Case Study 8

Ombre, Tie- “Pull” and “Push” Social
Media Strategies at
Dye, Splat L’Oréal Paris
Hair: Trends or
Fads?
FEBRUARY 12
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Executive Summary
As the saying goes, the brain of business might be the finance sector however the
heart of any company is the marketing division as it fuels both the external and
internal activities of a business. Maria Gulin, VP of Global Integrated
Communication at L’Oréal Paris knew exactly what she had to do. With the
evolving world in technology, fashion, trends and fads, marketing of all
businesses had to keep up to par. L’Oréal Paris was in the verge of introducing a
new product in the ultra-competitive market but was seeking guidance in the
right path to choose. The company wanted to stay competitive by identifying the
latest trends in the hair color industry and investing their time in developing the
most suitable product, along with setting a reasonable price and promotion to
ensure their utmost success in the industry. With real-time tv watchers and social
media enthusiasts, it is evident that social media provides insights on the most
recent trends and fads. However, the biggest challenge for most beauty
industry’s like L’Oréal Paris is to distinguish between trends from fads. With the
power of the social media platform, L’Oréal Paris seeks to research the new hair
trends on social media and use that very platform to promote their new line of
product(s).
SWOT Analysis
STRENGTHS WEAKNESSESS
 L’Oréal Paris has become the  L’Oréal Paris is struggling to
largest beauty products identify the difference between
company in the world trends and fads in the market
 Reputation for innovation and  Not enough research done to
research – spent 3.5% of sales distinguish between and fad or
on R&D, registered 611 patents, trend, as the L’Oréal Paris
and had 5 hubs in the US, Japan, marketing team wants to deliver
China, India and Brazil, 22 a product that consumers will
research centers and 17 continue to use as the years to
evaluations centers, etc. come
 Largest market share (7.6%) in  L’Oréal Paris fears that Certain
hair care hairstyles or hair trends are
 Product caters to various age complex to achieve at home
groups alone with easily usable which can limit product
hair coloring products (cutting capability and eventually reduce
down a multi-step process to 1 sales.
step)
 Strong global brand awareness
through 3 key brands along with
a strong distribution channel
OPPORTUNITIES THREATS
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 Due to transparency in trends,
 The rising trends open up any competitor who develops
various opportunities for the their product first has
company to take advantage in competitive advantage of first to
developing the products market
 Partnership with Google to  Social media had huge influence
identify trends from fads: as a on the branding of the product
result, new products can capture line, where a trend can quickly
market share over competitors turn into a fad (due to social
due to “trends” media changing at the second)
 Break out of the traditional
industry - L’Oréal Paris’s
approach of collecting data from
social media platforms can help
make accurate decisions on the
new product development
 L’Oréal Paris was #1 in Western
Europe and #2 in Latin America
– global company can cater to
different companies depending
on their trends
Market Segmentation
The answer to any marketing question you can reason is; “meeting consumer
needs.” As simple as that, the success lies behind knowing your buyers individual
need, preference, resource and behaviour. Segmentation allows L’Oréal Paris to
tailor the marketing mix to more individual consumer need. With that being said,
L’Oréal Paris offers their hair color product/service to each demographic based on
their need, making them a number reason for their high brand awareness and
strong market share over their competitors like P&G. For instance, they categorize
their market by age, gender and the type: temporary, semi-permanent and
permanent dyes. According to the case, there was the worry of keeping up with
the trends in the market and competitors surrounding L’Oréal Paris, especially
due to the fact that it was a global business. The observation of trends correlates
to behavioral segmentation as consumers base their decision making around
what everyone else is doing. For instance, focusing on segmenting the new
product to young consumers gives great benefit and opportunity, as they are
people that follow trends and set the trend pattern from continuing. L’Oréal Paris
has to also take into consideration geographic segmentation as trends/styles in
Europe may differ to what’s trending in Latin America. Therefore, the company
needs to focus on various types of trends occurring in the market and region and
from there after building around it is using geographic, behavioral, geographic
and psychological segmentation.
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Targeting
So far L’Oréal Paris segments based on age and consumers motivation hair
coloring and to target the right segment areas, has three key brands; Casting
Crème Gloss, Preference and Excellence. The first brand “Casting Crème Gloss”
targets consumers around their 20s to 30s as they prefer starter dyes who look to
only change the natural share of their hair color. The “Preference” brand targets
woman between 30s to 50s who seek variety and novelty, and lastly the
“Excellence” brand targeting consumers 50 who look for grey hair coverage. Now
for the new product, L’Oréal Paris looks for a target audience who are all about
trend and their partnership with Google allows them to observe and research the
trends from fads. Google is a tool to monitor real-time watchers and web surfers
and obtain the most accurate and effective data as they have the largest online
database. Here L’Oréal Paris can use consumer’s bias views and take the most
trending hair styles from celebrities/people and invent a perfect product to target
consumers of today. Therefore, while sticking to the traditional target method, the
company should expand their targeting to people on social media platforms.
Positioning
In order to gain positive feedback and increase consumer’s perception on the
brand or product in relation to its competing brands or products it is crucial to
lastly position your company in way that make it stand out. Establishing the
identify of the brand is crucial and, in this case, L’Oréal Paris is no new or small
starting company. This company is a well-established company worldwide known
for its hair and beauty products. According to the case, L’Oréal Paris has the
largest market share being 7.6% in hair case products. The urge to create a new
product is to further develop the company and its brand, which is why positioning
is essential when the company decides to release its new line. With using their
research from Google and social media, the company’s first goal should be to
value the trends to make sure there are worth pursing and not becoming a fad
later. In order to correctly position itself, the company evaluates “Trends vs Fads”
using 4 major questions outlines in the case:
1. Is the item/style compatible with a change in consumer lifestyle?

2. Does the innovation provide real benefits?
3. Is the innovation comparable with other changes in the marketplace?
4. Who is adopting the trend?
By comparing data before and after the trend, you can analyze to see if any major
changes made in their life. By observing reviews online and comments on
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YouTube/Facebook posts, L’Oréal Paris van question whether the trend holds value
to consumers or not. Here we can also absorb their willingness to try the trend for
themselves. For instance, in one of Miley Cyrus’s video, her was in “space buns”,
or that is the term used for her hairstyle. Many people post pictures on Instagram
with similar hairstyles, however does this mean this a trend or a fad? Again,
through online research it is essential for L’Oréal to capture the right market
because it is crucial l to know if a large enough market it willing to adapt. By
answering these four questions, it makes L’Oréal Paris to position themselves
correctly and to develop their new innovative hair product based on listening to
the market.
Product Strategy
L’Oréal Paris began making its products to capture the three main utilities; form,
time and place. In order to save time from going to salon, to give you the
opportunity to do it from home, and to reduce the number of steps to dye your
hair from five to one. Voila! L’Oréal Paris’s hair product line was born where varies
products were catered to meet the needs and demands of consumers. Their
previous and current product strategy consisted of catering hair products for
woman to hide their grey hair or for woman to increase their self-confidence by
dying your hair. According to the case, a study found in UK, Mexico, China, Russia
and the United States found that over 88% women’s self confidence was increase
due to dying their hair.
Now this new product in the making is strictly based on listening to consumers
through social media and figuring out the greatest trend and developing a
product based on it. For instance, the recent trends in hair is ombre hair coloring,
tie dye hair or splat hair coloring. With keeping in mind, the trend aspect, the new
product should still stick the features of customers being able to color their hair
with minimal steps in the comfort of their homes.
Pricing Strategy
Currently the pricing strategy used by L’Oréal Paris on its hair products was
strictly based on market and penetration pricing. For instance, Revlon being the
least expensive was priced as low s $2.97 while John Frieda was priced as high as
11.97/ Now L’Oréal Paris’s Preference brand was priced at $8.97, Excellence at
$7.97 and Garnier Nutrisse at $6.97. Since their competitors or in other words
substitutes are pricing in that range, to stay competitive the company chooses to
price in between. Therefore, when they roll out their new product, they should
enter the market with penetration pricing. As result, consumers having found a
good deal as well as gaining value from the product will most likely come back
again. Low-pricing can also encourage word-of-mouth advertising as people will
be excited about a product that they are able to use to achieve current trends.
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Pricing level plays a huge role as it take part it is determining the perceived value
from consumers. The price difference of doing it at home vs at the salon adds
great value to the marketing strategy as this can be used for L’Oréal to obtain the
willingness from consumers to pay for an experience, they want to achieve from
home vs the salon.
Place
The advantage of being able to dye your hair using L’Oréal Paris’s product gives
the ultimate package to a consumer; efficient use of time and gaining similar
results. The whole point of these hair products is to prevent people from going to
the salon and finding the easy way out to achieve the trending hair colors and
styles. Nevertheless, using the salon as distribution channel is strategy that
L’Oréal can consider which potential can add more value in the long run. Having
hair salon professionals using L’Oréal Paris hair color products can encourage
consumers to later try themselves at home. If they liked the service done at the
salon but feel it took over priced to continuously go to the salon, their experience
having L’Oréal Paris products being used in their hair can motivate consumers to
by the hair coloring kits to do it at home. Another crucial channel to market
L’Oréal Paris’s products is through social media such as Twitter, Instagram,
Facebook or YouTube. Using these great modern channels, is a way to not only be
placing to see your products but to promote them as well.
Promotion Strategy
With the ever-evolving world of technology, there is no perfect place to promote
your product other than through social media. Using online ads, using Facebook
and Instagram to promote your product is great exposure for the brand. For
instance, a lot of trends are followed through famous YouTubers and if L’Oréal
Paris gets famous YouTubers to demonstrate how to use the product or give
review on them, that was attract many consumers to want to try it. This new
refined way of promotion allows them to establish themselves on a global scale
and allows to build a refined connection between the company and the
consumers. By using their own website, online ads and social media, they are
able to be cost-effective, reach a large audience and bring the desired impact of
the brand on consumers.
Recommendation
L’Oréal Paris is on the right path to expanding their business and brand in terms
of listening to the consumers and developing a new product based on that. By
utilizing their partnership with Google, they are able to gather all the necessary
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research and data on trends and fads using real time data from consumers. Their
main goal and challenge are to be able to distinguish between trends from fads
and develop a product in which they are able to target a large pool of consumers
and increase their brand/product value. Fads burn out quickly while trends last
longer and can even become “classics” which is why L’Oréal Paris needs to be
cautious of how it positions itself. As market leader in the hair care industry,
needs to come up with product that incorporates the trend such as Ombre hair.
Ombre hair being a very popular hairstyle, is seen trending by many famous
celebrities and Youtubers. Now coming up with a product to easily be able to
achieve at home is an idea L’Oréal Paris should pursue.
With that being said, the use of social media creates mass awareness as well
influences more than you expect. Social media is “thee” platform for trend setters
and utilizing the social media tools such as Snapchat, YouTube and Instagram,
creates a real-time effect on people and increase the purchase behaviour of
consumers and thus increasing the sales of the company.
Work Citation
Dubois, David, and Bens, Katrina. “Ombre, Tie-Dye, Splat Hair: Trends or Fads?”
Harvard Business School, June 23, 2014
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Ombre, Tie- “Pull” and “Push” Social

1. Is the item/style compatible with a change in consumer lifestyle?

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