L'Oreal Case

Summary Statement

L’Oréal should continue to market its “star” products; however, it should also allocate a portion of its marketing budget to its daily moisturizer products and to targeting a younger demographic of consumers. In addition, L’Oréal should simplify its packaging and classify its products into categories as additional guidance for consumers.

Situation Analysis

Context

The moisturizer and cleanser market in the U.S. is characterized by several competitors, a wide variety of personalized products, and both high and low end products.  L’Oréal is considering multiple strategies to increase sales by making better use of their marketing budget.  L’Oréal’s success in the U.S. will contribute to the brand's global position. 

Company

L’Oréal is a global leader in the hair care, cosmetics, and skincare industries.  It prides itself on a strong brand name and technological innovation. The company's goal is to become a global leader in the industry by parlaying their dominance of the French market into success in the U.S. market. L’Oréal has a ‘trickle down and fire up’ strategy; leveraging its technological insights from premium products to the mass market, and in turn using the mass market revenue to fund research and development.

Collaborators

L’Oréal has multiple distribution channels, including: drug stores, grocery stores, beauty salons, department stores, and specialty stores. L’Oréal has established a strong distribution network and great reputation within this network. They have earned a reputation for living up to their commitments and historically their products are good profit generators. L’Oréal has been able to leverage this reputation to persuade retailers to their advantage.

Competition

L’Oréal faces major competition from the established mass market players in the U.S. Its two main competitors are Oil of Olay, who is considered traditional and generational, and Ponds, who is considered reliable, accessible, and...