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Case Study: L’Oreal International Marketing Strategy

L’oreal is the world’s biggest cosmetics and beauty products company. Basically it’s a French based company and its headquartered in Paris. It is focusly engaged in the field of production and marketing of concentrating on hair colours, skin care, perfumes and fragrances, make up and styling products. L’oreal products also based on dermatological and pharmaceutical fields. Their products are made for Individual and professional customers. This company operates over 130 countries like Asia, America, East and West Europe through 25 international brands.

The success of L’Oreal lies in the fact that the company succeeded in reaching out to the customers of different countries of the world, across different income ranges and cultural patterns, giving them the appropriate product they are worthy of. The area of expertise of L’Oreal being that it succeeded almost in every country that it entered. The strategies of L’Oreal was varied enough to help it and stop itself from restricting itself in a single country. L’Oreal sold its product on the basis of customer demand and country want rather than keeping the product identical across the globe. It built ample number of brands or mammoth brands entrenched to the restricted culture and which appealed to a variety of segment of the universal market instead of generalising the brand and edible in innumerable culture. L’Oreal went on to being a local product in every international market. The brand extension of L’Oreal also came in the same sector or the same segment of market . L’Oreal believed in growing its expertise in the segment it is conscious of rather than going into a completely new sector of market.

International  marketing strategy is more in-depth and broadened in one sense of the term. It is simply a principle of marketing however on a global scale. Setup of global marketing strategy has a lot to do with understanding the nature of global market itself, and most importantly the environment. Business environment across the globe has different economic, social and political influence. Thus, it is believed that selecting a global market target for examples when strategizing is a good idea.

International marketing strategy of L’Oreal is concentrated on a cross cultural arena spanning four market destinations. They are namely, 1.) Asian Market, 2.) European Market, 3.) North America Market and 4.) The African, Orient and Pacific Region.

Marketing Strategy of L’Oreal in Asia

At present L’Oreal is one of the best company in the whole world in the field of cosmetic products. The cosmetic products of the L’Oreal are widely used and specially the hair colour which was introduced by L’Oreal few years ago. L’Oreal is very famous in Asia and their products in Asia are very cheaper than the other companies and are used by majority of people in china, Thailand, Japan etc. L’Oreal is famous and very successful because of their global marketing strategies which are very helpful and also distinct from the strategies used by other companies in this field. L’Oreal in Asia uses the sustainable strategy that is of growing the company as the demands of cosmetic products in the countries like china, Thailand etc is in great amount. This company uses the strategy of suspicious brand management and they also brought the strategy of more suspicious acquisitions . The main problem that a company like L’Oreal faces in Asia is of competition given by the other companies dealing with the cosmetic products. To overcome this problem in Asia these companies use the strategy of selling good quality products at the cheaper rates than the other companies. One of the best strategies of L’Oreal in Asia is of diversification of the brand and the main reason behind this strategy by L’Oreal is to make them palatable in the local cultures. L’Oreal in Asia aims at the management of the global brands with the local variations and this means that their main aim is of becoming a local and not the foreign company in Asia. For example L’Oreal in Thailand has given local names to their stores and most of the employees present in this company, are local people of Thailand. It is because of all these strategies, L’Oreal is very successful in whole Asia.

Marketing Strategy of L’Oreal in European Market

L’Oreal is the only company which uses the strategies which also supports the people in many ways and not only in providing good quality products at cheaper rates. L’Oreal used different strategies of marketing in the European market like they used the strategy of nurturing self-esteem of the people with beauty. In France, L’Oreal created the programs like “Beauty from the heart” for helping the people made helpless by illness or any kind of negative life experiences. In the countries like UK and Germany, many of the women and also the young people regain their confidence and their self image gradually by using the cosmetics which are provided by L’Oreal. In European countries L’Oreal also used the marketing strategies like taking calculated amount of risk etc but most of the strategies are related to the growth of the people mentally and not only for the beauty or the fashion purpose. Various innovative treatment programs are launched by L’Oreal for the young people of European countries and this company also launches the free skincare and make-up workshops for the women suffering from cancer. For example in France a programme named as “La Vie, de Plus Belle” offers the free skincare and makeup for the cancer suffering women in all over the France. This helps them to cope with the treatment’s side effects and it also helps them to retain their self esteem which is very important for a patient. In the European countries L’Oreal generally uses the strategy of the management of brand by which L’Oreal had made a large amount of brands which are rooted in the local culture and which all appeals to the various segments of the global market. By using these social types of strategies for the people of Europe has helped L’Oreal in expanding their business in the whole Europe.

Marketing Strategy of L’Oreal in North American Market

North American markets are considered as a perfect place for the companies like L’Oreal, Olay, ponds etc. The best business of L’Oreal comes from the market of US. The reason for this much success is that L’Oreal uses very good global marketing strategies in North America and the other countries like Canada etc. One of the successful strategies of L’Oreal in US market is brand extensions which includes the extensions of the brands after doing a complete research. For example when L’Oreal launched a shampoo for kids they firstly made a complete research and also debated about the new launch or for an extension. In US and Canada L’Oreal uses the strategy of frequent advertisements and promotions. As we know in the present scenario proper advertisements and promotions are very important for any company because people follow the promotions and due to which the demands of the products like hair colour increases at a very rapid rate. We can clearly understand the advertisement and the promotions of L’Oreal through their media budget. L’Oreal has the twelfth largest media budget in the world which is much more than the other companies of this field. For example in the late 1990’s the expenditure of L’Oreal advertising and promotion was jumped from the 37% to around 47% of the total amount of sales. The global ad spending of L’Oreal was increased to $1.25 billion which was on par with the company named as coca cola. The best thing about this company is that they have a separate and very distinct policy of promotion in the market of US. Matrix is the number one brand of L’Oreal in US and the main reason behind the success of matrix is the frequent and distinct advertisement and promotion of the cosmetic and the hair products. The people of countries like Canada like to use new products that mean they like changes in their product after some interval of time. So by keeping this thing in mind L’Oreal uses the strategies of modifications which mean they modify their existing products according to the latest tastes and fashion of the local people. According to latest surveys of the people of L’Oreal company, majority of the profits of this company is because of US and these perfect strategies used by this company in US is the reason behind this type of success specially in north American market. (Helping vulnerable people)

Marketing Strategy of L’Oreal in Africa, Orient and Pacific Region

Like other countries in the world L’Oreal is also very successful and equally famous in Africa and pacific region. L’Oreal entered into the market of India in the year 1997 and at that there was not much awareness about the sniff of structure in the industry of hairdressing. In the countries like UAE and Australia, proper and the organized education was totally absent and perfect and well trained hairdressers were also not present at that time. Despite of all these problems L’Oreal in India made some of the strategies and one of the best strategies of L’Oreal is that they launched various technical training centers and they even opened a club of only the hairdressers. IN UAE, L’Oreal products which were professional began selling through parisienne salons while the other companies have begun retailing their range of hair color to power growth. L’Oreal uses a global marketing strategy of launching its successful brands all around the world. For example in February of this year only, L’Oreal made an announcement of the arrival of the matrix which is the number one brand of L’Oreal in US to India, UAE etc with a reason of adding range of hair products to their existing products at affordable prices. The main thing about this company is that they make strategies according to the local culture of different countries and not uses the same strategies in every country. Because of all these strategies, L’Oreal gains a huge profit from Europe every year.

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Ombre, Tie-Dye, Splat Hair: Trends or Fads? “Pull” and “Push” Social Media Strategies at L’Oréal Paris – Case Solution

The case study "Ombre, Tie-Dye, Splat Hair: Trends or Fads?" focuses on a new social media strategy by L'Oréal, which is based on the idea of listening to consumers first, then developing a product, which meets their needs, before marketing it. Initially, the company partnered with Google to identify emerging styles, which might endure. Then, it used social media to define the name, positioning, and launch strategy of the product.

​Katrina Bens; David Dubois Harvard Business Review ( INS676-PDF-ENG ) June 23, 2014

Case questions answered:

• What’s the target market of L’Oreal? What’s L’Oreal’s positioning against its competitors? Summarize L’Oreal’s branding and 4Ps and discuss how these strategies align with their targeting and positioning strategies.
• Use web listening tools to research the three styles identified (Ombre, Tie-Dye, Splat Hair). Evaluate which is a trend (i.e., one that endures change in style) rather than a fad (i.e., a short-term craze).
• Given the trend that you choose, how do you advise L’Oreal Paris to leverage social media to build the marketing plan for the new brand?

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Ombre, Tie-Dye, Splat Hair: Trends or Fads? "Pull" and "Push" Social Media Strategies at L'Oréal Paris Case Answers

Summary – ombre, tie-dye, splat hair: trends or fads “pull” and “push” social media strategies at l’oréal paris.

In this case, Marie Gulin and her Marketing team at L’Oréal Paris are determined to come up with a new, innovative hair product that will boost their company and brand above the competition. The potential trends they were looking to identify were the rising popularity of ombre, tie-dye, and splat hair coloring, all of which presented different opportunities and challenges.

Not only are they looking to create a new product, but they must sift through various fads and define the stable trends in the hair coloring market.

If L’Oréal missed and picked up on a fad rather than a trend, there could be serious revenue and branding implications. Further complicating the matter is that L’Oréal needs to come up with a new product that will still be consistent with the company and brand values as well as attract new consumers.

Finally, the success of this product launch would be very dependent on marketing efforts, especially the execution of their strategy via social media.

Deciding which social platforms would reach their target market, what content to push (and pull) over those platforms, and how to properly engage their consumers to build positive associations and awareness, purchase, and repeat purchases.

L’Oréal’s ability to leverage its digital marketing strategy into its new hair dye product in a challenging and changing market is key.

1.) What’s the target market of L’Oreal? What’s L’Oreal’s positioning against its competitors? Summarize L’Oreal’s branding and 4Ps and discuss how these strategies align with their targeting and positioning strategies.

L’Oréal has a wide appeal due to its diverse product line and benefits derived from its products. Both men and women use their products. However, the products are mostly targeted at women.

The men that do use it are generally aging, looking to cover up their gray hairs and feel revitalized.

The women’s target market can be segmented threefold: the 20-30-year-olds urban professionals looking to add a little color to their style, the 30-50-year-olds who have more sophisticated needs, and the aging 50+-year-olds who need gray coverage and a more basic palette of colors.

With a fairly diverse target market, the brand can afford to try a variety of things but also needs to make sure it executes them properly to convert each segment into loyal.

Positioned very well against its competition (P&G, Unilever, etc.), L’Oréal has become an industry leader due to its business acumen, research and development, diversity, and accessibility of its products.

It is also important to note they have mass-marketed their brands, bringing salon-quality care to the household at reasonable prices. This is a value-based position and is easy to convert to if one is a value-seeking consumer, especially for the quality of the products.

In terms of branding, L’Oréal is a parent brand (along with Garnier and Maybelline) with several children’s brands, like Preference, Excellence, and their Casting Crème Gloss, in the hair dye sector.

While these smaller brands are targeted at various age ranges, they are more mass-marketed and could have potentially been more aptly segmented to capture more representative groups.

Their products are high quality and innovative, in both quantity and quality, making them an industry leader and pioneer in bringing their products from the salon to the bathroom. In terms of pricing, they are…

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Building a  Culture of Innovation

How L’Oréal empowers its employees to innovate using Viima

About L’Oréal & Nihon L’Oréal

Industry : Beauty  Size : 2700 employees    Location : Japan

Founded more than 110 years ago, L’Oréal Group is the 1st cosmetic group worldwide, and employs 88 000 people across 150 countries . The group has currently 21 research centers , one of which is located in Japan, the subject of our case study. Nihon L’Oréal has been operating for nearly 40 years in Japan and it has over 200 researchers working in skincare, make-up and hair care labs.

In brief, the outcomes of a systematic use of Viima at Nihon L’Oréal :

• Leverage the knowledge of 200 researchers to solve difficult technical problems
• Improved communication  between employees and management
• Reinforce a culture of innovation, mutual respect and positive communication
• Improvement of internal processes
• Optimized the efficiency of meeting practices
• Discover the best way to achieve the overall strategic goals of L’Oréal Group.

The Story of Nihon L’Oréal

Historically, research and innovation have been at the heart of L’Oréal’s philosophy, and to this day it’s a key pillar of their business driver. Nihon L’Oréal and the Research & Innovation Center have been operating in Japan for 40 years now and today it has 2700 employees working on unique and cutting-edge solutions  for tomorrow’s consumers. Nihon L’Oréal operates in the  second largest market in the world , and must answer the constant need to discover, invent and changing beauty needs and aspirations.

The evolving lifestyle and the emergence of a new beauty era, as well as the recent difficulties that hit all industries around the globe, brought a new set of challenges to the beauty and cosmetics industry. Expectations and needs have shifted considerably. Customers expect a more personalized experience in choosing their products and want an immersive and unique experience from brands.

The Challenge

To meet all these needs and build the future of the beauty industry in a highly competitive market, Nihon L’Oréal strives to be a constant source of innovations, ideas and technologies while adding value to the entire L’Oréal Group’s growth. At the same time, Nihon L’Oréal is also operating in East Asia, an area where respect for experience and seniority are highly valued and are essential parts of the national culture. This means that organizations are also influenced by the local culture and have more hierarchical structures than in many Western cultures.  While such organizational structures and respect of seniority have many upsides, it can lead to some communication challenges in both directions, as well as make junior employees more apprehensive in voicing concerns, as well as expressing their ideas.

The Solution

As part of their strategic mission to identify new business opportunities and ideas, Nihon L’Oréal wanted to improve communication between employees and management , and to engage more employees into solving scientific and technical problems that help develop and improve products.  To build an innovation culture is essential to reinforce the positive culture within the organization and acknowledge and praise employees. However, showing respect and admiration to colleagues doesn't come naturally in the context of remote work. To support all this strategic work, Nihon L’Oréal  chose Viima as their go-to solution for collaborative idea development, feedback collection and transfer of tacit knowledge into more refined ideas. For this, they created dozens of boards in Viima, some used by the R&D department and others used by smaller teams for internal brainstorming on specific topics.

With Viima, L’Oréal addressed five different areas

Cross-functional collaboration.

Having over 200 researchers, using Viima boards allowed L’Oréal to leverage their in-depth expertise and solve difficult problems. This also saved a lot of time and lead to much better outcomes.

Reinforce a positive organisational culture

With over 200 researchers in the organization, the use of Viima boards allowed L’Oréal to leverage their in-depth expertise and solve difficult problems. This also saved a lot of time and lead to much better outcomes.

Achieve strategic goals

After the early pulse survey that sets the strategic goals across L’Oréal Group, Nihon L’Oréal is using Viima to find the best way to achieve the overall goals.

Continuous Improvement

Different teams found new ways to leverage Viima and use it to improve on their internal processes and to get the best outcomes of their meetings and working processes.

Improve communication across the organization

Junior employees are now heard and management can have an even better understanding of the concerns and opportunities perceived by employees. Employees and top management got closer which brought clarity to the actions required to improve the working environment. 

The Results

In such large organizations like L’Oréal, it’s not easy to pinpoint exact actions that lead to innovation. There’s an entire ecosystem built to work towards the common goal of innovation. A big part of this ecosystem is made of  idea collection and development, enhanced flow of information and knowledge  as well as an  excellent communication  across different levels and parts of the organization. Thanks to Viima, Nihon L’Oréal is now collecting more ideas, solving more scientific issues that help develop new products and nurtures a culture where all employees have a voice and a role to play.

Viima allows everyone in the company to raise ideas, questions or concerns, directly to the top management team, and in an anonymous way.

It's a powerful tool to get feedback in full transparency and find adapted solutions in a very timely manner.

Did you know?

20,000+ organizations across the globe innovate with Viima.

Discover how they use Viima to innovate, grow, cut costs, and achieve their business goals.

Signify, the world leader in lighting for professionals is using Viima for collaboration and co-creation.

Viima takes great pride in enabling innovation in forward-thinking organizations, like L’Oréal .

You too, can drive more innovation in your organization! Start with a 7-day free trial, or book a demo for a guided tour .

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