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L'Oreal Of Paris: Bringing
"Class To Mass" With
Plénitude
A CASE SOLUTION BY : APOORV MALU
INTRODUCTION :
L’Oreal
 France based leading global cosmetic company.
 Founded in 1909.
 Led by Lindsey Owen Jones, the chairman and CEO of the
Company.
 Achieved double digit profit for eighteen consecutive years.
 Business in 130 countries with a turnover of around 13.7 billion
Euros.
 Only cosmetic company in the world to own more than one
brand franchisee.
 Cosmetic industry refers to the cosmetics, toiletry and
perfumery industry brands.
Plénitude
• L’Oréal’s first ventures beyond the hair care and
cosmetics arena.
• France positioned the brand as “high end, superior
performance but accessible.”
• Plénitude was introduced under a “class of the mass”
strategy.
• The success of Plénitude in France validated the “class to
mass” strategy in the minds of L'Oreal executives in
France.
• L'Oreal began to seek geographic expansion of both
Plénitude products and the marketing approach.
Over time, the success in France led L’Oréal to more precise
specification of and deeper belief in the formula for success
in mass skin care, viz.
• Have Technologically Superior Products
• Concentrate Resources and Support on newest “Star
Product” to pull the entire line.
• Follow the “Golden Rules” of Advertising:
• feature star product
• provide technological superiority evidence
• depict an executive woman who is up-to-date and assertive (“I
live with the times”)
L'Oreal tried and transported this formula to the U.S.
SWOT ANALYSIS
STRENGTH
• KNOWN WITH GOOD QUALITY
• GREAT R&D
• MATURE SKIN MARKET SEGMENT
• EXPERIENCE IN COSMETICS
WEAKNESS
• UNKNOWN US MARKET
• HIGH ADVERTISING COSTS
• NO PROFITS
• NO DIFFERENTIATION IN CLEANSNERS
AND MOISTURISERS
OPPORTUNITY
• BIG MARKET IN THE US
• YOUNG PUBLIC FELT DOMESTIC
PRODUCTS NOT AT PAR
• MANY CHANNELS FOR DISTRIBUTION
THREATS
• EXPENSIVE PRODUCT RANGE
• COMPETITORS KNEW CB
• LOYALTY TO OLAY AND PONDS
SWOT
PORTERS FIVE
FORCES MODEL
INTERNAL
RIVALRY
US- HIGH
THREAT OF
NEW
ENTRANTS IN
US - HIGH
BUYERS
BARGAINING
POWER- HIGH
SUBSTITUTES-
HIGH IN THE
U.S.
-SUPPLIERS
BARGAINING
POWER- LOW.
THE UNITED STATES LAUNCH AND
EARLY RESULTS
• L’Oréal decided to launch the brand nationwide.
• Specially, 14 SKU’s were introduced covering three
categories:
1. Basic moisturizers
2. Treatment moisturizers
3. Cleansers
• It had a very strong introduction in the United States,
quickly becoming the #2 brand in the market, only behind
Oil of Olay
• Plénitude sales grew pretty well through 1991 and the
company was achieving what it set out to do.
• But then it just hit a four-year sales plateau.
• It lost the #2 position to Pond’s.
• 8 or 9 years after the U.S. introduction and the company
still was not making any money there.
THE KEYS
1. Improve the top-line - break through the sales plateau
and get more product moving off the shelf to maintain a
strong position with the trade.
2. Get the bottom-line moving in the right direction quickly.
3. Get the united states in a position to be a major
contributor to the brand’s position globally.
4. Make sure that the company has suitable skincare
products for the U.S. Customer; but also that they fit
within L'Oreal's technology portfolio.
Rethink All Aspects Of
L'Oreal's Business-
1. Does L'Oreal have too many different types of products?
2. Is the premium pricing strategy appropriate for all the
products? For any of them?
3. Is the “star” system of putting almost all the media
dollars behind the newest and most technologically
advanced product still the best way to go?
4. Are aspects of the strategy “too French” for the U.S.
market?
5. How to best utilize an asset which the consumer research
shows is very powerful and no one else in this business
has - the L'Oreal brand name?
THREATS AND SOLUTIONS
UNAWARE
OF US
CUSTOMERS
TOO MANY
PRODUCTS:
CONFUSION
ELDERS
PRODUCT
HIGH
PRICING
MARKET
RESEARCH BY
AC NEILSON
AND SELF
SHORTENED
RANGE OF
PRODUCTS
FROM ‘AGEING’
TO ‘FACELIFT’
PRICECUTS ON
MOISTURIZERS
THREATS AND SOLUTIONS
SALES IN THE U.S. : VERY POOR
PROFITS : NEGATIVE
EXTENSIVE
ADVERTISING
CUSTOMERS
LOYALTY FOR
COMPETETORS
PRODUCT
CLIMATIC AND
SKIN
DIFFERENCES
TAKEN INTO
CONSIDERATION
FORMULA
PROBLEMS:
GREASY
PRODUCTS
PERCEPTUAL
MAPPING
• The image created by L'Oreal is of technically
sophisticated skin care used by elderly women.
• The user image of L'Oreal is products for exclusive and
glamorous women with premium pricing.
• Brand user’s were able to separately identify the brand as
Young, premium and stylish.
• Brand image held a different perception of a product
similar to Nivea, AlphaHydrox, not able to separate itself
from the class.
RECOMMENDATIONS
• Reinforce L'Oreal’s position as a innovation technological
leader.
• Continue in the daily moisturizer and cleanser mass
market.
• Follow ‘star product’ promotion strategy.
• Maintain premium pricing – Because I am worth it
• Change the technology and product according to
geographies.

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L'Oreal Of Paris: Bringing "Class To Mass" With Plénitude

  • 1. L'Oreal Of Paris: Bringing "Class To Mass" With Plénitude A CASE SOLUTION BY : APOORV MALU
  • 2. INTRODUCTION : L’Oreal  France based leading global cosmetic company.  Founded in 1909.  Led by Lindsey Owen Jones, the chairman and CEO of the Company.  Achieved double digit profit for eighteen consecutive years.  Business in 130 countries with a turnover of around 13.7 billion Euros.  Only cosmetic company in the world to own more than one brand franchisee.  Cosmetic industry refers to the cosmetics, toiletry and perfumery industry brands.
  • 3. Plénitude • L’Oréal’s first ventures beyond the hair care and cosmetics arena. • France positioned the brand as “high end, superior performance but accessible.” • Plénitude was introduced under a “class of the mass” strategy. • The success of Plénitude in France validated the “class to mass” strategy in the minds of L'Oreal executives in France. • L'Oreal began to seek geographic expansion of both Plénitude products and the marketing approach.
  • 4. Over time, the success in France led L’Oréal to more precise specification of and deeper belief in the formula for success in mass skin care, viz. • Have Technologically Superior Products • Concentrate Resources and Support on newest “Star Product” to pull the entire line. • Follow the “Golden Rules” of Advertising: • feature star product • provide technological superiority evidence • depict an executive woman who is up-to-date and assertive (“I live with the times”) L'Oreal tried and transported this formula to the U.S.
  • 5. SWOT ANALYSIS STRENGTH • KNOWN WITH GOOD QUALITY • GREAT R&D • MATURE SKIN MARKET SEGMENT • EXPERIENCE IN COSMETICS WEAKNESS • UNKNOWN US MARKET • HIGH ADVERTISING COSTS • NO PROFITS • NO DIFFERENTIATION IN CLEANSNERS AND MOISTURISERS OPPORTUNITY • BIG MARKET IN THE US • YOUNG PUBLIC FELT DOMESTIC PRODUCTS NOT AT PAR • MANY CHANNELS FOR DISTRIBUTION THREATS • EXPENSIVE PRODUCT RANGE • COMPETITORS KNEW CB • LOYALTY TO OLAY AND PONDS SWOT
  • 6. PORTERS FIVE FORCES MODEL INTERNAL RIVALRY US- HIGH THREAT OF NEW ENTRANTS IN US - HIGH BUYERS BARGAINING POWER- HIGH SUBSTITUTES- HIGH IN THE U.S. -SUPPLIERS BARGAINING POWER- LOW.
  • 7. THE UNITED STATES LAUNCH AND EARLY RESULTS • L’Oréal decided to launch the brand nationwide. • Specially, 14 SKU’s were introduced covering three categories: 1. Basic moisturizers 2. Treatment moisturizers 3. Cleansers • It had a very strong introduction in the United States, quickly becoming the #2 brand in the market, only behind Oil of Olay
  • 8. • Plénitude sales grew pretty well through 1991 and the company was achieving what it set out to do. • But then it just hit a four-year sales plateau. • It lost the #2 position to Pond’s. • 8 or 9 years after the U.S. introduction and the company still was not making any money there.
  • 9. THE KEYS 1. Improve the top-line - break through the sales plateau and get more product moving off the shelf to maintain a strong position with the trade. 2. Get the bottom-line moving in the right direction quickly. 3. Get the united states in a position to be a major contributor to the brand’s position globally. 4. Make sure that the company has suitable skincare products for the U.S. Customer; but also that they fit within L'Oreal's technology portfolio.
  • 10. Rethink All Aspects Of L'Oreal's Business- 1. Does L'Oreal have too many different types of products? 2. Is the premium pricing strategy appropriate for all the products? For any of them? 3. Is the “star” system of putting almost all the media dollars behind the newest and most technologically advanced product still the best way to go? 4. Are aspects of the strategy “too French” for the U.S. market? 5. How to best utilize an asset which the consumer research shows is very powerful and no one else in this business has - the L'Oreal brand name?
  • 11. THREATS AND SOLUTIONS UNAWARE OF US CUSTOMERS TOO MANY PRODUCTS: CONFUSION ELDERS PRODUCT HIGH PRICING MARKET RESEARCH BY AC NEILSON AND SELF SHORTENED RANGE OF PRODUCTS FROM ‘AGEING’ TO ‘FACELIFT’ PRICECUTS ON MOISTURIZERS
  • 12. THREATS AND SOLUTIONS SALES IN THE U.S. : VERY POOR PROFITS : NEGATIVE EXTENSIVE ADVERTISING CUSTOMERS LOYALTY FOR COMPETETORS PRODUCT CLIMATIC AND SKIN DIFFERENCES TAKEN INTO CONSIDERATION FORMULA PROBLEMS: GREASY PRODUCTS
  • 13. PERCEPTUAL MAPPING • The image created by L'Oreal is of technically sophisticated skin care used by elderly women. • The user image of L'Oreal is products for exclusive and glamorous women with premium pricing. • Brand user’s were able to separately identify the brand as Young, premium and stylish. • Brand image held a different perception of a product similar to Nivea, AlphaHydrox, not able to separate itself from the class.
  • 14. RECOMMENDATIONS • Reinforce L'Oreal’s position as a innovation technological leader. • Continue in the daily moisturizer and cleanser mass market. • Follow ‘star product’ promotion strategy. • Maintain premium pricing – Because I am worth it • Change the technology and product according to geographies.