Marketing Management Lecturer: Dr. Yusniza kamarulzaman Case Study Presentation “L’Oreal Nederland B.V” Presented by: Mohammad Shahid CGA 070092 Mohammad Zia Aslam CGA 070040

L’Oreal

L’Oreal is one of the largest cosmetic manufacturer company in the world.

L’Oreal’s subsidiaries are in more than 100 countries in the world.

L’Oreal’s European subsidiaries are in 2 group- 1: Major countries (England ,France, Germany and

Italy) 2: Minor Countries (Netherlands and Nine other

European Union Nations)

L’Oreal

L’Oreal market its products under its own name as well as under a number of other individual and family brand names, for example Garnier, Lancome line of cosmetic , L’Oreal brand hair care product etc.

France alone contributed 24% of the total world sales,

42% of the sales in Europe excluding France, U.S.A and Canada accounted for 20% and 14% in other parts of the world.

L’Oreal

Issue:

Yolanda van der Zande , director of the Netherlands subsidiary ,faced two tough decision and was discussing them with ,her marketing manager for cosmetic and toiletries. “We have to decide whether to introduce the Synergie skin care line and Belle Couleur permanent hair colorants”.

The Dutch market:

The Dutch market accounted for 4% of the total European union market.

The fastest growing population segments were 25 or older.

The number of women working outside of the home is increasing.

As a result women have more Disposable income and most of them were using it buy cosmetics for use on a daily basis.

Despite of the rising income Dutch women still shop for value, especially in the cosmetic and toiletries.

Synergie:

Snergie was a line of facial skin care products consisting of moisturizing cream, anti-aging cream, antiwrinkle cream, cleansing milk, mask and cleansing gel made with natural ingredients. Its advertisement slogan in France was “The alliance of science and nature to prolong the youth of your skin”.

Dutch Skin Care Market:

The skin care market was the second largest sector of the Dutch cosmetic and toiletry market, growing at a annual rate of 12%.

Fast growing category in skin care market of anti-aging and antiwrinkle creams.

Drugstore and Supermarket accounted for 82% of the Sales of mid and lower price skin care product.

The largest unit sales were from chians of stores and supermarket but maximum dollar sales from Large independent stores.

Dutch Skin Care Market: con’t

The competirors for synergie were Dr.vd Hoog, Oil of OLaz (Procter &Gamble), Plentitude (L’Oreal).

An Innovative product or new product could be quickly copied , retailer could develop and introduce their own product in four months and manufacturers in 6 months with advertisement campaign.

Belle Couleur:

Belle Couleur was a line of permanent hair coloring products. It has been sold in France for the last two decades with the brand image:

“natural colors, cover all gray”.

Dutch Hair Coloring Market:

There were two types of hair coloring products:

1: Semi-permanent 2: Permanent

73 % of the who color their hairs used permanent color in the past but for the last four years the trend had been to semi-permanent.

The majority of the sales were in chain drugstore 57%, with 40% equally split between large and small independent drugstore.

Hair saloon were indirect competitor in the hair coloring market.

Synergie Market Research Findings:

Dutch women typically purchase facial creams only once or twice a year.

Dutch women showing interest in natural products.

The participant reacted positively to products.

Belle Couleur Market Research Findings:

Consumer perceived permanent hair color as a technical product and its use was very risky.

When considering a new brands, both first time and current user carefully read the package information and asked store personnel for advice.

Hair colorant was almost exclusively purchased in drugstores.

33% of the women color hair to achieve warm/red colur,17% lighten the hair color and 29% for covering gray.

Belle Couleur Market Research Findings: Con’t

For Belle Couleur , buying intention increased after the price was given but decreased after the use ,opposite to the usual concept test (synergy line) results.

The reason was, the product was not modified for Dutch test .Dutch women tended towards naturally lighter hair color and the French towards darker shades.

Market Advantages:

Existence of the company in the market with good market share and brand image about offerings

Overall image of the company (innovation oriented) and its resources

Positive trends in the market about both products like “Natural Ingredients” and taking hair coloring as “fashion statement”

Week competitors as none of them had product positioning statement but L’Oreal already was using “Natural Ingredients” and “covering grey with natural colors”

Perception of retailers about the company that it offers high-quality, innovative products supported with good in-store merchandising

RECOMMENDATIONS:

Synergie Skin Care Problem: Customers loyalty with current

brands Reason: Users self-perception with brand

image because of un-familiarity with technical product descriptions

Strategy: Product awareness campaign i.e. Product Positioning, as increasing interest in products with “Natural” ingredients is already there in the segment

RECOMMENDATIONS: Cont.

Belle Couleur: Problem: Perception that its risky to use a

technical product like permanent hair color Reason: Again it’s the users careful behavior

about package info and advice from store personnel

Strategy: Product awareness (Positioning) and placement by exploiting the opportunity of hair coloring as a fashion