RAM Team,GMBA,STUST
MA1N0103
陳乃華
MA1N0206
Anja Išek
MA1N0245
Michel Sung
L’OREAL China
NURSING MININURSE BACK TO HEALTH
Agenda
Introduction of the case
Case Description
Conclusion
Current Situation
Case questions and Discussion
Introduction of the case
L'Oréal
One of the world’s
largest cosmetic and
beauty company.
It has all forms of beauty in
the world for over 100 years
and has built a portfolio of
27 international, diverse and
complementary brands.
The L’Oréal Paris brand
encompasses the four
major beauty categories –
hair color, cosmetics, hair
care, and skin care .
Mininurse
It first launched in 1992,
is one of China’s best
known skincare brands
with a 90 percent brand
recognition.
It was one of China’s topthree skincare brands
and target group of
younger women.
Case Description
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L’Oreal bought Mininurse, a Chinese mass skincare brand in
December 2003.
This acquisition is an opportunity to speed up L’Oreal growth in
the Chinese market. It is a major step forward in L’Oreal’s
development in a market which is strategically important for the
company.
Mininurse complements L’Oreal portfolio perfectly and
move more quickly into the Chinese consumer skincare market.
Soon after the deal, L’Oreal decided to co-brand Mininurse with
Garnier, L’Oreal’s global mass-market brand.
The Garnier name would bring international credentials and
bolster Mininurse’s brand equity.
Case Description
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However, Mininurse has been struggling lately.
Market data showed that the brand’s market share tumbled from
5.1 percent in October 2003, shortly before the deal, to 3.5
percent 2 years later.
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Market Share for Moisturizer Brands in China
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Brand
October 2003
October 2005
Da Bao
12.1%
11.0%
Long Li Qi
3.9%
5.4%
Mininurse
5.1%
3.5%
Tjoy
2.1%
4.1%
Conclusion
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China is the world’s second-largest market for luxury
cosmetics and is on track to become its largest.
L’Oreal saw Mininurse as a platform to further
develop its mass market Garnier range in China.
Current Situation
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New customers make up L'Oreal sales in China
SHANGHAI - Millions of new Chinese customers helped to
drive up sales for the French cosmetics giant L'Oreal SA.
Sales in China in 2010 rose to $1.38 billion, an 11.1 percent
increase over the previous year, and a double-digit gain for
the 10th consecutive year.
Although was quite challenging, L'Oréal managed to achieve
growth in both sales and profits, and expand it market share,
largely through innovations, new product launches, the
development of new market categories and a deepening of
distribution.
http://www.chinadaily.com.cn/cndy/2011-03/08/content_12132214.htm
Current Situation
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L'Oreal has done quite well in localization strategies.
From the formula (of the cream), and the packaging, to the
shooting of the advert and the choice of advertiser, all of
these were done in China.
Apart from plans to expand in China's first- and second-tier
cities, L'Oreal also entered some third- and fourth-tier cities.
Mininurse can reach the consumers that other brands can't
reach. At the current stage, is still the "great asset".
http://www.chinadaily.com.cn/cndy/2011-03/08/content_12132214.htm
Case questions and Discussion
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Q1.Was the MININURSE acquisition really worth the wait and
the effort for L’Oreal?
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Long-term strategy.
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Mininurse with forecast sales of Euro 40 million and
built up distribution network of 280,000 outlets.
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It has a good image in the Chinese market, and its prices are reasonable.
It was one of China's top three skincare firms, with a market share of 5
percent.
Targeting young women with a natural style, Mininurse complements
L’Oreal brand portfolio perfectly, and move quickly into the Chinese
skincare market.
Chinese consumers thinks that local and foreign brands as equally good.
Owning local brands or brands perceived seems therefore essential.
Case questions and Discussion
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Q2. What might have been the drivers behind MININURSE’s market
share drop? Was the MININURSE- Garnier co-branding a strategic
mistake?
L'Oréal uses a multi-brand strategy to cover the mass market in China.
But the new Mininurse made big mistakes in terms of target market and
sales strategies.
- The target customers for Mininurse were defined as young adults, thus
the thrifty middle-aged women patrons turn to other brands.
- Its low-end image didn't seem to appeal to the potential young ladies.
Sales therefore plummeted.
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MININURSE- Garnier co-branding a strategic mistake
- No clear positioning statement.
- Mininurse products quite similar to Garnier.
- Customer star to using Garnier rather than Mininurse, because of
consumers perceive global brands as being high in quality.
http://www.iceo.com.cn/research/leader/1999/1130/176169.shtml
Case questions and Discussion
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Q3.What is your prescription to revitalize Mininurse ? Should
L’OREAL discard the GARNIER endorsement? Should the brand
be repositioned?
Mininurse should reposition in the skincare market.
Brand management and reevaluate the brand basing on the need
of the local market.
For example, Mininurse was launched to the market with new
formula and package, which turned out to be a great success.
L'Oréal should not discard the Garnier endorsement.
Increase brand awareness for the Gariner family brands, and
thus bring brand loyalty.
To implement international strategy and explore new market.
Garnier has a series of skin care products specially for Asian
females.
Thank you for your attention