CLASS TO THE MASS

TEAM MEMBERS

Somarani Patnaik Jose Tom Jonak Mondal Gurpreet Singh Kunal Lunia Annie Ma

Owns 25 global brands

Cosmetics
Hair

color Skincare
High-end:

Lancome, Biotherm Mass market: Plenitude

LOreal Corporate Marketing Strategies

Trickle

Down and Fire Up

Revenue

from mass market products to fund their R&D for high end products; e.g. Lancome and Biotherm

Maintain

premium pricing to reinforce quality and performance Golden Rules of Advertising

Focus

advertising on star product Provide evidence of technological superiority Depicts an up-to-date and assertive executive woman Aishwariya Rai & Penelope Cruz

Plenitude Skincare Line Class for the Mass

1982 launch in France Designed for mass market (class of the mass) 1987 became market leader in France Decided to export class to mass formula to U.S. and other global markets

THREATS: Expensive product image Consumers loyalty to competitors product Local products knew US consumer behaviour Competition from Olay in mature skin segment TOWS WEAKNESS: Unknown about consumer behaviour in US Product cover unattractive Need to upgrade of US consumer No differentiation in daily moisturizer/cleanser market High advertising costs Lack of profitability

OPPORTUNITY: Big market in US Young consumer felt local product is not up to date US maker has many channel for L'Oreal product owned subsidiary, a true member of L'Oreal family.

STRENGTHS: Known with good quality Great R & D department Have a good expertise in handling cosmetic product Revitalift product potential Mature skin market segment

PORTERS FIVE FORCES MODEL

THREAT OF NEW ENTRANTS France-Low(French women were sofisticated in the use of skincare products) E.g.-Nivea,Diadermine US-High(customers loyalty to local brands)

SUPPLIERS B.P Low(there were many suppliers in processing their product)

INDUSTRY RIVALRY US-High France-Low

BUYERS B.P. FranceLow(Many buyers-no influence of price or product) US-High(Buyers concentrated)

SUBSTITUTES France-Low(Not very much effected by price) US-High(Highly affected by price change)

THREATS AND SOLUTIONS

THREATS AND SOLUTIONS

BOTTOM LINE SALES IN US: VERY POOR..
Customers loyalty to competitors products
Handled through intensive advertisement and Promotion event

Product cover unattractive

Rather than random product names they came up with product names like, Revitalife-Eye, Eye Defense, Moisture control etc

Product Formula Problems: Greasy Product, Does not absorb into skin

Climatic and skin difference has to taken into consideration

PERCEPTUAL MAPPING

The image created by LOreal is of technologically advanced skin care used by elderly people for softness. The users perception of LOreal is of the sophisticated & glamorous women in their 40s, with premium pricing. The difference in positioning of the product in the US market between perception of the brand & brand user perception led to slow acceptance. Brand Users were able to identify it separately from other products( Oil of Olay, Ponds) as young, stylish and premium product. Brand image held a different perception of a product similar to Nivea, AlphaHydrox, not able to separate itself as a different class.

RECOMMENDATION

Reinforce LOreal skin cares position as a innovation technological leader Continue daily moisturizers and cleansers & stay in the mass market channel Follow Star product promotion strategy Maintain premium pricing - Because Im Worth it Find new Celebrity endorsement Innovate & Change the product according to the market Problem with greasy products in