NETHERLANDS MARKETING STRATEGY

LOrals Objective in the Netherlands is to increase Garniers brand presence

Garnier currently offers one product in the Dutch market... How can Garnier successfully grow market presence without negatively impacting LOrals current market share?

LOrals Decision Criteria

Increase brand awareness for the Garnier family brands Minimize cannibalization from the introduction of Garnier products
Meet the needs of the Dutch market

We recommend LOreal develop its products to better suit the markets needs
Short-run strategy (0-12 months)
Launch Garnier Synergie skin care products Increase LOral Recitals distribution

Long-term strategy (12-36 months)

Develop improved products for LOral and Garnier Wait and see with Synergie anti-aging skin care line

Market analysis Company analysis Recommendation Implementation Risk Mitigation Expected Results Conclusion

A high per capital income and growing number of women in 6 the workplace makes the Netherlands an attractive market

Fastest growing population: Age 25 or older segment Increasing number of Dutch women working
29% labor force participation for women (and growing)

4th in per capita income but 6th in per capita spending on cosmetics and toiletries
Price conscious

Accurate colour results are a major value driver for Dutch women
Volume growing at an annual rate of 15% 46% of Dutch Women used hair colorant (up from 27%) Brand loyal Preference for lighter shades Permanent colorant (73%) Semi-permanent colorants
Grew from 12% to 27% Fashion driven Demand for warmer shades

Dutch women care about natural ingredients in their cosmetics and skin care products
2nd-largest sector of Dutch cosmetics Volume growth: 12% Sales growth: 16% 2.5 million Dutch women aged 15 to 65 use skin care products Consumers are brand loyal:
Performance matters Loyalty increases with age

Products heavily advertised and sold on the basis of brand image

Market share determined by share of voice

Increased interest in natural products

Market analysis Company analysis Recommendation Implementation Risk Mitigation Expected Results Conclusion

Current International Position shows a strong standing for both LOreal and Garnier LOREAL
Largest cosmetics manufacturer worldwide Subsidiaries in over 100 countries $6.8 billion in sales (+12%) $417 million in profits (+14%) Sales breakdown: France: 24% Rest of Europe: 42%

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GARNIER
Independent operation Belle Couleur Permanent hair color Successful in France for over two decades Market leader Synergie Skin care products Successfully launched in France

Garniers Current Position in Netherlands suggests low brand awareness

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Garnier

Operates under same division as LOral Currently manages one brand in the sun screen category Minimal brand presence

LOral

Brand is well perceived by Dutch consumers Plnitude: A mid-market, high quality skin care product Recital: A high-end, high quality hair colouring product

Recital is losing market share due to aggressive distribution strategy, private-label brands and salon services

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Market analysis Company analysis

Product lines

Recommendation Implementation Risk Mitigation Expected Results Conclusion

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LOral Recitals declining market share can explained by an increasingly competitive market

Strengths

Current market leader with one-third of the market

Weaknesses

No clear positioning statement Market share decreasing over the past two years No semi-permanent formulation

To protect current market share, LOral should develop a semipermanent formula for Recital to meet market demands

Avoiding cannibalizing by introducing a new product: LOral Plnitude

Reputation for high quality Anti-aging line appeals to older demographic

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Strengths

Weaknesses

Unclear differentiation Threat of cannibalization from Synergie

To differentiate Plnitude from Synergie, LOral should emphasize its anti-aging benefits to women 35 years and older

Garnier Belle Couleur must be reformulated to meet the needs of the target market
Only product with a strong positioning statement Positioning statement resonates with Dutch women

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Strengths

Weaknesses

Current colours are too dark for Dutch women Positioning statement is not consistent with results Buying intentions decreased after use

Belle Couleur is unable to meet market needs; Garnier should delay its launch until product improvements are made

Garnier Synergie offers its target market a unique value proposition

Buying intentions increased after use Different positioning from Plnitude

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Strengths

Weaknesses

Dutch market is very competitive Need to maintain share of voice to maintain market share

Garnier should launch Synergie skincare without anti-aging line and emphasize natural ingredients that are scientifically proven

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Market analysis Company analysis Recommendation Implementation Risk Mitigation Expected Results Conclusion

LOrals Decision Criteria

Launch Synergie only

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Launch Belle Couleur

Launch Synergie

Launch Both

Launch Neither

Increase Garniers brand awareness Minimizes threat of cannibalization

Meets Dutch market needs

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Market analysis Company analysis Recommendation

Positioning

Implementation Risk Mitigation Expected Results Conclusion

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Synergie will be positioned as high-performance, high-value skin care products for women aged 20-35
Reliable Natural Smart Choice

Synergie is a worry-free, natural skincare line for young women who care about healthy skin.
High Value High Performance Understated

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Synergie and Plnitude will be positioned as high value for women 20 to 35 years old
Middle/ Value

Performance
High

Synergie Plnitude

Ellen Betrix Yves Rocher

Upper End

Dr. vd Hoog

Oil of Olaz Price

Low

Nivea Visage
Ponds

High

Lower End
Low

Dead End

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Synergie and Plnitude will be differentiated on the basis of ingredients and demographics
ScienceYouth Science Plnitude Ellen Betrix Oil of Olaz General Purpose Synergie Ponds AntiAging ScienceMature

Nivea Visage
Dr. vd Hoog Yves Rocher NaturalYouth Nature NaturalMature

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Garnier will target the value-conscious segment with Synergie Target consumer profile:
Aged 20-35 Recently graduated university and started working Has tried multiple skin care brands with mixed results (not brand loyal) Looking for brand to use with consistent results Value and performance conscious but not brand focused Thinks natural ingredients are better for skin Unfamiliar with technical product descriptions and terms

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The positioning is aligned with capabilities, consumer needs and the competitive landscape
Dutch Consumer Needs Growing consumer segment that is value conscious and cares about natural ingredients Competitive Landscape No direct competitor in highvalue segment

Synergie Positioning Synergie is a worry-free, natural skincare line for young women who care about healthy skin.

Company Capabilities Alliance of science and nature natural products that dont sacrifice performance

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Market analysis Company analysis Recommendation Implementation Risk Mitigation Expected Results Conclusion

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Price the Synergie line in the mid-range to appeal to its value-conscious target market
Middle/ Value

Performance
High

Synergie Plenitude

Product Line Dr. vd Hoog Synergie (Garnier) Oil of Olaz Oil of Olaz Plnitude (LOral)

Price 10-11.95 9.95-16.95 12 10.95-19.95

Dr. vd Hoog Price

Low

Synergie should be priced below Plnitude to target younger demographic

Low

Launching Synergie will require a high level of coordination between sales teams and distributors

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0-2 months

2-4 months

4-12 months

Prepare Customize literature Train new hires

Create a beauty buzz Educate target market Sell bundling option to retailers

Launch time! Free product trials Advertisements

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Prepare for Synergie launch

Increase sales force Training period of two months Define sales incentives Distribution strategy:
Leverage current distribution network Grocery stores and chain drug stores in densely populated urban areas Incentivize retailers with LOral-Garnier bundling option

2 Create a beauty buzz

Secure optimal shelf space
Place near Plnitude

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Find the face of Synergie

Dutch celebrity spokeswoman

Educate about benefits of natural ingredients

PR efforts with women`s magazines and local TV stations

3 Launch time!
Free product samples
Mass mailing to select neighbourhoods Local charity events

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Product demonstrations
Shopping malls located near distribution outlets

Outdoor advertising
Public transit, bus shelters, shopping malls

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Market analysis Company analysis Recommendation Implementation Risk Mitigation Expected Results Conclusion

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risk mitigation

Cannibalization of Plnitude sales

Position Plnitude and Synergie for different target markets Even with some cannibalization, overall LOral-Garnier market share will still increase

Highly competitive skin care market

First-mover advantage in high-quality, high-value natural segment gain share before others can enter Emphasis on natural positioning for Synergie increase reluctance to switch due to possible allergic reaction

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risk mitigation

Declining market share for Recital

Develop a clear positioning statement and build on position as current market leader Introduce semi-permanent formulation to meet market demands

Lost opportunity for mid-range hair colour

Still no competitors in the mid-range hair colour market Reformulate Belle Couleur to increase chance of successful launch in future

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Market analysis Company analysis Recommendation Implementation Risk Mitigation Expected Results Conclusion

Expected Results

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Increase in LOral-Garnier market share and profits

Skin Care
Dutch skin care market: 2.5 million consumers 56 million guilders 10% market share for LOralGarnier = 5.6 million guilders Plnitude 5% Synergie 5%

Hair Colour
Permanent hair colour market: 1.7 million consumers 88 million guilders 30% market share for Recital = 26 million guilders

32 million guilders in revenue 2 million in profits

Metrics for Success

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Indirect metrics drive top- and bottom-line results

Direct Metrics Profitability Revenue Sales volume Market share

Indirect Metrics Retailer penetration Retail and wholesale margins Market share versus share of voice Brand awareness and consumer purchase intention

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