Running Head: L’ORÉAL CASE STUDY
L’Oréal Case Study
Chase Sudduth
27 March, 2022
Marketing Management
1
L’ORÉAL CASE STUDY
2
BACKGROUND, ISSUES, AND OPPORTUNITIES
When attempting to expand business into a new area, there are plenty of different factors
that can impact that firm’s success or failure. L’Oréal learned this the hard way after a failed
attempt to enter the cosmetics market of India. This would be an unfamiliar result for the already
established cosmetics company. Many adjustments needed to be made, yet a major reason that
the company did not see immediate success was due to the timing of not having the proper target
market in who they would attempt to sell their products to. This market would come later on,
following a major size increase of India’s middle class, that saw tremendous growth as the
country’s economy, as a whole, began to develop (Shamdasani, 2017). This would open the door
for L’Oréal, along with its many competitors, to enter the cosmetic industry that would use the
middle class as their primary target market.
In the initial attempts that L’Oréal made to establish a flowing business in India, the
company portrayed a lack of differentiation from competitors, as well as little understanding for
the Indian society and lifestyle. However, as the Indian economy boomed, the middle class grew
tremendously, there was a large increase in women joining the workforce, as well as $2.5 billion
increase in the cosmetics market between the years of 2011 and 2013 (Shamdasani, 2017). This
provided a perfect opportunity for L’Oréal to make another attempt to expand their cosmetic
company into India.
L’Oréal finally saw some success in their expansion to India, after they decided to take a
different approach. After conducting extensive research on what the consumers wanted, the firm
shifted their primary focus to hair color products, as well making products that would be widely
available for all socioeconomic levels. They utilized many different strategies to market and
appeal to consumers and retailers so that they would buy and sell their products. Among these
L’ORÉAL CASE STUDY
3
strategies was the idea to clean up retailers in exchange for the store to carry L’Oréal products, as
well as leaving the L’Oréal advertisement inside to gain the attention of shoppers. They also
participated in local manufacturing, business-to-business marketing, and even developed their
own hairdressing school, which contributed to their newly found popularity in India. All of these
different efforts would ultimately lead to L’Oréal becoming the number one selling company in
the highly competitive hair care market in India.
After establishing a positive reputation in India with hair care products like their Easy
Rinse shampoo, and many different hair coloring products, L’Oréal decided to expand their
horizons into the skincare facet of the industry. They introduced moisturizers, anti-blemish
creams, and sun-screens, just to name a few. The company was finding its way in the Indian
market which was once difficult for them to navigate, however these many innovations did not
give them enough separation from their competitors in the cosmetics market. L’Oréal would not
take their foot off the gas, and continued to dedicate their time to researching the most effective
ways to appeal to the Indian population. To ensure success, the company opened its own
research and innovation laboratories in Mumbai and Bangalore, in order to develop new Indiacentric products (Avantika, 2013).
RECOMMENDED STRATEGY
One area that is important to consider when attempting to appeal to the people of India, is
the fact that they lack an abundant supply of clean water. In a place such as the United States,
L’Oréal is not faced with the concerns that their consumers may not have adequate water to use
their products, but this is not the case for India. According to the United Nations Children’s
Fund, “less than 50 percent of the Indian population has access to safely managed drinking
L’ORÉAL CASE STUDY
4
water” (JMP, 2017). This is a problem that directly affects businesses who rely on the use of
water for the vast majority of their products.
After learning about the problems with attaining clean water in India, it would be wise for
L’Oréal to appeal to those who may not have that access. While they have already taken steps in
this direction by developing shampoo that only requires two dumps of water in order to rinse it
out, what if they made steps in the direction of needing no water at all? L’Oréal should make
steps in transitioning their dry shampoo products into India, as compared to Paris where it is
primarily developed, at the moment. To add, the increase of production of leave-in conditioner
would also benefit the people of India tremendously. An increase of availability in these products
would definitely give L’Oréal a boost in popularity after learning about the water troubles that
India faces.
While it is essential for the haircare products of L’Oréal to require less water, another
innovation that L’Oréal should pursue is the creation of waterless skin care and body cleaning
products. A simple cleaning product, that comes in the form of a wipe or spray from a wellestablished company, would benefit the Indian people tremendously as it limits the large
amounts of chemicals they are exposed to as they use their local water on a daily basis. Making
these products, along with the dry haircare products, easily accessible and affordable would
likely appeal to a large portion of India’s population. This would not be limited to the typical
L’Oréal consumer, which usually consists of women and children, instead all people would be
interested in products that helped them maintain good hygiene while also staying healthy at the
same time.
L’ORÉAL CASE STUDY
5
EXPECTED OUTCOMES
After learning of India’s large issue of having a clean and sustainable supply of water for
everyone, it is easy to see that the increased production of dry shampoo, leave-in conditioners,
and waterless skin care and cleaning products are exceptional alternatives. While these products
are mainly targeting the lower income individuals, they are also appealing to higher class
individuals as well, as it reduces time necessary for showers and their overall consumption of
water. The expansion and improvement of these products are applicable for everyone and would
benefit L’Oréal tremendously.
These products would be offering a creative solution for individuals unable to properly
shower in India. More and more individuals would be able to cleanse themselves regularly
regardless of water supply, and L’Oréal would be able to reach their target market in a broader
way. These products can be used by all income levels and for the wealthier, convenience would
be the biggest advantage. Simple face and body wipes, or haircare products, could be used at
lunch or after a long day with minimal time consumption. Meanwhile, the opportunities these
waterless products offer are endless for individuals without access to safe water.
By introducing dry shampoo into the market, L’Oréal would once again lead the market
with innovation and create separation from the competition through the use of waterless sanitary
and beauty supplies. Although L’Oréal had already pursued a shampoo that was convenient for
various lifestyles and incorporated Indian traditions and needs, water was needed for both
products. While attempting to create a more ideal product, it still left some individuals out of
reach, the creation of fully dry products leaves nobody behind. Transitioning all the products you
L’ORÉAL CASE STUDY
6
use in your daily shower routine to a waterless concept expands L’Oréal’s reach and impacts
customers in a great way.
RISKS AND MITIGATION PLANS
While India has had great troubles with their clean and managed water supply, they have
similarly struggled with air quality and in 2019 alone, over 1.5 million deaths in India were
attributable to air toxicity (Shetty, 2020). Most dry shampoos in the United States are produced
in aerosol cans, only adding to air pollution globally. The best way to combat the risks of
aerosols on air pollution would be to aim to develop a dry shampoo that is put into your hair like
hair gel, leave-in conditioner, or mousse. By doing so, and taking a more sustainable approach,
by making the packaging out of recycled material, L’Oréal will eliminate the risk of aerosols
contaminating the air in India, and promote the use of recycled materials. Both of these options
together will benefit the environment while also appealing to consumers who are conscious of
what they are doing to the environment around them.
Although wipes would eliminate the need for individuals to expose themselves to harmful
chemicals and toxins, the wipes themselves may create more waste within the country. Despite
the issues with water sanitation, India also struggles with waste management, which would not
contribute to the environmental improvements that L’Oréal would be aiming to make. India only
treats 11.9 million tons out of 43 million tons of municipal waste per year, hinting that the
problem is already prevalent (Brunn, 2020). Face and body wipes would only add to the issue if
you think of how many people would be using these products and how often.
To avoid the risks of added garbage in India, L’Oréal can develop face and body wipes
that would decompose in a relatively short period of time and add key nutrients back into the
soil. The all-natural ingredients would reduce waste spillage into local water supplies, and
L’ORÉAL CASE STUDY
eliminate the issue of congesting the waste management system any further. As the wipes
decompose, they can provide beneficial nutrients back into the topsoil. The difficulty would be
cultivating this type of product, and would be dependent on the cost to do so. Brick making,
flooding, and the incorrect elimination of waste and water chemicals has depleted the soil’s
organic matter content (Bera, 2020). By developing completely decomposable sanitary wipes
and adding nutrients back into India’s soil, L’Oréal will be adding value to the individual and
promoting their sustainability efforts.
7
L’ORÉAL CASE STUDY
8
APPENDIX
1 Indian Rupee = 0.013 US Dollars
190,000,000,000 Indian Rupee = 2,524,357,100 US Dollars
L’ORÉAL CASE STUDY
9
REFERENCES
Bera, S. (2020, July 20). Soil health is degraded in most regions of India. Retrieved April 13,
2021, from https://www.livemint.com/news/india/-soil-health-is-degraded-in-mostregions-of-india-11595225689494.html
Brunn, M. (2020, May 06). Waste management crisis in India. Retrieved April 13, 2021 from
https://www.recycling-magazine.com/2020/05/06/waste-management-crisis-inindia/#:~:text=Urban%20India%20generates%2062%20million,just%2011.9%20million
%20is%20treated.
Clean drinking water. (2021, March 24). Retrieved April 13, 2021, from
https://www.unicef.org/india/what-we-do/clean-drinkingwater#:~:text=Less%20than%2050%20per%20cent,to%20safely%20managed%20drinki
dr%20water.
Möller-Gulland, J. (2019, March 26). Toxic water, toxic crops: India's public health time bomb.
Retrieved April 13, 2021, from https://www.circleofblue.org/2018/india/toxic-watertoxic-crops-indias-public-health-time-bomb/
NC Climate Education. (n.d.). Retrieved April 13, 2021, from
http://climate.ncsu.edu/edu/Aerosols
Shamdasani, P. (2017). L'Oréal India: Where beauty meets tradition. National University of
Singapore and Richard Ivey School of Business Foundation.
Shetty, D. (2020, December 24). Air pollution cost India $36.8 billion in 2019. Retrieved April
13, 2021, from https://www.forbes.com/sites/dishashetty/2020/12/22/air-pollution-costindia-368-billion-in-2019/?sh=613092695c70