More Related Content
Similar to Marketing Strategy L'oreal (20)
Marketing Strategy L'oreal
- 2. Introduction • L’Oreal is the world’s largest cosmetic company based out of France. • Founded in 1909, the company today owns around 500 brands and 6 worldwide R&D centers spread across 5 countries and India being one of them. • With the slogan “Because We Are Worth It”, the company believes in strong consumer involvement in order to provide more customer satisfaction with the products. • With an ecstatic board of directors the group today has a total revenue generation of 25.25Bn Euros. • With more people becoming beauty conscious, the group is all set to grow not just in-terms of revenues but also intends to expand its brands and product line. For the same reason they will be setting up two more R&D centers in the US. 2
- 3. L'Oréal Products & Market Share 39% 22% 18% 21% Market Share L'oreal Revlon Oriflame Others
- 4. L'Oréal Hair Spa L'Oréal - Consumer L'Oréal shampoo life cycle
- 5. Marketing Mix • Product L'Oréal Hair Spa Shampoo Results Equivalent to Hair Spa Treatment Strong and Healthy Hair – Chemical Free Shampoo • Place Double layer channel strategy will be used – distributors and retailers will form the chain Retail Outlets - Reliance Fresh, Big Bazaar, Health & Glow, Newme Salesforce will be used to create a strong ‘Sales Relationship’ with various distributors Various channel issues like – double marginalization, cannibalization etc. will be taken care of • Promotion Advertisements – Television, Radio and print media will be done as part of ‘Brand Awareness’ campaigns HEM model will be used to measure the efficiency of the ‘Brand Awareness’ campaign Digital Marketing – Social Media Marketing i.e. Blogging, Facebook, YouTube Campaign to create ‘Brand awareness’ in the digital platform Sampling and couponing will be done as part of ‘Demand Generation Marketing’
- 6. Marketing Mix • Pricing Strategy – • Here we will first calculate the cost to manufacture of the shampoo • Then we will calculate the cost plus price using accounting approach • Then we will use the ‘price elasticity co-efficient’ to determine optimal mark-up and from that we will calculate our mark-up price • Then we will benchmark our competitors price against our optimal mark-up price to see if we are pricing more or less than the industry standard Cost to Manufacture Cost Plus Price Optimal Mark -up Bench Mark Price
- 7. Forecasting Sales -Bass Diffusion Model L'Oréal Shampoo Sales data Shampoo sales 40,000,000,000 L'Oréal Sales 1,600,000,000 L'Oréal average price 250 unit sold by L'Oréal 6400000 • The tables in the right hand side shows rough estimate of the L'Oréal sales data • We did a desk research and found out the average price of a L'Oréal product is around INR 250 • We made a few assumptions to forecast the category level sales of the premium shampoo product in India: • 1) co-efficient of innovation (p) and co- efficient of imitation (q) is equal to the well established values in various categories • 2) 50% of all sales are coming adopters and rest are coming from repeat purchases Bass Diffusion Model N(t) 342857 M 17,142,857 p 0.03 q 0.38 n(t) 631680 Unit sold by loreal 246355
- 8. Determine Importance of Attributes -Fishbein Model Attributes L'Oréal Revlon Oriflame Others Importance Frizzy free 8 7 6 5 0 Fragnance 7 5 8 6 0 Chemical -Free 6 6 8 6 48 Anti-dandruff 8 5 9 7 25 Hair- Fall 9 8 7 6 28 Attitude A1 = 6.69 A2 =3.77 A3=3.09 A4=3.6 100 Market Share 0.39 0.22 0.18 0.21 6.685714 3.771429 3.085714 3.6 • We use the reverse fishbein model to find out the relative importance of the various attributes that are relevant for L'Oréal • We found the rough estimates of market shares of the various competitors for previous year • For this year we use Bass Diffusion model to forecast category level sales and calculate market share • From that market share we find out attitude and then run a Regression analysis on Brand Attitudes and beliefs to find out the ‘Importance’ ratings
- 9. Bipolar Perceptual Map • Here I have identified two most important attributes from the Fishbein model used earlier • Then created a Bipolar plot of the brands based on these two attributes • The map shows Oriflame is on the fair value line • Whereas our brand is on the upper side of the fair value line • This implies we need to improve our offering according to the perceptual map shown on the right hand side • When we launch the product, our brand should be ideally on the fair value line Loreal Revlon Oriflame Others Min. HairFall Control ChemicalFree Max. HairFall Control HighChemical
- 10. Marketing Strategies • L’Oreal believes in a strong consumer inclusion in their marketing campaigns. • They believe in defining their essence and aspirations which most will influence most of its consumers. • Apart from the regular ad based marketing, they also tie-up with Vloggers and Bloggers who are influencers and trendsetters and will add credibility to the brand. • They also look at partnering with saloons to promote its brand and products. • With digitization, the brand has launched a couple of apps that will engage its consumer base along with virtually applying makeup and trying different looks. 10