Pricing Strategy: L Oréal

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Introduction.
After reviewing the data provided by L’Oréal, we recommend focusing the marketing efforts on the ombre hair colouring style. L’Oréal can successfully market this style trend through the development of several campaigns on major social media platforms to promote the new product. We are confident that a strong social media presence will allow L’Oréal to mass promote its new product in a feasible fashion, while capitalizing on the strong L’Oréal brand.
Background.
Hair colouring has been a critical focus at L’Oréal for decades. In the 1950’s, The hair dying process was reduced from five long steps to a simple, one step solution. In 1966, L’Oréal launched home-colouring kits to meet consumer trends across the world. Despite a reputation …show more content…

Like several of L’Oréal’s products, they should utilize a market based pricing strategy, setting the price of their ombre product according to the prices of the similar products in the market. Current competitors price their colour products between $7.97 and $11.97. L’Oréal should remain competitive with these products by pricing their products in the upper middle range, between the $10-$12. Our team believes L’Oréal can afford to charge a slight premium for their products because of their brand reputation, but should not leave the upper limit because the demand for the products is likely elastic.
Alternatives, Risks, and Assumptions.
Our biggest assumption lies in the idea that YouTube signifies grassroots support for a particular style.
Another assumption lies in the idea that visibility from partnerships with beauty vloggers and “It-Girls” will translate into sales. An alternative marketing strategy could be to hire a professional celebrity spokesperson. However, we believe that this would add significant risk for L 'Oréal as it would again have to identify fads vs. trends in order to choose a spokesperson. Other companies have experienced similar scenarios this year, such as Ralph Lauren’s and Speedo’s sponsorship of Olympic swimmer, Ryan

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