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  • 1. NETHERLANDS MARKETING STRATEGY 1
  • 2. 2L’Oréal’s Objective in the Netherlands is toincrease Garnier’s brand presence • 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?
  • 3. 3L’Oréal’s Decision Criteria • Increase brand awareness for the Garnier family brands • Minimize cannibalization from the introduction of Garnier products • Meet the needs of the Dutch market
  • 4. 4We recommend L’Oreal develop its products tobetter suit the market’s needs • 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
  • 5. 5Market analysisCompany analysisRecommendationImplementationRisk MitigationExpected ResultsConclusion
  • 6. A high per capital income and growing number of women in 6the 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
  • 7. 7Accurate colour results are a major value driverfor Dutch women Volume growing at an annual rate of 15% 46% of Dutch Women used hair colorant (up from 27%) Brand loyal Preference for lighter shades Permanent colorant (73%) Semi-permanent colorants Grew from 12% to 27% Fashion driven Demand for warmer shades
  • 8. 8Dutch women care about natural ingredients intheir cosmetics and skin care products 2nd-largest sector of Dutch cosmetics Volume growth: 12% Sales growth: 16% 2.5 million Dutch women aged 15 to 65 use skin care products Consumers are brand loyal: Performance matters Loyalty 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
  • 9. 9Market analysisCompany analysisRecommendationImplementationRisk MitigationExpected ResultsConclusion
  • 10. 10Current International Position shows a strongstanding for both L’Oreal and Garnier L’OREAL GARNIER Largest cosmetics Independent operation manufacturer worldwide Belle Couleur Subsidiaries in over 100 Permanent hair color countries Successful in France for $6.8 billion in sales (+12%) over two decades $417 million in profits Market leader (+14%) Synergie Sales breakdown: Skin care products France: 24% Successfully launched in Rest of Europe: 42% France
  • 11. 11Garnier’s Current Position in Netherlands suggestslow brand awareness Operates under same division as L’Oréal Garnier Currently manages one brand in the sun screen category Minimal brand presence Brand is well perceived by Dutch consumers Plénitude: A mid-market, high quality skin care product L’Oréal Recital: A high-end, high quality hair colouring product Recital is losing market share due to aggressive distribution strategy, private-label brands and salon services
  • 12. 12Market analysisCompany analysis Product linesRecommendationImplementationRisk MitigationExpected ResultsConclusion
  • 13. 13L’Oréal Recital’s declining market share canexplained by an increasingly competitive market Strengths Current market leader with one-third of the market No clear positioning statement Weaknesses Market share decreasing over the past two years No semi-permanent formulation To protect current market share, L’Oréal should develop a semi- permanent formula for Recital to meet market demands
  • 14. 14Avoiding cannibalizing by introducing a newproduct: L’Oréal Plénitude Reputation for high quality Strengths Anti-aging line appeals to older demographic Unclear differentiation Weaknesses Threat of cannibalization from Synergie To differentiate Plénitude from Synergie, L’Oréal should emphasize its anti-aging benefits to women 35 years and older
  • 15. 15Garnier Belle Couleur must be reformulatedto meet the needs of the target market Only product with a strong positioning statement Strengths Positioning statement resonates with Dutch women Current colours are too dark for Dutch women Weaknesses Positioning statement is not consistent with results Buying intentions decreased after use Belle Couleur is unable to meet market needs; Garnier should delay its launch until product improvements are made
  • 16. 16Garnier Synergie offers its target market aunique value proposition Buying intentions increased after use Strengths Different positioning from Plénitude Dutch market is very competitive Weaknesses Need 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
  • 17. 17Market analysisCompany analysisRecommendationImplementationRisk MitigationExpected ResultsConclusion
  • 18. 18L’Oréal’s Decision Criteria … Launch Synergie only Launch Belle Launch Launch Both Launch Neither Couleur Synergie Increase Garnier’s brand awareness Minimizes threat of cannibalization Meets Dutch market needs
  • 19. 19Market analysisCompany analysisRecommendation PositioningImplementationRisk MitigationExpected ResultsConclusion
  • 20. 20Synergie will be positioned as high-performance,high-value skin care products for women aged 20-35 Reliable Natural Smart Choice Synergie is a worry-free, natural skincare line for young women who care about healthy skin. High Value High Performance Understated
  • 21. 21 Synergie and Plénitude will be positioned as high value for women 20 to 35 years old PerformanceMiddle/ High UpperValue Ellen Betrix End Synergie Yves Rocher Plénitude Dr. vd Hoog Oil of Olaz Price Low High Nivea Visage PondsLower DeadEnd End Low
  • 22. 22 Synergie and Plénitude will be differentiated on the basis of ingredients and demographics Science- Science Science- Youth Mature Plénitude Ellen Betrix Oil of Olaz PondsGeneral Anti-Purpose Aging Synergie Nivea Visage Dr. vd Hoog Yves Rocher Natural- Natural- Youth Mature Nature
  • 23. 23Garnier will target the value-conscioussegment with Synergie Target consumer profile: Aged 20-35 Recently graduated university and started working Has tried multiple skin care brands with mixed results (not brand loyal) Looking for brand to use with consistent results Value and performance conscious but not brand focused Thinks natural ingredients are better for skin Unfamiliar with technical product descriptions and terms
  • 24. 24 The positioning is aligned with capabilities, consumer needs and the competitive landscape Dutch Consumer Needs Competitive LandscapeGrowing consumer segment that is No direct competitor in high-value conscious and cares about value segmentnatural ingredients Synergie Positioning Synergie is a worry-free, natural skincare line for young women who care about healthy skin. Company Capabilities “Alliance of science and nature” – natural products that don’t sacrifice performance
  • 25. 25Market analysisCompany analysisRecommendationImplementationRisk MitigationExpected ResultsConclusion
  • 26. 26Price the Synergie line in the mid-range to appeal toits value-conscious target market PerformanceMiddle/ HighValue Synergie Product Line Price Plenitude Dr. vd Hoog 10-11.95 Synergie (Garnier) 9.95-16.95 Oil of Olaz 12 Dr. vd HoogPrice Plénitude (L’Oréal) 10.95-19.95 Oil of Olaz Low Synergie should be priced below Plénitude to target younger demographic Low
  • 27. 27Launching Synergie will require a high level ofcoordination between sales teams and distributors 0-2 months 2-4 months 4-12 months 1 2 3 Prepare Create a beauty buzz Launch time! Customize literature Educate target Free product trials Train new hires market Advertisements Sell bundling option to retailers
  • 28. 1 Prepare for Synergie launch 28 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
  • 29. 2 Create a beauty buzz 29 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
  • 30. 3 Launch time! 30 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
  • 31. 31Market analysisCompany analysisRecommendationImplementationRisk MitigationExpected ResultsConclusion
  • 32. 32risk mitigation Position Plénitude and Synergie for different target Cannibalization markets of Plénitude sales Even with some cannibalization, overall L’Oréal-Garnier market share will still increase First-mover advantage in high-quality, high-value Highly natural segment – gain share before others can enter competitive skin Emphasis on natural positioning for Synergie – care market increase reluctance to switch due to possible allergic reaction
  • 33. 33risk mitigation Develop a clear positioning statement and build on Declining market position as current market leader share for Recital Introduce semi-permanent formulation to meet market demands Lost opportunity Still no competitors in the mid-range hair colour market for mid-range Reformulate Belle Couleur to increase chance of hair colour successful launch in future
  • 34. 34Market analysisCompany analysisRecommendationImplementationRisk MitigationExpected ResultsConclusion
  • 35. 35Expected Results … Increase in L’Oréal-Garnier market share and profits Skin Care Hair Colour Dutch skin care market: Permanent hair colour market: 2.5 million consumers 1.7 million consumers 56 million guilders 88 million guilders 10% market share for L’Oréal- 30% market share for Recital = Garnier = 5.6 million guilders 26 million guilders Plénitude 5% Synergie 5% 32 million guilders in revenue  2 million in profits
  • 36. 36Metrics for Success … Indirect metrics drive top- and bottom-line results Direct Metrics • Profitability • Revenue • Sales volume • Market share Indirect Metrics • Retailer penetration • Retail and wholesale margins • Market share versus share of voice • Brand awareness and consumer purchase intention
  • 37. 37THANK YOU