Essay on Marketing: Marketing and L ' Oréal

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Loreal's Segmenting and Targeting Markets

L'Oréal, the world's largest cosmetics and beauty company, was founded in 1907 by the French chemist, Eugene Schueller. After a little over a century of steady growth, L'Oréal has jumped from being a small family business to become the world’s leader in the cosmetics industry. Today, the L'Oréal group has regions in more than 150 countries in the world that are home to 283 branches, more than 100 agents, 50,491 employees, 42 factories, and more than 500 high-quality and popular brands of cosmetics. Their "global or nothing" strategy allows L'Oréal to take market segmenting even further by custom developing and marketing products to meet the specific demands of any given country or region.

In order to clarify different product positioning in Asia, L'Oréal decided to move from “the open-shelf brand” in Europe up to “the top international brand” in Asia. In Asian countries, L'Oréal set up their counters in upscale department stores according to the Asia specific marketing channel strategy. However, this “accessible luxury brand” strategy did not meet the levels of success they anticipated. The reason for this is that the image of the texture or packaging of their products failed to reflect the luxury image that are so important to marketing in Asia. They failed to understand the significance of the fact that texture and packaging in Asia is more delicate than the required standard in Europe. L'Oréal must prove that the quality of their product shows "significant improvement" if they are to obtain market recognition while moving up their prices in the Asian markets.

In 2003, L'Oréal created a new line of teeth whitening products in order to open up Japanese and Asian markets. Unlike those products made for the U.S. and Europe, the flavor of the creams and gels sold in Asia have a more oily texture and a more intense flavor. In order to meet the expectations of consumers in Asia, they are also more delicately designed and packaged. In doing so, L'Oréal conveys in its advertising its unique French brand image of "Paris,” the world center of art, fashion and beauty.

This does not mean that this brand can only be used by French people. Their spokespersons include the famous actresses, Michelle Reis from Hong Kong, Gong Li, from China, Andy McDowell from the United States, and the Indian beauty queen, Ice baby Ya Rui. Each of them has the appearance of expressing “a French beauty” that is also suitable for people of every culture.

Thanks to their understanding of global and cultural diversity, the L'Oréal Group operates 17 cosmetic brands throughout the world while clearly showing the different features of each brand. A further result of this effort was that L'Oréal Paris made a successful comeback to Japan.

Finally, due to the global economic depression, female consumers are looking for quality assurance and affordable products. L'Oréal has become an "easy-going" brand of open-shelf cosmetics. The Japanese media calls L'Oréal "the best choice for smart consumers." In Japan, the new L'Oréal line of skin care products currently accounts for 35% of the total sales every month, and that percentage continues to rise.

The strategy to transfer a brand to a higher or lower market is riskier than its first entry into the market. L'Oréal tried to move to a higher class in order to develop new market segments. Now it seems that L'Oréal Paris has completed the challenge of "dangerous mission." L'Oréal has had many successful experiences in "hitting the right audience with the right product," but it won’t be achieved without enough information from marketing research.

Although the global economy is so weak, L'Oréal still continues to grow fast in China. The reason is that L'Oréal always updates its marketing intelligences through maketing research.
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