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.
L'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
• Silk Protein:
smoothness and is
nourishes weak hair
Weak, limp, damaged
• Ceramide: restores
smoothness and shine
Revive your shine
• Pearl Protein:
provides brilliant shine
• Citrus: purifies hair
by freeing deposits and
• Shine Booster
roots, make your hair
applied directly to scalp
• Reduces Hair Fall by
• Restructures hair fiber
Visibly prolonged hair
• Color Protect Light
nourishes hair and
protects hair fibers
[with UV filter]
• Provides shiny and
radiant hair color
elasticity, bounce and
with Royal Jelly
• Royal Jelly: natural
ingredient that bathes
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.
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.htm
3US Commercial Service. Doing Business in Indonesia: 2011 Country Commercial Guide for US Companies
EVOLUTION OF THE HAIRCARE INDUSTRY
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%
Unilever P&G L'Oreal Other
COMPANY 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
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
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
2008 2009 2010
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.
- Existing high-end brand image with L'Oréal
- Existing Elsève products already target the
major consumer needs in Southeast Asia
(Total Repair 5, Nutri Gloss, Smooth Intense,
- Experience in using celebrity marketing
- Current global reach/capacity
- Advanced research & marketing capabilities
- 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
- Growth of conditioner sales in Southeast Asia
- Positive economic conditions and growing
- 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
- Strength of competitors (Unilever, P&G) and
the existing number of brands that L'Oréal has
- Increase of counterfeit goods; both because of
their low price cannibalizing L'Oréal sales but
also cheap products ruining L'Oréal brand
- Macroeconomic factors that decrease
SWOT ANALYSIS SWOT
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
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.
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
A RISING MIDDLE CLASS
The 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.
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
UNDERSTANDING THE CONSUMER
MEET 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
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.
“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?”
In pitching the perfect product for the ASEAN zone, we took into consideration the following factors:
Southeast 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.
Improving 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.
Smoothness and manageability
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?
Dull, without shine
Top hair concerns for the ASEAN region:
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
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
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”
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 Spray
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
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
“SHARE YOUR STORY”CAMPAIGN
Leveraging 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
A TWO PART STRATEGY
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.
• 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
• 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.
OFFLINE continued ONLINE continued
• Countries of high GDP: Glamorous shopping centers [Central World]
1.Watson’s is well-known in Asia for the “Watsons Your Personal
[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
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 STATEMENTL'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
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