Loreal Global Marketing Case L'oreal Global Marketing

Loreal Global Marketing Case L'Oreal Global Marketing Case Study Case Outline L'Oreal was founded back in 1909, but has remained relevant within the growing international beauty market. With its humble beginnings in Parisian hair salons, the company has now grown to own 23 separate brands that operate in over 130 countries (Henderson 2011). However, the main issue L'Oreal faced with its new segmented marketing strategy was the ability to maintain such a fragmented approach in an era that has been dominated by the universalism of globalization.

The company has continuing to favor an aggressive growth strategy within this volatile international economy. It has set the goal of two billion consumers by 2020 with a similar doubling of sales revenue (Henderson 2011). Situation Analysis The global health and beauty industry is a huge market. It is often most dominated by global brands and corporations which have power over a number of smaller brands, similar to L'Oreal's strategy, but not as refined. The sheer number of competitors in the industry makes it a very volatile one, with immense competition.

Thus, L'Oreal faces some stiff competition in all of the regions around the globe it operates in. L'Oreal operates in three major market segments: cosmetics, body products, and skincare options. As such, it had divided itself into three separate groups that all worked autonomously to retain the highest competitive advantage within its own specific market environment. One of the most lucrative groups was the cosmetics, which raked in 93% of the overall revenue earned by the company (Henderson 2011).

Within this larger section, there are four divisions dealing with consumer, luxury, professional and active cosmetic products and brands. Therefore, the company is actually involved in numerous specific market segments, each one having its own unique consumer demands. Brand loyalty for the individual brand names under L'Oreal is often very strong, especially in luxury and professional sectors. In order to retain consumers even with so many brands being controlled under the L'Oreal name, the company adopted a policy of only distributing products through carefully designed distribution channels.

Certain brand names under L'Oreal can only be bought at specific locations. This has worked to diversify branding within the company, so that consumers do not see their favorite products as an extension of a brand that does not suit their overall interests or needs. Consumers have shown, especially for luxury and professional products that they are willing to abide by the distribution policies of the company, even if it may be an inconvenience. L'Oreal's biggest competitive advantage has been its market strategy.

In fact, the marketing strategy of the company has often been a strength in the competitive environment of health and beauty. The company is broken up into various sections and departments based on category of products. There is The Body Shop, which deals in natural body products, but also a cosmetics and skincare department. The cosmetics department is even further broken down, as it is one of the most complex.

Here, four separate categories have been created to look after individual brand names, that produce consumer, luxury, professional, and active cosmetic products. The case study shows that each division has its own marketing team, and is allowed to autonomously tailor and execute marketing strategies to the unique demands and objectives of the specified sections of the larger company. Each targeted market segment has a product line that specifically meets its needs.

Essentially, the overall marketing strategy is segmented in order to allow each product and brand name under the umbrella of L'Oreal to generate marketing strategies specifically tailored to a unique consumer base. This allows the marketing strategy to remain very specific, despite the company's global presence. L'Oreal prides itself on its ability to keep up with local consumer needs; partly accomplished by its segmented approach to marketing on an international scale.

Rather than taking on a single brand identity that doesn't fit any specific market segment exactly, L'Oreal has opted for many different brand identities that are tailor made to each specific market segment it operates in. According to the case study, "L'Oreal aimed to have a global brand that could then be adapted to regions and markets to address the specific needs of those consumers" (Henderson 2011 p 3). This essentially created a very multi-faceted and culturally diverse nature to the branding strategy.

L'Oreal is an organization that thrives in an environment facilitating creativity and innovation. That is one of its major strengths that provide its competitive advantage. The company has had a long standing tradition of heavy reinvestment into research and development in order to meet this market strategy of constantly updating its product lists with new and creative items. In fact, the case study states that "L'Oreal believed that launching new innovative products on a regular basis was key; the company typically outspent its competitors on research and development" (Henderson 2011 p 1).

The company has focused its efforts on creating quality products that utilize the newest innovations of science and technology to provide better beauty and skin care options for the company's loyal consumers. L'Oreal used its strong research and development investments to thoroughly research individual markets that were being targeted in its segmented marketing strategy described earlier. "Geocosmetics" focused on examining specific regional and cultural cosmetic trends in order to provide the most appropriate products tailored to specific market segments.

Business Assumptions To continue to succeed in its aggressive growth strategy, the company will have to adapt to an ever-evolving market. In the years to come, social media marketing will continue to play a huge role in how companies like L'Oreal will adapt their marketing strategies to a more involved consumer base.

L'Oreal has already shown efforts in using social media as a major marketing strategy, with different brands of the company using sites like Facebook and Youtube to not only disseminate product information, but to also actively engage the consumer in a Web 2.0 dialogue, where reviews and feedback can help drive future regional strategies. Alternative Evaluation Still, the company will need to think of alternatives that can help augment their current marketing strategy to meet the.