BRAND MANAGEMENT EXERCISE

L’Oreal is a house of brands that owns a lot of well known brands in the beauty & health
industry. Its brand architecture comprises 4 divisions: L’Oreal Luxe, Consumer Products,
Dermatological Beauty and Professional Products.

L’Oreal is using the mixed brand architecture strategy, where it owns both umbrella sub
brands and individually branded products. You can see a brief look of its outstanding brands
for each division as belows (from the L’Oreal website):
Their brand architecture strategy is clear. They segment their brands based on
socio-economic and cultural backgrounds, so that they have a portfolio with culturally diverse
brands. With this they can access a wide range of market, with different messages and
identities for each brands.

Although this strategy comes with high advertising costs, the advantages outperform of the
clear and great market coverage.

In addition, they also create interesting inter-brand competition among their own brands,
which is aimed at maximizing the sales revenue within one market segment. The most
outstanding example is between L’Oreal Paris and Maybelline New York.