The document outlines L'Oréal's sales plan. It discusses L'Oréal's mission of offering beauty to all through ethical and responsible means. It analyzes L'Oréal's strengths in strong brands, diversified presence, and R&D capabilities, as well as weaknesses like slow revenue growth. The plan examines opportunities in demographic trends, acquisitions, and emerging markets, alongside threats such as cosmetic surgery and counterfeiting. Finally, it focuses on the Asian market, specifically China, India, and Vietnam, as key growth drivers over the next two decades.

1. Sales Plan

2.  Executive Summary
 Mission Statement
 SWOT Analysis
 Key Performance Indicators
 Target Customers – Segmentation
 Industry Analysis
 Financial Analysis and Competitors
 Brand Marketing and Sales Strategy

3.  For more than a century, they have devoted
their energy and their competencies solely to
one business: beauty. They have chosen to
offer their expertise in the service of women
and men worldwide, meeting the infinite
diversity of their beauty desires. They are
committed to fulfilling this mission ethically
and responsibly.
 L'Oréal is the second leading beauty and
personal care manufacturer in the world,
L'Oréal is the second leading beauty and
personal care manufacturer in the world, and
also the most favorite brand in Vietnam for its
good quality and reasonable price in Vietnam.
 L'Oréal’s exclusive focus has enabled it to make
more targeted investment in R&D and
advertising, growing to be a formidable force
in the industry. In color cosmetics, L'Oréal is
the leading provider at over 19%. It has also
made strong strides in skin care through a
number of launches based on cutting edge
technology

4.  Beauty is a language
 Beauty is universal
 Beauty is a science
 Beauty is a commitment
 L’Oréal, offering
beauty for all

5. STRENGTH
 Strong brand:
L’Oréal has a strong brand portfolio.
It includes Body Shop, Garnier,
Maybelline,…all are recognized
globally -> has built a portfolio of
strong brands through heavy
advertising expenditure over the
years.
 Diversified presence:
The company currently has
operations in over 130 countries
across five continents
 R&D capability:
focused on cosmetology and
dermatology. The company
registered 569 patents related to
cosmetics and dermatology in 2006.
WEAKNES
 Slow revenue growth
L’Oréal's long term revenue growth has
been low.
Slow revenue growth relative to the
industry average and the revenues of
competitors such as Estee Lauder
indicates a decline in competitiveness
and lack of revenue driving products.
 Weak performance in parts of
Vietnam
The company is also losing market
share in the parts of Vietnam to
Unilever in hair care and skincare
market. A weak performance in
such a geographically strategic
market undermines investor
confidence, as well as adversely
affects revenue growth.

6. OPPORTUNITY
 Demographic trends in the US:
Growing beauty consciousness
especially among the aging baby
boomers is an important trend for all
cosmetics companies.
 Acquisition and alliances:
The natural personal care products
market is rapidly growing. Demand for
natural personal care products is rising
as consumers shift to products which are
safer and more eco-friendly.
 Cosmetics market in emerging
nations:
The importance of emerging markets
such as China, India and Vietnam is on
the rise for cosmetics companies due to
increasing popularity of beauty contests
and increasing disposable incomes.
THREAT
Growing popularity of cosmetic
surgery:
Beauty consumers are increasingly
taking refuge in new technologies such
as advanced dermatology, cosmetic
surgery, hair and organ transplant and
other treatments to enhance their
beauty. Not only are the results from
these treatments instant, but they are
also long lasting. This could reduce
dependence on traditional beauty aids
which could lead to a fall in demand for
the skin and hair care products of
L’Oréal.
 Counterfeiting:
Low quality counterfeits also reduce
consumer confidence in the products of a
company. More importantly, the
company's key differentiator, exclusivity,
is damaged by counterfeiting operations

7.  The Asian cosmetics market is the most
dynamic market for L’Oréal, representing
about one-third of the global cosmetics
market. Excluding Japan, the Asian market
(including Vietnam) has been growing at
over 10% per year and has contributed to
more than 45% of the market growth. The
skincare category is particularly dynamic
and is an essential driver for worldwide
market growth.
 L’Oréal is especially focusing on the Asian
markets of China, India and Vietnam to fuel
its growth over the next two decades.
Currently serving around 30 million
nantional buyers, L’Oréal plans to drive up
its customers fivefold to 150 million over
the next decade.

8.  Geographic and Psychographic Segmentation
Knowing no geographic bounds or social class limitations, L’Oréal's
main marketing tool is the innate drive to be attractive in men and
women alike. By using young female models and celebrities of many
different ethnicities L’Oréal accomplishes an important task. Women
of all ages and races will see how beautiful women look using L’Oréal
products. This triggers a personal interest and inferring that L’Oréal
products make you beautiful.
 Demographic Segmentation
Demographically, the largest consumer segment for the entire beauty
industry is white women aged in their early teens and older.
Women of different ethnicities can purchase cosmetics from L’Oréal's
Soft Sheen product line, men, young and old, can hide their gray or
change their look with L’Oréal's Color Spa for Men hair coloring, and
all parents can make bathing fun with a brightly colored bottle of
L’Oréal Shampoo for Kids.

9.  Benefits-Sought Segmentation
L’Oréal Paris offers 6 different lines of lip color each
with 48 different shades. To compare the product
lines consider the shine, texture, and richness of
color. This phenomenon is the product of benefits-sought
segmentation.
 Situation Segmentation.
L’Oréal USA has 10 companies for manufacturing
and 11 companies for distributing. Considering that
the majority of revenue comes from retail stores,
the proximity and abundance of distributing firms
might persuade a retailer to choose L’Oréal.

10.  Suppliers
Bargaining Power of suppliers – LOW
L’Oréal owns most of its suppliers through its different brands (forward integration).
Very few brands compete with L’Oréal and thus its suppliers are dependent on them.
The cost of suppliers relative to the cost of its products is actually quite low.
 Substitute Products
Potential development of substitute products -MEDIUM to LOW
Because L’Oréal is a much-diversified company in cosmetic products ranging from
makeup, crèmes to hair products, it is difficult to find a substitute product that L’Oréal
is not already selling.
 Competitors
Rivalry among competing firms - HIGH to MEDIUM
The number of competitors in this industry is quite high. Moreover, most of L’Oréal’s
competitors are specialized in a certain type of cosmetic, giving them an expert image
advantage over L’Oréal.
 Buyers
Bargaining power of consumers/buyers - MEDIUM to LOW
Consumers have increasing power over companies because of the increased
accessibility of company information. However, L’Oréal is considered a high-end and
high-tech leader in its industry that directs demand rather than follows it.

11.  Entry of New Competitors
Potential entry of new competitors – LOW
L’Oréal offers products that are different and benefit from economies of scale
for its production. In the cosmetic industry, brand identity and product
differentiation is very high. High capital is required because of the heavy R&D
needed to create cosmetic products.
 Internal Environment
Tangible Resources: The tangible resources of L’Oréal would be first and
foremost its financial position and capital.
Intangible Resources: For a cosmetics company like L’Oréal, a majority of its
resources are intangible. Some of the company’s major intangible assets are
its technological patents.
 Resource and Capabilities
Some of L’Oréal’s main capabilities are its ability to cater products to
different ethnic backgrounds, as well as its advanced R&D in these skin types.
For this reason, they are able to venture into untapped markets. L’Oréal’s
constant innovation and cutting edge technology puts them at the top of the
market. They have recently conducted the first ever stem cell research for
makeup purposes.

12.  L’Oréal is the leading
company for the cosmetics
and skin care industry, with
Estee Lauder behind, and
then Proctor and Gamble,
and then Avon.
 Proctor & Gamble is as big in
size as L’Oréal; however, in
terms of cosmetics and skin
care, L’Oréal triumphs over
them. Avon loses in terms of
advertising and market 29
shares, and Estee Lauder
comes in second due to its
product selection as well as
product quality.

13.  Liquidity Ratios
L’Oréal is not as liquid then the
competitors. L’Oréal is not able
to pay off their short-term
debts and liabilities as well as
their competitors.
 Leverage Ratios
L’Oréal is less levered compared
to its competitors. They have
low Debt to Assets ratio
meaning that they have low
liabilities and more assets,
which is a good sign. Their low
Debt to Equity ratio is also
lower than competitors
meaning they are less of a risky
company than competitors.

14.  Activity Ratios
Inventory turnover
In line with competitors: They can try to improve to
match Estee Lauder but they are in healthy shape.
Fixed asset turnover
Very healthy number and in line with competitors: They
have a low number, meaning their fixed assets are used
very efficiently.
A/R turnover
Better than competitors, which mean the company is
able to collect money from its customers faster than its
competitors. This is good for liquidity.
 Profitability Ratios
Gross Margin Ratio
L’Oréal has a relatively high gross margin ratios
compared to its competitors, which is a good sign. They
are left with more money for the company.
Return on Equity: L’Oréal’s ROE is low compared to its
competitors. They are less able to generate return for its
shareholders.
Their net income ratio is in line with competitors.
Revlon recently came out of bankruptcy, therefore they
have a very high net income but it is a skewed ratio

15.  L’Oréal operates strict brand segmentation across its
portfolio to retain its exclusive brand identity. For each of its
brands L’Oréal maintains distinct retailing channels to keep
its brand image intact. Its premium ranges Lancôme and
Yves Saint Laurent are marketed through department stores.
Its mid- and lower-tier mass brands L’Oréal Paris and Garnier
share the same retailing space in Western markets but the
distinctions are made on the basis of price and product
offerings.
 The economic downturn necessitated L’Oréal to use its
brand portfolio carefully to exploit any growth potential.
 For premium and mid-tier brands, it launched more targeted
products whereas for mass brands such as Garnier the focus
has been on multifunctionality.

16.  Lancôme
 L'Oréal Paris
 Maybelline
 Hair care
 Natural/organic
category
 Clarisonic

17.  Lancôme for global market growth in
premium cosmetics
Yves Saint Lauren, Shu Uemura and Ralph
Lauren are mostly present in Western
Europe, Latin America with the majority of its
sales emerging from premium fragrances.
Lancôme has performed well in Asia Pacific,
notably in China and Vietnam, driven by the
brand’s strong reputation across the world.
L'Oréal uses Lancôme to help drive global
growth
 Lancôme will be L’Oréal’s leading
premium cosmetics brand operating across
skin care, color cosmetics and fragrances
although skin care and color cosmetics form
the majority of its global sales.
.

18.  L'Oréal Paris focusing on hair
care and skin care
In recent years, the brand’s
focus is gradually gearing away
from color cosmetics to focus
more on hair care and skin care.
In 2011, L'Oréal Paris
experienced the highest
absolute growth in hair care in
comparison to all its other
categories.
 L'Oréal Paris operates across
a number of categories, but its
key categories are hair care, skin
care and color cosmetics.

19.  Maybelline cannibalizes L'Oréal Paris’
color cosmetics share
Maybelline’s more affordable price points also
made it popular with consumers in both
developed and emerging markets. In recent
years, the parent company, L'Oréal, has been
using Maybelline to drive growth in color.
Apart from the fact that Maybelline is an
affordable brand, which is a key factor
motivating consumer purchase at times of
economic austerity, Maybelline developed as
a color cosmetics brand while L'Oréal Paris
was originally a hair care brand.
Consequently, consumers associate
Maybelline with color cosmetics and L'Oréal
Paris with hair care.
 Focusing on the brands’ core portfolios
allowed the brands to retain their identities
more closely.

20.  Develop hair care pace
Hair care in Vietnam is becoming a key reason for the drop in
L'Oréal beauty and personal care market share globally. Hair
care is one of its key categories, but the pace has dropped as
L'Oréal focused on other categories such as skin care. It faces
competitive challenges from Henkel, Unilever and Procter &
Gamble in developed markets and has the option of tapping
into retail channels through salon hair brands.

21.  Growth potential in
natural/organic category
L'Oréal lost market share to
Beiersdorf which gained share
through Nivea Pure and Natural.
L'Oréal has done well to expand
The Body Shop in emerging
markets but has yet to tap into
Vietnamese market
natural/organic category.
 L'Oréal should take advantage
of growth opportunities in the
natural/organic category in
developed markets.

22.  Introduce Clarisonic in Vietnam
L'Oréal has been driving sales growth of Clarisonic primarily in the US and
recently launched it in France.
 Consider launching it in Vietnam given Vietnamese consumers
increasing affordability and preoccupation with skin care. The brand is
available on a number of websites although there are doubts about its
authenticity. Nevertheless, Clarisonic has received rave reviews,
indicating a good market opportunity.