L'Oreal Of Paris: Bringing

"Class To Mass" With

Plenitude

A CASE SOLUTION BY : APOORV MALU

INTRODUCTION :
LOreal

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.

Plenitude

LOreals first ventures beyond the hair care and

cosmetics arena.
France positioned the brand as high end, superior
performance but accessible.
Plenitude was introduced under a class of the mass
strategy.
The success of Plenitude 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
Plenitude products and the marketing approach.

Over time, the success in France led LOreal 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
STRENGTH
KNOWN
KNOWN WITH
WITH GOOD
GOOD QUALITY
QUALITY
GREAT
GREAT R&D
R&D
MATURE
MATURE SKIN
SKIN MARKET
MARKET SEGMENT
SEGMENT
EXPERIENCE
EXPERIENCE IN
IN COSMETICS
COSMETICS

OPPORTUNITY
OPPORTUNITY
BIG
BIG MARKET
MARKET IN
IN THE
THE US
US
YOUNG
YOUNG PUBLIC
PUBLIC FELT
FELT DOMESTIC
DOMESTIC
PRODUCTS
PRODUCTS NOT
NOT AT
AT PAR
PAR
MANY
MANY CHANNELS
CHANNELS FOR
FOR DISTRIBUTION
DISTRIBUTION

WEAKNESS
WEAKNESS
UNKNOWN
UNKNOWN US
US MARKET
MARKET
HIGH
HIGH ADVERTISING
ADVERTISING COSTS
COSTS
NO
NO PROFITS
PROFITS
NO
NO DIFFERENTIATION
DIFFERENTIATION IN
IN CLEANSNERS
CLEANSNERS
AND
AND MOISTURISERS
MOISTURISERS

SWOT
SWOT
THREATS
THREATS
EXPENSIVE
EXPENSIVE PRODUCT
PRODUCT RANGE
RANGE
COMPETITORS
COMPETITORS KNEW
KNEW CB
CB
LOYALTY
LOYALTY TO
TO OLAY
OLAY AND
AND PONDS
PONDS

PORTERS FIVE
FORCES MODEL
THREAT
THREATOF
OF
NEW
NEW
ENTRANTS
ENTRANTS IN
IN
US
US -- HIGH
HIGH

-SUPPLIERS
-SUPPLIERS
BARGAINING
BARGAINING
POWERPOWER- LOW.
LOW.

INTERNAL
INTERNAL
RIVALRY
RIVALRY
USUS- HIGH
HIGH

SUBSTITUTESSUBSTITUTESHIGH
HIGH IN
IN THE
THE
U.S.
U.S.

BUYERS
BUYERS
BARGAINING
BARGAINING
POWERPOWER- HIGH
HIGH

THE UNITED STATES LAUNCH AND

EARLY RESULTS

LOreal decided to launch the brand nationwide.

Specially, 14 SKUs 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

Plenitude 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 Ponds.
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 brands 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 Business1. 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
UNAWARE
OF
OF US
US
CUSTOMERS
CUSTOMERS

TOO
TOO MANY
MANY
PRODUCTS:
PRODUCTS:
CONFUSION
CONFUSION

MARKET
MARKET
RESEARCH
RESEARCH BY
BY
AC
AC NEILSON
NEILSON
AND
AND SELF
SELF

SHORTENED
SHORTENED
RANGE
RANGE OF
OF
PRODUCTS
PRODUCTS

ELDERS
ELDERS
PRODUCT
PRODUCT

HIGH
HIGH
PRICING
PRICING

FROM
FROM AGEING
AGEING
TO
TO FACELIFT
FACELIFT

PRICECUTS
PRICECUTS ON
ON
MOISTURIZERS
MOISTURIZERS

THREATS AND SOLUTIONS

SALES IN THE U.S. : VERY POOR
PROFITS : NEGATIVE

CUSTOMERS
CUSTOMERS
LOYALTY
LOYALTY FOR
FOR EXTENSIVE
COMPETETOR
COMPETETORADVERTISING
S
S PRODUCT
PRODUCT

FORMULA
FORMULA
CLIMATIC AND SKIN
PROBLEMS:
PROBLEMS:
DIFFERENCES TAKEN
GREASY
GREASY
INTO CONSIDERATION
PRODUCTS
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 users 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'Oreals 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.