L’oreal and the Globalization of American Beauty Essay

(Part 2)

 

Weaknesses:

 

• L’Oreal is exclusively a beauty company, predominately in cosmetics (95.4%). They should diversify into other areas.
Opportunities:
• L’Oreal is a strong company that should diversify into other commodities.

 

Threats:

 

• Being the number one beauty company makes others watch and aspire to be you. L’Oreal must not become complacent as other cosmetics companies grow.
• The economy is in a recession and beauty products are not a necessity.

 

Innovations and Recommendations:

 

At L’Oreal, they develop clever, innovative ways to make the right kinds of products to suit the customer’s needs. This is accomplished by strategically purchasing companies that reach one certain market segment. After acquiring these companies, L’Oreal gives them a facelift and then introduces them around the world. Maybelline and Soft Sheen-Carson are examples of local cosmetic companies that L’Oreal successfully marketed to the world.

Oreal’s CEO Lindsay Owen-Jones notes: “It’s a very carefully crafted portfolio . . . each brand is positioned on a very precise market segment which overlaps as little as possible with others.”(Kotler, Keller, 2006, p. 695) This creates an illusion that L’Oreal’s products were created for the individual. Women have used cosmetics for years, and it is often difficult to find a product that perfectly matches your desires (whether it is radiant skin, or silky hair). L’Oreal has taken the time to develop many small marketing niches, which allows the individual to feel pampered.

L’Oreal’s challenge is to continue to think creatively about how to market their products to fulfill the dreams of most of the world’s population, making people feel special, beautiful, sexy or even youthful. Two of the more common ways L’Oreal accomplishes this is by promoting their products on sexy models and actresses and secondly, with marketing slogans like, “Because You’re Worth It.” This slogan says it all, I deserve the very best, and L’Oreal does that. They satisfy my needs, by making me desirable and beautiful.

L’Oreal should continue with their large R & D expenditures, which have led to numerous breakthroughs and a strong technological reputation. In 2002, more than three percent of L’Oreal’s turnover was invested in R & D. (Loreal, n. d.) L’Oreal should invest more heavily in their R & D to foster advances in their current products and to promote the development of new product lines.

Innovative describes L’Oreal, who provides an opportunity for undergraduate students to compete on a marketing campaign. Annually, L’Oreal provides a case study where students from leading universities and different countries compete. (Newswire, 2004) “For the students, it is a unique learning opportunity based on a real life business model and a real brand. For L’Oreal USA, it provides nontraditional access to the best creative talent across the country.” (Brankweek, 2006) What a great way to promote the company and learn from the younger generations! L’Oreal, the innovative, marketing genius!

Coke and L’Oreal are developing a new tea based beverage, which is targeted toward the active, influential, and image conscious women over the age of 25. The drink will have ingredients that will help woman care for their skin. One more of L’Oreal’s, and Coke’s; creative, marketing ideas! (Brandweek, 2007)

 

Plan of Action:

 

L’Oreal should focus on the aging population. In 1996, the largest group of consumers of beauty products was between 40 and 60. Today, this peak consumption was between ages 45 and 70. By 2050, the number of people over 50 will represent 33.4 percent of the world’s population. (World Population Prospect, 2006)
L’Oreal has created a niche in the “ethnic hair care line.”
Diversify into other product lines

 

References

 

Brandweek (June, 2006). L’Oreal Whips Up Marketing Storm. Retrieved (3/24/08) from: http://www.brandweek.com/bw/magazine/article_display.jsp?vnu_content_id=1002689876
Brankweek (March, 2007). Coke and L’Oreal Partner On New Health Beverage. Retrieved (3/22/08) from: http://www.technologymarketing.com/bw/news/recent_display.jsp?vnu_content_id=10035
Kotler, P. and Keller, K. (2006). Marketing Management 12e (Twelfth Edition). Prentice Hall of India.
L’Oreal (n. d.) Research. Retrieved (3/23/08) from: http://www.loreal.co.uk/_en/_gb/research/homeres.aspx

 

 

Loreal