L’Oréal of Paris: Bringing “Class to Mass” with Plenitude

Case Analysis Submission by: P39006|P39022|P39043|P39050|P39088|P39229

Situation Analysis: L’Oréal, the renowned French cosmetic firm launched its line of
products “Plenitude” with the main objective of bringing Class to Mass. After the product
line witnessed a huge success in the French market, the company decided to launch it in US
market in the year 1988. Eight years following the introduction, the product line was still
making losses. It had lost its second position to Ponds, a major competitor. In addition,
L’Oréal Plenitude hit a 4-year sales plateau and was not generating any profits in US Market.

SWOT:

STRENGTH WEEKNESS
- Technological Superiority over competitors - High Promotional Expense as compared to competitors
- Prowerful Brand Image - Star product focus
- R&D Capability - No separate strategy for US market (4 P's)
- Pan World Presence
- Superior Quality Products
SWOT
ANALYSIS
THREATS
OPPORTUNITIES
- Large number of competitor brands in mass market
- Huge scope of growth in US matket owing to large category
population
- Consumer loyalty & strong emotional connect towards
native brands

Problem Statement: Revitalizing the brand and bringing it to profitability is the key concern
faced by the company. Carol Hamilton, senior VP marketing is in a dilemma whether to
continue with the star product system behind Revitalift for a few months and then switch to
Revitalift-Eye. Alternatively, to improve value proposition by developing the existing range
of moisturisers and cleansers. The above dilemma is caused due to critical strategy lacunae
owing to the following:
 Product: Consumers perceive the product as greasy and oily. The product portfolio of
plenitude is designed taking in to account the need of French women. In addition, the
product line is cluttered with too many SKUs.
 Packaging: it was too wordy and highly confusing. Required plenty of time to go
through while product selection.
 Promotion: Plenitude follows a star product strategy focussing excessively on the
new launched product. It is not able to connect with masses and gives a notion of
premium. Too much of expenditure on promotion is not converting into trials (Ex.
11).
  Positioning: Consumers perceive that product targets to older women. As per the
perceptual map, it is clear that L’Oréal is positioned as technologically superior
product for stylish upper class women. It is far from affordable and value for money
like its competitors (Ex.9)
 Branding: Consumers recognise L’Oréal. However, they are not able to connect with
the Plenitude Line.

Alternatives:
 Continue with the current strategy of star product focus.
 Improve value proposition by developing existing range of moisturizes and cleansers
and focus only on price conscious socializers.
 Expand on Treatment moisturizers segment and focus on stressed out and Age
focussed consumers

Evaluation of alternatives:
 The current strategy is mired by several issue as discussed above, hence this kind of
strategy with no longer help in generating profits.
 The US market gives a huge scope in the mass-market category. In addition, new
brands have gained tremendous market shares, thus, this segment has immense
potential. L’Oréal should leverage its brand value to educate the consumers and
capture this market.
 Technology is the core competency of the company. Treatment moisturizers reflect
this. However, these products should specifically be targeted premium customers who
are willing to spend.

Proposed Solutions: L’Oréal should target two different set of consumers through its
products. The first set of consumers are value conscious who are ready to pay premium but
require generic and daily use products. The daily moisturizer and cleaners come in this this
category. The second set of consumers include premium buyers for treatment moisturizers.

Implementation: For targeting the first set, substantial changes needs to be made in the
existing product, packaging and promotional strategies. Products should be designed as per
the skin type of US women. Packaging should be renovated for the ease of understanding.
Products should be made available extensively through their distribution channels. The
company should undertake extensive promotions to educate women and spread awareness
about the entire product line. Magazines like seventeen can be used. Product bundling and
gift packs can be used to increase product trials.
The second set of consumers should be targeted in the similar way as described above.
Additionally, they should also focus on superiority in technology and focusing on product
benefits for this segment during promotion. Alternately, these products should be made
available only in speciality stores. Company appointed salesperson should be available at
these stores to educate consumers and induce trials.