L'Oreal, that was were only available in 1909 with a French chemist named Eugene Schueller now, is the major cosmetic and beauty company in the whole world. With a century of proficiency in cosmetics, the company has 23 global brands in 130 countries around the world and 649 patents in 2009 2009. The company has made its presence in every major markets on earth. The business's main focus is on hair insignia, skincare, protection from sun, perfumes, etc. This company is more vigorous in dermatology and pharmacy fields and it is leading patent holder in nanotechnology in USA. The business makes up about 50% sales outside Europe and has acquired brands in those countries. Not merely to women, but the company offers beauty products to even men. The brands of the company are grouped by the particular markets like mass, professional brands, luxury products and active cosmetics. The "Consumer products" are high technology ones at aggressive costs through mass-marketing trade channels. The "Professional products" is a pool of brands which meet up with the needs of salons and customers an considerable variety of modern products. Next, the "Luxury products" are high-status brands that present customers with products and finest quality services in stores and travel outlets. The "Ac
tive cosmetics" are mainly cosmetics related to skin bought from pharmacies and need advice of dermatologists. The business is known because of its steady quality of products worldwide and priority to diversity. The main focus of the company is on research and development with research work being done in 14 countries to build up new products for the customers. For the past 19 year, the growth rates of the business have been around in double digit numbers. With sales at 14. 029 billion, the net profit of the company was 1. 653 billion in 2003. 96. 7% sales occurred in cosmetic activities and rest in dermatology. The company conducts Brandstorm contest, a marketing related game for students round the world. L'Oreal and UNESCO in partnership established awards to recognize women with exceptional research work. The business promotes its brands through renowned celebrities like Beyonce, Freida, etc. (About Loreal)
Marketing Globalization:
Globalization has influenced every filed and marketing is no exception for it. Marketing today is not the same from what it used to be earlier due to free flow of knowledge and IT. Businesses will have to require different and brand new strategies to be implemented to handle the competition surrounding the world. Marketing globalization is marketing on a wide-reaching scale taking business advantage of operational differences and similarities worldwide and opportunities in order to meet the global objectives. The 4 P's are influenced when a company shifts to global from domestic. The affect on Product due to marketing globalization is a company produces single product and makes adjustments to fit the targeted market. Same product has to have varying Prices in several markets. The way in which the merchandise is put is also a matter of concern; the distribution is influenced from market to market because of difference in competition offered in various markets. Same message in several parts of the world might not be received the same way in every places; hence the Promotion should be achieved keeping in mind several factors that vary from place to place. Through global marketing a product can be introduced by advertisements. This lowers marketing costs with increasing power and scope. It provides steady brand image, goods can be leveraged fast and effectively with uniform marketing practices all around the globe. Four important marketing constituents have to be looked after to investigate globalization of marketing: Customers, Brands, target market and academic field. There are different types of strategies in this category. Incorporated Global ONLINE MARKETING STRATEGY under which many of the components of marketing policy have been made all over the world. Global Product Class Strategy which is the slightest integrated type of the above. A firm that wants to target exactly the same segment in many places of the world employs the Global Segment Strategy. Globalization along each marketing mix constituent like pricing, place, promotion is performed using Global Marketing Mix Constituents Strategy. Company that wants to globalize its products uses Global Product Strategy. When same logo can be used worldwide, it is named Global Branding Strategy. A business which acquired different other businesses could use different local brands and rely upon a same ad worldwide; this policy is Global Ad Strategy. The truth is, when several policy from the above are mixed, it is Amalgamated Global Marketing Strategy. (Edmondson, 1999)
L'Oreal ONLINE MARKETING STRATEGY in India:
Many brands like the L'Oreal tried a lot of ground breaking and new marketing policies that paid-off. Today, the success of the business is seen by its 41. 5% share in hair conditioner market, 20% in hair coloring, 6. 5 in skincare and 4. 6 in shampoo markets. L'Oreal is India's foremost player in beauty salon products sector.
The company's focus is on the two 2 most populated classes of the united states vis- -vis the middle and the upper classes. Innovation for local markets was done in both product and price along with a forceful online marketing strategy proved profitable and effective for the company.
GOING LOCAL:
For the customer product brands like Garnier, the company has chosen to adapt to the neighboring culture and preference was the main priority of the firm. For example, Garnier restructured its superior hair-coloring goods which demanded more man power and manual work in order to blend the dye. But, it was found that the clients were prepared to buy the products at 25 % of the retailing price prevailing worldwide. Introduction of Oil-based shampoo i. e. Oil blended with Garnier Fructis, is proven to be another success. This is done to equivalent the usage of hair oil combined with the goods for earlier-dormant parts like the wrinkle free creams and skincare for men. India's head of procedure Dinesh Dayal call it 'Indo-vation'. Aside from this, informing people about the brand and making them aware through celebrities in television set advertisings proved critical in gaining a solid grip. When it was initially launched in 1997, the company targeted the unstructured salon industry to sell its products. The company has started to educate the hair stylists for which five regional centers to provide training were opened. International Hairdressing Academy premiered in 2006 in Mumbai to offer basic and higher styling training and invites instructors even from abroad to arrange workshops and seminars.
INCREASING THE CLIENT BASE:
Product penetration is not fast in the budding markets providing insufficient scope for growth. Even though the products prosper and the use is more, they should be upgraded to improve the performance. Which happens not merely in a section but included in this.
Along with the blissful luxury products that are showing a growing trend, the focus of the company is on every sector as each has their own preference.
SEGMENTING MARKETING:
As per experts, even if the luxury products are selling in more developed cities like Bangalore, Hyderabad, Mumbai, etc, the small customer base in these cities make these highly competitive markets allow it be for cosmetics, perfumes or any other products. There are greater opportunities in two-tier cities that happen to be developing faster but are lagging behind in luxury products. There is also a large selection of growth in middle market where customers are willing to consume products, but of less cost which is a challenge for worldwide brands like L'Oreal. With the products costlier for the middle class to cover, the business has introduced the same product in smaller trail packs which increased its reach to every sector of the society. The competition in this area is mainly from local brands. It was during setting up of the business that tv viewing exploded in India. Women making profits and exposure to global culture are two main key points.
Viral Marketing, an extremely popular technique used by companies to advertise its products was adopted by L'Oreal to market its product, Garnier Fructis shampoo in the Indian markets. The firm brought out a competition in which consumers can register on a website and develop a relationship with the business's brand. With this, they even invited their friends to go to and this would enhance the scores. A record of 76, 000 customers got registered and the hyperlink was forwarded to around 82, 000 others, a survey indicated. The company was not expecting profits then and there but it was looking for long term profits that was the basic concept underlying in Viral Marketing. Garnier was positioned mainly as something for youngsters and teenage girls. That is evidential from the advertisements of Garnier products. A recent ad had a girl giving advising her mother to provide it a go and hence the product is promoted even among the list of middle-aged.
So, increasing the target segment's base provides new market to the marketers only thing they need to be successful in making the consumers believe the second-rung section. (Brannigan, 2008)
L'Oreal ONLINE MARKETING STRATEGY In China, Japan:
Customers of different countries and from different parts of the world have their own expectations about the merchandise they purchase. Companies like L'Oreal, dealing with markets across the world should take these issues under consideration. The effectiveness in marketing is measured by the way a company adopts to the local cultural values. Culture was proven to influence the use of cosmetics. The brands of the business are more customary in Asia while the make of product is more of western. Product brands are made for the purpose of positioning and differentiation and positioning policies are usually more of Western. Both they are against supplementary brands of company's portfolio of brands. Not only does standardization or adaptation bother the product but also the way they may be packed and other extra services. A standardized product can be sold in any country the same way thereby reducing the excess costs. Extreme standardization of a product is known as globalization of a product. Success in one country doesn't mean the same product would achieve success everywhere else. The factors related to adoption of product are: Physical Attribute, Packaging, Service Attributes and Symbolic Attributes. The firm had considered, understanding of the regional language. The message to be conveyed can be influenced by the character, language and structure of words. The firm's head chooses to walk through the streets to directly find out what people take into account the firm's products. Within an incident, Owen-Jones, CEO of L'Oreal stopped two women going on a street and asked if they used the firm's products for his or her hair. The women when gave a negative response, the individual he himself escorted these to a near by store and offered the hair-color kits free for the coffee lover. These kinds of incidents give him knowledge and keep his executives sharp. Paris has a luxury association in Asia. The firm used this as an advantage while entering the Asian market. The people of Japan are more reluctant to products from outside; they don't accept any products that happen to be from outside Japan. Hence, L'Oreal Paris established Japanese laboratory that helps them to understand and cope up with this aspect of culture of Japanese. Unlike Japanese, the people of China and Korea are confident about products from USA and France and hence they accept products from the West than of their own. The labs in Japan and China also helped to increase the awareness about the brand by spreading L'Oreal's name through the research and through its existence in the country. The primary motto of L'Oreal Paris is not to become L'Oreal Japan or L'Oreal China in Japan or China respectively, L'Oreal Paris is just adapted to the respective country. Brand image carried by the L'Oreal as luxury made its products to be sold at an increased price than at additional places. (Christine, Spring 2006)
When it involves product decision making in Asia, 5 important things should be taken care of:
Whether the merchandise is acceptable on the market.
Brand name related decisions and selling features.
Labeling, packing and repacking needs.
Service needs.
How the culture influences the products.
The company's main focus is to know more about the markets of Asia, behaviors of customers and what they expect. Tests and surveys are conducted by the firm to get details about the various types of Chinese skin according to their habits, etc.
The company also collects experience from the customers about its products giving a product to consumer test for a few days and taking feedback from the customers. Additionally feedback method, experts are used to check how the used the merchandise and what the impacts were. L'Oreal also uses CRM (Consumer Reply Management) to be able to gain more understanding of the clients. L'Oreal adopts different product mix for different countries. Example, products in North Europe and Asia are lighter in color. In Japan, products are made separate in comparison to other countries as they think these are special in needs. L'Oreal has put Sun Protection Factor for women in Asian countries to be safe guarded from sunlight. (Brannigan, 2008)
Japanese give importance to packing combined with the aesthetic of something. Even smaller imperfections may cause the product's rejection. Equally important is the scale and design standards. The products of the firm aren't bought from supermarkets in mass mainly in Japan, the products sold through selective marketing. Rigorous training for 2 weeks minimum is directed at salespersons as Japanese people are definitely more alert to cosmetics. L'Oreal tests your skin of people in a special way in order to advice them correct product to get desired results. L'Oreal spends a lot on ads; each country has a website using its regional language. The advertisements in several parts vary with place. The advertisements in China are different from those in Sweden.
L'Oreal ONLINE MARKETING STRATEGY In Netherlands:
Dutch market is a faster growing market with higher per capital income and increasing quantity of working women. The Dutch women spend a lot on cosmetics and toiletries which ultimately shows these are more aware of the cosmetics. Accurate results of color are main value drivers for women from Dutch. A lot of the Dutch women (47%) use hair colorant, they may be brand loyal. The Dutch ladies prefer lighter shades and 73% of these use long lasting colorants. Women from Dutch care a lot about 100 % natural ingredients in the cosmetics they use. In a market like this, performance matters a lot so that the customers are brand loyal, the loyalty increases with increasing age.
The main objective of L'Oreal has been to promote the brand presence of Garnier in Netherlands without negatively impacting its present market share. The main focus of the company has been to increase the awareness about Garnier family products, to reduce cannibalization through introducing Garnier products also to meet up with the customer needs of the Dutch. L'Oreal develops products that best suits the marketplace needs. A couple of two strategies employed by the business: Short Run for 0-12 months and long-term from 12- 36 months. While the former includes launching Garnier Synergie skincare cosmetics and increasing the distribution of L'Oreal Recital, the later includes development and improvement of the L'Oreal and Garnier products and observe with Synergie the anti-aging cosmetics. The brand of L'Oreal is well accepted by the Dutch customers. The demand for products range from high quality, mid-market to high quality and high ending products. But the brand occurrence of Garnier among Dutch women is very less. The high ending, high quality product Recital is losing its share in market due to its aggressive allotment policy and competition from local brands and salons. The business avoided cannibalization by bringing out new product name L'Oreal Plenitude. With its high reputation and the elderly seeking better anti-aging cosmetics, the product is well located in the market. Garnier Belle Couleur is reformatted in order to meet up with the requirements of the targeted segment. The product offers strong positioning statement and as this statement resonates the Dutch people, the merchandise is easily accepted on the market. L'Oreal is well known for positioning its products as per the needs of the customers. As the customers of Dutch are regarded as more brand aware and loyal, proper positioning of the product is more very important to both short-term and long-term survival. Synergie, something of L'Oreal is put with this aspect and is well known by worry-free, natural cream for skincare. L'Oreal has high value, mid-value, upper end and budget products for different group of customers. The pricing is manufactured according to the segment it will be concentrated upon. High end products are more priced in comparison with the other groups and are also positioned for particular groups. The positioning of something in L'Oreal is associated with capabilities, needs of the consumers and competitive landscape. The prices of services are fixed so to be able to please the value-conscious customers. L'Oreal knows that for success of any product, an effective co-ordination between salesperson and distributor is needed and this, the business maintains through different means. It offers customized literature about any new product launched, trains the new employs to be able to face the customers who are aware about the cosmetics. The firm educates the targeted market about the consumption and advantages of the product and also sells bundling options to the retailers. The firm offers free trail offers through mass mailing to the selected neighborhoods and since known, the firm spends a lot on advertisements because they are the methods which will take the company's message to focus on market. It also organizes local charity events to make its word spread all over. Demonstrations about the merchandise are made at shopping malls and near distribution outlets. Advertising isn't just done through TV advertisings but also out door advertising is done like those in bus shelters, malls and public transits. Every business is dependant on customer satisfaction, if the product reaches the client in right place and at the right time, the product is likely to be a success. L'Oreal's improvements are mainly based on the feedback they get back from customers once they use something for a specific period. The firm even organizes competitions wherein folks from around 44 countries get together to participate. Not merely does the metrics like profit, revenue, sales volume and market share, but also retailer penetration, retail margins, market share against share of voice and awareness of brand and customer's purchase intentions are used to measure the success of the business.
L'Oreal ONLINE MARKETING STRATEGY In USA:
The major profits earned by L'Oreal are earned from USA with 15. 9% of the whole profits earned by the company accounting for all of us only. It owns several brands including Garnier, Maybelline, etc. Both main competitors of L'Oreal USA are Revlon, Proctor and Gamble Company. Packaging of every product sold in US was made captive and informative. The printing of information had a unique purpose i. e. , to push the products in the shops without dedicated salespersons which ultimately shows that the client should get educated through the instructional package. With this, customers would learn about the products and also learn products as they don't have anyone to guide them and they have to find the needed product independently. The business had good collaborations with the channel partners that have been of all importance for distribution of the products across markets. The relations with retail shop owners were worth focusing on, which ranged from very high class stores like Les Galeries Lafayette to small beauty salon and beauty parlors which particular products of the firm like Salon Classics targeted. These relations were extended to operators like the Wal-Mart and the K-Mart. Branding and communicating information about the merchandise also was of a crucial success feature at L'Oreal. Proper collaboration with the agencies like 'Publicis' was very important to send the message about each sub-brand inside a market. Collaborations with agencies like 'AC Nielsen' helped the company in introduction and maintaining of services and product portfolio through tracking of quantitative as well as qualitative issues of the target market. Collaboration was also made using U. S Licensee, Cosmair by which the salon products were marketed. Certain requirements fulfilled by each product were more than fundamental physiological needs and comprehended to 'belonging' and self-esteem' factors which are important for a person's sense of closeness, self-importance and necessity for respect using their peers. This is the reason behind the business's ad campaign with a punch line that means 'as you are worth it'. The type of goods exceeded the functional values and exciting attachment that customer thought was also worth focusing on to differentiate and create 'star' goods. This policy is adverted into the 'Consumer Value Hierarchy' that identifies basic, improved and core product values.
The firm understands the high needs of customers and shows them that it is tempting with their needs. The company's strategy involved licensing its Technique Professionelle, the Salon Classics and Cosmair. The positioning of few products like the plenitude was 'high-end greatest performance but still accessible' in a competitive market and still the company cannot attract many from the mass-market. Keeping in view this opportunity, the firm launched the 'Class of Mass' policy where even high-end cosmetics were sold at 30% premium in comparison to competitors. Another significant part of L'Oreal was the policy was launched in incremental basis. Example, only moisturizing cream was launched first as invention in the purification segment was considered hard to accomplish. Along with, awareness was created through print campaign which evolved to integrate TV as spots. To roll-out the Plenitude from the US market, the management used 'blast' type strategy which introduced 14 SKU's just within3 categories on the market which didn't workout properly in U. S that led to confusion among customers. When compared with the strategy adopted in France by L'Oreal for Plenitude, a new group of product was launched in France while an already existing product was brought to the U. S market. A fundamental theory of L'Oreal's policy was to provide quality, innovation along with expansion in the U. S market was educating the buyer when they choose the products. MEDICAL and Beauty stores did not have trained workers to tell the value of a particular product. Even while the customers are aware of the lipsticks, nail-polishes and other subtle products, the purchase depended about how effectively the merchandise were packed.
Why L'Oreal MUST Understand Cultural Differences?
A business is not restricted by nationals or political constraints, liberalization and globalization brought out the earth major changes. With increased IT and knowledge sharing, there is certainly more customer focused method of win in a competitive world like today's. Selling across different cultures worldwide is a booming business with the earth moving nearer to the global economy. Many countries around the world have started selling their products in other parts of the world and the amount of success without giving much importance to the neighborhood culture is available to be less. L'Oreal is one such type of companies whose branches can be found surrounded by customers whose tastes, expectations change from location to place. Proper importance should get to these changing needs of customers and proper changes are to be made to cope up with the values of the country.
Knowing the cultural distinctions is very important for survival of any business. Combined with the local cultures, there's also other issues to be addressed like the political and business factors while preparing marketing policies. Neglecting the cultural considerations not only brings about negative response for something but can also impact the firm's international image. A number of countries frown at the consumption of colors, symbols mainly in experiences with their lives. Even colors appeal different in different countries. Gender is another matter of importance to be taken care of by the firm. To market a dermatological product to the client is more different in Russia in comparison with US, UK, etc as the number of female doctors are higher in Russia than male doctors while males dominate female doctors in the latter countries. Even gender esteem is a matter of notable implication in countries India, Japan where in fact the power to make a decision lies with men ultimately. Past and present political influence in this country can also influence the way people read or hear. Some countries wouldn't normally give their citizens a freedom to choose while some may seek goods with government's approval seal which seems trustier for these people.
The society where individual thought was suppressed for long time, people might not have the capacity to put into practice a rational way of thinking. And so, purchasing the product with their choice may be difficult for them. These individuals need each and every aspect of the product explained in detail to generate confidence in them about the merchandise. Family structures are also a matter of concern. Family structures in Parts of asia change from those of many other countries worldwide. Considerations of the family rule respect in every matter even for small individual actions. People who have lived under such circumstances place family decision uppermost compared to their own. As seniors expect respect, they may have command on almost all small matters associated with the family members.
A most marked factor in selling to Asian cultures is avoiding 'loss of face'. The Chinese have a culture of business that is dependant on the status in the society and fame of the individuals. Doing whatever degrades the non-public standing of Chinese, they think is equal to insulting them copiously. Using any insulting conditions in advertisements or during promotions will destroy the marketing stone dead. In few countries like India and China, tradition is very important to the people and the esteemed. Unity in diversity has been way of life in India for Hundreds of years.
The socio-economic status and the overall perception of the clients about any related product is usually to be taken care of. Some individuals believe the more expensive something is, a lot more is its value and quality while others look for products with better quality but at a lesser price. In countries like India, religious beliefs are also of importance to the society. Religion impacts every part of an individual including reaction and respond to something. Educational, sensitive and informative data is well received in the Indian markets.
With careful study of the distinction between different countries, a company can modify the right group of words to increase the reach of its products and even impact the international market. (Welsh, 2005)
Conclusion
L'Oreal is a growing company which uses different approaches for different parts of the world with changes in Price to Promotion. It has lead to success of the business worldwide. Before entering a market, the business has taken into account all the cultural areas of the marketplace which it is entering which helped it to grow. Continuous innovation of services, understanding the clients and reaching every sector of the clients has been the key area of focus of the company. The firm did not finish up with selling/delivering the merchandise to the client but also offers considered, how the customer was thinking about the product through its feedback mechanism and CRM. The feedback then used to make continuous improvements to the merchandise.
Neither did the company use same marketing strategy for the merchandise about the world; it even changed the product mix among few countries. The present day's success of L'Oreal can be attributed to its varying strategies for different customers. Really the only market in which it saw failure was the U. S market through the launch of its new product Plenitude as it includes didn't differentiate between your French and U. S market. Hence, different places in the world demand different ways of be employed which can be done through a thorough research about the mark market.
