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1. L’Oreal Case Study
Submitted to: (Group number :8)
Dr. Hufrish Majra
Submitted by :
Tanuj Jain HRB038
Gaurav Kataria HRB018
Mansi Gandhi HRB010
Rohit Raj HRB026
Divya Mekala HRB039
Q1. Was L’oreal’s multiple segment strategy a successful
one. Substantiate with examples.
L’Oreal has engaged in many forms of Market Segmentation in their venture in
India, with different variables during different time periods. Firstly we will
discuss the segmentation methods when it first entered the market in 1991,
followed by what ensued after their makeover.
When it First Entered the Market
Gender Segmentation: L’Oreal first segmented the population into the different
sexes as they thoughttheir products’ “combination of low price and natural
ingredients would fit India’s market, where womenuse plants and herbs as part
of their beauty culture”. Their productspecifically catered to the women
of India, though later our group discusses how it should carve a niche market
for itself in the Men’s sectoraswell.Income Segmentation: L’Oreal segmented
the market into 2 main segments: the poorermasses and the rest. It marketed its
productas low in costto attract the poorermasses, and her efforts in reducing
ingredients to cut price reveals her aim to minimize costs as much as possible.
At this point of time, it was not yet targeting the affluent middle class or upper
class and thus did not make any distinct segmentation of the richer classes,
preferring to regard them as a whole entity.
The “L’Oreal Makeover”

2. After a poorstart, L’Oreal approached the market with a different concept.
Presence of home brands posed problems as they had already captured a large
proportion of the masses’ market share. They offered cheaper products to
buyers at a price which L’Oreal was unable to match, and their long presence
hadestablished a strong sense of loyalty in the buyers, making it difficult to pry
them away. With theunderstanding that it needed to capture a different market,
it proceeded with a different from of segmentationin order to better identify its
target segmentsIncome Segmentation: This time L’Oreal separated a new
segment from the original 2 segments: thequickly rising middle class which was
gaining in affluence. This was very specific compared to the originaltwo broad
segments it identified as they saw that this was the fastest growing income class
that represented ahighly untapped market potential due to their radically
different mindsets from the masses.Psychographic Segmentation: L’Oreal
segmented India into different groups based on their thinkingand behavior from
the older, more conservative Indians who held conservative values of thriftiness
more strongly and stubbornly, and the younger one.
More impressionable generation who had developed a very different and
westernized view on spending and culture. Influx of brands like Tommy
Hilfiger, Benetton andeven MTV in 1991 greatly emphasized Western values
of luxury, beauty, and self-awareness leading to therise of a new segment of
people who did not view thriftiness with equal importance as their predecessors
butwere rather more willing to splurge on luxury goods which were previously
considered too expensive
andwasteful.Age Segmentation: By segmenting the market into the younger mid
dle class from the moreconservative, often older Indians, it had also inevitably
segmented the market based on age, and showed anincreased interest in
capturing the market share of the younger Indians.Benefits Segmentation:
L’Oreal further segmented the market on a benefits basis when it
introducedExcellence Crème. Being in crème form, it [was gentler on hair]
compared to the natural ingredients such asammonia which damaged and dried
up women’s hair. It thus segmented the market into those who neededthe hair
dying and strengthening benefits of Excellence Crème and those who did not.
This was a crucialform of segmentation for L’Oreal as it underlined the core
conceptof its marketing strategy to promisesuperior products with additional
benefits to consumers when choosing between L’Oreal and Home brands,and
subsequently has led to the immense success that L’Oreal has experienced in
India.L’Oreal has made use of various variables to identify the segments it

3. wishes to target, and alsoengaged in using Multiple Segmentation Bases (Age,
Income, Psychographic and Benefits) to
complementits Differentiated Marketing approach. This allows them to effectiv
ely identify several differentiatedsegments and design separate offers for each,
translating into stronger sales and a stronger position withineach market
segment. In the following section we discuss which segments were targeted and
the strategiesemployed by L’Oreal with its newly identified segments
Q2. What were the benefits of Masstige Positioning?
Ans. L’Oreal, in order to give a broader consumer base access to prestige was to
develop and sell products in the category known as “masstige” or prestige for
the masses. Masstige products were defines as “premium but attainable” and
reflected two key tenets:
a. They were considered luxury or premium products.
b. They had price points that filled the gap between mid-market and super-
premium products.
L’Oreal Paris was L’Oreal’s leading masstige brand and one of the first brands
globally to offer high quality at an affordable price.
The Brand generated nearly 50% of the company’s total sales in Western
Europe and 20% in the US, and had over 3% of the global beauty and personal
care market.
Thus, we see by positioning itself for the mass market who couldn’t afford the
ultra-premium products butwere ready to a higher price for a premium product.
This positioning strategy helped them to generate such huge sales and provide
market penetration.
Q3. What steps did L’oreal take in increasing customer
engagements and how did it strengthen its positioning?
Ans. L’Oréal has often used A-list celebrity endorsers in highly successfulad
campaigns to push products to a wide range of age brackets, ethnicities, and
genders by creating customer engagement

4. L’Oréal was also a major sponsorofthe Cannes Film Festival and prepared the
actors and actresses with L’Oréal makeup before they walked the red carpet.
Spokesmodels for the brand at
Cannes included many ultra famous faces like Aishwarya Rai.
L’Oréal Brandstorm, is an initiative not only to recruit but to engage the target
group of students. Its a competition that challenges students to come up with a
new marketing conceptfor a series of L’Oréal brands, had involved over 43,000
students from 285 universities in 43 countries since the competition’s 1992
launch
L’Oréal had a strong reputation as a leading print media advertiser but the
company gradually reduced some of its ad spending on traditional media and
shifted toward the Internet to engage a new segment of customers
Loreal's innovation has changed completely the nature of the contact between
them and their customers. It is at a forefront in initiating various modes to
engage its customers
In 2007, Garnier Fructis launched a user-generated website that was the focus of
a major campaign. The website asked users for input and views on certain styles
and allowed them to submit their own ideas and suggestions. Users had the
ability to upload their own samples of how they styled hair using Garnier
Fructis products, and they could win cashprizes or vacation packages. Content
on the site included information about the Garnier products and a series of
“how-to” videos with celebrity stylists using the products.
Creation of the virtual personal stylist, in collaboration with ELLE
magazine and Bloomingdale’s. To use the program, a shoppercreated an avatar
at an in-store 3D
scanning booth. The avatar was then stored on the Internet and accessible at
participating retail
stores. Shoppers used the avatar to try on makeup and clothes, eliminating the
hassle of changing-
room lines and multiple applications of skin-care products and cosmetics. This
increased the brand popularity and certainly increased customer engagement.
Another initiative to engage the salon owners and their customers was L’Oréal’s
grassroots campaign which helped more than 4,000 salons build Facebook
pages for their business.64 L’Oréal offered instructional videos, and trained and
advertised credits, to the salons.
In 2010, L’Oréal launched its YouTube channel, “Destination Beauty,” which
contained how-to

5. videos filmed by beauty bloggers who provided hair and makeup tips. Loreal
used established web personalities to pitch products, suchas makeup artist and
blogger Michelle Phan. This increased the connect with customers who were
also common people and brought about engagement of masses digitally.
4. On what basis did they segment the men’s grooming market
across the globe?
Answer : Loreal is a leading player in the beauty and skincare market, it has
been pushing boundaries of science to invent beauty and meet the aspirations of
women and men. Loreal began targeting men in the year 1999 when it
introduced “Loreal Feriah” for men and Casting colorspafor men in the year
2000.Loreal had to cater to diverse customer base an aging population in the
west, ethnic groups around the globe, aspiring customers in the east, emerging
markets and growing interest in health and beauty care among men all over the
world. Loreal launched a challenge for students to come up with a beauty
productrange for the mens brand Diesel. Later the challenge also that involved
designing a new advertising conceptto attract men to professional salons. It also
launched “Garnier Men” specialy designed products for men.