Philippines, an average of 50% of

consumers rated hair care as the most

important when compared to skincare

and make-up, demonstrating a need in

the market for more refined products.

WHAT ARE ANNISA’S CONCERNS? Damaged hair

Split ends

Dull, without shine

Dry/dried-out hair

Hair breakage

Top hair concerns for the ASEAN region:

SO WHAT CAN

L'Oréal DO?Water is less readily available in

Southeast Asia than in the West. In India

only 38% of women have water 24/7.

Most ASEAN women use cold water for

hair washing, and the quality of tap

water, which often has harsh effects on

hair and unpleasant smells, is also a deep

concern.

Most Indonesian women follow the

Islamic religion, which requires them

to wear the jilbab, or head scarf.

Wearing a jilbab will make hair and

scalp conditions damp and

sweaty, damaging over-all hair

quality. 7

5 PROBLEMS1 SOLUTION

The Total Repair 5 product line caters almost specifically to the ASEAN

consumer, combating the region’s top hair concerns with a “5 problems, 1 solution”

promise.

One specific product we are especially excited about is the Conditioning Restoring

Spray. This spray provides a quick fix for dry, dull hair without weighing it

down, making it perfect for the busy ASEAN woman on the go.

TOTAL REPAIR 5

WHY THE SPRAY WORKS

The ASEAN zone marketing hub recommends pushing the TR5 Conditioning Restoring Spray as the next “star” product in the ASEAN

region. It is the product that adds convenience & ease into Annisa’s busy lifestyle – a quick spritz of shine & nourishment anytime, anywhere.

Conditioning Restoring SprayPOSITIONING STATEMENT

FULL

SILKY SMOOTH

REVITALIZED

SHINE

STRONG

The great thing for Annisa is, not only does the spray promise beautiful hair on the

outside, the Pro-Keratine and Ceramide enriched formula actually dives deep to

replace her hair's natural cement and helps repair weak, limp, lifeless

hair, improving actual hair quality over time.

The spray’s water-less

application allows Annisa to

escape the hassle of cold

showers and a limited water

supply.

Hair-coloring was recently a huge trend in the ASEAN zone. However, Annisa’s

hair quality took a toll, as colored hair tends to become more dry, brittle, and

harder to manage. She loves how the spray works to restore hair quality, adding

back smoothness and manageability to her damaged hair.

The Restoring Spray is super

easy to use, no need to let the

conditioner set for 5 minutes –

just a quick spritz and Annisa is

ready to go.

The spray works around the

clock, constantly revitalizing her

hair when it is needed the

most, even while Annisa wears

her headscarf.

HAIR FALL

ROUGHNESS

DRYNESS

DULLNESS

SPLIT-ENDS

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“SHARE YOUR STORY”CAMPAIGNLeveraging its current

brand image in Southeast Asia, the company can teach women why

Total Repair 5 should be their go-to hair solution.

EDUCATE CONSUMERS BUILD RELATIONSHIPS L'Oréal needs to create a

relationship with its consumers to increase brand loyalty. Better market

penetration will allow the company to increase the growth rate of its

market share.

A TWO PART STRATEGY

OFFLINE ONLINE

L'Oréal can reach the consumer with “Share Your Story.” Consumers will share how they are diligently

pursuing their ambitions, and how Total Repair 5 conditioning spray fits into their lifestyle.

1. Secondary School & University Brand Ambassadors

2. Pop-Up Salons & Workshops

3. Distribution Method

1. Social Networking

2. The Online Gaming Sector

3. Short Video Series: Make it viral!

Secondary School & University Brand Ambassadors

• Increase confidence and drive in

students, have them apply by submitting

their version of Share Your Story.

• “L'Oréal Paris encourages women to

embrace their beauty and celebrate their

self worth. I feel very honored to be working with L'Oréal Paris to

help spread that message to young women.” –Lea Michele

• Brand Ambassadors will distribute product samples and coupons to

build relationships with consumers and promote the TR5 spray.

• Will spearhead Share Your Story at their respective schools.

Pop-up Salons & Workshops

• Coordinate with shopping centers, companies, and local schools to

host pop-up salons, offering free hair care services and advice.

• Goal: Women will be involved with Share Your Story during and

after their workshop experience.

Social Networking

• L'Oréal has done an exceptional job with social media in Southeast

Asia, beating competitive brands [Head & Shoulders] in metrics

such as Facebook “likes” and Twitter “followers.”

• The strong social media base should be used to promote Share

Your Story. Stories, whether they are on the Facebook wall, a

YouTube video, or a Tweet @ #ShareYourStory, will be released

daily.

• Community managers will actively encourage users to “share their

story” via social.

• There remains the opportunity to create online relationships with

relevant strategic partners – i.e. fashion designers, community

events, and other organizations whose brands align well with

L'Oréal Paris and would contribute to promotional synergies.

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OFFLINE continued ONLINE continuedDistribution Method

• Countries of high GDP: Glamorous shopping centers [Central World]

have tenants:

1.Watson’s is well-known in Asia for the “Watsons Your Personal

Store” chain

[Indonesia, Malaysia, Singapore, Philippines, Thailand], and

should be considered as a potential distributor.

2.The Body Shop, another L'Oréal brand has expanded into Asia

through these high-traffic shopping centers. This shows that

there are existing synergies with L'Oréal that exist in these

areas that can be expanded upon.

• Countries of low GDP:

1.Consumers are starting to desire higher quality products as their

disposable income grows.

2.Give them a taste of L'Oréal: We want L'Oréal Paris to maintain

its high quality image while making this product accessible to

individuals with lower income. Therefore, it would be best to

introduce sachets only in select areas.

3.When demand for TR5 products increases to a certain point

where we are certain that brand loyalty has taken hold, when

we think it’s the proper time to introduce the bottled product. At

that point, consumers, now familiars with TR5, should be

willing to pay a premium for the product.

• Have beauty consultants educate women on how to use the Total 5

Repairing Conditioning spray depending on their specific lifestyle.

The Online Gaming Sector

• Southeast Asian gaming revenues are expected to double by 2015

and half of that money is coming from women.

• Integrate L'Oréal’s mission into the game; women will create a

user profile through Share Your Story. In the digital L'Oréal Paris

world, each woman is represented by her story. This will

encourage women to embrace themselves and celebrate their

beauty and success.

• Have a point system or different levels that can allow users to win

prizes and TR5 products. The more time people spend playing the

L'Oréal game, the more they share with friends, the more they can

win!

Short Video Series: Make it Viral!

• Create a short video series targeting different age groups in our

demographic (15-35 yrs).

• Young Adult, College Student, Professional Worker, Mother

• Videos should use basic plots that are comparable to popular soap

operas in the Southeast Asian region. The plot for the final video in

each series should reveal inspiration from Share Your Story to

celebrate the life of a real L'Oréal customer.

• Make TR5 blend seamlessly into consumers’ entertainment and

take full advantage of product placement.

• Make it Viral! Like all digital media campaigns, these videos

should spread rapidly, and the success of this distribution should be

monitored on a regular basis through :

• L'Oréal Paris Website, YouTube, Facebook Video

CLOSING STATEMENT L'Oréal Paris owns an aspirational brand image that is a reflection of an ASEAN

woman’s pursuit for a better life. L'Oréal encourages women not to stay content with where they are, but to advance to

their full potential. The TR5 Conditioning Restoring Spray especially hopes to fit seamlessly into their lifestyles by

helping them achieve beautiful hair without the hassle, thus boosting their confidence as they advance towards their goals.

Because They’re Worth It. 10