L’Oréal
Paris
By Gloria Garza
Table of Contents
I.
Brand Inventory
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
II.
Company………………………………………………………………..3
Category………………………………………………………………...6
Products within category………………………………………………10
Brand Analysis…………………………………………………………13
Consumer Profile………………………………………………………14
Advertising/Marketing Communications………………………………15
Media…………………………………………………………………...16
Promotions……………………………………………………………...16
Internet and New Media………………………………………………...16
Other Pertinent Information……………………………………………..16
Brand Exploratory
A. Research Methods………………………………………………………18
B. Recommendations………………………………………………………19
Works Cited…………………………………………………………………20
I. Brand Inventory
2
A. Company: L’Oreal Paris
•
Location:
L’Oreal International headquarters are located in Clichy Cedes France.
However, L’Oreal has many other subsidiaries located all around the
world including the United States, Mexico, Canada, Israel, South Africa,
Australia, China, and India (L’Oreal around the world).
•
Organization and major activities, subsidiaries:
1. Organization: L’Oreal is an organization that “relies on global
research and innovation, a unique portfolio of brands organized
by distribution channel, and integrated industrial production.”
(Loreal.com)
2. Major Activities: L’Oreal’s major activities consist of creating
and developing cosmetic products. These cosmetic products
include: hair care, hair coloring, skin-care, makeup, and perfume.
(Loreal.com)
3. Subsidiaries: The Body Shop became L’Oreal’s subsidiary after
its acquisition in 2006. (L’oreal.com)
• Brand History:
L’Oreal was created in 1909 by Eugene Schueller, a chemist who created
hair dye and sold it to Parisian hairdressers (loreal.com/group/history).
However, after the war in 1920 his products became popular outside of
France and L’Oreal became an international brand. Since then L’Oreal
has continued to grow and expand its horizons. What once was a local
company specialized in hair dye products, became the world’s leader in
cosmetics with thousands of brands specializing in different areas of
cosmetics such as makeup, perfume, skincare, and hair products.
• Financial Data:
L’Oreal’s latest fiscal year (2012) was a successful year for L’Oreal.
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Sales equaled to 22.46 billion euros, which resulted in 2.12 billion
dollars more than the previous year. The following graphs provide a
summar of L’Oreal’s financial performance.
Performance over five years (consolidated sales) ( 2012 annual report p.88)
Key figures for 2012:
http://www.loreal.com/group/our-activities/key-figures.aspx
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• Annual Report:
L’Oreal’s most recent report can be found in the following link:
http://www.lorealfinance.com/_docs/fichiers_contenu/0000000713/LOre
al_Results_2012.pdf
• Key personnel/managers (try to arrange an interview with a few key
individuals):
L’Oreal’s executive committee is formed of 15 members led by JeanPaul Agon, the chairman and CEO of L’Oreal (2012 Annual report
p.12-13).
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Laurent Attal: Executive VP Research & Innovation
Jean-Philippe Blanpain: Executive VP Operations
Nicolas Hieronimus: President Selective Divisions
Brigitte Liberman: President Active Cosmetics Division
Marc Menesguen: President Consumer Products Division
Christian Mulliez: Executive VP Administration and Finance
Alexis Perakis-Valat: Executive VP Asia Pacific Zone
Alexandre Popoff: Eexecutive VP Eastern Europe Zone
Sara Ravella: Executive VP Communication, Sustainability and
Public Affairs
Frederic Roze: Executive VP of the Americas Zone
Geoff Skingsley: Executive VP Africa-Middle East Zone
Jerome Tixier: Executive VP Human Resources and Advisor to
the Chairman
An Verhulst-Santos: President Professional Products Division
Jochen Zaumseil: Executive VP Western Europe Zone
 Recent news (from online database sources, newspapers, etc.)
L’Oreal creates a group travel retail division (11.21.2013)
5
L’Oreal announced that it would create a travel retail division that will
include products from its luxe, consumer products, and professional
products division.
http://www.loreal.com/Finance.aspx?topcode=CorpTopic_Secondary_Medi
as_FinanceNews&id=929
Melbourne Fashion Festival drops L’Oreal as naming rights sponsor
(11.26.2013)
In this article the magazine mentions how L’Oreal will no longer be the
principal sponsor of Melbourne’s fashion festival.
http://www.marketingmag.com.au/news/melbourne-fashion-festival-dropsloreal-as-title-sponsor-46556/#.UpVzF6X5FiE
L’Oreal “gobsmacked” after Adele turns down $19 million contract
(11.10.13)
L’Oreal was in negotiations with Adele on a $19 million dollars contract
because she didn’t want to have her name associated with any other
brand.
http://www.washingtontimes.com/news/2013/nov/10/loreal-godsmackedafter-adele-turns-down-19-millio/
B. Category
•
Category Definition: Cosmetics company.
•
Size of category in units, dollars, etc:
L’Oreal organizes its brands and products in 7 divisions. These divisions
include: L’Oreal luxe, consumer products, active cosmetics, professional
products, The Body Shop and Galderma
(lorealfinance.com/eng/brands.com).
The following pie chart demonstrates the 2012 consolidated sales of the
cosmetic branch by division (2012 annual report p.88).
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-
L’Oreal Luxe:
Offers different domains of luxury beauty, skincare, make up, fragrances
and hair care. Their goal is to offer high quality products through a
selective distribution channel. Brands that are included in this division
are: Lancôme, Kiehl’s, and Giorgio Armani.
-
Consumer products:
This division offers “the best in cosmetics innovation to the greatest
number
of
people
on
every
continent.”(Loreal.comfinance.com/eng/brands.com). To provide their products to the largest
number of people this division’s brands are available in mass-market
channels like supermarkets and drugstores. Some brands that belong to
this category are: Garnier, L’Oreal Paris, Maybelline New York.
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-
Professional products:
This division offers hair products with the highest standards of quality.
These brands include Redken, Kerastase, and Matrix (lorealfinance.com/eng/brands.com).
-
Active cosmetics:
Focuses on products for skin that “is half way between healthy and
problem skin.” (loreal-finance.com/eng/brands.com). These products are
distributed through pharmacies, beauty and health retailers, drugstores
and medi-spas. This division is the world’s number one in
dermocosmetics (loreal-finance.com/eng/brands.com). Some brands
include Vichy, Skinceuticals, La Roche-Posay.
-
Body shop
-
Galderma.
• Category history and growth
The following graph represents the “Worldwide cosmetics market from 2003
to 2012” in annual growth rate as a percentage. It demonstrates how the
cosmetics market has grown in the past 9 years (2012 annual report p.87).
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• Category growth projections
There was no information available.
• Distribution channels/methods of distribution
There are different distribution channels depending on the division the product is
categorized in. For example, higher end brands such as Kiehl’s and Lancôme
have a selective distribution channel and can be found in stores such as Sephora,
Ulta, and Macy’s. Consumer products can be found in more convenient channels
such as supermarkets and drug stores. (loreal-finance.com/eng/brands.com).
• Major manufacturers/players:
L’Oreal has an integrated production facility and has 41 factories around the
world that produce almost 90% of all the units of the cosmetics products sold
by L’Oreal. It also only has one single unit, the Operations Division that is in
charge of worldwide production and product distribution. Under this division, 7
lines of business (purchasing, packaging, production, quality, logistics,
environment, hygiene and safety) are integrated. In a few words, the Operations
Division is in charge of the entire production chain, from beginning to end
(loreal.com/group/group-activities).
• Seasonal factors
Cosmetics are products that can be worn and used throughout the entire year.
However, there are some seasonal factors that can increase the likelihood of
certain products being bought more at certain times of the year. For example,
sales of skin care products such as sunscreen will be higher during the summer
time than the wintertime. For makeup, the same time of products might be
bought (mascaras, lip-glosses, foundations) but the shades of colors being
bought might be different depending on the season. For example, it might be
more likely that a consumer will buy darker shades in the fall/winter, and
brighter colors during the spring/summer.
• Regional factors:
One thing L’Oreal is very good at is creating and adapting products according
to the region they are going to be sold in. How they are able to do this is by
locating their research facilities in the main regions so that they may develop
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products specific to that region’s need. An example that is provided in the
company’s annual report is a black eyeliner “Colossal Kajal” by Maybelline
New York that has been created specifically for India. This eyeliner was
inspired by an ancient beauty ritual Indian women have in which they apply a
black paste to “emphasize and care for their eyes” (2012 annual report p.21).
Through research and innovation Maybelline was able to create an eyeliner
that would provide them with the qualities and benefits Indian women seek in
this beauty ritual (2012 annual report p.21).
• Other relevant category factors N/A
• Legal considerations
Legal considerations can vary depending on the country. In the U.S.A there are
different standards that FDA has created and that L’Oreal has to abide by.
Some regulations that the FDA has in the U.S is that anybody who is involved
in the cosmetics commerce, whether it be a manufacturer or retailer, has to
ensure that the product has not been “adulterated or misbranded”
(fda.gov/cosmetics).
• Major trade publications
For the cosmetics industry there are several trade magazines including: Happi,
GCI magazine, Skin Inc. magazine, Modern Salon (chemistcorner.com).
• Major trade organizations in category
L’Oreal U.S.A is a member of the National Advertising Review Board panel,
which is the review board within the Advertising Self Regulatory Council
(ASRC) (fairworldproject.org).
C. Products Within Category
• Share of category by product
Since L’Oreal has a large selection of products due to the many brands it
owns, we will instead discuss the share of category by the type of product
(i.e.: skincare, makeup, etc.).
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The following chart provides a breakdown of the 2012 consolidated sales of
the cosmetics branch by business segment (2012 annual report p.88).
• Product-form description (size, flavor, model, etc.)
L’Oreal has different skincare, makeup, hair care, hair colorants and
perfume products from different brands. Sizing varies according to the
brand and the product they’re offering.
• New product introductions (in the United States)
“Magic Nude is our 1st revolutionary liquid-powder
formula that glides on and transforms to a fresh,
powder-like finish. It's so light, like you're wearing
no makeup at all!”
(lorealparisusa.com/en/brands)
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“EverCurl is Sulfate-Free so curls are left
hydrated, defined and full of bounce. Our
formulas, with Hibiscus Extract and Grape Seed
Oil, nourish and care for curls while also
imparting fruity and floral fragrance notes. Find
your must-have curl product for wavy hair - Silk
& Gloss Dual Oil care, curly - Sculpt and Hold
Cream-Gel, coily - Cleansing Conditioner.”
(lorealparisusa.com/en/brands)
“From L’Oréal Paris, a breakthrough
mascara innovation to deliver a bold
lash effect. The breakthrough wing tip
brush catches lashes and extends to the
outer corners of the eye. The new fiber
infused formula delivers lashes with up
to 6x more volume.”
(lorealparisusa.com/en/brands)
• Benefits and appeals of new products
Some benefits and appeals of the products mentioned above are: bold eye
lashes, a shampoo and other hair products to help control curls, and having
coverage without making you feel like you’re wearing makeup.
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• New packages, innovations, etc.
L’Oreal is a company that is continuously innovating and that is largely due to its
many research facilities across the world. It is currently working on beauty
products that provide different benefits consumers around the world are looking
for such as a lip-gloss that will continue to provide color without the sticky feeling
(2012 annual report p.76).
• Recent news about product category N/A
D. Brand Analysis
• Top brands by dollar or unit sales
There was no information on the top brands by dollar or unit sales.
•Growth trends of top brands N/A
• Category share by country and by region
The following chart shows a category share by geographic zone according to
the 2012 consolidated sales (2012 annual report p.88).
• Pricing trends
Prices vary among countries.
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• Recent news about brand N/A
E. Consumer Profile
• Demographics of users
Most of L’Oreal’s consumers are female because the majority of its products
are targeted towards women (lipsticks, eye-make up, nail polishes, etc).
However, it also carries colognes, skin products and hair products for men.
There is no data on L’Oreal’s annual report about it’s consumer profile, but it
can be guessed that most of its products are being targeted towards a
consumer of 17 years old and older.
• Frequency of purchase/usage
There was no information about the frequency or usage of the product in
L’Oreal’s website but since most of the products are daily use products (such
as makeup, skincare and hair products) the frequency of the usage is quite
high.
• Place of purchase
The place of purchase varies on the product and brand the consumer is
buying. For more luxurious and/or professional products of brands like
Lancôme and Kerasotes, they might be found at higher-end stores like
Macy’s. For more common brands like Maybelline, the place of purchase can
vary from drugstores to stores like Wal-Mart and Target.
• Heavy-user profile N/A
• Awareness and attitudes toward brand
There wasn’t much information about brand awareness and attitudes toward
the brand. However I conducted my own survey and it seemed that there was
awareness for the L’Oreal but not for many of it’s other brands. It also
appeared that L’Oreal was not their “go-to” brand for cosmetics. Further
discussion will be provided in part II “Brand Exploratory.”
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• Decision-makers vs. purchaser (same, different? If different, what is purchase
decision like?)
Decision-makers are the same as purchaser because usually the products are
personal products since cosmetic choices are based on the
consumer/purchaser’s specific needs and preferences.
• Normal purchase cycle n/a
• Brand loyalty/switching n/a
F. Advertising/Marketing Communications Messages
• Creative strategies of top brands
-In India Maybelline New York used Facebook to promote their new
Colossal Kajal Kohl (an eyeliner). This strategy was very successful as
sales doubled in just a few months (2012 annual report p. 25).
-True Match by L’Oreal Paris had a new marketing campaign that was
represented by 4 brand ambassadors from different cultural backgrounds to
represent the diversity of different skin colors. These ambassadors included
Beyoncé Knowles, Jennifer Lopez, Liya Kebede and Aimee Mullins. A
unique aspect about this marketing campaign is that they created an app,
True Match Maker, which allows women to find the right shade for their
skin color. It has been so successful that one million consumers have found
their true match through the app (2012 annual report p.45).
• Specific promises, appeals, claims, special effects
Specific appeals for Colossal Kajal, is that women are getting a modern
product while remaining close to tradition.
Appeals for Color True Match is that women will be able to find the right
color foundation for them.
• Examples of past and current executions n/a
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G. Media
• Category and brand spending
According to L’Oreal’s annual report, advertising and marketing and
promotional expenses equaled to a 30.2% of sales (p.89) in 2012 (2012
annual report p.89).
• Seasonality (by quarter) N/A
• Regionality (spot buying) N/A
• Media employed by top brands
L’Oreal’s top brands use a variety of media including magazine advertising,
TV commercials and social media.
• Spending patterns – flighting, continuous, etc. N/A
• Spending compared with market share N/A
H. Promotions
• Promotions used in category
Promotions vary depending on region and brand.
• Major brand promotion types and examples
Some examples include buy one and get one half off, buy one and get a free
sample.
• Success rates of promotions n/a
I. Internet and New Media
• Website/URL
-Company Official website: http://www.loreal.com
-L’Oreal U.S.A website: http://www.lorealusa.com/_en/_us/
-L’Oreal product website:
http://www.lorealparisusa.com/?cid=lorus_rm_Google_Brand+Brand_Lorea
l&gclid=CKSqqKLNtrsCFclcMgodQAIAoQ
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• Purpose of site:
-Company official website: To provide information about L’Oreal Paris
internationally, it’s brands, financial reports, news, careers etc.
-L’Oreal U.S.A: same as above but with a focus on the United States
sector.
-L’Oreal product website: To provide consumers information about new
and existing products. They also provide makeup tips, apps for hair color
and makeup.
• e-commerce activities:
The L’Oreal product website has the option for customers to purchase
online or find the in a store near them.
• Social media activities:
They have a twitter, Facebook and a youtube channel.
In their YouTube channel they have a lot of behind the scenes videos of
photo shoots. They also have “how to” makeup videos with professional
makeup artists.
In their twitter and Facebook page they send out informational tweets about
their products.
J. Other Pertinent Information
• Personal interviews n/a
• Other information sources n/a
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II. Brand exploratory
A. Research:
A survey of 23 participants was conducted in which participants were
asked questions to find out more about L’Oreal’s brand awareness.
The participants consisted of all females between the ages of 17 and 22
years old and out of these 23 participants 56% said that they
occasionally used L’Oreal products (see graph below).
How familiar are you with L’Oreal and it’s products?
Participants were then asked to select the brands they recognized. The following
graph represents the choices and how many participants recognized them.
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Results seem pretty good, with most brands being recognized with the exception
of Vichy and La Roche-Posay, who weren’t recognized by as many participants.
However, one interesting thing was that when participants were asked if they
knew that all of the brands above belonged to the L’Oreal group, 100% of
participants answered no.
Another interesting finding was when participants were asked, “ What brand first
comes to mind in the cosmetics industry?” Out of 23 participants only 2 out of 23
participants said L’oreal, and 2 other said Maybelline. The most popular
responses were Cover girl (5 responses) and MAC (5 responses).
B. Recommendation
From the various secondary research I have conducted, L’Oreal is the largest
cosmetics company in the world. They have many well-known brands as part of
their group, which helps their sales. However, my primary research shows that
L’Oreal is not the first brand that comes to mind in the female consumer between
the ages of 17 and 22. I think that this is because a lot of the products L’Oreal
creates seem to be targeted towards an older audience, and their brand ambassadors
are always women between the ages of 27 and older. What L’Oreal could do is to
get younger celebrities to represent a new product line that is more attractive to a
younger audience. The reason why I think it is important to increase awareness and
likeability of the L’Oreal brand in this younger generation is because if L’Oreal
doesn’t create that personal relationship with this younger generation now, in a few
years they will struggle to make them buyers of L’Oreal products.
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Works Cited
L’Oreal. Key figures. Web. 4. Dec. 2013 http://www.loreal.com/group/ouractivities/key-figures.aspx
L’Oreal. Organization. Web. 4. Dec. 2013 http://www.loreal.com/group/ouractivities/organization.aspx
L’Oreal. Activities. Web. 4. Dec. 2013 http://www.loreal.com/group/ouractivities.aspx
L’Oreal. Around the World. Web. 4. Dec. 2013 http://www.loreal.com/group/ouractivities/loreal-around-the-world.aspx
L’Oreal. Brands. Web. 7. Dec. 2013. http://www.loreal.com/brands/brandshomepage.aspx
FDA. Cosmetics. Web. 10.Dec.2013
http://www.fda.gov/Cosmetics/GuidanceComplianceRegulatoryInformation/
default.htm
Chemist corner.Top cosmetic industry magazines you should be reading. Web. 10.
Dec.2013
http://chemistscorner.com/top-cosmetic-industry-magazines-youshould-be-reading/
Fair world project. Voices of Fair Trade. Web. 15.Dec.2013.
http://fairworldproject.org/voices-of-fair-trade/alternative-trade-organizationsand-the-fair-trade-movement/
L’Oreal. Voluminous Butterfly. Web. 14.Dec. 2013
http://www.lorealparisusa.com/en/Brands/Makeup/Voluminous-Butterfly.aspx
L’Oreal. Magic Nude. Web. 14.Dec. 2013
http://www.lorealparisusa.com/en/Brands/Makeup/Magic%20Nude.aspx
L’Oreal. EverCurl. Web. 14.Dec. 2013
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http://www.lorealparisusa.com/en/Brands/Hair-Care-Styling/EverCurl.aspx
L’Oreal. History. Web. 9.Dec. 2013 http://www.loreal.com/group/history.aspx
L’Oreal. Annual Report. Web. 9.Dec. 2013
http://www.loreal-finance.com/eng/annual-report
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