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Case Study LOREAL : Global Brand Local Knowledge

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Global Brand Local Knowledge

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Case Study LOREAL : Global Brand Local Knowledge

  1. 1. CONSUMER BEHAVIOR | SYNDICATE 13 LUPITA THANAYA - 29114322 ANNISA MULIASARI - 29114342 MELATI P. PUTRI - 29114355 DEA ANANDYA - 29114469 CASE ANALYSIS GLOBAL BRAND, LOCAL KNOWLEDGE
  2. 2. Founded in 1909, L'Oreal coupled innovation and speed to market with expansion of its geographic and consumer base.
  3. 3. Leading player in the beauty and skin-care market. €19.5 billion of 2010 sales (half outside of Europe) “Launching new innovative products on a regular basis was key” “Science of beauty in a jar” 3,5% 2,7% 1,7% % of Revenue on R&D in 2010
  4. 4. 1907 EUGENE SCHUELLER Developed Aureole, a hair-color formula. Formulated and manufactured his own hair- dye product, sell to Parisian hairdresser. 1957 FRANCOIS DALLE Initiating the concept of selling beauty through several channels. Perception of “Parisian beauty as being expensive and out of reach” 1988 LINDSAY OWEN-JONES Focused on 5 core business (hair color & care, skin care, cosmetics, and fragrances). “The firm had to promote its national brands to the rest of the world.”
  5. 5. What is L’Oreal doing? How are they executing this strategy? What are the trade-off of this strategy?
  6. 6. 66.000 employees 130 countries 130 countries 38 factories 5.7 billion units hair-coloring hair-styling fragrances cosmetics skincare
  7. 7. department stores retail stores duty-free stores internet Direct marketing to professional
  8. 8. acquisition add more 1966 USA CHILE GERMAN U N I S A J A D E 2000 CHINA USA CHINA 2003 2004 1999 Men Product Top skin-care brand in China Makeup and skin-care brand manufacturing plant Pune, India Secured L’Oreal’s Asia presence Ethnic hair-care marketers
  9. 9. LOCAL CUSTOMER UNDERSTANDING
  10. 10. GEOCOSMETICS created to understand consumers at local level Study the beauty trends around the world and deliver the best product for that region. “People on different continents have their own specific needs, habits, dreams, and desires – so one product, or even one formula, does not fit all”
  11. 11. “L'Oreal developed brands in the low-, mid-, and high-ends which every brand has their own brand policy.”
  12. 12. MASSTIGE “Prestige for the masses” Luxury or premium products Price points that filled the gap between mid- market and super- premium products
  13. 13. Maybelline had lost focus, losing brand equity, struggle to keep up with the rest of the market. L'Oreal acquired Maybelline in 1996 for $768 million
  14. 14. “Maybe she’s born with it Maybe it’s Maybelline” MARKETING STRATEGY Improving products (Fast-dry Nail) Moving the headquarter to New York Boosted ad spending by 30% to $70 million Brought back Maybelline’s slogan
  15. 15. Modernize the advertisement Video of Christy Turlington
  16. 16. 70 Was in Countries by 1991 93% Sales grew From 1996 to 2002
  17. 17. REGIONALLY FOCUSED ROLLOUT “2008; A key focus of his group would be to accelerate the geographic rollout of its brand in new high-growth markets by tailoring product performance and price to local needs.” – L’Oreal’s President of Consumer Products. L’Oreal did not use the direct-sales approach  hired personal beauty advisers at Department Stores “The more the market develops, the less relevant direct sales will be.” L’Oreal Invested in : 1. Strong Ad Campaign on the internet 2. Women’s magazines  drive word of mouth 3. Have consumers generate demand for salons’ products Redken (1990s) : Innovated a different kind of marketing approach. A highly successful American Premium brand.
  18. 18. TELLING THE STORY
  19. 19. Diverse Customer Base  Aging population in the West  Ethnic groups  Aspiring customers in the East  Emerging Markets  Growing interest in health & beauty care among Men all over the world. Managing Transition  Swelled $4.56 Billion in worldwide advertising spending in 2009 0 2 4 6 8 10 12 L'Oreal P&G Unilever 2005 2006 2007 2008 2009 Total Global Ad Spending (in $ Millions) – Based on Exhibit 5
  20. 20. Company’s Ad Budget :  75% for Television  20% for Print  5% for Billboards 2007, Company spend 2% of its ad budget on Online Initiatives 2010, L’Oreal resumed investments after focusing on cost cutting L’Oreal aimed to attract a bigger customer base in US & Emerging Markets L’Oreal was one of China’s largest & fastest growing advertisers. Spent > 10% of its 2009 media spend in China. 75,4 132,5 196,5 333,3 576,8 0 100 200 300 400 500 600 700 2005 2006 2007 2008 2009 Total Ad Spending in China (in $ Millions) – Based on Exhibit 6
  21. 21. Fame by Association “L’Oreal used A-list Celebrity endorsers in highly successful ad campaigns to push products to a wide range of age brackets, ethnicities, and genders.” ENDORSEMENTS Sarah Jessica Parker – Garnier Nutrisse Eva Longoria, Diane Keaton, Scarlett Johansson, Beyonce Knowles Kate Moss – YSL Parisienne Patrick Dempsey & Gerard Butler – the face of L’Oreal Paris Men’s Expert Line The Cannes Film Festival – L’Oreal Makeup “L’Oreal associates itself with brand ambassadors who tap into all ages, race, and sexes, and the portfolio leaves no stone unturned.” 2011, L’Oreal launched a Cannes-inspired line of makeup, L’Or.
  22. 22. Fame by Association
  23. 23. Fame by Association
  24. 24. The challenge in 2010 was for student teams to come up with a beauty-product range for men’s brand Diesel. In 2011, the challenge involved designing a new advertising concept to attract men to professional salons. L’Oreal Brandstorm 43.000 students 285 universities 43 countries Marketing as Recruiting:
  25. 25. from print TO DIGITAL “The big revolution is digital, and it is a great revolution. Because it changed completely the way we communicate about our brand.”
  26. 26. Garnier Fructis launched a user-generated website that had the ability for the users to upload their own samples of how they styled their hairusing Garnier Fructis products. User-Generated Website
  27. 27. Digital Marketing Innovation: Virtual Personal Stylist
  28. 28. The Facebook pages included a customizable tab that displayed products and how- to videos L’oreal Grassroot Campaign Help more than 4000 salons build Facebook pages for business L’Oreal offered instructional videos, and training and advertising credits to the salons
  29. 29. L’Oreal Destination Beauty Contained how-to videos filmed by Beauty Bloggers who provided hair and makeup tips. Destination Beauty allowed L’Oreal to engage viewers at home and establish sense of community. Used established web personality to pitch product, like Michelle Phan
  30. 30. Double it’s customers base to 2 billion people, and increase it’s shares of sales from emerging markets from 30% to 50% during that time Year 2020 “Reaching the Next Billion Customers”
  31. 31. thank you!

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