MARKETING STRATEGIES

AND POLICIES AT L'ORÉAL

Scientific coordinator:
Conf. Univ. dr. Amalia DUŢU

Students: DRĂGHICI Liliana

IONESCU Bianca
MITRICĂ Adriana
About L'Oréal

• L'Oréal is a French cosmetics industry group. The company, founded by Eugène

Schueller on July 30, 1909, has now become an international group, the world's
number one in the cosmetics industry.
• A vision: cosmetics are rich in meanings. They allow each person to increase their
self-confidence, to express their personality and to be open to others.
• The mission that L'Oréal has set itself and that inspires its teams is to offer women
and men around the world the best cosmetics in terms of quality, effectiveness,
safety, sincerity and responsibility to make them satisfies all their needs and all
their desires for beauty in their infinite diversity
 Portfolio of L'Oréal

L'Oréal has a rich portfolio of international brands, unique in the world, covering all the
range of cosmetics: hair care, coloring, skin care, makeup and perfume.
 Portfolio of L'Oréal
Two reasons explain L'Oréal's unique positioning within the cosmetics industry: its
exclusive focus on perfumery-cosmetology and its presence in all market segments.

Mass retailing Selective Professional Medical Direct sales

distribution distribution distribution
- L'Oréal Paris - Lancôme -L'Oréal - Vichy - The Body
- Garnier - Giorgio professionnel -La Roche Shop
- Maybelline Armani - Kérastase Posay
New York - Yves Saint - Matrix -
- SoftSheen Laurent - Décléor SkinCeuticals
- Essie - Cacharel - Carita -Roger&Gallet
- And so on - Biotherm - Essie -Sanoflore
- Kiehl's - Redken -CeraVe
- Ralph Lauren - Pureology
- Shu Uemura - And so on
- And so on
 The company's image on the market

The group L'oréal develops several important communication campaigns every year that
underline the ability and the growth of the group. If it is omnipresent across several media
channels and the constant presence enables the brand to retain its regaining position in the
market, despite stiff competition from numerous cosmetic brand

Furthermore, we note that the mythical slogan "Because I'm worth it" has been
transformed and is known as "Because you're worth it." Another form of strategy, in the
words of Claudia Schiffer, "You too you're worth it" incited consumers to buy the product.
This is like a personal message and it is the purpose of the brand to let audiences belive
that the ambassadress addresses only to them.
 The macro-environment of the organization
Political factors do not have an impact on the cosmetics sector, instead, the legislative aspect
becomes much more important
Legal regulations influences the perfume and cosmetics industry. For example, environmental
concerns and related measures taken by the government have a direct impact, whether it is on
product composition, packaging or product testing in R&D (the scope of animal testing is still
relevant).

Economic structure:
- Declining purchasing power linked to the economic crisis in developed countries may
force consumers to reduce their purchases of cosmetics.
- Increasing purchasing power in emerging countries and the emergence of a new and
growing middle class is a major phenomenon that is set to intensify
 The macro-environment of the organization
Socio-cultural factors
- The hedonistic tendency and the pursuit of well-being, as well as the importance given
to physical appearance, are developing more and more in different categories of
consumers.
- The phenomenon of migration, past or present, imposes an increasingly marked ethnic
diversity in developed countries
Technological factors. R&D is at the heart of the development of new cosmetics, consumers
demand a scientifically proven effectiveness for the new products they want more and more
innovative and a proven safety of the products they use.
Ecological / ethical factors. The demand for organic products is growing, at a rate of about
25% per year. At the same time, classic products must offer a lower environmental footprint
 The microenvironment of the organization
Analysis of competitive forces in the market using Michael Porter's model
Competitive intensity. Competitors are numerous and differ in size, nationality or market.
This sector can be defined as an oligopoly with competitive fringes, in which multinational
groups operate, which are found in all regions of the world (L'Oreal, Procter & Gamble,
Unilever, LVMH) and smaller companies
Bargaining power of suppliers. Manufacturers of chemical compounds, flavors, essential oils
and others. They are scattered and do not have a real bargaining power with cosmetics
manufacturers, with the exception of perfume manufacturers

The availability of several quality brands with identical or even competitive prices has
increased the bargaining power of buyers.
The sector has solid barriers to entry.
In the industry that keeps the decline in substitutes low
Analysis of competitors
 Analysis of competitors

Turnover (billion€)
Competitors' market shares,%

Year 2018 2019 2020 Year 2018 2019 2020

Company % % %
Company Mld.€ Billion € Billion €
l'oreal 0.28 0.28 0.27
l'oreal 26.82 29.87 27.99 Unilever 0.27 0.27 0.25
Unilever 25.63 27.95 26.17 Estée Lauder 0.15 0.15 0.18
Estée Lauder 14.24 16.14 18.19 Procter & 0.13 0.14 0.17
Procter & Gamble 12.59 14.52 17.29 Gamble
Shiseido 0.1 0.1 0.08
Shiseido 9.87 10.41 8.65
Coty 0.07 0.06 0.05
Coty 6.84 6.28 4.71 Total 100% 100% 100%
Total 95.99 105.17 103
 Analysis of the internal environment
Commercial capacity. For L'Oreal, building a strong image among the public is a significant
global goal, which can only be achieved through an appropriate communication strategy

• Financial capacity • Productive capacity

In the case of the “L’Oreal” company,
the technology consists in the
technology of making the products, in
order to satisfy the needs and
requirements of the consumers.
L’Oreal has 40 factories in the world.
 Identifying the market strategy adopted by the analyzed company

- Presence on all distribution channels and in all

segments;
- World leader in cosmetics;
- High quality of products;
- Strong marketing communications;
- Strong brand portfolio;
- Staff training;
- Continuous R & D;
- Targeted acquisitions.
- Growth of new markets in development;
- Targeted acquisitions abroad;
- Development of Internet sales;
- Wide target group: age, sex, various ethnic
groups;
- High demand for organic products.
- Too many sub divisions;
- Lower profit margins (higher investments in
R&D);
- Difficulty managing employees;
- Human capital expenditure is huge.
S W
- Strong competition;
- Change in consumer preference;
- Economic crisis – low cash flow;
- Increasingly strict legal regulations in different
countries;
O - The risk of imitation by the competitor; T
L'Oreal's internal power is 3.25. This score means that this company has a a very high
potential.
This score means that this company has a high degree of adaptation to the requirements of the
external environment.
L'Oréal is positioned in the first quadrant, according to which the strategy that the firm has to
implement is a growth that can be implemented by:
-new targeted aquisitions;
-organic products to satisfy the new demand;
-identifying opportunities and expanding in developing countries;
-developing specific products for men by age and ethnicity;
-reducing subdivisions to facilitate communication and, if possible, reducing the number of
employees;
 L’Oréal strategy
L’Oréal has developed a unique strategy: Universalization. It is an approach to
globalization that captures, understands and respects differences. The differences in
desires, needs and traditions. To offer tailor-made beauty and meet the needs of users
around the world. L’Oréal is driven by this plural worldview

It means creating and producing cosmetics locally, so that formulas are perfectly suited to
their needs. To achieve this goal, the company has developed a global network in Research
& Innovation, as well as a marketing hub for each of its strategic markets: the United
States, Japan, Brazil, China, India and South Africa.
 Digital, a pillar of marketing strategies
With more than 38% of the media budget invested in digital
platforms, one billion Internet users consulting the
company's websites and nearly 250 million subscribers on
social networks, L'oreal adapts content to the new creative
codes of digital
The Colorista campaigns by L'Oréal Paris, Fructis de Garnier,
Minéral 89 by Vichy or Vernis à Lèvres by Yves Saint Laurent
were designed for digital platforms such as Facebook and
Instagram and really captivated our consumers, as evidenced
by the strong engagement and sharing rates. These dynamic,
colorful and immersive campaigns are obviously a
springboard to a new 4.0 marketing.
 Personalized marketing

L'Oréal consumers around the world

are also looking for personalized
content that meets their own
aspirations in all areas of beauty.
Thanks to the precision marketing
program and the agility of the teams in
the subsidiaries, the company is
increasingly adapting the content to the
context and the paths that will lead
consumers to make their decision, and
send them the right message, to the
good time.
 Measurable data

The return on digital investment is a priority for L’Oréal, whose teams are closely
monitoring the impact and valuation of the Group’s digital investments. The Digital team
has developed a set of proprietary tools that can now be used in country marketing and
Media Management to measure the performance of their digital campaigns in real time and
direct their investments to the best performing channels. . These measures, shared
throughout the Group, help to evolve good practices.

In conclusion, the general strategy of the company is an offensive one based on the
acquisition of new brands. In terms of marketing strategy they rely on the digital trend.