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History of l'oreal company case study
History of l'oreal company case study
History of l'oreal company case study
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Introduction:
L’Oreal was started in 1907 by French chemist, Eugene Schueller, who developed the world’s first synthetic hair-color product, L’Aureole. By 1912 his hair products were sold in France, Netherlands, Austria and Italy. In the mid-1930s, Schueller moved into the hygiene and toiletry sectors of the cosmetic market with great success. L’Oreal soon earned the reputation as the leader in European hair coloring and skin care products.
Although L’Oreal reached European success, entering into the U.S. market proved much more difficult. In 1953, L’Oreal formed licensee Cosmair Inc. in New Jersey to distribute its hair-coloring products to beauty salons. The company soon realized three challenges within the U.S. market. First, in the U.S. local middlemen delivered products to salons, and L’Oreal had little to no relationship established with this group. Second, L’Oreal hair products were not well known by the salon workers and their clientele and therefore were not purchased and sold much in salons. Finally, the French prestige, which helped sell perfumes, did little for the hair-coloring products.
L’Oreal continued its attempts of global expansion and gained ground in the U.S. hair-coloring market in 1973 with the famous, “Because you’re worth it” ad campaign. The success of the campaign L’Oreal established a quality reputation with U.S. consumers, allowing them to sell their hair-coloring products at a higher price than competitive firms for the first time.
In 1984, new CEO Owen-Jones began pushing for L’Oreal to become the largest cosmetics firm in the United States. In order to accomplish this, the company began assessing acquisition opportunities that would broaden L’Oreal brands throughout the U.S. The first tw...
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... press Releases. Retrieved (3/24/08) from:
http://www.loreal.com/_en/_ww/press-room/press-release.aspx?Year=2000?NewsID=4444e553-24d5-483b-9089-65e1469338b8
Mulliez, Christian (2007). L’Oreal Administration and Finance. Retrieved (3/23/08) from: http://www.loreal-finance.com/v9/us/contenu/resultats-annuels2006.asp?srub=310
PR Newswire (February, 2004). L’Oreal’s Marketing Award Competition Offers Real-Life Brand Management Experience and Career Opportunities: Eight U. S. Teams Compete in the Global Competition. Retrieved 3/25/08 from: http://www.highbeam.com/doc/1G1-113191007.html
The Gale Group (2007). The WWD List: Top Beauty Companies: The Worlds Largest Beauty Companies. Retrieved (3/24/08) from: http://www.accessmylibrary.com/coms2/summary_0286-18228667_ITM
UN, World Population Prospect (2006). The New Seniors, A Strategic Opportunity for L’Oreal.
“Sephora is highly regarded as a beauty trailblazer, thanks to its unparalleled assortment of prestige products, unbiased service from experts, interactive shopping environment, and innovation.”, according to Sephora’s website (“About Sephora”, 2014). Nowadays, Sephora recognized worldwide and below is figure that illustrate Sephora’s operation:
The biggest strength for Belle Couleur lies in one of its marketing mixes, price. Belle Couleur will be the only mid-priced product in the Dutch hair colorant market and will compete with the upper and lower priced brands. Moreover the price sensitive Dutch women are value shoppers and thus this aspect of the product will appeal to them. The market research indicated that the buying intentions of the women increased after the price was revealed in the test-use. The pricing of the product coupled with the price sensitive nature of the Dutch women will be the leading strength for Belle Couleur.
Lets start at the beginning Makeup Art Cosmetics or MAC was created in 1984 by two men, Frank Tosken a seasoned makeup artist and photographer and Frank Angelo a successful business owner of a chain of salons in Toronto. They found that cosmetic products that were readily available were not performing well under the intense environment of studio lights & perspiration, had little color payoff, and were constantly having to be touched up. So, they created cosmetic formulas and colors that met these specific needs. By using them backstage on models and performers news traveled fast about how wonderful these products were. At first MAC was only available to the professional makeup artist. Then by word of mouth news spread to the general population and was maid available to the public and in 1994 was purchased by the Estee Lauder who owns many of the world's favorite cosmetic brands. MAC continues to be a testimonial brand of cosmetics, meaning that there is no paid advertising for MAC to promote their traditional product. They rely solely on testimonials and word of mouth advertisement. However you may find that MAC does advertise only one product and that is Viva Glam Lipstick. This is their charity lipstick and it comes in five different shades.
Based on the information provided in the L’Oreal case, Yue Sai struggled to grow and capture additional sales in the high-end Chinese cosmetics sector. In the past, L’Oreal attempted to position Yue Sai in several different ways which can be viewed as detrimental to the company image, showing uncertainty as the company struggles to see which positioning strategy will stick. The most recent positioning presented in the case, which desires to “deliver Yue Sai’s longstanding brand promise that ‘Nobody knows Chinese skin better than Yue Sai’”, allows the highest probability of success for the company capitalizing on countless fresh trends in Chinese cosmetics (6). The positioning statement would reflect this new strategy: “For the modern Chinese woman Yue Sai offers a line of high-end cosmetics. Unlike other high-end cosmetics Yue Sai combines traditional Chinese medicine and sophisticated technology adapted to the unique skin type of Chinese women.” Yue Sai saw reasonable success and hope in the new Vital Essential line which utilized traditional Chinese medicine and, therefore, resulted in above average repeat purchases. Continuing to focus the strategy around traditional Chinese medicine should benefit Yue Sai considerably. Another suggested strategy would be to wholly reposition Yue Sai, however this is ill advised. As stated in the case, Yue Sai tried numerous different positioning strategies, which ultimately provided no clear path strategy. Repositioning would show uncertainty in the company, lowering brand value in the eyes of the consumer.
Plenitude by L’Oreal was introduced to the US market in 1988. Eight years since its introduction, it has quickly become the #2 brand in the market only to lose it later to Pond’s. Plenitude also hit a four-year sales plateau and was still not making any money in the US market.
The second direct competitor to Chanel is L'Oréal, the world's largest manufacturer of high-quality cosmetics, perfumes, and hair and skin care products. Although L'Oreal the company doesn't manufacture a perfume it owns the brand Lancôme that produces Tresor a perfume that rivals Chanel. In the chart below, it lists the US female fragrances brand share by value from the 2002 Tablebase data. The chart shows how the Lancôme perfume Tresor, Estee Lauder and Chanel are in relation to each other.
When we take a look at an ad we always take in what is the most significant thing that would catch our attention towards the product that is being sold. By looking at this L'Oréal Paris ad first thing that pops right out is the model. The model in this picture is a very close up image of an older woman with extremely flawless skin. Her face takes up most of the ad, and it is very closely zoomed in portraying where there is the most wrinkles on a woman’s face the eyes. The product that is trying to be sold is the Revitalift that reduces the look of wrinkles underneath the woman’s eyes to tighten the look of appearance and decrease the look of bags under the eyes. The models face is a more serious seductive look showing her none wrinkled eyes or bags. Underneath her eye is a quote by the model that says, “ I’m amazed… the results are spectacular!” (Andy MacDowell) This
The media control all mass communication all over the world, its existence is integral to today’s twenty-four hour society. All media is highly influential, from on television to radio, newspapers to magazines, but especially the £19billion advertising industry. Although many people refuse to admit it we are easily manipulated into buying particular products subconsciously, a well-produced and marketed advert can increase sales revenue for any product. Schwarzkopf hair care & dyes is well known as an alternative to the mainstream hair companies. Hans Schwarzkopf whose first formula in 1903 was an instant hit with his female customers established Schwarzkopf in 1868. The water-soluble powder shampoo, “The Shampoo with the Black Head”, offered an easy-to-use and value-for-money alternative to the expensive oils and harsh soaps of the time. Since then the brand has continued to grow and is famous for providing striking colours for women with a more adventurous style at an affordable price.
L’Oreal is the largest beauty company in the world and in the past 100 years that it has expanded, it has supplied to 130 countries with offices in 58 different countries. This global company is the number one premium cosmetic product in the world today and has taken the core and beauty of people’s everyday lives since 1907, the beginning of L’Oreal. The superior leadership of a guy named Eugene Schueller started this strategic company with basic products such as hair care and also the first man-made hair color product. Five years later you could find these products in Austria, Italy, and the Netherlands. In 1934 Eugene invented the first mass market of soap less shampoo and this led the success of L’Oreal in the country of Europe which soon recognized them as the leader in body care and hair coloring products. Finally soon after World War II L’Oreal moved into the United States and the company seemed to change. When L’Oreal expanded the competition was more involved and more growth was needed in order for the company to be more successful. With problems like this, the strategy and planning that has been applied in L’Oreal has been huge for the success of the company. L’Oreal realized they needed to expand in other fields of the beauty market and target markets in order to stay alive and successful. This would mean that L’Oreal would need to acquire other companies as part of their expansion and through this they have kept the constancy of the leading company with acquisitions of many small companies. Finally in the 1980s they started their globalization into new markets all around the globe by acquiring new companies that would form the cosmetics that we know today. Although the role of acquisitions has never been the main focus of the company, internal growth and strategy was the number one reason for L’Oreal becoming such a big name. The main strategy was to adopt new companies and expand it from within believing that the brand could be taken globally and benefit their overall brand portfolio. The main role of acquisitions was to increase and lengthen the internal growth rate. L’Oreal started acquiring companies from the beginning of their name. They started with the basics of their own brands such as L’Oreal Professional, L’Oreal Paris, Kerastase, and Club des Createurs de Beaute.
MAC or Make-up Art Cosmetics is a professional makeup brand that prides itself on its diverse market. It was officially launched in Toronto, Canada in March 1984 by creators Frank Toskan and Frank Angelo. Since its acquisition by the Estée Lauder Companies in 1998, it is now sold in over 105 countries including the United Arab Emirates. Being part of the “innovative, and fast paced” cosmetic industry (Kumar et al, 2006) makes MAC’s prospective growth in the UAE challenging. Furthermore, the increasingly competitive nature of the beauty sector in the region heightens the significance of how a company’s marketing strategy adapts to or even shapes certain external forces. This essay explores where MAC lies in the context of the macro-environmental
Andrea Jung became president and CEO of Avon in 1999 and has totally revamped the company. Under her leadership, the company has updated its product line, launched new advertising, and created a new image (Fact Monster, 2005). Avon's sales have increased by 30 %, profits 40%, and the stock price has dramatically improved (Ibid). Jung's has been able to align the firm's core capabilities with its strategic targets which has lead to phenomenal results. It appears that Jung has been able to establish a clear vision for the firm that has been incorporated in every aspect of the firm's operating system. This vision is shared by all employees and representatives of Avon priming the company for continued success.
Kraft, the owners of Oreo, decided to take their success in America and introduce the product into China, and Indian markets. The problem with their ambitious plan, was that Kraft believed since they were so successful, their marketing strategy and even the cookie, needed
Andrea Jung is the CEO of Avon. She aims to breathe life into her giant cosmetics’ worsening sales. Indeed, after four cycles years of brawny vending intensification under her tactical supervision (Andrew Jung), the gigantic cosmetic’s corporation’s (Avon) take-home pay has gone unexciting and the go halves or share cost has defoliated further than thirty percent (Hill, 2014, p 405). Since, seventy percents of Jung’s company’s proceeds are in developing and underprivileged foreign countries markets, any lessening of growth emphasizes a huge lost for Avon in the beauty products competition. In so doing, the cosmetic company under Andrew Jung would, in due course, crumple if her management team cannot plan new strategy to enhance the sale. In
"Some History and Background on Cosmetics." Some History and Background on Cosmetics. N.p., n.d. Web. 11 Nov. 2013.