Bringing Class to Mass
• Beauty products! Personal + Technology • 300 mn $ on Research, 300 new patents • Hair care distribution channels: beauty salons and mass outlets • Skincare: Department and Specialty as well as mass • Competitor: P&G’s Oil of Olay and Nivea
Revenue Distribution by Geography
Latin America 6% USA & Canada 20%
Rest 5% France 23%
Rest of Europe 40%
& what to keep
Key Strategy: trickle down and fire up
Key Areas: improve topline. target US
Key Problem Area Analyze if the French strategy will work in US?
Marketing – product mix.AN INTRODUCTION
A journey from ‘French’ to ‘US’
To reap What to change. premium pricing “star system of investment” Organizational structure
. bottom line.
• • • • High end.Reduces signs of Aging 54% users in 40% of segment – “Stressed out” and “Age focused” • Positives – L'Oreal brand. superior performance but accessible 30% price premium US. full product line
• Problem of plenty – Too many variants focussed on narrow segments resulting in a confused / non interested buyer.having 3 to 4 price points confused customers. Price • Multiple price point.Product designed for France market launched in US only with minor modifications. Need to rationalize.Only 40 % ( Stressed out & Age focussed Segment)
. • Over Priced – Product overprized for the target segment. • Over Delivery – Product over delivered and hence overpriced compared to competition.PROBLEMS
Product • No Localization . • Addressable Market .
It gives our brand a ‘therapeutic’ feel. Cosmetics – Company had no prior relationship with HBA buyers.PROBLEMS
• No Salesperson – Clearly hampered ability to communicate as PoP displays were poor substitutes. Promotion • Share of Voice – 18.83% compared to 31% of competitor. Suited for category with high involvement. Took competition head on by being right next to Olay. • Lost in Translation – Messages just translated from French to US.Lots of data. • Packaging . But the mass segment is more visualize than verbalize. • Communication Focus – Product ended up as an ‘Treatment Product’ and less of a “Daily Product
. • HBA section vs.
down to earth
Oil of Olay
• Traditional and generational
• Caught in no mans land
Brand Power L'Oreal The concept Plenitude The User and Market CHANGED!
REMAINED THE SAME
• Increasing Trend in Total Retail Market for Moisturizers and Cleansers. • Stagnancy in Plenitude sales for both category.
US MARKET ANALYSIS
• Assumed that advertising spending in all brand used for moisturizers and cleansers • Plenitude has poor advertising performance than Olay and Ponds • Plenitude brand not strong recognized in US • Market study divide consumers into 5 segments:
22% 17% 26% 17% 18%
Unconcerned Price Conscious Socializers Age Focused
Ingredient Apathetic Stressed Out
and maybe not even 30s
Motivation for Trial • Brand name cited • Brand name meant • Department store quality Respond to Product Formulas • Young rejecters found it too heavy and greasy • Didn’t absorb into skin
Perception as Full Product Line • Having large number of products but have plus and minus • Individual products could be more helpful in through the line
Respond to Packaging • Packaging seemed feminine and expensive look • Confusing and have lot to read
Perceived Target Consumer • Perceived targeted to older women • Not for 20s.
Taken from Exhibit 11
Oil of Olay Pond’s
Avon Revlon Plenitude Nivea
91% 90% 78% 76%
68% 35% 23% 26%
75 39 29 34
23% 10% 7% 6%
34 29 30 23
Low Consumers Ever Tried Low Conversation Ratio Low Current Used Low Retention Ratio
Poor Plenitude Sales Performance
accessible and reasonably priced Older and down-to-earth
Hard to understand
. generational brand
Seen as a staple of life
Aspects L’Oreal (Plenitude) Oil of Olay Pond’s
Premium and Motivation for Expensive Trial
Product Satisfaction Sources Brand Imagery Good quality product
Generated by information / advertisement
Light and reasonably priced Traditional.
S market • Pricing structure(Expensive) • Competition with Ponds it is rated higher on availability and good value for money
• Suitable skincare products for U.SWOT ANALYSIS
• Great Research and Development Department • Expertise in handling Cosmetics for years • Known for Quality • Superior Technological Products • Lack of Awareness About L'Oreal Products in US Market • Lack of Consumer Insight in US Market • Confusing Packaging • Too many Products posed confusion to Consumer
• • • • Entering into mass channels Upscaling skincare business Available in speciality stores Launching new product Revitalift Eye to bring technological superiority.
Bargaining Power of Suppliers
L'Oreal has many suppliers in processing their product. Easy switchers. Create a distribution network from scratch. P&G).
High Threat Low threat
. Rivals sell similar product/service
Bargaining Power of customers Low brand loyalty.
Threat of Competitors High no of competing firms (Eg pond’s. High brand recognition & trust for L’Oreal
Threat of new entrants
Difficult for a new entrant to enter to reach the same R&D expertise. So their bargaining power is low.PORTER’S FIVE FORCES
Threat of substitutes
Low vertical competition.
PRICE AND PROMOTION
. PLACE.4 P’S – PRODUCT.
• Product development needs to be given emphasis on:
– Needs to be less oily. non-greasy – Should be light and should easily get soaked into the skin – Less of a make-up substitute and more of product quality in terms of value-benefits to the customer
wrinkle defense. treatment moisturizer rather than Excell-A3.S mass perceive the product to be for the older women • Single brand name followed by the type of product.Picture. Hydra Renewal. eye defense. type of product • Change the positioning statement from ‘reduces the signs of ageing’ to something like ‘younger looking skin locked down forever’ • Model shown on the package should be young in her late 20’s rather than on the modern women positioning as U. leading to nothing but confusion • Emphasize on the parent name Loreal than that of product linePlentitude as it has a higher connect among people • Technological details along with user directions to be provided inside the pack and a lot of while space to be kept on the outer package
• Simple packaging. Action Liposomes that is beyond the understanding of the mass. Brand name. cleanser.Eg. L’Oreal Plentitude.moisturizer.
• We decide to strategize our selection of place for effective sales
– Mass merchandizing can be done in areas like malls. 1. 1.5 oz.213 1. 1.193.679.063
.580.4 oz.297. convenience stores of those products that have high sales/month.7 oz. 0. Eg
Sr.850 2.597 2. supermarket.7 oz.559.248 1. No
1 2 3 4 5
Revitalift Face Eye Defense Wrinkle Defense Cream Excell Cream Hydra-Renewal Cream Jar
entire range of plentitude can be displayed. make them available in all types of outlets by increasing the point of visibility
– Customer can get what they need for their skin – In terms of understanding the technological aspects of the product. sales people can help them take a sound decision – Product benefits and features can be effectively explained by the attendants making it customer centric & exclusive as against it’s players in the market – Effective CRM can be established at these stores
• Since Revitalift of Plentitude is doing good.PRODUCT
• In drug stores and departmental stores.
• Price remains unchanged of L’Oreal product line – Plenitude • Selective pricing observed during promotion for customer attractiveness (refer Promotion slide) • MRP remains unchanged
• More towards technologically advanced • Spend more on R&D to come out with the right product for their consumers
• Positioning for the consumers who like to be highly involved(like to spend more money on themselves) • More towards Stylish upper class
• POINT OF PARITY •
• The product line:
– Daily moisturizer – Treatment moisturizer – Cleanser
• • • • • •
• POINT OF DIFFERENTIATION For the consumer who love their skin and want to know more about the product to look young and beautiful (highly involved) For the people who think they are worth it They are technologically advanced For the upper class consumers Spend a lot on R&D Spend a lot on advertisements and for product support L’Oreal products are premium
shelf branding etc • Use of Social media platform – interactive website
– Communicate the advantages of our treatment cream (it being thick and oily) – Communicate about the different product lines and for what they must be used – Develop a feedback forum.Complementary offer • Point of visibility at retail outlets. Counter Branding.PRODUCT
• SKU’s in the form of sachets for sampling of moisturizers • Cleaners coupled with moisturizers.Accept the complains or suggestion of the consumers and address their grievances. flanches. Eg. if any
– Trimming productline: focus on mass products – Re-formulating product basis customer feedback
– US consumer as opposed French are utility driven – different positioning – Promotions and campaigns to be localized for greater mass appeal
•Leading range like REVITALIFT to be leveraged to promote other products •More effective communication focused on product value to justify premium pricing
Rajneet Kaur Rupani Ameet Khalsa Shraddha Nikam Akshay Patel Shivika Gupta Swati Joshi Anirban Ghosh Garima Malik Komal Suri Dewanshi Gautam Tejas Shinde