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a presentation on l;oreal...would like comments on improvement.....thank you to all scribd uploaders....keep uploading
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ARKAPRAVA GHOSH
I use the most expensiveHair colour in the worldIt’s not that I care about moneyIt’s that I care about my hairIt’s not just the colour ,I expect great colourWhat’s worth more to meIs the way my hair feelsSmooth and silky but with bodyFeels good against my neckActually I don’t mind spending more for L’orealBECAUSE I’m WORTH IT
1st cosmetics group worldwide
23 international brands
17.5 billion euros of sale in 2009
Presence across 130 countries
2005 2006 2007 2008 2009
1453315790
17063 17542 17473
consolidated sales(euro millions)consolidated sales(euro millions)
15%
53%
25%
8%
Product division : market weightage(%)
professional consumerluxury active cosmetics
KEY MARKETS:
Western Europe & North America accounting for 43.3% & 23.4% of total sales respectively
Asia accounts for 13.2% of total consolidated sales
PROFESSIONAL PRODUCTS• L’OREAL PROFESSIONAL •REDKEN •KERATASE •MATRIX
LUXURY PRODUCTS • LANCÔME • GIORGIO ARMANI • YVES SAINT LAURENT •BIOTHERM • RALPH LAUREN • KIEHL ’S • SHU UEMURA • HELENA RUBINSTEIN • CACHAREL • DIESEL
CONSUMER PRODUCTS •L’ORÉAL PARIS • GARNIER •• MAYBELLINE NEW YORK • SOFTSHEEN .CARSON •
ACTIVE COSMETICS VICHY • LA ROCHE -POSAY •• INNÉOV • SKINCEUTICALS •
•Soft Sheen Products Inc., a leader in the black hair care industry, was founded in 1964 and acquired in 1998•In 2000, L’Oréal USA acquired Carson Products, another successful manufacturer of ethnic hair and skin care products• The two companies were successfully merged in that year to become SoftSheen-Carson
Overview of the black hair care market
1960-1970Johnson products was the largest in black business & the first oneTo be traded on the American Stock Exchange. Johnson was closely followed by Soft sheen and Pro-line
1980 Black skin & hair care market had approached $1 billion
1994 Black hair care market approached $2 billion , Only 1.5% of the black
disposable income was spent on hair care
African- Americans represented 12.3% of the nation’s population & contributed 34%
to the hair care market in the USHuge market potential & the need for growth & diversification led to l’oreal’s decision
1998 Carson Inc. acquired Johnson products from IVAX co. for $90 million
With its “Dark & Lovely” black hair products , Carson became the market leader in black hair-care products
2000 Carson could not survive the debt incurred by the purchase of Johnson products & Was sold out to L’oreal for $250 million & merged with “softsheen” brand
L’oreal now gained control over 3 of the top 5 selling hair care brands & 62% of the African-American hair market
2009SoftSheen·Carson confirmed its positionas No. 1 in the ethnic hair care products market,with new initiatives in three major categories
upgraded the Dark andLovely range with a more moisturising formula, richer in shea butter than the other hair relaxers on the market
Launch of ammonia-free Dark and Lovely Colour Confidence Haircolor
Diversified into the skincare market in South Africa with Dark and Lovely Body. A line of body milks enriched with vitamin E and glycerine, which provide longlasting hydration
Source:Constructing corporate America: history, politics, culture By Kenneth Lipartito, David B. Sicilia
THE JAPAN CASE : THINK LOCAL ACT GLOBAL
TARGET SEGMENT: HIP , YOUNG & TRENDY WOMEN OF JAPAN
•Japanese women have small mouths & the concept of “mother of pearl” is very popular there•This particular molecule created the effect of water giving the lipstick a wet look
After careful economic analysis , L’oreal caterd to this segment withTheir new offering “Maybelline Watershine Diamonds”
In space of a year , Maybelline was the market leader in the mass-makeup market in Japan
Following success there , L’oreal also launched the same product in US & Europe where it enjoyed a similar meteoric success
Source :The new strategic brand management: creating and sustaining brand equity By Jean-Noël Kapferer
Case of BRAND SUBSTITUTION:GEMEY PARIS – MAYBELLINE NEWYORK
In 1996, L’Oréal bought the American make-up brand Maybelline, decided to promote it to a global make-up brand & as a consequence to substitute it to the local make-up brands, as Gemey in France
Gemey, the leader in mass market (45.4% market share) was considered to be “a brand specialised in the different types of make-up targeting French middle class women”
Maybelline was defined as “an in-brand of make-up from New York, targeting young ladies”
VAST DISPARITY IN POSITIONING
1998 2000 2004 2010
Progression of the Gemey – Maybelline visual identity
Case of BRAND SUBSTITUTION:GEMEY PARIS – MAYBELLINE NEWYORK
Stage 1 : WARNING
The brand name Gemey-Paris became Gemey-Paris New York in 1998 and started to be associated with “Maybelline New York #1 in make-up in the USA” both on the packaging and in communication when launching new products. From 1999 onwards, the two brand names Gemey and Maybelline were more closely linked on the packaging but in communication only the Gemey slogan was used
Stage 2 : REPOSITIONING
began in the second half of 2000
Gemey and Maybelline have come together to offer you better technology
Integration of skyscrapers into thebackground of advertisements and sales outlet visuals, sponsoring by American TV series andslogans
Value Curves and Value Proposition
The Body Shop made clear decisions regarding:
– What factors could be reduced below the industry standard?
– What factors could be eliminated that the industry had taken for granted?
– What factors should be raised beyond the industry standard?
– What factors should be created that the industry had never offered?
In so doing, The Body Shop created a unique business model, brand and position that ensured an sustainable competitive advantage
The Body Shop’s robust business model and unassailable position was evidenced by L’Oreal’s acquisition of it in 2006
Despite being an established, extremely well-resourced competitor L’Oreal had been unable to compete against The Body Shop’s values and positioning…..whether The Body Shop’s values were compromised by its acquisition, however, is a different matter!
The Body Shop - Illustrative Example
Price Packaging &
Advertising
Hi-Tech
Scientific
Image
Glamorous
Image
Natural
Ingredients
"Ethical"
Concerns
PARAMETERS
PE
RF
OR
MA
NC
E
The Body Shop
Cosmetic’s Industry
BRAND EVOLUTION1978-1993Greasy & rocksolid
1993-2000Quirky urban fashonistas
2000-presentConscious hedonism
Reason for being Dress the tough guys Make people feel different & provocative
Help people carry a more pleasant experience
Value proposition Stylish jeans & workwear with a used worn out look
Affordable fashion urban street wear
Fun , imaginative & colourful fashion
Differentiation Worn out look Urban street wear Happy & colourful clothing
Persona Tough , wild , adventurous
Extravagant , critical Witty , culture conscious
Associations Rebels , women , cigarettes , gas stations , leather
Political issues , religion , sexuality , fashion
Youth , vitality , happiness
Product range Jeans & workwear Jeans , clothing , shoes , fragrances
Jeans , clothing , sunglasses , watches , shoes , bags , fragrances
Audience Tough guys wannabes
Intelligent urban fashionistas
Hipsters
Emotional connect Pal that gives advice to be tough & brave
Uncommonness - to make your life more exciting
Ego & mood booster
1978-1993 1993-20002000-
PRESENTOriginal motto “only the brave” charectizes their first eraDifferentiated themselves by selling jeans that looked wornJeans came pre washed and with holes on themInitially consumer perception related to defective jeans on shelvesCommunication changed to tight fitting jeans & mohawk logoT shirts with the mohawk logo soon became a hit
Communication shifted to odd messages & unexplainable “how to” guidesThis branding redirection was exemplified using models & non models in the same pictureThe aim was to get people to remember their campaigns by creating a “mismatch buzz”“people in jeans drownedunderwater with a stone attached at their feet” which was very controversial in Argentina since many people during the dictatorship was murdered that way“being a man” ad portrayed 2 gay sailors kissing
Communication changed to individual itself , their passions , fears & motivation for lifeWith the consolidation of Internet and the explosion of free fashion magazines they realize that their consumers are really smart and they decide to change their strategy and gear their brand towards very informed people, intelligent, more individualistic and most important that want to be treated intelligently creation of campaign specific web sites that provide a moreintimate relationship with their audience
1976•First body shop opened at a small street in brighton•sold only about a dozen inexpensive ‘natural’ cosmetics, all herbal creams and shampoos, all in simple packaging
Differentiated business model Why should anyone not have the freedom on the quantity they buy?With this in mind , body shop offers customers only the required amount of cosmetics specified by them be it skincare or haircare
Offering totally natural products , against testing on animals
Business model could easily be copied by competitorsLack of finance with founders for rapid expansion of brand
Developed the idea of franchising
Selected partly with their fit on “body shop ideals” a head franchisee was granted exclusive rights as user of the trade mark, distributor and, after an initial trial of running a few shops themselves, the right to sub-franchise
OVERVIEW
Key advantage of franchising
All “Body shop” built upon local market knowledge thus minimizing loss of risks and cultural clashes
1984Company gets listed on the stock market while still maintaining the franchisee model
Key strategies followed•Own warehousing & distribution network wherein products were delivered within 24 hrs.•Started manufacturing with the trade not aid policy
Body shop gained popularity worldwide mainly due to its sustainable development programmes
establishing direct trading links with producer communities in developing countries so that they can sustainably finance their own social and economic development
sourcing ingredients and accessories from disadvantaged communities around the world
OVERVIEW
2006:ACQUISITION OF BODY SHOP BY L’OREAL
STRATEGIC RATIONALE
Body shop contribution to l’oreal
Naturally oriented natural cosmetics with strong identity & values
Distribution expertise and access to direct producer channels
A leading british brand to complement L’oreal UK
L’oreal contribution to the body shop
Access to R&D practices , improved product development for body shop
Leverage L'Oreal's marketing expertise while respecting body shop identity
Established 2004 , a joint venture between L'Oreal & Nestle
2004 also saw new haircare developments: by launching Innéov Hair Mass, a product aimed at a wide range of women affected by low hair mass
The innovative feature of the product is the taurine-basedformulation, which specifically targets the bulb where the hair is made to produce clinically-proven improvements in the number, volume and quality of hair follicles
Diversification into the market of cosmetic nutritional supplements
This brand marked the launch of “nutraceutical development”
Key strategy•Capture growing demand for skin products to retain youthfulness•Tap the growing market for dietary supplements
ranges target cellulite, wrinkles, and hair loss, as well as a product that claims to help protect the skin against UV rays
The market for nutricosmetics was practically empty & unexploredExcept for a few competitors like “IMDEEN”
strong degree of relevance in the associations and skills the two brands bring to the alliance
BRAND FIT
Nestlé’s reputation as leading and competent nutrition brand is highly relevant when making a diet supplement. L’Oréal image as a beauty expert is just as relevant when making a diet supplement meant to improving the quality of your skin and hair
L’OREAL USA purchased Kiehl’s in 2000 as a part of a carefully planned acquisition strategy
The US buildup was critical to the globalization of its business
By adding brands such as redken , maybelline , kiehl’s , softsheen-carson , L’oreal had created an international brand portfolio with wide range of incomes & tastes in 140 countries
Kiehl’s skin care , body care , fragrance & hair care products were renowned for their high quality , effectiveness & cult following among celebrities
Customer base was loyal and young
No advertising at all , only through
celebrities touting their products
Little expansion , most business came from a singe neighborhood store in New
York
Unable to meet rising demand , sold itself to L'Oreal
Foray into INDIAN MARKET
india indonesia china brazil USA germany
0.3 0.83.2
10.9
26.9
36.6
Per capita consumption of skin cleans-ing
US$/year
hair oil
soap
s
toothpaste
sham
poo
skin cr
eam
fairn
ess cr
eam
cold cr
eam
0102030405060708090
100 94 91
5651
2316
1
Penetration in India %penetration %
Skin care in India is the most sought after personal care category by both local and global consumer majors given significant head room for growth (23% penetration, growing at 20% p.a.) with an estimated size of Rs25bn
Rising consumer awareness and interest, increasing income levels and favorable demographics (growing share of working women) are driving growth for the category
With a GDP of 1.9 trillion $ & rising per capita incomes India offers a lot of market potential to tap
L’oreal in indiaCame to India in 1991 with its Ultra Doux range of shampoos through its agentLaboratories garnier
1994 – laboratories garnier becomes 100% subsidiary of l’oreal
2000 – l’oreal launches its range of products in the cosmetic market
Biggest contributor to the Indian revenue - GARNIER
HAIR CARE SKIN CARE
Fructis Nutritioniste
•Garnier mainly operates in the mid price & luxury segment•In 2000, ganier garnered a 20% share in the hair colourant & dyes market
Performance is mainly attributed to being the first player in india to launch a
hair based colour below the price of Rs 100(2002)
Home highlighting kit(2005)Technological breakthrough :
Usage of fruit concentrate in all their products (combination of fruit acids , vitamin B3 . B6 , fructose & glucose
USP : strong hair
Caters mainly to the natural segment ; beauty through nature
The core brand values of " Green " and the tagline " Take Care " can be used across multiple categories without any dilution to the core brand positioning
The name “Laboratories Garnier” was changed to “Garnier” in 2001 to facilitate the brand’sacceptance in all the 5 continents it operates
Shampoo market in India generally caters to men & women ; kids & teens categoryIs totally absent
COMPETITION: PARACHUTE STARZ• Garnier as a brand is slowly targeting the entire personal care market• Adopting a segment by segment targeting strategy
The launch of Garnier Fructis kid's shampoo is expected to revive the kid's personal care category in India. The kid's hair care market is dominated by HUL's Clinic Plus brand and the other players being Parachute Starz. But recently the activities in this category has been minimal.
The entry of Garnier into the kid's segment may have been to catch them young.The new generation kids have a mind of their own and they are brand conscious. So tapping them with a variant makes sense. Moreover mothers feel that young hair /skin needs special care and adults products may be too strong for the kids.
Entry in the men’s fairness segment
FMCG companies have been increasingly focusing on catering to men’s grooming products Men’s fairness segment is currently estimated to be around Rs4.1bn and is growing ahead of overall skin care market in India
Emami entered the men's fairness cream segment in 2005 with the launch of 'Fair & Handsome' which still dominates the space with 63% share
Hindustan Unilever in 2007 launched 'Menz Active' in this sub-category, but the product has not been able to garner much share
46%
22%
3%2%
11%
4%
12%
Segmentation of Indian skin care market (%)
fairness moisturizer anti-ageing anti-marksbody care sun care others
Garnier saw a potential in the men’s fairness market& also realized the gap in the moisturizing market
With that in mind, garnier men's light & power active were launched which along with fairness also catered to “face wash” and “moisturization” instead of just offering “fairness” as the core benefit
Diversification into 2 categories with a single brand extension
STRATEGY/DIFFERENTIATION